MLB Trade Rumors

Freedman: So it’s kind of difficult to predict at this point because we don’t really have a lot of reports about whether they are at the table negotiating right now. I suspect that they’re doing some of the lower-hanging fruit.  Some of the articles in the CBA won’t be renegotiated, they’ll just be “rolled over,” is the term that we use in labor negotiations. Where the parties basically say, “We’ll tentatively agree that this article won’t be changed in the CBA.” But of course that’s subject to negotiation of the entire package. So I think that a lot of those things are going to be resolved relatively quickly and easily and then you’ll get down to the more complicated issues.

I think that one of the big things that was kind of obscured throughout the restart of the 2020 season was the fact that part of the big issues that were being negotiated were the revenue split for the playoffs. There obviously was going to be no gate or very limited gate. The CBA talks about the players’ share being based on gate receipts. And then you had reports of Major League Baseball signing a bigger package with I believe it was the TBS-Turner deal for the playoffs and that wasn’t going to go into effect right away, but it was something that was on the horizon as a big issue for how that money was going to be split. And so they didn’t resolve it for 2021 as part of those negotiations, and I saw that as pivotal.

What happened, if you recall, was that the players were asking for a 50/50 split on the increase in television revenue – not the base package that they had in place but whatever the increase was going to be. At the same time Major League Baseball was offering a flat amount because they recognized that there weren’t going to be gate receipts and they proposed $25 million. At the last minute as they were they were coming to a deal Major League Baseball and the Players Association agreed to a $50 million flat amount that was going to be the players’ share of playoff revenue split among the players.

I saw that small negotiation as really what the big negotiation was going to be about for 2021. When the parties go into that negotiation, they’re going to have to resolve those issues of revenue splits of new revenue. A lot of these things were not contemplated – streaming revenue, things like that, in prior CBAs, and because of that Major League Baseball  received either the lion’s share or basically all of those new revenue streams for the ownership groups.

And so the players, to the extent that those owners have not passed that along through free agent contracts, that seems to be an imbalance and perhaps one of the imbalances that the media has picked up on. I see that as something for this year. Recently the articles have been talking about whether they’ll reach an agreement to expand the playoffs for 2021. I think that however they decide to split the revenue this year – if the playoffs are expanded – that will serve as a template for the next CBA. And so, if they are able to reach an agreement on basically splitting the revenue and sharing it between players and management on increased television contracts and/or additional streams of revenue, particularly streaming, that will be a template and it will make the 2021 offseason negotiations that much easier.

But if they’re unable to reach an agreement now on expanding the playoffs, that would basically tell us that the parties are going to have long protracted negotiations and it’s likely that we will see a work stoppage, whether that’s management-initiated through a lockout and spring training, or player-initiated through a strike.

Dierkes: If the owners are content with the status quo, at least to a degree, why would they initiate a lockout?

Freedman: Well, I think the question about who’s going to initiate any kind of work stoppage is kind of one of those questions that will depend on the circumstances at the time. The parties will be trying to negotiate, and more management than the union will be trying to negotiate in public. Getting the PR side and their kind of proxies in the media to put out their messages. If you start seeing messages about greedy players, if you start seeing messages about the unreasonable offers coming from the Players Association, but you don’t see similar things saying how the current system is broken and needs to be fixed, and you don’t see parallel things saying how there are there are things that need to be resolved mutually and jointly, which normally would be the message that everybody puts out.

But baseball seems to always take the more aggressive tack in their negotiations and their PR campaign. I think if they start putting out a lot of anti-player press it’s possible that they will engage in a lockout. And the reason for management to do it is not because they want to disrupt the apple cart in terms of the status quo, but it’s to place additional pressure on the players.

I don’t think we’re going to see a situation where there would be imposed work rules and replacement players like we had in 1995 spring training, but I think what you see is the players at the lower end of the pay spectrum, who probably live more like everyday people, would feel the burden of not being paid. They travel from their homes to spring training every year. They don’t get paid in spring training, they get paid from opening day to the end of the season, but knowing that they’re not going to get that first paycheck when they’re on perhaps a split contract or even just a league minimum contract. They’re going to feel the crunch, whereas a player at the higher end of the spectrum likely has sufficient savings to make it through. And that kind of attempt to fracture the solidarity of the players is a tactic that management not just in baseball, but elsewhere, uses, to pit the more junior employees against the more senior employees. They have the same long-term interest and they have the same interest in benefiting the bargaining unit as a whole but they do have different individual financial interests as the negotiations are ongoing.

Dierkes: I wanted to get at that topic of public opinion a little bit that you touched on. From what I can sense, I feel that the players will struggle there just based on some polls we’ve run with our readers. I do think that the majority of baseball fans feel that they’re overpaid or greedy. Plus you kind of have a different dynamic here in my opinion where the players are seeking a radical change from the status quo, as opposed to ’94 when the the owners were attempting to impose it. I’ve seen some of the things that Marvin Miller expressed where it seems like he really didn’t care what the public thought because he knew they were wrong. Do you think it matters what the public thinks and do you think the players union takes that as a major concern and should they try to shape it or should they try to ignore it?

Freedman: So I would say there are a couple aspects of that. First, in terms of changing the structure or seeking some kind of radical change, I think all collective bargaining is making changes around the fringes. It’s very rarely making a major change all at once and I think the idea of getting younger players paid earlier in terms of whether it’s raising the minimum or making arbitration eligibility earlier, I don’t see those as radical. I see them as things that are smaller. Changing it from Super Two to perhaps after Year 2 for all players, or removing the disincentives for teams signing free agents. Those things are within the current system. They’re not big radical changes.

Number two, in terms of the media presence. Major League Baseball has a significant number of writers on their own payroll, not directly through Major League Baseball, but some of them do work for MLB.com, many of them work for the TV arm of Major League Baseball, and then others work for the individual teams. And so they do a lot in shaping public opinion just through spreading around their own money and the Major League Baseball Players Association can’t counter that. They have to look to, I guess I don’t know how to describe them other than independent journalists, who are stating facts rather than stating positions and sometimes it’s very hard for the average fan to parse that difference because they see certain people on TV and they recognize them and they accept them as as experts, even though they may be publishing a company line.

That said, I don’t think that public opinion is a huge factor in shaping the negotiations. I think that Major League Baseball, going all the way back to the teens and perhaps a hundred years ago or perhaps even before then, owners were calling players greedy. Just look at the Black Sox Scandal and the conflict between Charles Comiskey and his players. I think that there’s always been that conflict. I don’t know that it’s going to go away and there’s always been a disagreement about who he is greedy and who is just seeking fair compensation.

It’s interesting. My ten-year-old daughter said to me the other day, “What does that mean, ‘owner?'” And I said, “Well, they own the team.” Then she says, “Do they manage the team? Do they coach the team?” And I said, “No, they don’t. They just collect the profits off of the other people’s work.” And she said, “I don’t know why we need them.” It was kind of an interesting viewpoint because she sees teams she’s played on and there are coaches and there are players, but there’s not someone collecting money for everybody else’s work. So perhaps we missed the boat on it, and I don’t know too much about their structure, but the Green Bay Packers ownership structure may be the fairest where it’s municipally owned by shareholders who live in the city as opposed to an individual or group of individuals collecting revenue off of other people’s work.

But that’s more of an economic philosophy argument. With regard to the PR side of it, I think, one thing that the Players Association has to do is maintain the confidentiality of negotiations as best they can. I know that MLB frequently leaks things. I think that it would benefit both parties for the negotiations to go on quietly and privately to the greatest extent they can. I think that the negotiations that went on during Michael Weiner’s tenure as executive director [of the MLBPA] were the quietest we’ve probably ever seen. I think they announced that there was a new CBA before anyone even knew that they were in negotiations. That’s really how it should happen.

Most industries though aren’t followed by dozens of media people in each city. So it’s a little bit different than UPS negotiating with the Teamsters. But that said, it can be done quietly and it can be done confidentially. It really takes both parties to achieve that though and when one party is constantly bashing the other publicly, it does lead to friction at the bargaining table. I’ve been there. I’ve been at the table in contentious negotiations when there were dueling press releases or public statements all the time. It meant that every single day the first 20 or 30 minutes of our bargaining was actually discussing what was out there in the press and not the actual issues that we were negotiating and it really distracted from the negotiations themselves. So I would hope that this negotiation happens more quietly and it happens behind the scenes at the table and not publicly in the press.

Dierkes: What do you think about the possibility of an offseason lockout by ownership perhaps as a way of freezing free agency? Do you think that that’s a plausible scenario?

Freedman: It is possible. As I mentioned, creating that tension between the lower-paid players and the players who have more tenure and have received their first big contract who might not be economically affected by the loss of income for a few months, that would create a tension also with another group, which is the group of players who do not have a contract. They’re not going to be signing. They’re not going to know what team they’re playing for.  Obviously their whole family living situation will be in flux for an extended period of time. It is a pressure point. It is a way to try to separate some players from the solidarity of the larger group.

Dierkes: How likely do you think a scenario would be where the owners are willing to start the 2022 season without a new contract, putting the onus on to the players to strike?

Freedman: That’s a good question, because the the threat of strike is almost as powerful as the strike itself. Because if they’re operating without a contract the players could go on strike basically at any point and that could create chaos for management. It would create a situation where they would potentially lose television revenue, lose gate, if fans could actually go to the games by 2022. There are a lot of risks to management of the threat of strike and it’s very possible that they would use a lockout as a tactic to avoid giving the players control over the situation.

I think that the players, though, are less likely to strike than they were back in the 80s, particularly. It’s not something that has happened in many of their lifetimes. You’re talking about the last strike in 1995. So you’re talking about 25 years. It’s not something that is every three or four years the parties are looking at at a strike or a lockout as they were in that period of the 80s through 1995.  And when it happens that frequently you’ve got players who were in leadership roles in the union like Paul Molitor and Tom Glavine, who had lived through other negotiations, had lived through other strikes or lockouts.

Now, you’ve got an entire generation of players who never even lived during the time of a strike or lockout. And so the mentality is different. The mentality is more, “Hey, we’ve got a good system here, we can change it and we change it through bargaining, not through economic pressure.” Then again, we don’t know how the internal leadership of the union is. There were a number of players who were very vocal during the restart negotiations. They spoke very strongly of solidarity. They came out of the negotiations very unified. And so I think the fact that this happened only 18 months before they were going back to the table for term negotiations probably helped the union in terms of developing and building that solidarity that they’ll need going into these negotiations that otherwise they might not have had.

Dierkes: I would assume that now even with the salaries stagnating a bit, even adjusted for inflation, that the salaries now for players are probably a lot higher than they were in the 90s. Do you think that as salary has gone up does that that make solidarity more difficult?

Freedman: I think it may be more difficult in terms of basically that gap. So you’ve got players who are making approximately $30 million a year and you’ve got players making the minimum which is a little bit more than $500,000 so that’s a 60 times differential. I don’t know and I haven’t looked at it but I would suspect that that differential is one of the largest it’s ever been, at least in the collective bargaining era. I imagine when Babe Ruth was making $100,000 a year, he was probably making more than 60 times the lowest-paid players in the league, but in the collective bargaining era the the salaries have been more compressed in terms of their ratios. And I think that that’s something that could affect player solidarity.

Then again, if you have players who are at the top end of that salary scale like Mookie Betts and Mike Trout and others who are supporting the union’s efforts and saying that they’re going to do the right thing for the 25th or 26th man on the roster, that would go a long way towards building solidarity and ensuring that there aren’t fractures in the membership.

Dierkes: Do you feel that the players have sufficient chips to bargain with, or does that matter, having chips?

Freedman: Well, yeah, every negotiation is about power to some extent. There are obviously other factors that play into it and the players do have the ultimate issue which is, they are the product. Without them, there is no baseball. We talked about negotiating around the fringes. There are things that management wants that aren’t necessarily related directly to player compensation. We saw a lot of changes in the area of the Joint Drug Agreement over the last decade. We’ve seen other changes in play on the field.

The expanded playoffs is a big deal to management. Expanded playoffs for 2021 can’t happen unless the parties agree to it and they’re not going to agree to it unless they agree to some kind of financial arrangement around the split of revenue. And that’s why I think that issue for the 2021 season will really lay out the idea of whether or not it’s going to be an easier collective bargaining agreement or a more difficult one. Because that’s probably the number one issue on management’s mind, is expanded playoffs, and they can’t get there now without the players union.

You talked about the possibility of going into the 2022 season without a CBA in place and just carrying forward the existing CBA as they negotiate. They won’t have extended playoffs in 2022 under that scenario either. And so I think that that being a big driver for all of management’s interests is something that the players have significant leverage over and it’s something that I think they need to focus on in terms of this upcoming negotiation. I’m not saying they’re not focused on it, but I think that it is the primary area that will give us an indication about the next term CBA.

Dierkes: So if we saw an agreement for this year for expanded playoffs and the accompanying agreed-upon split, that would increase your optimism for avoiding a work stoppage, would you say?

Freedman: Yeah, I would say and and partially depends on the structure. If it winds up being a fixed pool again, I’m going to consider it a one-off, but if it involves some kind of revenue sharing arrangement, no matter what that arrangement is, I’ll see that as a very positive thing that the parties are working collaboratively to reach a mutually beneficial agreements.

Dierkes: How do you think having Democratic control of the government might come into play with these CBA negotiations?

Freedman: I think there are a couple aspects to that. One is the National Labor Relations Board. The National Labor Relations Board General Counsel position I think will be vacant in June [editor’s note: On January 20th, the Biden administration asked NLRB general counsel Peter Robb to resign, and subsequently fired him]. That will be filled by someone who will be more union-friendly and because of that it means that if management were to engage in an unfair labor practice or something that is unique that hasn’t been heard before by the Board, it’s more likely to result in a complaint being issued. And if a complaint is issued, then it goes through the quasi-judicial process and ultimately judicial appeals process.

Also the Board itself, the makeup of the board will switch from three Republican members and one Democratic number right now by, I think it’s the fall, to three Democratic members and two Republican members. And in that scenario, it means that cases that were more on the borderline are more likely to be resolved in favor of the unions. It doesn’t mean all cases will result in in in in the union winning versus now all cases management winning. It’s more of those close cases wind up more likely to be in favor of one party or another and so you’ve got that that aspect of it which is the kind of regulatory and legal aspect of it.

But then you also have the Federal Mediation and Conciliation Service should the parties need a mediator to participate in negotiations. That’s something that the president’s appointment to the FMCS director is important. In the Obama Administration, George Cohen was the director of the FMCS and George mediated the NFL situation, their negotiations. I’m not familiar at all with the NFL, I don’t follow it. So I don’t want to misspeak on any of the details there but George had been engaged in collective bargaining for 50 years. He knows how agreements are reached. He actually was the counsel who argued the case of the ’94-95 baseball strike in front of now Supreme Court Justice Sonia Sotomayor. He had represented the NBA players back in the 70s. He’s retired now, but he was one of the greatest labor lawyers in US history. And so he was a great person to lead that body, the Federal Mediation and Conciliation Service, and he could basically, any two parties who could not reach agreement, he could help them reach agreement. Because he could see things differently than they could.

President-elect Biden hasn’t yet named a director of FMCS. That’s usually a later person in the process. They’re probably vetting people now, but they haven’t announced publicly whom that person might be. That director could play a key role. Also, I just think that the tone of the President plays a big role in it as well because President Biden has said publicly that he’s going to be the most labor-friendly president in the in the nation’s history. If there are these close calls, I think he will use the bully pulpit of the White House to weigh in on issues. And if you’re talking about that PR campaign aspect of it, if you have the president of the United States saying, “The players are right. You should reach a deal. I don’t think management should lock the players out,” those are things that are kind of incalculable in their value in the PR campaign, and the public support or opposition to one of the party’s positions.

Dierkes: Can you explain the concept of an impasse as it relates to collective bargaining?

Freedman: Impasse is frequently misunderstood or misused as a term in the media, unfortunately. Impasse is basically a temporary state of affairs. It’s not a permanent fix situation. So normally, throughout the course of negotiations the parties negotiate over different things at different times and they may set certain things aside to deal with later, especially if they’re thornier issues. Compensation frequently comes last in negotiations. So the National Labor Relations Board basically defines impasse through its case law and it’s a combination of things. It basically uses a totality of the circumstances test and factors in things like how long have negotiations gone on, whether the positions of the parties have become fixed or whether they’re still making progress on certain issues. It can only occur over mandatory subject of bargaining. Those are the things that the parties have a duty to bargain over –  their wages, hours, and other terms and conditions of employment. They can’t reach the impasse technically over permissive subjects, which are the subjects that there’s no duty to bargain over.

So in terms of negotiations, obviously it has to be good faith negotiations. I mentioned the length of the negotiations. The importance of the issues on which there is a disagreement plays into it. Whether both parties agree that they’re not making progress plays into it. I mentioned that it is a kind of a moment in time. Any changed condition can terminate an impasse. If the players were to go on strike after management says there’s an impasse, that strike could could break a pre-existing impasse.

There are other things to kind of play in sometimes behind the scenes like unfair labor practices. If one of the parties is violating the National Labor Relations Act and engaging in bad faith bargaining the Board frequently will say that an impasse cannot exist because the one party was not bargaining in good faith. Good faith and bad faith are kind of things that have been thrown around primarily by management last time but I think Tony Clark said it at one point as well in a press release or on a press call. So take those for the grain of salt as well because the National Labor Relations Board has tests for bad faith bargaining as well. And a lot of the time the parties will kind of throw the term around when it doesn’t become legal standard.

Some of the issues are like if there’s a break in bargaining and the parties are no longer meeting, that could create an impasse, or it could be seen as no impasse because the parties haven’t met and shown that their positions are fixed. I mentioned that the parties sometimes set aside certain topics to be dealt with later. If they’re at an impasse on one of those issues, that doesn’t suspend your bargaining obligation of all the other unsettled issues. So they still have to negotiate everything else to conclusion and withdraw any permissive proposals to actually declare an impasse in bargaining. The other important thing about an impasse is it doesn’t remove the duty to bargain. So if the parties mutually believe they’re at impasse that doesn’t mean that management can do whatever it wants. It can unilaterally implement its last best offer, but that doesn’t eliminate its duty to bargain. If it were to try to change anything else, it still has the duty to bargain.

It’s based on the totality of the circumstances. Disagreement doesn’t mean impasse, a stalemate on one issue doesn’t mean impasse over the full collective bargaining agreement. It just means that the parties are not working on that one thing right now and they still have a duty to get back to it. There are going to be stops and stalls throughout the process. The more complicated issues are going to be the ones that they leave for last. It’s just always how it’s done.