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The strike arose as the result of declining revenues for baseball team owners. In 1993, the owners of Major League Baseball teams collectively proposed a salary cap to their players, claiming that small-market clubs would fall by the wayside unless teams agreed to share local broadcasting revenues and enact a salary cap. The players opposed this plan. On January 18, 1994, the owners approved a new revenue-sharing plan that included a salary cap, but the plan required the players’ approval. The following day, the owners agreed to give the Commissioner of Baseball complete authority for them on labor negotiations.
Owners had forced Commissioner Fay Vincent to resign in September 1992 after Vincent said the owners had colluded in the signing of free agents. Donald Fehr, executive director of the Major League Baseball Players Association, said that he had no trust in many of the owners, including Milwaukee owner Bud Selig.
On June 14, 1994, owners' representative Richard Ravitch officially unveiled the ownership proposal which guaranteed a record $1 billion in salary and benefits. The ownership proposal called for the elimination of salary arbitration. It proposed that free agency would begin after four years rather than six, and owners would have the right to keep a four or five year player by matching his best offer. Owners claimed that their proposal would raise average salaries from $1.2 million in 1994 to $2.6 million by 2001. Fehr rejected the offer from the owners on July 18. The major stumbling block was the salary cap. Fehr said if serious negotiations between the players and the owners did not begin soon, the players could go out on strike in September of that year, threatening the postseason. The existing collective bargaining agreement ran out on December 31, 1993, with no new agreement signed.
As negotiations continued to heat up, the owners decided to withhold $7.8 million that they were required to pay into the players' pension and benefit plans under a previous agreement. On June 23 when the Senate Judiciary Committee failed to approve an antitrust legislation by a vote of 10–7. According to Fehr, this action left the players with little choice but to strike.
On July 28, the Players Association executive board set August 12, 1994, as a strike date. That day arrived without any resolution and the players went ahead with their threat to walk off the job. The last games of that baseball season were played on August 11, 1994.
Mediation efforts ensued and on August 31, three-and-a-half hours of negotiations with federal mediators produced no progress in the strike. No further talks were scheduled as the strike went into its 4th week. Acting commissioner Bud Selig announced that September 9 was the tentative deadline for canceling the rest of the season if no agreement was reached between the owners and players. The MLBPA offered a counterproposal to ownership on September 8 calling for a two-percent tax on the 16 franchises with the highest payrolls to be divided among the other 12 clubs. Teams in both leagues would share 25% of all gate receipts under the MLBPA's plan. The owners rejected this proposal and on september 14, 1994, the rest of the season, including the World Series, was called off by Bud Selig on September 14. The loss of the rest of the season cost $580 million in ownership revenue and $230 million in player salaries. In 1994, the average MLB salary was an estimated $1.2 million.
The Montreal Expos were having their best season in their history at the time. They had the best record in baseball, 74–40, and were six games ahead of the Atlanta Braves in the NL East despite having the second-lowest payroll in MLB. Most baseball writers considered the Expos to be World Series contenders. The Colorado Rockies, completing their last season at Mile High Stadium, had been on pace to set an attendance record, with an attendance of 3,281,511 through 57 home games for an average of 57,570 per game. At that pace, the team was on pace to draw over 4.6 million fans in their 81 home games, which would have eclipsed the major league season attendance record of 4,483,350 fans set by the Rockies only the season before.
One of the oddities of the strike concerned a trade in which the Minnesota Twins traded Dave Winfield to the Cleveland Indians for a player to be named later by the season's end. When the season was officially canceled, no player was named. To settle the deal, the executives of the teams went to dinner, and Cleveland picked up the tab. Winfield had been traded for a dinner. (Official sources list the transaction as Winfield having been sold by the Twins to the Indians).
Richard Ravitch resigned as negotiator for the owners on December 6, 1994 and on December 14, labor talks headed by federal mediator Bill Usery broke down. The next day, the owners approved a salary cap plan by a vote of 25–3, but agreed to delay implementing it so that another round of talks with the players could be held. On December 23, the owners unilaterally implemented a salary cap.
Politicians in Washington entered the picture and on January 4, 1995, five bills to end the baseball strike were introduced into Congress. On January 5th, Donald Fehr declared that all 895 unsigned Major League players were now free agents, citing unilateral contract changes made by the owners. On January 10, arbitrator Thomas Roberts awarded 11 players a total of almost $10 million as a result of collusion charges brought against the owners.
It was on January 26th that President Bill Clinton stepped in. He ordered that both players and the owners were to resume bargaining and reach an agreement by February 6. Unfortunately, President Clinton's deadline came and went with no resolution of the strike, although some progress was made. On february 1st the owners agreed to revoke the salary cap and return to the old agreement. The day after the deadline, Clinton met with representatives from both sides. Following is a video of a statement that he issued on February 7, 1995 after meeting with players and owners.
After the deadline passed with no compromises, the owners agreed to the use of replacement players for spring training and regular season games. These players were guaranteed US$5,000 for reporting to spring training and another $5,000 if they made the Opening Day roster. Bud Selig announced, "We are committed to playing the 1995 season and will do so with the best players willing to play." But Baltimore Orioles owner Peter Angelos announced that his team wouldn't use replacement players. His star shortstop Cal Ripken, Jr. was close to breaking Lou Gehrig's consecutive games record. Angelos's had also once been a labor lawyer representing unions. On March 20, the Orioles canceled the remainder of their spring training games because of the team's refusal to use replacement players. The next day, the Maryland House of Delegates approved legislation to bar teams playing at Camden Yards from using replacement players.
On March 26, the MLB announced that the 1995 season would be reduced from 162 games per team to 144 games per team as a result of the use of replacement players.
In addition to Angelos, Detroit Tigers manager Sparky Anderson was put on an involuntary leave of absence as he refused to manage replacement players. The Toronto Blue Jays assigned manager Cito Gaston and his coaching staff to work with minor league players so that they wouldn't have to deal with replacement players. On March 14, the players' union announced that it would not settle the strike if replacement players were used in regular season games. On March 28, the Ontario Labour Board announced that replacement umpires would not be allowed to work Blue Jays home games. To avoid breach of Canadian labour law, the Blue Jaysdecided to play their home games at their Spring training facility in Dunedin, Florida, as long as replacement players were used.
On Tuesday, March 28, 1995, the players voted to return to work, provided that a U.S. District Court judge supported the National Labor Relations Board's unfair labor practices complaint against the owners (which was filed on March 27). By a vote of 27–3, owners supported the use of replacement players. The strike ended when Sonia Sotomayor, then a Judge of the United States District Court for the Southern District of New York, issued a preliminary injunction against the owners on March 31. On Sunday, April 2, 1995, the day before the season was scheduled to start with the replacement players, the strike came to an official end at 232 days. Judge Sotomayor's decision received support from a panel of the Court of Appeals for the Second Circuit, which denied the owners' request to stay the ruling. As part of the terms of the injunction, the players and owners were to be bound to the terms of the expired collective bargaining agreement until a new one could be reached and the start of the season would be postponed three weeks, with teams playing an abbreviated 144-game season instead of a 162-game season.
The strike left resulting bad feelings from many baseball fans, who blamed both players and owners. Attendance at the games plummeted, and so did television ratings. Total attendance at the first 1,600 MLB regular season games played in 1994 was 50,010,016, averaging 31,256 per game. In 1995 that number was not reached until over 2,000 games have been played for an average attendance of just 25,008 per game. This represented a decline in average attendance of 20% from 1994 to 1995. Some of the fans who showed up demonstrated their frustration, booing the players and finding other ways to express their displeasure. At a game at Shea Stadium, three men wearing T-shirts with "Greed" lettered on them leaped onto the field and tossed $160 in $1 bills at the player's feet before being restrained by security. They received a standing ovation and when they were removed, the fans loudly booed those who escorted them off the field. In Cincinnati, a fan hired a plane to fly over Riverfront Stadium that carried a banner reading "Owners & Players: To hell with all of you!" Fans in Pittsburgh disrupted the Opening Day game between the Montreal Expos and the Pittsburgh Pirates by throwing various objects on the field, causing a 17-minute delay before being warned that the game would be declared a forfeit to the Expos.
On August 3, 1995, the Senate Judiciary Committee sent a bill calling for the partial repeal of baseball's antitrust exemption to the full Senate. The vote passed narowly, 9–8. On September 29, 1995, a three-judge panel in New York voted unanimously to uphold the injunction that brought the end to the strike in April 1995.