MLB’s lacking luxury tax increase a reminder of the limitations of bargained thresholds

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Just a few weeks back, in reaction to one of the few economic proposals Major League Baseball actually bothered to submit while the now-expired collective bargaining agreement was still active, I wrote about how MLB’s pay-for-WAR, algorithmic plan to replace arbitration could not work without revenue scaling. Two days into the lockout, it’s time to give another example as to why any of these plans that rely on bargaining financial thresholds have the same inherent problem, and that’s because of how MLB has treated the raising of the luxury tax threshold during talks so far.

As was reported by Evan Drellich, MLB proposed raising the luxury tax threshold from the 2021 figure of $210 million to $214 million, with it eventually reaching $220 million by the final year of the new CBA. That’s clearly just a starter offer in terms of raising the luxury tax threshold — the numbers would almost surely be at least a little bit bigger if the two sides were finished negotiating by now — but what sticks out to me is that it’s presented as a concession at all. Not by Drellich, who is one of the few writers at a major outlet who is actually nailing the framing and depth of their coverage, but by MLB. Inflation exists. Revenues climb. The value of money changes over time. The luxury tax threshold increasing should just be a thing that is expected to happen, not something that is considered a concession, especially not with the minuscule bumps the league is proposing.

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A busy weekend for free agents suggests a lockout is likely

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We’re just a few days away from the expiration of the current collective bargaining agreement: when the clock strikes midnight and December 2 arrives, that’s it. There was a sudden flurry of free agent activity this weekend, with likely more to come — Max Scherzer is rumored to be close to a deal with the Mets, but as of this writing nothing is official — and there is a pretty reasonable explanation for it all that MLB.com’s Mark Feinsand tweeted on Sunday night:

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A brief history of MLB’s lockouts

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The history of strikes in Major League Baseball gets a lot of play in historical look backs, but lockouts? Not nearly as much. Baseball Reference’s comprehensive encyclopedia Bullpen doesn’t even have a page just for lockouts: it just lumped them in with the “Strikes (labor)” page instead. Part of this lack of attention is because there has never been an MLB game canceled because of a lockout: even the one that dragged into the start of the season just pushed back when games were played. They tend to be a thing that occurs during spring training, with the owners balking at some demand the players are making, and then, the lockout ends shortly after.

So, with a lockout potentially on the horizon this winter or next spring, let’s take a look back at the previous times the owners locked all the doors to keep the players out.

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