It has happened, just like we all thought it would. Major League Baseball and the MLB Players Association failed to reach an agreement on a new collective bargaining agreement before the expiration of the now-former CBA.
The expiration time of the former CBA was 11:59 PM EST on December 1. Just two minutes later, at 12:01 AM EST on December 2, MLB initiated a lockout. It is the league’s first lockout since 1990 and first work stoppage of any kind since 1994. That season, the players initiated a strike that led to the cancelation of the World Series and part of the 1995 season.
“Today is a difficult day for baseball,” MLB Commissioner Rob Manfred said. “But as I have said all year, there is a path to a fair agreement, and we will find it.”
While statements like these are fine and dandy, what should worry any baseball fan is the palpable distrust that lies between the league and the Players Association. Much of this was on full display during negotiations surrounding the shortened 2020 season and remains in both the league and union’s recent statements:
“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,” Manfred continued. “From the beginning, the MLBPA has been unwilling to move from their starting position, compromise, or collaborate on solutions.”
The Players Association, in response, said, “It was the owners’ choice [to initiate the lockout], plain and simple, specifically calculated to pressure Players into relinquishing rights and benefits, and abandoning good faith bargaining proposals that will benefit not just players, but the game and industry as a whole.”
So, now there is a lockout. Now what? What does that mean in the short-term? In the long-term? And why is there a lockout to begin with?
What Does a Lockout Mean?
A lockout is different from a strike. A strike is initiated by the players in absence of a CBA. This occurred in 1994. A lockout is initiated by the owners and prevents communication between team officials and players of any kind. Supposedly, it also prevents MLB’s website from showing any stories related to any player whatsoever:
The lockout also prevents any sort of transaction from happening. Free agency discussions, contract negotiations, and trade proposals cannot occur at all. The Winter Meetings have also been canceled.
Who Are the Key Players in Negotiations?
The Players Association hired Bruce Meyer as its chief negotiator in 2017. Meyer’s hire came soon after the installment of the latest CBA, which was seen as a major win for the owners.
Meyer has labor dispute experience for all of the players associations in the three other major North American professional sports leagues. Many consider former Cardinals and Indians reliever Andrew Miller the top player representative in the MLBPA.
Dan Halem is the MLB Deputy Commissioner and works hand-in-hand with the MLB Owners labor policy group, whose top guy is Rockies owner Dick Monfort.
Is There a Threat to Games Being Lost in 2022?
The short answer is: nobody knows. It really is too early to tell. The MLB calendars are pretty empty in December and January and pitchers and catchers don’t report to Spring Training until mid-February.
The next 60-90 days are going to provide a clearer answer to the question of lost games. Opening Day is March 31 and all players report to spring training by the end of February. A new CBA deal will need to be struck by March 1 in order to not lose any games. That gives the league and the Players Association 88 days.
The good news is that a lockout has never resulted in a loss of games. A shortened 2022 season is certainly a worst-case scenario for both the league and the union after the 2020 season was just 60 games long.
But the contentiousness from those 2020 negotiations certainly left a bad taste in everyone’s mouth. And while the level of acrimony may not be as high now as it was then, some of it has undoubtedly lingered.
Max Scherzer, a top union representative that just signed a three-year, $130 million with the New York Mets this week, had some interesting comments that hinted at the union’s resolve in these negotiations.
“We have a pretty good war chest behind us of money that we can allocate to players [in the case of a lockout]. The best-case scenario is not to tap it. Obviously, hopefully, we get a deal at some point in time, but just know as players, we’re steadfast in our belief of how we see the game.”
What Are the Key Issues?
The key issues are financial in nature, namely free agency and salary arbitration. In the previous CBA, players were under team control for their first six years of service time.
Pre-arbitration took place in years 1-3. This meant players made low six-figure salaries negotiated when they were drafted.
The player could then go through salary arbitration during the next three years of his career. Arbitration involves both the player and team to have a hearing that determines a player’s salary via a third party.
What players want: For a player to reach free agency either after a player reaches six years of service time or 30.5 years of age with five years of service time, whichever comes first. That age threshold would decrease to 29.5 after the 2025 season. They also want salary arbitration to occur after a player’s second year, not third. Salary arbitration did occur after a player’s second season from 1974 to 1986.
What the owners proposed: The owners have been fine with the 29.5 years of age rule but have not even been willing to listen to the six years of service time rule. On top of that, MLB’s counter-proposal to this issue has been to remove salary arbitration altogether.
The replacement system would include using FanGraphs' fWAR metric to determine a player’s salary, weighed on recent stats and service time. For a variety of reasons, players have been unwilling to use fWAR.
The salaries of top MLB free agents are the highest among all North American professional athletes due to the lack of a salary cap. This has been something the league has leaned on in CBA negotiations for years.
However, under the current system, players don’t make that much money before they hit free agency. They want to change that so they can experience more of a payday when they are in their athletic prime.
The league believes that in order to do that, the Players Association must make financial concessions elsewhere. Of course, the union does not believe it should give up other positions.
Where Do Both Side Stand On Other Issues?
Expanded Postseason: The owners want to expand the postseason 14 teams (from the current 10 teams). The Players Association has been willing to compromise and extend invitations to 12 teams.
Revenue-Sharing: Players want reduced revenue-sharing. I know it seems counter-intuitive, but players see increased revenue sharing as the clearest path for owners to implement a salary cap, something the players will never agree to. Here are some in-depth reasons why that is the case.
Service Time Manipulation: The Players Association made proposals aimed to prevent teams from manipulating a players' service time by delaying MLB call-ups during a player’s rookie season. The proposals aim to allow rookies to establish service time by winning specific awards or achieving specific accomplishments. The league unanimously rejected these proposals.
Amateur Draft & Tanking: The players have balked at the recent trend of teams tanking and purposefully not trying to put winning teams out on the field. Tanking teams usually have lower payrolls, which brings down the average salary, hurting players in the long run. The league proposed implementing an NBA-style draft lottery for the worst three teams. The players are fine with this idea but want to expand the number of teams to eight.
Luxury Tax Threshold: Currently, the luxury tax threshold is $210 million. A 20% tax would apply to every dollar over the threshold for a first-time offending team. A 30% tax would apply to repeat offenders and a 50% tax would apply to teams going over the thresholds three-plus years in a row. There is also a surcharge for exceeding $230 and $250 million.
The union wants to raise the threshold to $245 million and eliminate surcharges. The league proposed raising the threshold to $214 million in addition to a $100 million payroll “floor” funded by a 25% tax rate on salary caps exceeding $180 million. The league would then increase the threshold to $220 million in the final season of the CBA.