Rob Manfred Discusses Economic Proposals

Rob Manfred spoke with reporters after this week’s quarterly owners meetings. Jorge Castillo of ESPN, Ronald Blum of The Associated Press and Evan Drellich of The Athletic were among those who relayed the commissioner’s comments.

Manfred spoke publicly for the first time since the league and Players Association exchanged initial economic proposals last week. Those were worlds apart, with the most notable development being MLB’s first official proposal for a salary cap since the 1994-95 players strike. The league proposed a $245.3MM cap and $171.2MM floor. That would come with a 50-50 revenue split between players and ownership, which requires holding some of players’ salaries in escrow in case the league underperforms projections.

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MLBPA executive director Bruce Meyer unsurprisingly blasted the proposal on Monday, reiterating the union’s opposition to a cap — which he called “a form of institutionalized collusion.” Manfred didn’t directly respond to Meyer’s comment but took his typical approach, framing it as a competitive balance issue.

“We have tried mightily over several rounds of bargaining to use a competitive balance (luxury) tax to address competitive concerns,” Manfred said. “And sometimes you’ve got to admit you failed.” Manfred didn’t expressly state that a cap was the only solution but implied that drastic changes were necessary.

“We made a proposal on one set of topics. At the outset of negotiations, I went and said myself, ‘We’re open to whatever ideas people have, but we need a realistic framework that addresses the fans’ concerns about competitive balance.’ You just can’t ignore that financial penalties have not gotten it done for us.” The luxury tax has been in place since 2003.

That’s a standard talking point for the league. The union’s initial proposal called for more revenue sharing and a “competitive integrity tax” penalizing teams that spend less than $150MM on payroll. The union favors maintaining the luxury tax setup and proposed raising the base threshold dramatically to $300MM.

Of course, both sides are going to push for competitive balance measures that are in their favor on revenue split. Fixing spending on players would also go towards owners’ goals of escalating franchise values. It’s debatable whether either really cares about competitive balance, though that’s obviously a primary concern for many fans — especially those of smaller-market clubs.

An offseason lockout seems inevitable once the current bargaining agreement expires on December 1. The 2021-22 lockout lasted 99 days and narrowly avoided the cancelation of games. “Of course I do,” Manfred replied when asked if he was worried about a more disastrous work stoppage like the ’94-95 strike. He declined to answer a question about whether the league’s desire for a cap would make an extended lockout worthwhile, saying he wouldn’t “speculate about work stoppages.”

There’s no incentive for Manfred to answer that question. The extent of both sides’ willingness to tolerate a lockout that’d cost them game revenue is a pivotal piece of information that neither will disclose publicly. It behooves both parties to stress their resolve more generally.

The commissioner also touched on a few non-CBA topics. He provided an update on the sale agreement that values the Padres just shy of $4 billion. That’s still pending approval from the other 29 owners. Manfred said that’s “not ready for a vote today” but is likely to come up at some point this summer. He also touched on expansion, noting that’s a topic which will be on the back burner until a new CBA is in place.