As the calendar turned to February, there are less than 2 weeks until the planned start of spring training. Unfortunately, the MLB and MLBPA (MLB Players Association) don’t appear to be any closer to an agreement on a new CBA (Collective Bargaining Agreement) and an end to the lockout. With each passing day, the likelihood of a delayed start to the season or a shortened season grows exponentially and the damage to the sport grows deeper and deeper. Now that we are 2 months into the “negotiations”, a reasonable person would expect some serious progress, if not a resolution, but we haven’t really seen either. For a sport that has been struggling to bring in younger viewers for some time now, a prolonged stoppage and a shortened season could be a devastating blow.
Almost exactly 2 months ago, the MLB work stoppage began after MLB owners voted to unanimously begin a lockout when the current CBA expired. This is the first work stoppage in 25+ years and at the time the lockout began, there was some hope that both sides understood the devastating impact of a dragged out negotiation and would take that into consideration when making concessions. Unfortunately, that was just naïve optimism and both sides haven’t made any significant effort to bridge the gap since December. The two sides barely came to the table in 2021 and set their sights on jumping back in after the new year. After weeks of little to no movement, both sides have been meeting more regularly the past few weeks, but it’s been reported that they aren’t even tackling the major economic pieces that are dividing both sides at this point.
With the lockout not likely to be resolved quickly, let’s take a simple look at the main disagreements between the players and owners.
Salaries
This is the easiest disagreement to understand. The players want the minimum salary to move from $570,500 to $775,000, while the owners are proposing a scale, beginning with $615,000 for their first year, then $650,000 in year two, and $700,000 in year 3. The players want to be paid more from day 1 and the owners want to pay less. Pretty simple economics.
Competitive Balance
Luxury Tax
There are a few major areas that are focused theoretically on creating a more balanced league and the first is the luxury tax. It boils down to this: limiting big market teams (i.e. New York Yankees and Los Angeles Dodgers) from spending unlimited dollars on every free agent player and thus preventing smaller market teams from fielding a competitive team. You can see how the players would want the luxury tax to grow more significantly because it would mean higher overall salaries from larger market teams. The players have proposed an incremental growth from $210 million to $273 million by 2026 and the owners obviously want a smaller increase, proposing steady growth to a max of $220 million in 5 years. There are also some proposed changes in the fees for going over the threshold which I’m not going to dig into, but as you can see, the gap is pretty significant.
Tanking
Another area of league balance revolves around teams tanking (losing games to get better draft picks). Both sides seem to agree that it’s an issue in the MLB (finally) and a draft lottery is a suitable solution, but they are disagreeing on which picks should be included in a draft. Essentially now, if you finish with the worst record, you get the #1 pick, 2nd worst gets the #2 pick, etc. A draft lottery would mean that any team that does not make the playoffs would have a chance at the #1 pick via a lottery, which in theory disincentives teams to lose games to get a better pick. That’s where the agreement ends, because the owners want only the top 3 picks to be decided by the lottery and the players want the top 8. It’s a fight between the owners wanting more control over draft order and the players wanting a more fair and competitively balanced league that discourages serious tanking. This is one area I think a compromise could be relatively easy to achieve.
Player Control
Arbitration
There are two areas of negotiations that revolve around player control and the first is arbitration. In its simplest form, the current arbitration system allows teams to control players who have been in the league for more than 3 years and less than 6 years if they do not already have a contract agreed upon. The system allows teams and players to negotiate a one-year salary each year and if they do not agree, the contract negotiations go to an independent arbiter to make a decision on the player’s salary. The idea is that a player gets a comparable salary to similar players who have received contracts in the recent past and remains in the team’s control. For top tier players, the teams are able to pay them less than they would make on the open market and retain their services until 6 years of service time are complete. After year 6, the players are eligible for free agency and the teams no longer have any control.
This is an area where owners said they would not negotiate, but the players association continues to push. The MLBPA initially asked for arbitration to be after year 5, then retracted that proposal. The current proposal from the players has shrunk and they are now basically only fighting for arbitration eligibility at 2 years vs 3 in the current system, which is out of the question according to owners.
Manipulation of Service Time
Like arbitration, service time manipulation this is an issue of player control for owners (and as always, money). Right now, there are certain requirements a player must meet in order to have a season count toward their service-time (essentially years in the league). By keeping top players in the minors for longer than they should, teams are able to manipulate that player’s service time, keeping them in team control longer (i.e. a longer period of time until they become free agents and thus need to be paid a much higher salary). This is connected to the “bonus pool” for pre-arbitration players also, because there would be certain benchmarks a player needs to hit in order to be eligible.
It boils down to this: both sides identify a need for changes in this area, but owners understandably want to retain control of a player’s contract for longer because it saves them money and the players want to be able to jump to arbitration or free agency earlier because it increases their earning potential. The owners have proposed a plan to incentivize teams to promote top 100 minor league prospects by giving the team an extra draft pick if they do, but the players don’t believe the incentive is strong enough to encourage a team to essentially relinquish a year of control for a top player. An often used example of this practice is 3B Kris Bryant with the Cubs. He was not on the opening day roster in 2015 despite clearly being ready for the majors. The team made excuses about him needing more time to work on his defense, etc, but it was clearly BS. He was called up strategically a few weeks later so that at the end of the season, he fell 1 day short of 172 days of service time required for it to count as a service year. This gave the Cubs control over Bryant for an extra season so he didn’t become a free agent until this offseason (and still is thanks to the lockout).
Unfortunately for fans of baseball, both sides are pretty far apart in negotiations as of today. Is it possible the two sides make an earnest effort and resolve most of their issues soon? It’s possible, but not probable. It’s not looking like either side wants to move the needle more than a little at a time and at this pace, baseball won’t return until summer and take another huge punch in the gut. The average baseball fan is age 57 (according to Front Office Sports), significantly higher than any of the other 3 major sports in the United States and has been growing. The league has been struggling to bring in younger fans and the MLB and MLB Players Association holding an ugly public fight over who gets more money is not exactly helping. As a baseball fan, I hope this ends soon and doesn’t further drag the sport into oblivion.