Happy new year, MLB’s lockout is ongoing

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Just because it’s now 2022 on the calendar doesn’t mean that we’re going to see progress in collective bargaining anytime soon. Nothing has changed from mid-December, when I published a newsletter titled “Don’t expect a quick resolution to the MLB lockout.” It’s now January, so, as was reported at the time by Evan Drellich, the two sides are expected to discuss core economics eventually, but “discuss” and “agree on” are not the same thing. MLB and the Players Association might be closer on a few items than MLB’s staunch refusal to take bargaining seriously pre-lockout might have indicated, but there is seemingly enough distance on other issues that it’s going to take more than a discussion or two before things can be ironed out in a meaningful way.

What are some of the core issues? The Players Association would like arbitration eligibility to begin one year sooner, so, after two years of service time instead of three. They want a significant raise to the league minimum, though, it has not been reported on what that proposal actually looked like and just how significant their ask was, just that it exists, and that MLB countered with a lower figure. The PA wants free agency to arrive a year earlier, too — they don’t seem to be focused on service time explicitly, instead thinking that fewer years where service time plays a significant role will be more meaningful than an adjustment to service time itself. They, of course, want a higher luxury tax threshold so that teams will spend more, and lessened penalties for clubs that exceed said threshold.

Major League Baseball does not want to tweak arbitration: they want to get rid of it. Prior to the lockout, their labor committee focused on lowering the luxury tax threshold, and increasing the penalties. No wonder they are acting as if ever so slightly raising the CBT is movement in negotiations. They proposed items such as a salary floor and a universal free agency age, but I have my concerns with both of those: the former looked a lot like theater, for one, and the latter would exacerbate existing issues rather than solve them.

MLB’s proposals, on the surface, make it look as if they are really trying to make things work, by proposing significant, sweeping changes. This isn’t a new strategy for them, though. Proposing these massive new ideas for player compensation is a thing they just tend to do when the sides are far apart: as I said back at the time when details leaked, MLB is doing it mostly for the headlines and so they can throw this back in the union’s faces later on when negotiations are in a rough spot. Which, you know, Rob Manfred already started to do when he published the woe is us, lockouts are defensive letter to fans.

This time around, it’s the $1 billion spending pool that will replace arbitration, that MLB promises will actually pay players more than the current arrangement, which is highly unlikely for reasons I’ve already linked to but will do so again and quote, too, for the sake of convenience:

Yes, the $1 billion pool for arbitration-eligible players looks good, in comparison to the roughly $650 million that same class of players is receiving for the 2021 season. However, the universal free agency system could conceivably create more arbitration-eligible players for that pool to be paying out to, since it would, in this proposal, at least, be limiting free agency for players who get started out in the bigs earlier, which in turn might pressure some of those players into signing even more team-friendly, early-career extensions that are essentially universal wins for teams than we are already seeing. So don’t just start citing the difference in average salary that would exist when you plug in $1 billion instead of $650 million, because a whole lot more goes into it than the big shiny round number that’s being reported.

As [Joel] Sherman noted, as well, it’s also a cap. A cap of $1 billion is a helluva cap, sure, but it’s still a cap, and if the system adjusts itself so that the cap is never in danger of being approached—like was mentioned before, what if teams just start cutting these arbitration-eligible players at an even higher rate than they already are, increasing churn to avoid any kind of overall increase in spending—then that $1 billion pool doesn’t mean all that much in comparison to the current system, does it? It’s for show, and little else, but it did succeed in eliminating that pesky economic level MLB doesn’t have full control over. It’s also worth noting that the offered age of 29.5 for universal free agency only “solves” the problem of service time manipulation by granting teams control of the years they’re attempting to wrest from players in the first place. Isn’t it nice to solve an issue of your own making by codifying the gains your problematic behavior granted you?

MLB tried a similar tactic back in 1990, when they proposed a revenue-sharing arrangement with the union that would see the players receive 48 percent of annual revenue as pay, with an algorithm/comparison model determining what player pay would be in the years prior to free agency, and a salary cap basically ensuring that a team couldn’t just spend big on free agents to squash the less wealthy competition. It’s just a sneaky way to throw in a cap of sorts and curb spending, and there is little difference between the ‘90 proposal and the current one, in the sense that MLB doesn’t actually expect it to be accepted, but wants to look as if they are really trying and that it’s the players who are overreaching.

Sure, the league would be thrilled if their proposals were welcomed and accepted, I’m not saying they would reject the PA being into them or anything like that. And there might even be a few owners who actually think this setup is legitimate and would be good for the players. All in all, though, MLB is the one issuing forth unrealistic and unhelpful proposals that use some convoluted planning to help codify existing issues and likely would cause new ones to emerge. The players seem like they mostly just want to plug up some loopholes in the current system so that it’s not as exploitative. Whose fault is it, exactly, that there isn’t a new deal in place already, when you consider that outlook?

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