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From 1975-1978, the California Angels and Cleveland Indians maintained their protest against Major League Baseball: no pitcher reached twenty wins, and the antagonistic relationship with Commissioner Bowie Kuhn continued to sour. But Angels owner Gene Autry and Indians owner Nick Mileti began to realize that their protest was no more than a gesture, and that their battle was one of little consequence, even within their own organizations. It seemed that the whole project was about to be dismissed as the rich man’s folly that it really was.

But then Gene Autry went bust.

Autry made most of his money from cowboy records, the Westerns he starred in and the beef industry, which funded many of his projects and also kept him on retainer as an unofficial spokesman for big-business ranching. But the late ’70s, which saw a resurgence of “urban” culture like disco, were not kind to Autry’s portfolio, and suddenly he was in dire financial straits — so much so, that it seemed he might even have to sell his beloved Angels.

Sources within Autry’s inner circle say that for weeks he agonized over what could be done. It wasn’t just the money; pride was at stake, too. Feeling up against the wall, Autry finally made a phone call to his friend Mileti, and asked for a loan. Mileti, who had no closer friend in the game, immediately said yes, he would do whatever Autry asked.

Rather than a simple loan, Mileti and Autry agreed to a longer term deal that could help both financially. The agreement they reached is now commonly referred to as “revenue sharing,” but at the time it was a somewhat novel idea, especially within the sports world. The deal worked like this: revenue that each team made over a certain amount would be added to a joint fund, and then that amount would be divided between the two teams. Not only would it keep Autry afloat, but it would similarly help Mileti should he fall upon tough times as well. The one drawback to this deal, however, was obvious: should both teams have simultaneous down years, there would be no relief.

Autry and Mileti began to court other owners to join their pact to combat this one flaw. New owners who joined would receive 20% of the fund, with Autry and Mileti each receiving 40%. For each new team that an owner brought in, that owner would receive an additional 5%. And no matter how many teams joined, Autry and Mileti would never receive less than 30% of the money, and no other owner could exceed that amount. (Several sources suggested that the idea originated with Jackie Autry, Gene’s wife, who was an active member of cosmetics agency Mary Kay, which used a similar scheme. Others theorized that some of Mileti’s alleged mafia ties could have inspired the idea.)

With those parameters in place, the two men began to recruit new members. They made house calls on various owners, making their pitches with charts, diagrams and Cuban cigars, one owner who rebuffed their overtures remembers.

“Gene came in to my office smiling like a used car salesman, a big pinkie ring gleaming on his hand,” he remembers. “He had some assistant with him, who unloaded an easel and some pie charts showing the money I could make if I signed up with them. I told him that I thought the idea was foolish, and asked him if Bowie [Kuhn] knew what he was up to. Gene just laughed and continued with his pitch. He called me many times after that to follow-up. It just didn’t feel right to me.”

Others, however, were more intrigued by the idea; most notably new San Diego Padres owner Ray Kroc, who made his fortune by founding the McDonald’s franchise, and Montreal Expos owner Charles Bronfman, who owned Seagrams whiskey. Both men quickly signed up with Autry and Mileti, and saw their profits soar in the ensuing years as a result. And, in a curious throwback to the agreement’s childish beginnings, Kroc and Bronfman both agreed to prevent any of their pitchers from winning twenty games as a subtle insult to Commissioner Kuhn.

Through 1981, Autry, Mileti, Kroc and Bronfman were making enormous sums of money. They were sharing information on how to squeeze every last dollar out of their franchises and prospering in the resulting revenues. They had a tight network among and within their organizations, and the quartet was happy counting its blessings — and profits.

In 1981, however, word got out about their agreement within baseball. None were sure how, and none could be certain of how much was known. But the 1981 labor stoppage, which halted the season for 50 days, was a direct result of their private pact. Word of Autry and Mileti’s earlier visits to a number of front offices had long circulated the grapevine, but no one had paid much attention to the seemingly outlandish rumors. As revenues for other teams began to wane in 1980 and salaries increased due to free agency, however, the coupling of those rumors with Autry’s newfound wealth made some owners more than suspicious — they were downright irate.

(Continued in part five)

Seymour Hersh, a regular contributor to The New Yorker, is a Pulitzer Prize-winning journalist and author of several best-selling books.