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Collective Bargaining Agreement

No CBA Negotiations Between MLB And MLBPA Currently Scheduled

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Last month, Evan Drellich of the Athletic reported that Major League Baseball and the MLB Players Association weren’t expected to discuss core economics issues until after the New Year. The calendar has since flipped, but there still don’t seem to be any talks on the horizon. Bob Nightengale of USA Today reports (on Twitter) that there is currently no schedule for the next set of collective bargaining discussions.

Nightengale adds that the parties have met twice since MLB instituted a lockout in the early morning hours of December 2. Those talks, as expected, were strictly regarding issues not related to core economics. It’s those key economic issues (i.e. the game’s service time structure, the competitive balance tax and potential playoff expansion) that are of greatest importance to both sides. Finding a mutually agreeable solution on such topics figures to be the most time-consuming and difficult aspect of negotiations.

In the aftermath of the lockout, both commissioner Rob Manfred and key members of the MLBPA (including executive director Tony Clark, lead negotiator Bruce Meyer and players with leadership roles in the union) have expressed a desire to get back to the bargaining table. That hasn’t happened in earnest over the past four weeks, although it’s not clear talks would’ve achieved much regardless. Drellich wrote last month that individuals on both sides believed that December discussions on core economics would likely have only resulted in negotiators “saying the same things to each other over and over.”

Instead, it seems that there’ll need to be an approaching deadline that spurs conversation. At this point on the calendar, neither side is dealing with the level of financial pressure they’d face if the threat of game cancelations became more tangible. The league’s owners aren’t in imminent danger of losing gate revenues, while the players aren’t yet faced with the possibility of foregoing game checks.

Spring Training games are first scheduled to begin on February 26. Players aren’t paid for Spring Training, but owners would first face lost revenues at that point. If the work stoppage lingers long enough into Spring Training that regular season games are threatened — at least some form of exhibition play, even if abbreviated, will be required for players to work their way into game shape — then the possibility of lost income for players looms larger. Of course, current free agents (and a few players in DFA limbo) are faced with ongoing employment uncertainty due to the ban on major league transactions.

For now, it doesn’t seem those scenarios are imminent enough to push the parties back to the negotiating table. It does seem, however, that significant progress will have to be made at some point during this month. Shortly after the institution of the lockout, Nightengale suggested the sides viewed February 1 as a “soft deadline” for a new CBA to be in place in order to avoid interruptions to Spring Training. He floated March 1 as a possible deadline for regular season play to proceed on schedule given the need for some form of ramp-up period. Opening Day is currently scheduled for March 31.

Collective Bargaining Issues: Competitive Balance Tax

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Few of the game’s core economic features figures to be as impactful in upcoming collective bargaining negotiations as the luxury tax (or competitive balance tax, as it’s officially known). Where to set the tax thresholds and what penalties should be in place for teams that exceed them are key points of issue for the league’s owners and the MLB Players Association.

As a brief primer, the luxury tax was first introduced for the 1997 season. The provision’s purpose is to deter spending among big-market franchises by penalizing teams that exceed certain player expenditures. (MLBTR’s Tim Dierkes covered the year-by-year progression of the luxury tax in a post earlier this month). Teams that surpass certain thresholds will be faced with financial penalties and potential draft choice/international signing bonus forfeitures, which become more significant for teams that exceed the threshold by particularly high margins and/or surpass the mark in multiple consecutive seasons. Teams’ CBT figures are calculated by summing the average annual values of their commitments and accounting for certain player benefits, not by looking at clubs’ actual payrolls in any given year.

For the 2021 season, the first luxury tax marker was set at $210MM. Only the Dodgers and Padres exceeded that figure. Five teams, meanwhile, curtailed their spending between $205MM and $210MM, seemingly treating the CBT threshold as some form of cap.

The three clubs that exceeded the threshold in 2020 (the Yankees, Astros and Cubs) all ducked underneath in 2021. That’s in continuation with a fairly common pattern for teams to “reset” their tax bracket after a year or two above the threshold, thereby avoiding the escalating penalties for exceeding in consecutive years.

It’s not only resetters that stayed below the threshold though. The Phillies, Mets and Red Sox — none of whom exceeded the tax in 2020 — were within $5MM of the mark but decided against surpassing $210MM. MLBTR’s Tim Dierkes explored teams’ increasing reluctance to go over the tax threshold in February. Even for teams that didn’t have firm organizational mandates to stay below the mark, many were reluctant to take on any sort of penalty unless they were in position to blow by those markers, as both Mets owner Steve Cohen and Astros general manager James Click explained over the summer. The fees for exceeding the various thresholds under the 2016-21 CBA were as follows:

With certain high-payroll teams at least planning their budget with the luxury tax in mind — if not treating it as a firm cap altogether — pushing the thresholds up figures to be a point of emphasis for the players. After all, higher thresholds should lead to more willingness about the league’s top teams to spend. In collective bargaining talks before the lockout, the MLBPA proposed a $245MM threshold that would eliminate the escalating penalties for repeat payors, according to Gabe Lacques and Bob Nightengale of USA Today.

The league, predictably, hasn’t been as keen on increasing penalty-free spending capacity. MLB’s first core economics proposal actually called for the first tax threshold to be reduced to $180MM, as Ken Rosenthal and Evan Drellich of the Athletic reported in August. That came attached to a $100MM salary floor designed to incentivize spending among lower-payroll clubs, but the significantly lowered CBT thresholds always looked to be a non-starter for the union.

After the MLBPA rejected the $180MM possibility, the league offered to raise the tax thresholds above the $210MM level from 2021, albeit nowhere near the MLBPA’s target area. Shortly after the beginning of the lockout, Drellich reported the league was willing to push the first tax marker up to $214MM in the early years of a possible CBA, maxing out at $220MM by the end of the deal. That’s more in line with the gradual increases that have been in place in recent collective bargaining agreements than with the MLBPA’s push for a marked uptick.

There are a few different aspects for the league and union to agree upon regarding the competitive balance tax. Identifying a mutually-agreeable base number is the most obvious, but whether to reduce or eliminate penalties for repeat payors could be a point of contention. So too may be how the parties want to handle the escalating fees for clubs that exceed the marker by greater amounts. Indeed, the league’s initial proposal (the one which would’ve included a $180MM base tax threshold) also would’ve involved the creation of a fourth tier of penalization.

Ironing out the finer details of the luxury tax will be a challenge. Back-and-forth regarding the specifics of the CBT figures to be a recurring theme once the parties reinitiate discussions regarding core economics next month.

Britton, Giolito And Semien Discuss Lockout

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The MLB lockout has been ongoing for nearly a month, with the accompanying transactions freeze halting essentially all major league activity. The league and the MLB Players Association aren’t expected to discuss the game’s core economics issues — the most contentious in collective bargaining — until sometime after the New Year.

A few prominent players — each of whom assumes an active role within the MLBPA — recently appeared on the Chris Rose Rotation (YouTube link via Jomboy Media) to discuss the current state of talks (or lack thereof). Yankees reliever Zack Britton, Rangers middle infielder Marcus Semien and White Sox starter Lucas Giolito all expressed some frustration with the lack of progress to date.

Not surprisingly, the players argued MLB has yet to seriously engage in negotiations. “We feel like we’ve offered some good proposals,” Britton said. “And really we didn’t get anything from their end in Dallas (in negotiations during the final few days of November).”

Semien and Giolito largely echoed that sentiment. The former pointed out that MLB could’ve continued to negotiate rather than locking the players out upon the expiration of the previous collective bargaining agreement. The latter plainly stated that the MLBPA was hoping to return to the table as soon as possible. “We’re here, we’re ready to negotiate,” Giolito told Rose. “We’re pretty much waiting on MLB. We’ve made our proposals, we’ve made multiple proposals right before they decided to lock us out. They said no, they weren’t interested at the time. … We’re not going to negotiate against ourselves. It takes two to tango.”

Of course, there’s been similar rhetoric on the part of MLB. At the time the league locked the players out, commissioner Rob Manfred told reporters that MLB “candidly … didn’t feel that sense of pressure on the other side” and added it was the league’s desire to “get back to the table as quickly as we can.” Very little has happened in the nearly four weeks since, although it’s not clear whether continued discussions on core economics would’ve done much regardless. Evan Drellich of the Athletic wrote a few weeks ago that December negotiations would have likely entailed the parties “saying the same things to each other over and over.”

The most pressing issues in talks — the competitive balance tax, the service time structure, salaries for early-career players, etc. — have been discussed ad nauseam in recent weeks. While speaking with Rose, each of Britton, Semien and Giolito argued that the union was more concerned than the league is with competitive balance. “We want every team to be trying to win year-in and year-out,” Britton said. “We think that’s fair to the fanbases and that’s what we want. We’re going to continue to send that message.” Giolito took a similar tack, alluding to clubs that have slashed their MLB payrolls during rebuilds. “We want thirty teams competing, trying to field the best possible players so that the game is more competitive. That’s kind of what we are stressing with our proposals: let’s make the game better for everybody, number one being the fans.”

Some lower-payroll clubs have of course managed to consistently remain successful in spite of budgetary limitations. Yet it’s clear that the players took issue with clubs that have largely chosen to sit out free agency while orchestrating massive organizational overhauls. Britton pointed to his former team, the Orioles, as one such club of concern, although he cautioned that the Baltimore franchise was merely one of a few examples of what the players feel to be a widespread problem.

Given the lack of movement to date, is it still possible for a new deal to be reached without games being interrupted? Semien expressed optimism on the union’s behalf about avoiding interruptions to Spring Training, although he unsurprisingly noted that “January is a huge month.” That said, all three players reiterated they didn’t feel any time pressure to meaningfully move off their current goals.

Britton and Giolito each pointed to last year’s pandemic freeze as a potential strengthening factor for the union. That wasn’t technically a work stoppage, as the game was paused due to national emergency. Yet the return-to-play discussions proved contentious, with the MLBPA eventually filing a grievance alleging that MLB didn’t negotiate in good faith to play as many games as possible last year during a season with essentially zero gate revenue.

“(Waiting it out) is part of the process right now,” Giolito said. “ Going through the pandemic year, kind of fighting for what we wanted as players, really coming together, communicating well, that puts us in a good position now. … Even if things are delayed a little bit, we’re here, we’re ready to negotiate. We’re going to keep pushing for getting a season going as soon as possible.“

2021 Leaguewide Player Payroll Reportedly Down 4% Relative To 2019

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According to a report from the Associated Press, major league teams spent approximately $4.05 billion on player payrolls in 2021. The AP indicates that’s a 4% drop relative to 2019 — the most recent 162-game season — and the lowest full-season tally since 2015’s $3.9 billion. In raw dollars, there was a $167.69MM drop in spending on players between 2019 and 2021, writes Maury Brown of Forbes.

It’s not surprising to see team spending dip. The 2020 season was played with essentially no fan attendance as a result of the COVID-19 pandemic. A few ownership groups publicly lamented the loss of gate revenues last year, and free agent spending was chilled a bit last offseason. The value of the qualifying offer — calculated as the average of the 125 highest salaries around the league — also dipped from $18.9MM to $18.4MM between 2020 and 2021, suggesting that spending at the top of the market took a slight step back.

That said, attributing the spending downturn entirely to the pandemic feels a bit simplistic. According to the AP, the league record for player payrolls (a bit less than $4.25 billion) was set in 2017. The league saw slight reductions in spending on players in each of 2018 and 2019, although it had been slated for a new all-time high in 2020 before the season was shortened and player pay was prorated.

However much one wants to attribute the 2020-21 decrease in spending to the pandemic, those figures will no doubt be of interest to the player’s union. While spending at the top of the market took a small step back last year, there’s been a more dramatic decrease for the average player (from a salary perspective) over the past few seasons. In April, the Associated Press found that the median salary of Major League players has fallen 18% since 2019 and 30% since 2015.

That’s largely a reflection of how many teams have approached roster construction over the past few years. By and large, clubs have continued to pay big money for elite talent, but they’ve become more reluctant to invest in players with closer to average production. Star players have continued to set richer precedents and free agency was quite strong in the weeks leading up to the lockout, but the gap has widened between top-of-the-market stars and mid-tier veterans and young players. Recognizing that a roster can be built most cost-effectively by leaning on young talent, front offices in recent years have spent more heavily on premier players, knowing that they can rely on pre-arb players and non-star veterans making lower salaries to provide adequate value on the rest of the roster.

As Chelsea Janes of The Washington Post writes in a piece that’s worth checking out in full, the disconnect between stars, mid-tier veterans and young players presents a challenge in collective bargaining. The league has pointed to the top-end salaries as evidence of a robust economic system. In the letter he penned to fans following the lockout announcement, Commissioner Rob Manfred wrote “Baseball’s players have no salary cap and are not subjected to a maximum length or dollar amount on contracts. In fact, only MLB has guaranteed contracts that run 10 or more years, and in excess of $300MM.”

MLB’s proposal of a salary floor in collective bargaining discussions suggests some willingness on the league’s part to incentivize spending on mid-tier players. That was contingent on drastically reduced luxury tax thresholds that’d limit spending on top-end players, though. Rather than merely redistributing salaries, the MLBPA has focused on raising the players’ overall share of revenues. “MLB’s negotiators are open to changing the way younger players are compensated but do not necessarily believe players need to receive a broader share of the revenue pie to rectify those disparities,” Janes writes. “The union, meanwhile, wants to change the way players are compensated in large part by injecting a greater percentage of revenue back into player compensation — helping those at the bottom without costing those at the top.”

Union members could have differing interests based on their financial status. Yet as Janes notes, a number of key player representatives within the MLBPA reside squarely on the top end. Gerrit Cole, Marcus Semien, and Max Scherzer are among the sport’s premier athletes advocating for a market that is kinder to their youngest and oldest peers. This advocacy isn’t lost on others on the union side, including retired reliever and self-proclaimed “middle-of-the-pack guy,” Jerry Blevins. The former big league southpaw tells Janes having players with nine-figure salaries trying to push forward salaries for lower-tier vets “makes a big difference because they represent us, the normal guy, even though at the same time they’re benefiting from the system as it’s set up.”

The AP and Forbes each provide additional data on team spending habits. According to the AP, ten teams ended the season with a payroll under $100MM, a figure not seen since 13 teams ducked under that mark in 2014. The Pirates checked in with the lowest end-of-year payroll at $50MM, the lowest figure for any team since 2013. The Dodgers and Yankees were the only teams to exceed $200MM in actual payroll; the Dodgers and Padres, meanwhile, were the two clubs whose commitments exceeded the luxury tax threshold. (CBT calculations are based on deals’ average annual values as opposed to year-by-year payouts, explaining why the Padres paid the tax while the Yankees didn’t in spite of New York having the higher actual payroll).

Eleven teams raised their payrolls between 2019 and 2021, according to Forbes. The Padres’ 77% jump from around $104MM to approximately $184MM was easily the biggest. The Guardians had the biggest decline over that stretch, dipping from $123MM in 2019 to $53MM this past season. Forbes provides the exact payrolls of all thirty teams in 2019 and 2021 for those interested.

MLB, MLBPA Not Expected To Discuss Core Economics Until January

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TODAY: Thursday’s discussions involved such topics as PED policies, the joint domestic violence/sexual assault/child abuse policy, special events, procedures for filing grievances, and scheduling, ESPN.com’s Jesse Rogers writes.

DEC. 15: Since Major League Baseball instituted a lockout in the early morning hours of December 2, there’s been little known back-and-forth between the league and the MLB Players Association. Evan Drellich of the Athletic reports this evening that the sides aren’t expected to discuss the game’s core economic structure until sometime in January. The parties have, however, been in contact about other issues and are expected to meet in-person tomorrow to discuss issues outside of core economics.

Disagreements related to core economics figure to be the most important, contentious issues to hammer out. Such topics as the service time structure, playoff expansion and the competitive balance tax are among the areas of import for both sides that could be difficult to iron out. Agreeing on the core economics structure figures to take ample bargaining time, and that the sides won’t even address the issues again until January is the latest confirmation that the lockout figures to drag on for quite some time.

In the aftermath of the lockout, both Commissioner Rob Manfred and MLBPA lead negotiator Bruce Meyer publicly expressed a willingness to continue negotiating. Yet Drellich hears that neither side has initiated talks regarding core economics in the nearly two weeks since then, even as they’ve engaged on less contentious matters.

There doesn’t seem to be much belief that meetings regarding core economics before January would serve much of a purpose, though. Drellich hears from individuals on both sides of talks who suggest that a sit-down within the coming days or weeks would likely have only resulted in negotiators “saying the same things to each other over and over.”

As Drellich points out, there doesn’t seem to be a ton of urgency for either side to move off their initial demands at this point on the calendar. During the winter months, owners aren’t losing gate revenues while players aren’t forfeiting game checks. Major league transactions are frozen, but that alone doesn’t seem to be enough of a motivator for either side to alter their bargaining positions.

The league’s owners are clearly content to wait through a transactions freeze, having voted to lock the players out unanimously as the previous collective bargaining agreement expired. MLBPA executive director Tony Clark, meanwhile, suggested to reporters on December 2 that the freeze wouldn’t affect the players’ negotiating resolve. “Players consider (the lockout) unnecessary and provocative,” Clark said at the time. “The lockout won’t pressure or intimidate players into a deal they don’t believe is fair.”

It’s possible both sides will begin to feel more pressure to move closer to an agreement as the scheduled start of Spring Training nears. As things currently stand, the first exhibition games are scheduled to begin on February 26, 2022. Of course, there’ll need to be some time for players to report and to get into game shape before jumping right into game play. In the immediate aftermath of the lockout, Bob Nightengale of USA Today suggested the sides viewed February 1 as a “soft deadline” for a deal getting done to avoid interruptions to Spring Training.

Major League Rule 5 Draft Expected To Take Place After Lockout

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The 2021-22 major league Rule 5 draft is expected to take place shortly after the signing of the next collective bargaining agreement, tweets JJ Cooper of Baseball America. Originally scheduled to take place this week, the major league Rule 5 draft was postponed indefinitely as part of the leaguewide transaction freeze once MLB instituted a lockout upon the expiration of the previous CBA on December 1.

Still, it’s a noteworthy development that it’s expected to happen at all. The Rule 5 had seemingly been on thin ice, with reports last week initially suggesting it’d be canceled entirely. Instead, it now seems the draft is on track to happen at some point. That’s a continuation of a more than century-old trend, as the Rule 5 has taken place each offseason since 1920.

For those unfamiliar, the big league Rule 5 draft is an acquisition process designed to give opportunities to players who might be buried on the depth chart in their current organizations. Players with either four or five years of professional experience (the exact threshold depends upon the player’s age at signing their first contract) have to either be added to their club’s 40-man roster or exposed in the Rule 5.

If they’re left exposed, they’re subject to selection by other organizations. If selected, players must remain on the active roster or major league injured list for the entirety of the upcoming season. Otherwise, they’re made available to the rest of the league and then — if not acquired by another team — offered back to their original club. After a full season on the big league roster or injured list — including a minimum of 90 days on the active roster — the player becomes a full-fledged member of his new team.

There is also a minor league phase to the Rule 5 draft, in which eligible players not included among an organization’s protected Triple-A group can be selected by another club. The minor league phase, which does not contain any roster restrictions for the acquiring teams, is scheduled to proceed tomorrow. Players selected in the minor league Rule 5 draft will not be added to teams’ 40-man rosters, so that process will continue in spite of the lockout affecting 40-man players.

Collective Bargaining Issues: Expanded Playoffs

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Last week, we covered what figures to be one of the top priorities for the MLB Players Association during collective bargaining discussions — alterations to the service time structure. Today, we’ll look at what should be one of the most important issues for Major League Baseball: potential postseason expansion.

An expanded playoff has looked to be a key issue for the league for quite some time, as MLBTR’s Tim Dierkes discussed in January with labor advisor Eugene Freedman. More playoff teams simply means more games for MLB to offer television partners — deals which have proven extremely profitable for the league in recent years. Under past collective bargaining agreements, playoff TV revenue has gone exclusively to the league. The creation of additional rounds to sell to FOX, Turner or any other broadcast partner would figure to provide the league and its owners another windfall.

The league and Players Association already agreed to one playoff expansion, bumping to 16 teams during the 2020 truncated season. That was a one-off agreement, but commissioner Rob Manfred publicly voiced support for a permanent playoff expansion last year. Manfred has previously floated 14 teams as the league’s ideal number, and Jesse Rogers of ESPN reported last week that MLB has had a 14-team playoff format on the table during its early collective bargaining proposals.

According to Rogers, MLB’s proposal would contain seven postseason teams from each of the American and National Leagues. In addition to the three division winners, each league would feature four Wild Card clubs. The team with the best record in each league would receive a first-round bye, while the remaining six teams in each league would participate in a three-game Wild Card series.

Under MLB’s vision, the two division winners in each league that don’t receive the bye would choose their Wild Card series opponents. The division winner with the second-best record would choose its opponent from the bottom three Wild Card clubs; the remaining division winner would have its pick of the bottom two Wild Card teams still available; the remaining Wild Card winners would face one another. The higher-seeded team in each league would host all three games of the opening series.

While potential postseason expansion looks to be an obvious positive for MLB, its effects on the players could be more mixed. The introduction of a playoff round would have a direct financial benefit for some players. Under the terms of previous CBAs, players on postseason teams received varying shares (dependent on team finish) of gate revenues in October. More playoff games would mean more gate revenues, which would stand to benefit some players each year.

That alone doesn’t seem enough to convince the players to wholeheartedly embrace postseason expansion. For one, the league’s interest in larger playoffs is greater than that of the MLBPA, giving the union a powerful bargaining chip to possibly extract concessions on other issues (i.e. service time structure, luxury tax thresholds) of more import to the players. And the MLBPA no doubt has concerns about playoff expansion’s potential indirect effects on team spending habits.

A bigger playoff field inherently means a greater possibility for every team to make the postseason. With increased odds could come complacency. A club with an already-strong roster may not be as motivated to improve under a 14-team field as they’d be under the current system, reasoning that they’re already comfortable with their current odds. Removing the Wild Card game reduces the incentive for teams to win their divisions, since division winners and Wild Card clubs alike would find themselves in an opening round three-game series (although the potential bye for the top seed would increase the incentive for clubs to pursue the league’s best record).

That’s particularly true in MLB, a league with a comparatively high level of variance in small samples. Playoff series in MLB are less predictable than they are in leagues like the NBA and NFL, a trend reinforced in 2021 when the playoff team with the worst regular season record (the Braves) won the World Series. Based on that high level of playoff volatility, many teams could be content to make the postseason — even as one of the lower seeds — and simply hope for a hot stretch once there. Lowering the bar to entry could make it easier for organizations with already strong big league rosters to be less active in free agency, an obvious concern for the players union.

MLB could counter that possibility would be offset by higher desire to improve among mid-tier clubs. After all, that small sample volatility gives teams with even average or marginally above-average rosters an opportunity to go on a lengthy playoff run. Improving from, say, a 76-win roster to an 84-win roster would be significantly more impactful under this vision than it is under the current system.

Still, the MLBPA has seemingly had reservations about the competitive incentives that come with potential playoff expansion. That’s reflected in their counterproposal, as Rogers reported that the union’s most recent offer involves a 12-team postseason, not MLB’s desired 14 clubs. Details on the MLBPA’s offer aren’t clear, although Rogers noted that proposal involved a significant restructuring that would see each league modified from the current three division setup to two divisions apiece (one containing eight clubs, one with seven).

With the MLBPA already showing openness to a 12-team playoff, it’d be a surprise if the next CBA didn’t involve some form of expansion. Keeping the 10-team status quo seems unlikely, since MLB would presumably prefer a 12-team setup to the current system even if the MLBPA doesn’t go for a 14-team tournament. Union amenability to playoff expansion could go a long way towards landing more favorable outcomes in some other areas the MLBPA finds more pressing.

As for fans, playoff expansion seems largely to be a matter of aesthetic preference. Some will naturally recoil at the idea, which would likely eventually result in a new mark for worst regular season record for a World Series champion (currently held by the 83-78 Cardinals of 2006). MLB has traditionally had a smaller postseason field than other major leagues, a point of great appeal for some fans. On the other hand, some viewers are likely to relish a bigger field. Greater opportunity to reach the postseason means more teams remaining in contention. That’s likely to keep more fanbases invested in August and September each season, which will be a feature for many observers.

Rob Manfred, Tony Clark Discuss Start Of Lockout

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Major League Baseball’s first work stoppage in more than a quarter-century went into effect last night, with the owners unanimously voting to lock the players out until a new collective bargaining agreement is reached. Each of MLB commissioner Rob Manfred and MLB Players Association director Tony Clark met with the media this morning.

Both Manfred and Clark suggested the other side was primarily to blame for the lack of progress to date. Manfred justified the call to lock out within minutes of the previous CBA’s expiration — a decision the owners weren’t legally bound to make — by indicating the MLBPA hadn’t previously been anxious to move talks along. “People need pressure sometimes to get to an agreement, but candidly we didn’t feel that sense of pressure on the other side during the course of this week,” Manfred told reporters (including John Shea of the San Francisco Chronicle).”The only tool available to you under the act is to apply economic leverage.”

Unsurprisingly, Clark pushed back at the assertion the MLBPA had been dallying in negotiations. “From the outset, it seems as if the league has been more interested in the appearance of bargaining than bargaining itself,” Clark claimed (via James Wagner of the New York Times). He also took a swipe at the lengthy “letter to baseball fans” MLB penned in announcing the lockout last night, quipping that “it would have been beneficial to the process to have spent as much time negotiating in the room as it appeared was spent on the letter” (via Chelsea Janes of the Washington Post).

The game’s core economics structure has long been the biggest divide between the parties. Such issues as the service time structure, the number of playoff teams and the competitive balance tax threshold are the particularly strong concerns. Economic discussions have unsurprisingly been the focus of early negotiations, as Manfred said the parties haven’t yet begun to discuss potential on-field rules changes (via Scott Lauber of the Philadelphia Inquirer).

It is generally expected that there’ll be some alterations to the on-field rules. Most around the industry anticipate the introduction of a designated hitter to the National League. Manfred has previously gone on record to voice support for the potential introduction of a pitch clock. Seven-inning doubleheaders and the extra-inning runner of the past two seasons — to date temporary measures — have been topics of debate for fans. It seems those are ancillary negotiation points MLB and the MLBPA will address at a later date, with the broader economic divide the more pressing matter.

It’s not clear when the sides will get back to the table to discuss anything, though. After fairly brief discussions earlier this week seemingly didn’t make much progress, Manfred told reporters this morning no further meetings are currently scheduled (via Evan Drellich of the Athletic). The commissioner added that it was the league’s desire to “get back to the table as quickly as we can.”

The sides will no doubt reconvene at some point, and Manfred again expressed optimism a deal will be reached before the potential loss of any Spring Training or regular season games (via Bob Nightengale of USA Today). That’s a particularly important date for owners, who would first stand to lose revenue in the event of cancellation of games. Manfred has already drawn a clear distinction between an offseason work stoppage and one that threatens play, and we’re still months away from the specter of lost Spring Training revenue.

The players, however, are no doubt less thrilled with the freeze on free agency — and, to a lesser extent, their ability to access team facilities and personnel. While players aren’t in danger of losing salary until games start up, there’s some risk that a shortened transaction window on the eve of the season could leave some players in the cold. There was a flurry of activity before December 1, and the free agent market remained quite strong. Yet the MLBPA has always resisted the possibility of a formal offseason transaction deadline, fearing that teams would have increased leverage to wait players out until the very final stages of free agency in hopes of lowering asking prices.

While the MLBPA has expressed disappointment with the lockout, Clark pushed back against the notion they’ll need to acquiesce to end the transaction freeze quickly. “Players consider (the lockout) unnecessary and provocative,” he said today (Shea link). “The lockout won’t pressure or intimidate players into a deal they don’t believe is fair.“

Collective Bargaining Issues: Service Time Structure

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The process for determining free agency and arbitration eligibility figures to be among the more contentious aspects of collective bargaining negotiations transpiring over the coming weeks. The MLB Players Association is expected to push for an overhaul of the existing system to get more money to players earlier in their careers; MLB, on the other hand, would seem to prefer the status quo.

Under the current structure, players are first eligible for free agency after logging six full seasons of big league service. Most play their first three seasons on salaries right around the league minimum, first qualifying for arbitration after three years. (The top 22% of players in the two-plus year service bucket also reach arbitration via the Super Two exception).

Jeff Passan of ESPN wrote earlier this week the MLBPA is hoping for players to reach free agency after six years of service or after five years of service and 29.5 years of age, whichever comes first. The Athletic reported in August they were also seeking arbitration eligibility arising after two seasons. The former ask would be an unprecedented development; since the 1975 abolition of the reserve clause, every collective bargaining agreement has set a six-year service threshold for free agency qualification. There is some precedent for the latter proposal, though. Between 1973 and 1987, players only needed two years of service to reach arbitration.

The league, unsurprisingly, hasn’t been keen on either idea. Over the summer, MLB proposed scrapping service time considerations altogether and making players first eligible for free agency at 29.5 years old. That was an obvious non-starter for the MLBPA.

While an age-based threshold would certainly be of benefit to some late-bloomers (hence the MLBPA’s desire to incorporate age into the equation to some extent), it’d also have a negative effect on many of the game’s top young stars. Carlos Correa and Corey Seager — each of whom is either expected to command or already has commanded one of the largest deals in major league history this offseason — would still be multiple years out from free agency under that kind of setup.

An age-based system would, however, address another concern players have expressed: service time manipulation. Calling up a player just days after the threshold passes for a player to earn a full season of service can give clubs a de facto seventh year of control, a loophole multiple teams have exploited when deciding when to promote their top prospects. That’d no longer be a relevant consideration under an age-based system, but even the MLBPA’s modified “age/service time hybrid” proposal could lead to gaming of players’ service clocks.

Evan Drellich of the Athletic wrote yesterday that the MLBPA has resigned itself to the potential for manipulation in any system with service time considerations. As a means of somewhat offsetting that issue, Drellich writes they’ve considered more creative ways of players “earning” service time beyond simply counting days. He floats the idea of a player who narrowly missed a service time threshold picking up additional service credit depending upon All-Star nominations or MVP voting.

Regardless of the specific form it takes, it’s clear that getting more money to early-career players is a priority for the MLBPA. Last week, Mets right-hander Max Scherzer — a member of the Players Association’s eight-person player subcommittee — told Drellich “unless this CBA completely addresses the competition (issues) and younger players getting paid, that’s the only way I’m going to put my name on it.”

Earlier free agency eligibility seems to be a non-starter for the league, however. Drellich wrote yesterday that the league refused to make a counter-offer to the MLBPA’s proposals on service time and luxury tax issues unless the union dropped its push for earlier free agency. Drellich reported this morning that the league has been similarly steadfast in its objections to arbitration eligibility after two years.

MLB has shown a willingness to revamp arbitration, albeit not in a manner the MLBPA has found acceptable. Over the summer, MLB proposed abolishing arbitration altogether and replacing it with a revenue-based pool system to be distributed to younger players based on performance. In MLB’s vision, salaries would be fixed based on objective performance metrics — likely some form of Wins Above Replacement statistic.

At a press conference this morning, Commissioner Rob Manfred reaffirmed the league’s objection to earlier free agency and arbitration eligibility (link via Bob Nightengale of USA Today). Manfred argued that the league “already (has) teams in smaller markets that struggle to compete. Shortening the period of time that they can control players makes it even harder for them to compete. It’s also bad for fans in those markets. The most negative reaction we have is when a player leaves via free agency. We don’t see that making it earlier, available earlier, we don’t see that as a positive. Things like a shortened reserve period … and salary arbitration for the whole two-year class are bad for the sport, bad for the fans and bad for competitive balance.”

Manfred echoed competitive balance concerns in pointing to another issue of contention: revenue sharing. The MLBPA has sought to cut back on the amount of money being distributed from higher-revenue franchises to their lower-revenue counterparts, Drellich wrote this morning, believing the reallocation “goes too far in keeping teams afloat without having to invest in players.”

The MLBPA has expressed concern about whether smaller-market clubs adequately reinvest those funds, filing grievances against teams like the Pirates, Rays, A’s and Marlins in years past. The 2016-21 CBA required teams to use revenue sharing money “to improve its performance on the field,” but investments in such things as scouting and player development staffs fit that criteria without offering direct financial benefits to players.

Manfred implied this morning that the MLBPA has expressed a desire to reduce revenue sharing by around $100MM, a development he said would further harm small-market clubs’ ability to compete. How significantly those proposals would harm competitive integrity is up for debate. MLBPA negotiator Bruce Meyer argued they’d have the opposite effect.

“Our proposals would positively affect competitive balance, competitive integrity,” Meyer told Drellich. “We’ve all seen in recent years a problem with teams that don’t seem to be trying their hardest to win games, or put the best teams on the field. Our proposals address that in a number of ways. And we’ve offered to build in advantages for small-market teams.”

There’s some room for debate about the competitive balance impacts of the MLBPA’s goals. There’s little question, on the other hand, that shrinking teams’ windows of contractual control would get more money to younger players. Unless paired with a drop in spending on older veterans, that’d raise the players’ overall share of revenues — a development with which Manfred and league ownership groups certainly wouldn’t be enamored.

Certain Players Remain In DFA Limbo Over Course Of Lockout

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With the lockout formally in place, teams are barred from making any major league transactions. That includes any move involving a player who was recently designated for assignment, MLBTR’s Tim Dierkes has learned (Twitter link). This had also been the case for players DFA’d shortly before 2020’s pandemic-driven transaction freeze.

Angels left-hander Sam Selman, Phillies right-hander Adonis Medina and Dodgers infielder Sheldon Neuse were all designated for assignment within the two hour span preceding the transaction freeze last night. They lost their roster spots as teams scrambled to find space for other last-minute additions before the previous collective bargaining agreement expired. Those players will remain in DFA limbo throughout the duration of a work stoppage.

Only a small handful of players find themselves in this particular predicament, and they’d have been prohibited from contact with team personnel during the lockout even had they not been DFA’d. Yet that group now finds themselves in an extended window of uncertainty regarding their 2022 employment. They remain members of the organizations that designated them for assignment yesterday, but they no longer occupy a spot on clubs’ 40-man rosters. Upon agreement on a new CBA, teams will have a window to explore trades or expose those players to waivers.

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