Rami’s Roundup: What Kind of Proposal To Expect From Tomorrow’s Meeting Between MLB & The Players Association
Rami Lavi
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ESPN’s MLB insider Jeff Passan reported that Major Leagues Baseball’s players and owners will meet on Thursday to discuss core-economics for the first time since the lockout began on December 2nd.
“Major League Baseball and the MLB Players Association plan to hold a bargaining session Thursday, sources tell ESPN. MLB is expected to make a core-economics proposal at the session, which would be the first between the sides since the league locked out the players on Dec. 2,” Passan wrote on Twitter.
We have seen both sides be extremely stubborn and unwilling to move from their positions, so what can we expect to see in this meeting?
MLB (the owners) is expected to make an offer to the PA (the players). However, understanding what that offer might look like, depends on understanding what each side wants and why there has been no movement to date.
Of course, in the end, it is going to all come down to money.
The PA’s Argument
As it stands, the players do not get their fair share of revenue. MLB made $10.7 Billion in 2019, its last non-pandemic affected season, making its revenue the second-highest of the North American major sports only behind the NFL.
The players feel that the competitive balance tax is keeping teams from spending and should be raised. While baseball’s revenue has grown by 70% over the last decade, the competitive balance tax has only risen 15%. Only two teams spent beyond that $210 million threshold, yet five more teams were within $3.5 million of the threshold.
The players are making the case that those teams would have paid players more, had the tax been higher. Salaries have dropped across the leagues since 2017 from $4.25 billion to $4.05 billion.
What the PA wants
Higher minimum salaries, from $500,000 to $750,000. Also, they want to reduce arbitration and achieve earlier entry into free agency. Another action item would be a bonus structure for young players who have not yet reached free agency. The players want the CBT raised from the current $210 million to $245 million.
MLB’s Argument
The owners are business people who saw revenue drop over the last two years. While they understand that the players make the game, they don’t view themselves as a charity organization and do not want to pay grown men who already play ball for millions of dollars a penny more than they have to.
While salaries have dropped across the board, we have seen some record-breaking deals handed out to the league’s top stars. The owners are essentially saying “we will pay the people who bring in the most money.”
The owners also make the argument that raising the tax too much would cause a significant competitive imbalance as big market teams such as the Yankees and Dodgers would be spending $240 million, while the Pirates and Orioles spend $70 million.
MLB’s Previous offer
The final offer ahead of the deadline included a deal that would raise the CBT to $214 million and by the end of the new CBA it would be at $220 million. Plus some rule changes, such as the universal DH and expanded playoffs.
While the two sides are certainly not close to an agreement, they are also not that far. So why the hold up?
One reason is the lack of a deadline. We saw ahead of the December 1st deadline how much money was thrown at players in a matter of days because of a looming deadline. The other is both sides being stubborn.
The billionaire owners do not want to budge off their money. It’s how they became billionaires. The players look to Commissioner Rob Manfred. Manfred has become somewhat of a sports villain amongst the fans and players, and now many view him as “out to get the players.” In past lockouts, or in other leagues, players often have caved due to fear of losing money, especially those players not making as much as the top 1%. Here however, it seems all the players have unionized against one common enemy.
What upsets me most as a baseball fan is how blinded both sides have become to reality. Baseball’s reputation has gotten worse and worse amongst both casual sports fans and amongst baseball’s own fans. While there are a variety of reasons for this, the common man watching billionaires and millionaires argue over a few million dollars does not help. With both stuck in their tunnel vision, they seem to have forgotten about the fans and public perception. If we continue down this path and wind up missing games, that may be a blow the league never fully recovers from.
So how do we avoid that?
Jeff Passan predicted the final agreement to look something like this.
1. Raise minimum salaries to around $650,000.
2. Add performance based bonuses for pre-arbitration players.
3. Implement the universal designated hitter.
4. Expand the postseason from 10 to 14 teams.
5. Remove indirect draft-pick compensation for free agents.
6. Make significant changes to the draft to disincentivize tanking and reward small markets (an NBA style lottery).
7. Raise the CBT threshold into the $230 million-plus range and remove other restraints, including non- monetary penalties.
This would be heavily tilted in the players direction, but after seeing how much money it cost the owners in 2020 to lose games from the schedule, they do not want to relive that experience. A positive that the owners may see from showing the players how much the league values them would be a more favorable public perception.
If instead of talking about stats and pace of play, the league chose to market guys like Shohei Ohtani and Fernando Tatis Jr., fans would start coming back to the game.
The question remains: is this the agreement we will see offered in tomorrow’s meeting?
I would guess not. Seeing how stubborn the owners have been I don’t see a reason for them to budge too much just yet. Spring Training is scheduled to start February 16th, and we are not yet in the danger zone of missing that at the moment.
What I do hope and expect from this meeting is the owners moving towards the direction of the ultimate agreement. I hope this opens a dialogue that was previously closed between the two sides. I hope both sides can be enlightened to the perception and negative affect this all has on the game, and move closer to a resolution. While some things may still remain unclear we will have much more clarity tomorrow.
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