Business as Usual
When you win, say nothing. When you lose, say less. Paul Brown (Founder of the Cleveland Browns football team)
April 30th, 2022 [Started typing 3/15/22. Good thing there is no deadline.]
The 2021-22 Major League Baseball Lockout lasted 99 days from December 1st, 2021, to March 10th, 2022. Before the dust had even settled, Baseball was back to business as usual. The labor strife already seems like a faded memory. Now, with a little time and perspective, several relevant questions can be asked. Was it worth it? Who won? Should the losing side have done anything differently?
On March 10th of 2022, Major League Baseball Owners and the Players Union came to an agreement on a new Collective Bargaining Agreement [CBA] that will govern the game from 2022 to 2026. This new CBA ended the Lockout of the Baseball Players, 99 days after it began on December 1, 2021. Previously, I predicted that, if the Lockout ended during Spring Training, the Owners would have surely won an overwhelming victory. That prediction hardly qualifies as some sort of clairvoyance, but let’s check the results now that all the dust has settled. Because it ended early in Spring Training, the Lockout certainly never seriously touched the Baseball Owner’s pocketbooks Basically, the entire first month of the season would have had to been lost for that to happen. If the first month had been canceled, the Owners would have had to refund some of their television rights payments. Because there was no real financial pressure applied, the Baseball Owner’s experienced negotiating team would have had to fail epically if they actually lost this round of bargaining with the Players Union. The obvious question here is not: Did the Baseball Owners win? The obvious question is really: How Big was the Owners victory?
The Owner’s strategy was quite simple: 1) impose a pre-emptive Lockout as soon as possible [they locked the Players out the same day that the previous CBA expired] ; 2) immediately take three of the four main negotiating issues totally off of the table; 3) completely stonewall the only issue remaining, and 4) negotiate on the peripheral issues that did not really touch their four core issues. This strategy was completely successful. Their pre-emptive Lockout was settled before the Owners lost any serious money at all. The new CBA negotiations never even touched on the three core issues that Owners had taken off the table: a) the Players’ threshold for reaching arbitration, b) the Players’ threshold for reaching free agency, and also c) the Owners’ Shared Revenue system. The Owners’ decision to stonewall the one remaining issue, the Competitive Balance Tax (i.e. the Luxury tax with penalties applied to any team that spends more than a certain amount on payroll) was also settled in their favor. On this issue, the Owners, whose revenues have soared, gave up some ground. But nowhere near as much as they should have. After basically winning on all four of their core issues, the Owners were then able to horse trade on some of the peripheral issues, giving a little and getting even more back. Everything they got back was just icing on the cake.
In one of the stranger footnotes to the CBA settlement, the Representatives of the Players Union voted 26-12 to accept it. The Player Reps consisted of two groups: 1) the Players Executive Committee consisting of eight veteran players who accompanied Union Director Tony Clark (and other Union officials) to the actual negotiating sessions for the new CBA; and 2) the thirty Player Reps for each individual Major League team who were not present at the negotiations, but communicated what was going on to their individual team members. The 30 team Player Reps voted 26-4 for the new CBA. However, all 8 players on the Union’s Executive Committee voted against it, making the final tally a still lopsided 26-12. Of course, the eight Executive Committee members were all intimately involved in negotiating the new CBA. Was their 8-0 vote against it simply symbolic? Did it represent their personal feelings about the Owners’ hardball negotiating tactics? Fascinatingly, the eight Players on the Executive Committee had very little to lose by agreeing to this new CBA. All eight had already reached free agency status. The rules and regulations that limit any Player from receiving their fair market value until they become free agents no longer applied to them. So why the solid bloc vote against the new CBA? It is my belief that the eight Players on the Executive Committee voted en masse against it because they truly understood exactly how bad a deal the Players Union had just made with this new CBA.
DETAILS OF THE SETTLEMENT:
Owner’s Core Issue #1: Owners Revenue Sharing
The 1994 through 1995 Baseball Strike between the Players and the Owners wiped out the end of the 1994 season, the 1994 World Series, and the start of the 1995 season. The simplistic view of that disastrous Labor Dispute would be that it was a culmination of the Player/Owner salary fight that had began back in 1976 when the Players won the right to free Agency. Of course, this is true. More importantly, it was also the culmination of the battle between the Large Market and Small Market Owners. Led by Bud Selig, the Small Market Owners were the true winners of the 1994-1995 Baseball War. As a result of this struggle, the Owners instituted Revenue Sharing between themselves. It ensured that the Small Market Owners could not lose money no matter how poorly they ran their teams. Because of Revenue Sharing, any Small Market Owner could simply reduce his Player Payroll to the bottom of the barrel and immediately become profitable. In fact, this strategy was so easily lucrative that certain teams [currently the Baltimore Orioles and the Pittsburgh Pirates] were content to stop competing at all and happy to just rake in the effortless profits from Revenue Sharing.
Other Small Market teams adopted a boom and bust strategy. They would load up with the high draft picks from finishing last and then try to compete. If that did not work, they would strip their roster of any expensive players and begin the cycle again. This strategy of ‘Tanking’ by losing games on purpose so that the team would receive high draft picks and possibly get better in the future was reportedly an anathema to the Players Union. It was reported that two major goals of the Players Union were: 1) to punish any teams deciding to purposely lose; and 2) to limit or abolish the Tanking strategy in the new CBA. Did they achieve their goals? The answer is most definitely no. As soon as the new CBA was signed, two teams [the Cincinnati Reds and the Oakland As] promptly stripped their rosters of a bunch of players with large contracts and began new cycles of ‘Tanking’ that should keep their squads finishing last or close to last for the foreseeable future. By not including the Owners’ Revenue Sharing system in the negotiations, the Players Union clearly guaranteed that ‘Tanking’ would still be a viable strategy.
Owner’s Core Issue #2: Players Arbitration Threshold
The Players’ Arbitration Threshold remains at three years of service time [with 172 days on a Major League roster constituting one year of service time]. The “Super Two” Arbitration category [the top 22 percent of Players between two and three years of service time are also eligible for Arbitration] also remained unchanged. In other words, the Arbitration Threshold for Players to have their Salaries set by an independent Arbiter is still about 2.78 years of service time in the Major Leagues. This Arbitration Threshold was reportedly one of the biggest issues for the Players Union going into negotiations for a new CBA. For years, the Owners have manipulated this threshold by keeping deserving Players down in the Minor Leagues until they lose a year of eligibility. These manipulations are far reaching because they delay not only the Threshold for salary Arbitration, but also eventually Free Agency. The most famous example was probably Kris Bryant, formerly a star player for the Chicago Cubs. Despite the obviousness of the Cubs’ tactics in manipulating his service time, Bryant’s appeal to an independent arbiter was denied for the simple reason that a deal is a deal despite the Owner’s bad faith.
Bizarrely, the Baseball Owners’ assertion that the Arbitration Threshold was a non-negotiable topic for the new CBA was just accepted by the Players Union. Early in the negotiations, the Owners oddly even claimed that the Arbitration Threshold was set in stone and could never be changed. In fact, the original 1976 Arbitration Threshold was exactly two years. In 1985, the Players Union gave back an extra year with the ‘Super Two’ qualifiers. By that time, Marvin Miller, the Player Union’s original and most capable Director, had retired. The Owners were finally getting some traction in their efforts to roll back the gains made by the Players Union. Perhaps what the Owners really meant by ‘set in stone’ was: They couldn’t go back to just two years because it would destroy the historical occasion of when the tide finally shifted their way? In any event, the Players Union completely whiffed on this issue too. Despite all the talk about the Owners’ bad faith with service time manipulations, the Player’s Union, in the end, did nothing at all about it. The Owners still get to set the salaries for any and all Baseball Players for their first three years in the Major Leagues.
Owner’s Core Issue #3: Free Agency Threshold
The Threshold for Free Agency remains at six years. This is the second half of the Arbitration Threshold. In the beginning, before the Lockout, the Players Union floated the idea that the Free Agency Threshold should be reduced to five years. They also floated the idea that it should be age based (i.e. a Player becomes a Free Agent, regardless of service time, at age 28 or 29 or 30. The Owners refused to budge and the Players caved. It will still be possible for an Owner to sign a college player at 22 years of age, keep him in the Minors until he is 24 or 25, fiddle with his service time so that he doesn’t reach Arbitration until he is 27 or 28, thus delaying the Player reaching free agency until he is in his early 30s. The normal career path for a Baseball Player is reportedly to: 1) Improve in his early 20s; 2) Peak around 26 years of age, 3) Plateau but slowly decline until 29 or 30, and then 3) rapidly lose value in the Player’s 30s until he is forced to retire. In other words, most college players were finally getting their shot at free agency when they are already in their decline phase. The Players Union briefly tried to address this… but then simply gave up on it.
Incredibly, the Baseball Owners took the issues of their Revenue Sharing, the Arbitration Threshold, and the Free Agency Threshold off the table before the negotiations even started. The Players Union, for reasons that are completely unclear, just accepted this without objection. The Small Market Owners’ very profitable strategy of ‘Tanking’ works because the Revenue Sharing system is paired with the Arbitration and Free Agency Thresholds. As long as the Small Market Owners can pay Players who have not reached Free Agency far below their open market value, they can simply field terrible teams and practice the art of ‘Tanking’ over and over again. By not addressing or insisting that any of these three issues be subject to negotiation, the Players Union had lost before they even began negotiating for a new CBA. Basically, the Players Union just surrendered before the War actually started. The only real question left would be: How badly was the Union whipped on the other issues? If this had been an actual Baseball game, the Owners would be up 27-0 in the seventh inning at this point. The only question is whether the final score would be 32-0 or 27-3 or maybe 28-7. But the game was over.
Owners’ Core Issue #4: Competitive Balance Tax [CBT] Threshold
After beginning their 2022 CBA negotiations by declaring that three of their four main negotiating issues were out of bounds, the Owners left just one big topic on the chopping block for discussion with the Players Union. This was the Competitive Balance Tax [CBT]. The CBT is probably better known as the “Luxury Tax.” It works as a soft Salary Cap [a hard Salary Cap is a set amount that cannot be exceeded]. If a Major League team exceeds the Threshold set for the ‘Luxury Tax,’ they have to pay exorbitant penalties for: 1) how far they exceed it; and 2) how often they exceed it. Despite the oxymoron epithet of ‘Competitive Balance Tax,’ the threshold for this ‘Luxury Tax’ functions mainly to suppress Player Salaries, not to foster competition. To say that it worked well would be somewhat of an understatement. From 2009 to 2019, Major League Revenues reportedly increased about 75% while Player Salaries rose around 25%. This disparity transferred enormous amounts of money from the Players’ pockets to the Owners’ bank vaults. But perhaps it is unfair to go all the way back to 2009. The Players Union’s current leadership negotiated the 2017 CBA and now the 2022 CBA. How did they do this time around?
In 2017, the Threshold for the Luxury Tax was set at $195 million dollars [i.e. any team with an annual payroll over the 195 maximum would be penalized]; and Owner’s Revenues were reported as $9.46 billion dollars. The Luxury Tax then rose each year until the 2017 CBA expired [ in 2018 it was $197 million; 2019 it was $206 million; in 2020 it was $208 million; and then in 2021 it was $210 million]. By 2019, the Owner’s Revenues had reportedly risen to $10.37 billion [per Statista.com] or $10.70 billion [per Forbes.com]. But the Co-vid pandemic wiped out most of the 2020 season, and no one has estimated the 2021 Revenues yet. If we assume that 2022 Baseball Revenues exactly match the $10.70 billion dollars that Forbes.com estimated for the 2019 season, what should the Luxury Tax be? If the 2017 Luxury Tax threshold was $195 million and 2017 Baseball revenues were $9.46 billion, then the Luxury Tax Threshold should be approximately $220 million in 2022 with revenues of $10.70 billion. For the new 2022 CBA, the Luxury Tax was set at $230 million. It is scheduled to rise each year until the new CBA expires [it was set at $233 million for 2023; $237 million for 2024; $241 million for 2025; and finally $244 million in 2026, the last year of the new CBA]. This seems like an actual victory, although not a major one for the Players Union.
On closer examination though, it does not look like much of a win at all. It is based on the assumption that the 2022 Major League Baseball revenues will match the 2019 revenues. But this is very unlikely. Far more likely is that 2022 Baseball revenues will be quite a bit greater than they were in 2019. Recently, the Major Leagues re-negotiated their major television contracts to the tune of an additional $300 million dollars. The Major Leagues have also reportedly added an extra $700 million dollars in endorsement contracts since getting past the Co-vid pandemic shortened season of 2020. In the new CBA, there are multiple new opportunities for the Owners to expand their revenues even further. It is far more likely that Baseball’s 2022 Revenues will far surpass the supposed $10.7 billion peak set in 2019. There is a good possibility that they were already surpassed in 2021. There is a much greater chance that Major League Baseball will have Revenues of around $12.0 billion in 2022 than just $10.7 billion dollars. If the Luxury Tax threshold was $195 million in 2017 with revenues of $9.46 billion, then the Luxury Tax threshold should be about $247 million in 2022 with the Revenues at $12.0 billion or so. Basically, the Players Union and Owners agreement on a $230 million dollar Luxury Tax threshold was bargained blind by the Union. For just that reason, you have to assume that the Owners stole the Union’s wallet here.
And it is even worse than just that. To get the CBA threshold raised to $230 million, the Players Union had to agree to another level of onerous penalties for a team exceeding $290 million in payroll. This has been jokingly dubbed the “Cohen Tax” after the new and free-spending owner of the New York Mets franchise. But it should hardly be a joking matter for the Players Union. There is a good chance that, by the end of the current CBA, the initial threshold for the Luxury Tax will be getting close to $290 million if it just rises at the usual rate that Major League Baseball Revenues have risen for the last 20 years. On top of all this, the percentage increases in the new Luxury Tax Thresholds from 2022 to 2026 are basically minimal. If Major League Baseball revenues rise at their normal rates, the percentage disparity between the Luxury Tax threshold and actual Baseball revenues will only increase. Considered closely, this is yet another clear win for the Baseball Owners as long as their Revenues continue to grow at their customary rate. Strangely enough, it is the Owners who seem have faith in the continued popularity of the game and expanding revenues, not the players themselves. I wouldn’t bet against their confidence.
So the Players Union almost surely lost every major issue that they negotiated for the 2022 Collective Bargaining Agreement. Did they make up any ground on the Peripheral Issues?
Peripheral Issue #1 Player Minimum Salaries
The Player Minimum Salaries should also rise with overall Baseball Revenues. For instance, the minimum Major League salary in 2011 was $414 thousand dollars. The new 2012 CBA Agreement kicked that up to $480 as it had fallen far behind the growth in Baseball Revenues. In 2012, the reported revenue for Major League Baseball was $6.81 billion dollars. By 2019, revenue had grown to at least $10.37 billion. If the Players’ minimum salary (2012 to 2019) had kept up with reported Baseball Revenues, it should have been approximately $730 thousand dollars by 2019. However, the current Players Union’s labor negotiating team started with the 2017 CBA. For the year 2017, the Players minimum salary was set at $535 thousand dollars, and total Baseball Revenues were reportedly $9.46 billion. If the 2022 revenues equal about $10.7 billion, the minimum salary should have been around $605 thousand dollars to keep up with this rise in revenues. But, once again, it is far more likely that total 2022 Baseball Revenues will be around $12.0 billion dollars. In that case, the 2022 minimum salary should be about $680 thousand dollars. But the 2022 CBA reset the Minimum Salary at $700 thousand dollars. This seems like a pretty clear, if relatively minor, victory for the Players Union.
But, once again, the devil is in the details. If the past is prologue to the future, Baseball Revenues will rise at a far greater rate than this minimum salary does. After 2022, the Players Minimum Salary will go up just 20 thousand dollars for each year during the CBA [2022: 700k, 2023: 720k, 2024: 740k, 2025: 760k, and 2026: 780k]. These minimum salary increases are actually retrogressive [the % increase from 2022 to 2023 is 2.86%; but then the percentage actually shrinks each year; and, by 2025 to 2026, it is just 2.63%]. Why the Players Union has agreed to this type of retrogressive increase in each and every new CBA is an enduring mystery [the minimum salary always increases by a set amount with yearly decreasing percentage increases]. By 2026, if Major League Revenues rise annually by just 2.86% or more, the Baseball Owners will win this bet. If revenues continue to rise by the normal historical percentages, the Owners will have once again totally fleeced the Players Union. By 2026, the increase of the Players’ Minimum Salaries will once again have lagged far behind the rise in Baseball Revenues. Although only time will tell, it is unlikely that the Players Union have negotiated a good deal here. Once again, the Baseball Owners seem to be the party who has faith in the future of the game, not the Players Union.
For reasons also unknown, the Players Union has never tied the minumum salary to the Luxury Tax. In other words, the Luxury Tax, designed to inhibit top-end salaries, should be tightly related to the Players’ Minimum Salary by the Union. For instance, the Union has constantly complained about Major League teams ‘tanking’ their seasons. However, a higher Minimum Salary would automatically put a floor on this strategy. With the current 26 man roster, a Major League team could theoretically field a team of nothing but rookie players in 2022. That team’s payroll would be $18.2 million dollars [with each Player being paid $700k]. But, if the Minimum Salary was just $1 million, that payroll would be $26 million. If the Minimum Salary goes up to $1.5 million, the payroll rises to $39 million. If it is $2 million, the payroll goes way up to $52 million. This would be a very easy and simple way to: 1) put a salary floor on all tanking teams [who would probably not field 26 rookies], and 2) also compensate the Players who are being underpaid and cheated out of their actual value the most. Why the Players Union did not advocate some type of extreme raise to the Minimum Salary as a way to combat the tanking strategy is yet another mystery. Just the publicity from assuming this position would probably be advantageous to the Union. The Union just punted here and this will ultimately be a huge win for the Owners.
Peripheral Issue #2 Amateur Draft/Draft Lottery
Major League Baseball, with the help of the Player’s Union, has built a system that completely exploits younger Players. Until a Player reaches free agency, every financial step of his career is a denial of the Player’s rights to his actual free market value. The Amateur Draft allows the Player to only negotiate with one Major League team, not all thirty [30]. The Player’s signing bonus is then assigned by his position in the Draft. For the first three years of his career, the Player must accept a Minimum Salary. From years three to six, the Player has his value determined in Arbitration which, once again, limits his right to just one team. The Player only gets to exercise his free market rights (that other American citizens enjoy all the time) after six years of Major League service time. If he starts his career with several years in the Minor Leagues, a Player can be denied his rights under this system until they are well past thirty years of age and out of their prime. As long as Major League Baseball continues to enjoy its bizarre exemption from Federal Anti-Trust and Monopoly laws, this exploitation will probably always be built into the Baseball system.
The most extreme examples of how this system works are so beyond unfair that they appear ludicrous. For instance, Vladimir Guerrero Jr. had a fantastic third season in the Major Leagues during 2021, hitting 48 HRs with 111 RBIs while also batting .311. His 2021 salary was reportedly $605,400. His value to his team, the Toronto Blue Jays, has been estimated as $50 million dollars. In other words, Vlad Junior would have been a steal at even half that amount. In 2022, Vlad, who had finally reached Arbitration, got a raise to the amount of $7.90 million dollars. It is basically indisputable that, if Baby Vlad had been on the free market, his 2022 salary would be, at a minimum, $35 million dollars a year. Going into the 2022 CBA negotiations, the Players Union declared it was determined to address this type of injustice. For this reason, the Union took a principled stand against Major League teams purposely losing to better their position in the Amateur Draft (and get the next Vlad Junior to exploit). Did the Union accomplish this goal?
In the new CBA, the Baseball Owners and Players established a new Amateur Draft Lottery system to replace the old method of having teams draft Players in reverse order of their won-loss record. In the new Lottery system, the worst six teams each year get to participate in a lottery for the six top picks in next year’s Amateur Draft. These six worst teams now have to enter a Lottery to determine their draft position. Small Market teams cannot be in the Lottery three years in a row and the Large Market teams cannot be in the Lottery two years in a row. These changes could potentially put a crimp in some Baseball teams attempts to rebuild if that team gets unlucky in the Lottery. But it does not address why a team would tear down (“tank”) in the first place or attempt to rebuild around young cheap players. Basically, the new Draft Lottery is just the same as rearranging the deck chairs on the Lusitania. Totally meaningless. This is a clear win for the Owners. They did not change the rules of the game, they simply made the rules more complicated. The strategy of intentionally losing [or “Tanking”] was not even touched. The cycle of tearing down teams, purposely losing games, and then building them back up with cheap young talent will continue.
[5/12/2022 Note: By this new Draft Lottery formula, a “tanking” team (we will just call them the Orioles) will get into the draft lottery in the 1st and 2nd years of the new CBA. Then the Orioles will have to sit out the Lottery for one whole year; but will still get a high draft pick, maybe seventh or eighth, if they stink bad enough. Then the Orioles are right back into the Lottery for the 4th and 5th years of the CBA. Of course, at the point, the CBA expires and the Orioles have spent four of the five years in the Lottery. Not much of a penalty.]
Peripheral Issue #2 Designated Hitter in National League
The adoption of the Designated Hitter by the National League may seem like a win for the Players Union, but it is a slight one (if even that). The Union can claim that they created 15 new jobs (one for each formerly non-DH National League team). But this is not really correct. There was no addition of an extra roster spot for these new 15 DH slots. The real change is that some hitters will now get Major League at bats that used to be wasted on pitchers (I say wasted because no pitcher really got paid for his batting prowess in modern times until perhaps Shohei Ohtani). Realistically, National League clubs still retain all the discretion in this situation. They get to pick who gets to take all those ABs that used to be soaked up by pitchers. They do not have to hire a full time DH at all. Of course, the American League teams (or perhaps more accurately that half of the Major Leagues that used to be called the American League) has had the DH since 1972. The National League did not follow suit until 2020, the year of the pandemic. To demonstrate how ruthless they are in negotiations, the Baseball Owners basically took the National League DH off the table for 2021 just so they could have an extra bargaining chip in 2022. Never give an inch seems to be their motto. Can you call it a victory for the Players Union when they get something everyone knew was going to just be given to them?
Peripheral Issue #3 Pre-Arbitration Bonus Pool
Rather than simply raise the Minimum Salary for all Players being denied their Fair Market Value [FMV], the Baseball Owners and the Players Union came up with this odd answer. The Owners will contribute $50 million dollars to a pool that will be split up among the very best of the exploited young Players. The Owners get a set cost that is still far below the exploited Player’s actual value. The Players get a strange system which transfers some money to the Baseball underpaid. This entire arrangement goes against the usual advice to keep it simple. It will be interesting to see how the system, once it is up and running, can be exploited by the unscrupulous. Sooner or later, some player or team is going to try to game the system. Again, this is a clear win for the Owners. As pointed out above, there are individual players such as Vlad Guerrero Jr. who are underpaid by close to $50 million dollars all by themselves. The value to the Owners of their monopoly-induced powers to restrict the free market for young players is worth billions over the life of the CBA. To pay a set cost of only $50 million dollars for this privilege is golden. Despite this, there are probably Owners who actually believe that it is they who are being taken advantage of by the Players here.
Peripheral Issue #4 Pension Benefits
The Baseball Owners increased their yearly contributions to the Player’s Union Pension Plan from 201.9 million per year to 207.0 million annually. This is an increase of about 2.5 percent. The Union also apparently got a minimum 3.5 million per year from the CBA [Competitive Balance Tax] to spend on Pension Benefits. Some of this money is earmarked for Players who played from 1947 to 1979 but did not play the required four years to vest in the Pension. There was evidently a rules change that will allow any Players to buy eyeglasses and contacts in the same year.* Once again, all this is almost surely a clear win for the Baseball Owners. Their contribution to the Pension Plan will stay constant at $207 million plus the $3.5 million for the next five years. In the meantime, Baseball Revenues, if the past is any sort of prologue to the future, will keep rising. Why couldn’t the Players get even a minimum yearly increase for their Pension Plan? The Players only win this if Revenues stay flat [or win big if the Revenues collapse]. It is certainly strange that the Major League Owners, who always claim financial catastrophe is right around the corner like Chicken Little with a megaphone, are obviously betting that their Revenues will continue to rise up like a bunch of unruly peasants revolting against a king.
* It seems odd that, in all the coverage of the new CBA, this minor detail was reported.
Peripheral Issue #5 Sports Betting
It should be obvious to everyone that the legalization of sports betting has the potential to become a huge money maker for the Baseball Owners. The Major Leagues have already teamed up with the company Draft Kings, a on-line Sports Betting platform. Of course, gambling has been a total anathema to Baseball ever since the 1919 Black Sox Scandal. The Players Union and the Owners negotiated some rules and regulation for this brand-new world of legalized sports wagers. They announced their negotiated gains: 1) Baseball teams will have to institute more security; 2) Baseball teams are not allowed to sell Player’s personal info to anyone; and 3) the guidelines and restrictions under which Players themselves could enter into commercial contracts with Sports Betting companies were formalized. These negotiations also included the investigatory due process for violations. The Union publicized all this as a victory. The Baseball Owners, on the other hand, won the right to go ahead with their own joint ventures with Sports Betting companies. They did not put out any press releases about the fact that the Major Leagues will once again be swimming with the gambling sharks. But this is actually a gigantic victory for the Owners. They set up the future structure under which they will be able to maximize their profits from gambling ventures.
Peripheral Issue #6 Expanded Post Season
There will now be 12 (rather than 10 teams) reaching the post-season. Money will flow into the Owners’ pockets with expanded play-off contests. The extra two teams will be able to bank their profits. On the other hand, the 162 game regular season has been devalued once again. The players make their salaries during the regular season. Interestingly, the Owners actually have just gained an edge for future negotiations. In this negotiation, the Owners strategy was to lock the Players out way before the season even started. In other words, as far away from the lucrative post-season where the Baseball Owners make all their money as possible. By expanding the post-season, the Owners just grow this part of their pie. It is a sure thing that, during the next CBA negotiations, the Owners will follow the same exact strategy. This, all by itself, makes any expansion of the playoffs a victory for the Owners.
Peripheral Issue #7 International Draft
One of the stranger aspects of the recent CBA negotiations was the Baseball Owners suddenly bringing up an International Draft right at the end. With the CBA all but worked out, the Owners insisted that they would not settle unless an International Draft was addressed. The Baseball Owners also insisted that this International Draft be tied to any negotiations about “Qualifying Offers.” A “Qualifying Offer” refers to a Major League Baseball team’s ability to make an offer to their Free Agent Players and, if that Player later receives a contract from another team, the team making the “Qualifying Offer” gets an additional draft pick. Of course, this offering system was designed to put a drag on the free agent salaries while also rewarding any team shedding free agents. More rewards for tanking. In reality, this “Qualifying Offer” system hasn’t been all that great a brake on Player salaries. Usually it is just good for a laugh when some unfortunate player (poor Michael Conforto this year)* gets completely screwed over by it. In the end of the negotiations, the International Draft and the Qualifying Offer were not even settled. The negotiation provided that the Owners and the Union would appoint a joint Committee to study this issue. On July 25th of 2022, the Committee would make its recommendation. If the International Drafts is implemented, the Qualifying Offer system ends.
* Conforto has no one to blame but himself. He should have immediately taken the New York Mets Qualifying Offer.
You should take a minute to fully appreciate the beauty of what the Baseball Owners did here. In reality, the Union should have simply said that the end of this Qualifying Offer system was a pre-requisite for negotiations. They should have just taken it off the table like the Owners did for so many subjects (such as Arbitration Threshold and Free Agency Threshold). Instead, the Union just left it on the table. The Owners then tied negotiations for the Qualifying Offer system to something totally unrelated, the International Draft. Of course, an International Draft is a huge deal to the Owners. They want to, as always, cut down the negotiating leverage that any non-Union Baseball Players have. An International Draft will easily save the Baseball Owners millions and eventually billions of dollars. The Baseball Owners have tied the negotiations of a minor issue (the Qualifying Offer) that directly affects the Players to a major issue for the Owners (the International Draft) that doesn’t directly affects the Players. It is brilliant strategy. On July 25th of 2022, the Players Union will give away the store because they don’t own it for some trinkets and yarn.
Peripheral Issue #8 Uniform Advertising
Yet another win for the Owners. The Owners now get to sell advertising space on their players uniforms. This is cash that will go straight into their pockets. It seems like every player I see in 2022 now has a Nike swoosh logo on their jerseys. A quick internet search reveals that the Owners sold Nike the rights to put the swoosh logo on every uniform in December of 2019. The deal was for a cool one billion dollars over 10 years (so apparently from 2020 to 2029). This is $100 million dollars a year or $3.33 million yearly for each team. I can’t believe that I just noticed it. The Owners continue to line their pockets. Will the Players soon look as ridiculous as NASCAR drivers with commercial logos all over their uniforms like some crackpot banana republic dictator’s ludicrous military jacket covered with medals?
Peripheral Issue #9 International Games
The Owners got commitments from the Players Union to schedule baseball games in distant and strange venues. Despite years of such traveling teams reporting that these long distance trips throw off their rhythm, it seems like the Players Union got no concessions for it. This has to go in the Baseball Owners’ win column also.
Peripheral Issue #10 Scheduling
The Owners gave the Players Union assurances that their schedule makers would try to streamline the travel. This is a win for the Owners because they are only giving the Players Union something that the Owners should be doing anyways. Streamlining travel will most likely save the Owners travel-related costs. Of course, this is a theme of these negotiations. The Owners give up something that is actually in their best interest while the Players give up the things they should fight for without a whimper or a whisper.
Peripheral Issue #11 Player Roster Limits
For many years, the Major League Baseball Roster was 25 Baseball Players on the active roster with a 40 Man Roster under contract. For reasons that were never made clear, the active Baseball Roster could be expanded to all 40 men during the month of September each season. This lead to the odd result that teams were played by different rules as they roared down the pennant race at the end of the year. In 2019, this problem was taken care of by expanding the active Roster to 26 men during the regular season and just 28 in September. This was something that the Owners wanted and they got to formalize it in the new CBA agreement.
Peripheral Issue #12 Player Options
In a very minor victory for the Players Union, the Major League Owners did agree to limit Player Options [i.e. how many times a Player can be bounced around from the Minor Leagues to the Major Leagues] to just 5 each season. In recent years, with Roster Management being controlled by the new type of MBA style baseball executives, some players with options had been bounced between the Minors and Majors like human yo-yos. Players had to absorb the cost of being uprooted in mid-season [apartment rents, travel, etc.] One could argue that this new limitation was hardly a victory because the Players Union did not get the Owners to agree to compensate the Players for each Option. Rather than just limiting the Options to just five a year, the Union should have negotiated a price for each option. If the Union made it expensive to option a Player like a yo-yo, that would impose a natural limitation. And it would also reimburse the Player for being uprooted. Yet another missed opportunity for the Players Union.
Peripheral Issue #13 On-Field Rule Changes
The Players Union agreed to let Baseball Commissioner Rob Manfred impose on-field rule changes with just 45 days notice. This is yet another odd, if not downright bizarre, decision by the Union. During these negotiations, Manfred proved himself to be exactly what he is: a lawyer with little to no love for the game of Baseball. Manfred had strangely already denigrated the World Series Baseball trophy. During press conferences during the Lockout, he acted as if the loss of Baseball for an unknown amount of time was no really big thing. Manfred smirked and smiled in those press conferences like it was all a joke. To be fair, the Baseball Owners hiring a labor lawyer who could not give two craps about the game of Baseball itself is good strategy. Prior Commissioners who were actually fans (Bowie Kuhn, Bart Giamatti, Fay Vincent) acted against the interests of their employers at times. But why, by all that’s holy, would the Union cede control to a non-fan like Rob Manfred the right to make unilateral changes to the game’s rules and regulations in just 45 days? Obviously, Rob Manfred is only going to rubber stamp changes that line the Owner’s pockets even if these changes come at the complete expense of the Players. As usual, the Players Union’s strategy, and complete lack of backbone, are beyond odd.
Conclusion
In December of 2013, Tony Clark, a former Baseball Player, was hired as the head [Executive Director] of the Players Union. He has now headed the Union during the negotiations for the last two CBAs, 2017 and 2022. The 2017 CBA is generally conceded to have been a complete disaster for the Players Union. In my opinion, the 2022 CBA is the second straight CBA in which the Players Union has been whipped by the Owners like a borrowed dog. There is a good possibility that this new CBA will actually be much worse than the 2017 CBA for the Players. Tony Clark’s main qualifications for being the head of the Players Union seem to be that: 1) he is a former Major League Player and 2) he was deeply involved in the Players Union during his career. He is not a lawyer. He did not serve a long apprenticeship learning the ins and outs of a labor negotiation. The 2017 CBA was so bad that the Players Union had to bring in a professional labor lawyer, Bruce Meyer, to help Clark negotiate. It doesn’t seem to have helped much at all. Will Tony Clark improve at his job before the next CBA is negotiated with the Baseball Owners in 2027? There were absolutely no indications during this negotiation that he will.
On the other hand, the Owners are led by their own representative, Baseball Commissioner Rob Manfred. His qualifications are that: 1) he actually was a labor lawyer and 2) he has been involved in Baseball’s Labor disputes since the 1990s, long before he became the Commissioner. So far, it has been like watching Tony Clark’s David go up against Ron Manfred’s Goliath. However, this time, David doesn’t have his slingshot or any type of protective clothing. Meanwhile, Goliath is in full armor, including a helmut covering his temple, and is armed with a machine gun. It hasn’t been pretty. Will the third time be a charm? How many times can the Players Union let Clark hopefully learn on the job? Or should the players get some professional representation? Marvin Miller, the greatest Baseball Players Union Rep of All-Time, was a labor lawyer. He spent years representing Unions fighting the American Auto industry. The Players Union needs to find their next Marvin Miller. Tony Clark seems to be a nice guy. A nice guy is not what is needed here. To misquote Leo Durocher just one more time: “Nice guys finish dead last.”
In the final analysis, the new CBA can only be construed as a major victory for the Owners. They took three of their four core issues completely off the table. They bargained over peripheral issues and still got a pretty good return for it. In a grander sense, this is really not a big deal. The Players and Owners once again decided how to cut up their financial pie. The Baseball Owners got the larger piece. No matter how the pie is cut up, the fans still get to watch their sport. Does it make a real difference if the Owners get 90% of the profits (like they supposedly did before free agency) or just 47% (like they reportedly got in the 1990s) or their current alleged share of 53%? It would be a major upset if this CBA does not drive the Baseball Owners share of the game’s revenues much higher. But who wants to root for a bunch of Billionaires? Especially a group of Billionaires as scummy and scuzzy as the current lot of Owners? It should be noted that the Owners took quite a licking in the publicity battle. Even the lickspittle sportswriters who usually carry the Owners lunches were criticizing them. This could just be a sign of the times. But it hardly matters, the Players and their Union did not capitalize on the publicity advantage.
Postscript
Once the Lockout ended and the new CBA was signed, Baseball Owners and Players quickly returned to the usual business of the former National Pastime. The bitter taste of labor strife swiftly receded into forgetfulness. However, in strange postscript to the short but bitter negotiations, Baseball Commissioner Rob Manfred tried to patch up a few fences and maybe rehabilitate his image. During the Lockout itself, Manfred had come off as a tone-deaf executive who could really care less about the game of Baseball. Smirking through his press conferences and smiling at the wrong times, Manfred made an extremely bad impression. Now with victory achieved, Manfred (or his handlers) made what must have seemed like a gracious gesture. The Commissioners Office, in Rob Manfred’s name, sent each and every Major League Player some expensive ear buds as a token of their appreciation. All things considered, this would be like someone breaking into your house, taking all your stuff, eating all your food, and then leaving a coupon for a McDonalds’ cheeseburger with a note that says: Enjoy!