Negotiations Move Slowly Between Players, Owners

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Photo: The Cactus League - cactusleague.com

Milwaukee Brewers - Cactus League Spring Training

Sunday night is typically a milestone in the MLB offseason: As the football calendar wraps up for the year, many fans’ eyes turn to Arizona and Florida for the dawn of a new baseball season. Instead, this year they received a reminder that the sport’s return is no longer imminent.

While negotiations continue towards a new collective bargaining agreement to end an MLB lockout that is now nearing 80 days, progress remains slow and last week’s discussions seemed to value posturing over movement toward a deal. After going 11 days without making a counteroffer to the union’s latest proposal, on Saturday the owners presented a proposal that was immediately identified as “underwhelming” and summarily dismissed.

As expected, most of the disagreement is over money. The two sides remain about $100,000 apart in their proposals for the league’s minimum salary, a figure that affects a disproportionate percentage of the game’s young players. The MLBPA’s latest proposal also called for a significant increase to the threshold for the Competitive Balance Tax, the maximum teams are allowed to spend on player payroll without facing draft pick and financial penalties.

Pay Cut for Players?

The owners’ counteroffer calls for a much smaller increase, raising the figure to $222 million at the end of a new collective bargaining agreement in 2026. While it’s not intended to be a “hard cap” on player salaries, teams have tended to treat it as one. In 2014 the CBT threshold was $189 million, which is roughly $227 million in 2022 dollars after adjusting for inflation. Given that inflation, the owners’ latest proposal is in effect a pay cut for players after a decade where the value of their franchises have more than tripled. MLB’s proposal also called for increases to penalties for teams that exceed the CBT threshold, further disincentivizing team spending.

The proposal was disappointing at least in part because of the rhetoric leading up to it: At a Thursday press conference MLB Commissioner Rob Manfred told reporters "We are going to make a good-faith, positive proposal in an effort to move the process forward." At that time Manfred declined to announce a delay to spring training, which would have opened this week. Almost immediately after Saturday’s meeting, however, Jon Heyman of MLB Network reported that the league “understood its proposal carried no hope to facilitate a deal in days.” In the end, after eleven days of making no offers at all ownership made an offer that they knew would be dead on arrival.

This isn’t the first time the owners have followed a public statement with disappointing and contradictory action: In Manfred’s Dec. 2 letter to the fans, he said “We hope that the lockout will jumpstart the negotiations and get us to an agreement that will allow the season to start on time.” The lockout did not, in fact, jumpstart any kind of negotiation as the owners did not make a single proposal in the six weeks following that statement.

Players Tell Their Story

One of the big differences between the current MLB lockout and past work stoppages is the existence of widespread social media, which allows players to take their side of the story directly to fans during a conflict like this. One of Saturday’s outspoken participants, for example, was Giants pitcher Alex Wood. Before that it was Royals infielder Whit Merrifield and new Mets pitcher Max Scherzer.

Compared to previous work stoppages fans also have significantly easier access to economic experts and media members willing to look critically at what’s on the table. Meg Rowley, who formerly worked in finance and is now the managing editor of FanGraphs, took issue with Manfred’s previously stated comments that owning an MLB team is a less lucrative investment than the stock market.

“I think the idea that you are not going to realize very substantial return with minimal risk is a canard,” Rowley said on the Effectively Wild podcast on Friday. “I think that, from the perspective of advancing these negotiations, it’s kind of a harmful one because we’re not dumb. Part of what I find so frustrating about this is, I worked in finance, I dealt with hedge fund clients, I don’t think you need to have that kind of background to look at a statement like this and have it ring false.”

Economic Model

An offseason where baseball conversation gravitates around these issues is also creating a cottage industry of investigating economic issues in sports, often with unflattering results for the league. Travis Sawchik of theScore recently authored an extensive look at how the sport’s current economic model undercompensates young players. Meanwhile, as part of an ongoing lawsuit MLB is trying to argue that they shouldn’t have to pay minor leaguers at all for their participation in spring training. Having the average fan learn more about these issues will only damage the already dubious assumption that fans are willing to give the benefit of the doubt to billionaires.

Buried in all the hostility at this point is one kernel of good news:

While the two sides remain far apart on financial issues, what separates them is just money. That’s a significant difference from the last two major work stoppages in 1981 and 1994, where the owners were trying to make significant changes to the structure of the sport (attempting to institute a free agent draft in the former and a salary cap in the latter). It’s easier to envision middle ground in the current scenario, where the biggest difference is simply a gap between two numbers.

With that said, the two sides’ ability to quickly reach a deal depends on ownership’s willingness to participate in good faith negotiations with some sense of urgency. At this point, their public comments on that front simply do not match their behavior.