When the collective bargaining agreement (CBA) between Major League Baseball and its’ players ended on December 1, 2021, MLB immediately imposed a lockout of the players, even though no games were scheduled for another four months. They didn’t have to lock the players out. That was a choice, a tactic intended to put pressure on the players to cave in to owners’ demands in negotiating a new agreement.
At the same time that owners imposed a lockout, commissioner Rob Manfred also instituted a freeze on all player transactions. This is a separate action from the lockout, and one that is also not required. It’s another tactic, designed to gain leverage over the players in negotiating a new agreement.
In fact, the negotiating tactics used by owners prior to the expiration of the CBA clearly indicated that imposing the lockout was very much a desired and chosen path. Instead of responding to the players’ last offer before the agreement expired, owners demanded that players take the issues of free agency and arbitration service time as well as revenue sharing off the table completely before MLB would even agree to make another proposal. Of course, the players did not agree to these preconditions.
The formal announcement of the lockout by Manfred spun the move as one that was designed to help spur negotiations.
Simply put, we believe that an offseason lockout is the best mechanism to protect the 2022 season. We hope that the lockout will jumpstart the negotiations and get us to an agreement that will allow the season to start on time. This defensive lockout was necessary because the Players Association’s vision for Major League Baseball would threaten the ability of most teams to be competitive.
Of course, anyone paying attention to the negotiations knew from the start that Manfred’s comments were most disingenuous. Simply put, the commissioner was lying. The owners waited 43 days after declaring the lockout to even attempt to negotiate, and when they did finally make a counter offer, there was little movement from their previous proposals.
What about a strike?
The most common justification for the lockout is that, if MLB were to begin the season, the players could call a strike in August, before the playoffs where MLB makes a huge portion of it’s revenue, just as they did in 1994. In fact, the players’ strike in 1994 was the last player strike in any of the four major sports. Every work stoppage since has come by way of an owners’ lockout, primarily for this very reason.
But what if the players agreed not to strike for the rest of the season if the owners were to lift the lockout? Would the players ever agree to give up their right to strike? And if they did, would owners bite and lift the lockout?
If the lockout were to be lifted, with our without the players’ agreeing not to strike, the previous CBA would remain in effect, except without any competitive balance tax at all. The CBT is the most contentious issue facing the parties during the current talks, with owners proposing draconian penalties that would result in an even harder de facto salary cap, and players offering to keep the same tax structure, but with increased tax thresholds and no draft penalties.
What would happen without an agreement?
Continuing the previous agreement would be more remarkable for what it doesn’t have than what is in it.
- No competitive balance tax, of any kind
- No expanded playoffs
- No increase in minimum salaries
- No change in free agency or arbitration service time requirements
- No universal designated hitter
- No pre arbitration bonus pool
- No advertising patches on uniforms
- No international draft
- No change in revenue sharing
- No change to free agent compensation
- No deterrent to tanking or service time manipulation
What there would be, however, is major league baseball, while the two sides play a full regular season and begin to trade off things from the list that each of them would like to see as part of the new agreement. Some of them would be relatively easy to accomplish, while others would be more difficult, and may not be resolved by the end of the season.
Once the lockout is lifted, players would report to spring training, games would begin within a week, and another free agent signing frenzy would commence, perhaps even more frantic than what we saw before the lockout began.
Teams and players would submit their salary proposals for arbitration eligible players, and hearing dates would be scheduled, all during a four week exhibition season.
This isn’t working
It is abundantly clear that MLB owners have pursued a strategy of stalling negotiations, putting forth proposals that are complete non starters that will never result in an agreement. It is equally clear that the players can see right through MLB’s tactics, and are having none of it. They’re not going to negotiate against themselves, and they’re certainly not about to agree to a harder de facto salary cap. Not now, not a month from now, not ever.
MLB needs to come to that realization before they agree to abandon their game plan and embark on a new approach. The players could give them an exit ramp, secure in the knowledge that doing so would be the quickest and most lucrative way to ensure that they get paid full salaries for the 2022 season.
What would continued bargaining look like?
Coming to an agreement begins with the owners coming to the realization that they’re not going to get harsher penalties in the CBT scheme. Players have already proposed keeping the tax rates the same, but they’ll have to come down on their ask of a $245 million lowest threshold.
Reimposing the CBT at all is a big concession, and players will want something in exchange. Owners will suggest that merely not adding harsher penalties is a concession, but it’s not.
MLB desperately wants expanded playoffs, and they don’t necessarily need to agree on that before the season begins. They expanded playoffs to 16 teams in 2020 and that agreement was reached in late June. MLB’s new contract with ESPN will pay them $100 million more for a round of expanded playoffs per season, plus their share of the gate receipts, so anything that costs them less than that would be a net win.
For example, an increase in the minimum salary from the current $570,500 to $750,000 is an increase of $179,500 per player. If half a team’s roster earns minimum salary, that would be a net increased cost of $2.33 million per team, or $60.7 million for all teams. Some teams have fewer than 13 players in the minimum salary class. Advertisig patches on uniforms are said to be worth $6 to 8 million per team.
The mid point between the two sides on the minimum salary proposals is about $700,000, and this is one of the less expensive ways for team owners to make concessions, in terms of getting bang for their bucks. Over 60 percent of players fall in the minimum salary service class.
And on the bartering goes. But the main thing is, there would be baseball!
It’s been done before
Once a federal court issued an injunction in 1995, preventing MLB owners from hiring replacement players and implementing their own terms which included a salary cap, abolishing arbitration, and repealing anti collusion provisions of the previous CBA, the players agreed to call off their strike and games resumed without a CBA.
Baseball was played for two seasons until agreement was reached before the 1997 season. That’s when the players agreed to implement a tax on the highest payrolls and push the arbitration eligibility from two years to three. But there was baseball in the interim and there was baseball every season since.
The players called a strike in 1994 when owners refused to budge over the issue of a salary cap in negotiations. They finally settled on the CBT, and they’ve gradually bargained for stricter and stricter penalties to turn that into a de facto salary cap. They’re now using the same bad faith bargaining tactics over the same issue. If they were to drop that issue, there’s a good chance that the players would agree not to strike, and then there would be baseball. At very least, it would follow from the players’ 2020 refusal to re-negotiate against a deadline, simply demand to play baseball, and put pressure on the owners to make some real compromises to get the big ticket items on their wish list.