Collective Bargaining Issues News & Rumors

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.

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.