We’re already halfway into February, and the 2022 season is still a distant mirage. Pitchers and catchers were supposed to report yesterday. I just have to laugh reading that last sentence back given the state of the CBA negotiations. 78 days into the lockout and we’re seemingly no closer to an agreement than when it began.
MLB and the MLBPA most recently met last Saturday, with the owners making their latest economic proposal. Evan Drellich of The Athletic provided the full details of the offer, and the two most noteworthy adjustments are as follows:
The league proposed a $5 million increase to the pre-arbitration bonus pool, upping it to $15 million. The union most recently proposed $100 million, leaving still a major gap. MLB raised the luxury-tax thresholds by $2 million in the final three years of five over the deal. They would now progress as $214 million, $214 million, $216 million, $218 million and $222 million. Previously, they were: $214 million, $214 million, $214 million, $216 million and $220 million.
Unsurprisingly, the union was unimpressed with these minuscule improvements, especially when they are offering potentially hundreds of millions of dollars worth of revenue boosts in the form of expanded playoffs and advertising patches on jerseys. And while the owners contend that they are offering substantial gains to the players, MLBPA maintains that this offer is keeping in line with MLB’s bargaining tactic of giving the players something with one hand and taking something else away with the other. Most notably, the latest luxury tax offer also included a steep escalation in penalties for offenders, likely driving owners to treat the threshold as even more of a salary cap than in the previous CBA.
The union perceives that it gave up too much in the previous two CBAs, and is determined to claw back some of that ceded ground. As MLBPA executive Tony Clark put it in 2019:
“We are interested in re-establishing a competitive environment. We are interested in restoring meaningful free agency. We are interested in getting players something closer to their value as they are producing it. We are interested in ensuring that the best players are on the field at all times.”
In other words, the four main objectives in the next CBA would be to end tanking, remedy owners treating the luxury tax as a hard cap, get players paid earlier in their careers, and end service time manipulation. These are gains worthy of the union digging in its heels and not caving to the owners, even if it means missing games.
Often we’ve seen people bandy about the notion that losing games poses an existential threat to the game of baseball. Amid declining viewership, the 2020 shortened season, and the optics of “millionaires vs. billionaires” (eye-roll) arguing over money during a pandemic, surely neither side can afford to jeopardize the season. However, I would argue that’s exactly what must be done for the health of the game.
Changes to the analytic and economic landscape of MLB have fundamentally altered the way baseball teams are being run.
What happened in 2003? Revenue sharing increased greatly. If you're sharing more revenue, winning is less important to your bottom line, so you have less incentive to bid for players. Here's a summary table of some of the key provisions. pic.twitter.com/vK8z8nnaY1— J.C. Bradbury (@jc_bradbury) November 30, 2021
Ever since the sharp increase in revenue sharing, owners have less incentive to field winning teams. The system was created to even the balance between large and small market teams, but too many owners are pocketing the money rather than reinvesting into their teams.
According to Forbes, the average valuation of every Major League Baseball team has grown by close to $140,000,000 every single year over the last decade.— Joe Doyle (@JoeDoyleMiLB) February 3, 2022
Owners could end this lockout comfortably by agreeing to spend just ~$10m more each year.
Do not side with the owners.
Let's do payroll!— Joe Doyle (@JoeDoyleMiLB) February 3, 2022
The average payroll in 2011?
Roughly $93 million
The average payroll in 2021?
Roughly $104 million
Payrolls have jumped about 12% in a decade.
Meanwhile, the average value of a team has jumped 365% ($523m to $1.91b) in that same timespan.
The real money in owning a baseball team lies in the rapid and guaranteed appreciation in franchise value. And yet, payroll has stagnated while teams triple and quadruple in value. Owners are profiting more than ever off the labor of their employees without reciprocal gains seen by the players who make the business possible.
All of this creates a situation where owners have been able to divorce revenue from the product on the field. Revenue sharing, lucrative national TV deals, and RSNs ensure that they have a secure, and massive, stream of cash regardless of whether they win or lose. Owners are able to leverage their skyrocketing franchise valuations into separate investments, further diminishing the percentage of revenue that comes from actual on-field activities. It helps explain why we see perennial losing teams running barebones payrolls. If they’re already guaranteed to turn a profit, what use is there upping costs to try to win?
That brings us to the analytics. A few months back, Travis Sawchik of theScore compiled a comprehensive analysis of the way analytics have been leveraged to alter the foundations of roster construction and player pay.
The MLBPA's proposals of a $775k minimum and $100m pre-arb bonus pool would inject about $180m into the most productive and under-paid cohort of players they represent. Taking earlier FA off the table and keeping these on were correct priorities, imo. https://t.co/jXyuptu6N4 pic.twitter.com/5G4pQdrwtP— Travis Sawchik (@Travis_Sawchik) February 13, 2022
Don’t get me wrong, I am one of the foremost supporters of the analytic revolution that has swept through baseball. It has given us far more reliable ways to measure player skill, compare value, and project future performance. But one side effect of this injection of analytics into every nook and cranny of the sport is that teams are wielding it at the detriment of player compensation.
Teams have discovered that it is far more profitable to reap the majority of its on-field value from players making at or near the league minimum than it is to hand mega contracts to players at the tail end of their peak years. But more that just decreasing money going to the one-percenters, this system is killing baseball’s middle class.
As Sawchik found, players are having shorter major league careers, players are debuting later in life, and older players are getting discarded more readily in exchange for the next cycle of cheap, young talent. All of this conspires to create a large class of major leaguers who never get to reach free agency — heck, they may never get to earn their first substantial raise over the league minimum.
This system of prioritizing profit over both product on the field and treating players as more than just fungible assets is the true threat to the health of the game. That is why the players must stand resolute. The prospect of losing Opening Day pales in comparison to the consequences of caving to the owners.
Of course, a delayed Opening Day and loss of regular season games are entirely avoidable. Manfred has the unilateral authority to lift the lockout at any point in time. There is a perfectly legal recourse to end the lockout without ratifying a new CBA — they would simply play under the rules of the previous CBA until the new one could be agreed. Granted, the lack of the CBT under this arrangement gives it a minimal chance of happening, but just remember that the owner-instituted lockout, and not the demands from the players, remains the principle barrier to the season starting on time.
However, if Opening Day arrives and there is no agreement in place — and the owners refuse to lift the lockout without a new CBA — I urge the players to stay the course. The short-term pain of losing games and income — and I do not wish to minimize the hardship that many players would face — would be paid off many times over by the long-term gains they stand to reap by holding firm. Do not waver, do not fold, fight for that which you have earned.