I have played, watched and followed baseball since I was a little kid. Baseball is both my favorite sport and my least favorite sport. I was absolutely terrible at playing it. (I couldn’t hit the broad side of a barn) This blog post has almost nothing to do with politics or history. Its a topic that I am passionate about and just haven’t had the time to research it. Finally found that time. If you aren’t interested in baseball or labor negotiations then this blog post isn’t for you. (Thanks for the click tho)
There is a lot of different levels and angles to this topic. I think that this CBA negotiation takes on a different level in terms of hostility, desperation and bad blood. As everyone knows, the COVID-19 pandemic completely altered the 2020 season. It forced both the players and owners to take a significant losses. Obviously into the 2021 season, the conditions remain not ideal with limited attendance with the exception of the Texas Rangers. But even if you set aside the COVID stuff, there are still pretty big issues to be settled between the owners and players. I will link about four articles I read before writing this at the bottom. (I’m not going to explain every detail unless its relevant to my point, CBA stands for Collective Bargaining Agreement. The negotiations are between the owners of the teams and the players union. These are the basic things.)
Let me start with the COVID stuff because I think there is an obvious solution here. We know that with vaccinations rolling out in conjunction with state and local governments loosening restrictions the number of fans will grow later in the season. Also based on what happen last fall with COVID numbers, I’d predict even lower numbers of cases if vaccinations are even worth anything. But its clear that time is the key factor with this situation. Many of the articles acknowledge that both sides agreeing to move back the CBA negotiation to after the 2022 season would be beneficial for a few reasons. (Current CBA expires December 1st 2021) The first reason is like I explained earlier about restrictions loosening as the season goes on into the fall. This allows for more fans at games which means more money. The second reason is that it will give both sides time to figure the trickier issues with the complication of COVID related profit loss.
I want to move on with assumption that both sides agree to be rational and wait another season for COVID restrictions to subside. To build on what I’ve talked about, before this season there was a little back and forth on this current season. The owners offered a universal DH and expanded playoffs but the players rejected. It was smart because in those playoffs the players were to get only gate receipt profit. Clearly fans will be limited for probably most of the season. (owners would get all TV profits) The public perception has been contentious even though many representatives of both sides are calling for willingness to work together. There is also an important public perception that the owners downplayed how much profit they made during the shorten season. I think the public perception will be important for both sides especially the owners. We have to remember this fight between multi-billionaires and multi-millionaires. I think people including me are less inclined to give pity to billionaires over millionaires. However, being a free marketeer I think a good business deal means each side gets a fair cut of the profit.
Lets talk about on the field and schedule changes. These things overwhelmingly affect the players. Expanded playoffs alters the schedule pushing the season out a month with double headers in a 162 games. There was also version with 154 games. Expanded playoffs means only 14 teams in the playoffs, however as the other articles mention there is a disadvantage to this. It decreases incentive for teams who would otherwise sign free agents to get into the playoffs, to stay put. This would hurt free agency which in my opinion that’s no good. I find in nearly any sport that free agency adds a fun and exciting factor. Though I don’t mind expanded playoffs, I think there is a tasteful way to do it. I think more one game playoffs is one of the ways because teams still have to play an extra game to advance. Also just because your record is good enough to make a one game playoff, you probably want to fortify your team to ensure a win.
On money side of things I think that the profits need to be split more evenly especially for the expanded playoffs. Again, on the assumption they renew the current CBA and extend negotiations out to allow full fan attendance will help with profit split. The last few issues concern money in the pay rate of young players especially productive ones, minimum pay, pay inflation rate, and luxury tax/cap issues. I think there are some fairly standard and easy solutions to young players, minimum pay and inflation. In regards to the young players, you set up a standard rookie contract similar to the NFL. For example, lets say its a 4 year contract with a 5th year option. Each year it scales from minimum pay to median free agent value of position per year. This contract might look like this:
Rookie Shortstop: 4 years with a 5th year team option
Year 1: $570,500 Year 2: $1,000,000 Year 3: $2,000,000 Year 4: $2,500,000 Option Year 5: $16,500,000
Overall 4 years $6,070,5000 with a 5th year option of 16,500,000 for a total of $22,570,500. (Just note that I did a rough calculation based on Spotrac salary information of the top 14 highest paid shortstops. You could easily spend an hour to calculate the average free agent value, shortstops are one of the highest paid positions)
Now obviously this would be a major league contract, not a minor league deal which if a player had would have to be voided. The team option in the 5th year would allow player to hit free agency if team declines it. Obviously the numbers could be lower or higher regarding the yearly AV for the rookie player. A big issue for younger players is service time manipulation. The simple explanation is that service time is how the MLB determines when a player can get the minimum salary. Teams often like designate or send players down especially very good prospects to avoid having to pay them the major league minimum. I think this is a fair set up to both owners and players because it allows the owners to save money for a few years with only 6.5 million due in the first 4 years, now there has to be clauses for when players get hurt or get sent down that would reduce the hit on the team. It also allows teams to keep good young players for market value for one year before negotiating a new deal or letting them hit free agency.
It easy to deal with inflation in the pay rates, they simply have to raise the minimum rate a small percentage each year based on inflation. (unfortunately the fed reserve is screwing the players on this one.) The last issue I want to talk about before ending with my overall thoughts is the luxury tax/ cap. Nearly every other major league sport has a hard salary cap. Major League Baseball does not. However, there is something called a luxury tax. Teams can spend over the luxury tax but they are penalized with a fine which increases by year and amount over. The problem with the luxury tax is that some teams especially large market ones like the Yankees, Dodgers, Red Sox and Mets are perfectly able to go over and pay the fine. The small market teams like the rest of league can’t afford to break the luxury tax cap. This means in a somewhat controversial way that some teams get a competitive advantage due to how much money they spend. (Let me just say that money buys championships sometimes but its not 100 percent)
For me, I think the solution is simple but the sides agreeing on a solution isn’t going to be easy. Make a hard cap. Install a minimum spending floor to help with teams obviously tanking. I know in the NFL and NBA, the hard cap comes with a lot of revenue sharing mechanisms that just don’t exist in the MLB. But as a fan, I don’t really care how they split the money, just make sure the product on the field is interesting and competitive. This isn’t rocket science. Keep in mind, I’m a Mets fan. The Mets have one of the richest new owners in the game. We would benefit greatly from an expanded playoff like the MLB suggested. A hard cap would actually give us less an advantage, but I’m fine with it. I want to see all the teams competing. Its no fun if one team just keeps winning all the time.
Conclusion
Thanks for sticking around this long, much like an MLB game this post is a long one. We’re in the bottom of the ninth here, so hold tight. I want to close this piece out with my optimism and hope that an agreement can reached without an lockout. Although if a lockout does occur you can bet your ass I will be writing on it. A few weeks ago on twitter, there was some conversation about labor unions existing in an anarchy society. I think the MLB CBA negotiations are a perfect example of why labor unions absolutely need to exist. I think in this case both sides have legitimate concerns and issues. I also think there are obvious solutions. But the union will get a way better deal than if players had to negotiate like they did free agency.
I think the owners deserve their cut of the profit but they have to remember that baseball is a GAME of fun. The players do it for fun and many of them would do it for free if they could. There is definitely a balance, I think that MLB has just been stubborn to changes. I get it. But the game is moving forward slowly with instant replay, speed of game changes and their testing out other rules in the minor leagues. I believe the sides are more likely to come to agreement if they extend the current CBA beyond December 1st this year. It allows the COVID restrictions to ease up for fans to come to games which is an important profit. As a fan of baseball, I really hope they can figure it out.
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Sources (aforementioned in beginning)
Technically Analytics 