MLB Labor Negotiations: Moving Mountains

MLB Labor Negotiations: Moving Mountains

March 25, 2022 0 By Dan Freedman

From the moment word came down that the owners and players had reached an agreement and the MLB lockout would be lifted, baseball writers all over the country took to their keyboards to bang out stories about the new CBA. 

Jeff Passan, weary and exhausted, the victim of a Twitter hack, was able to hash out a quick summary of the deal.

Jayson Stark did another of his many-thousand-word summaries.

Evan Drellich, who followed this process as closely as anyone, wrote a great piece about how and what the players won. But I don’t think he went far enough.

What the MLBPA was able to achieve after a 99-day lockout was nothing short of monumental.

Did they get everything they wanted at the outset? Of course not. Did they fundamentally alter the financial landscape of the game? No, but that was never in the offing. Unfortunately, in the excitement of “a deal” and players reporting to Spring Training and the season being salvaged, I believe many of the changes they were able to achieve are either being overlooked or elided.

When negotiations got really heated late last month, Michael Bauman of The Ringer tweeted that it is hard to negotiate with a party when their singular response is “Fuck you, that’s why.” And that, truly, is what the players were up against. As has been written time and again – whether or not it is true may be immaterial – neither Rob Manfred nor the owners who employ him seem to like baseball. They may like owning their teams, and the reflective glory of being 1 of 30; they may like the tax benefits that come from owning a unique civic institution; they may like the centerpiece of their real estate portfolio, the item that draws people to their parking lots, hotels, and other “around the ballpark” destinations. But the game itself, and the players who make it great, well, whatever.

Oh, and they have billions of dollars. And most – if not all – have alternative revenue sources from which to pay their mortgages and fund their vacations. But the players – save for a few who have potentially lucrative hobbies on the side (looking at you Ross Stripling) – have baseball, and only baseball. And they only have that for a limited period of time. And the period of time during which they can be fairly compensated has been lessened by the owners repeated insistence on artificially deflating salaries and/or the ability to spend. 

The Long Road to Riches

When a player gets drafted, he doesn’t get to pick his team, and “slots” restrain his signing bonus. That player is beholden to that organization for years in the minor leagues making below-poverty wages. Once he reaches the majors, he is skilled enough to be (arguably) one of the best 750 in the world at his profession, and yet is paid a minimum salary for at least three years. After those three years, if he is still employed, he is forced to not only advocate for himself in an arbitration proceeding, but he is forced to listen to a fully-fleshed out assault on his worth, his value, and the team’s desire to keep him employed. And after three years of running that gauntlet, he is afforded “free agency,” where teams now tell him he is too old, his most productive years are behind him, that teams don’t pay for past performance, and/or they would but for that pesky Competitive Balance Tax, which has thwarted the team’s ability to pay your market value. Sorry!!

Here is where we insert the “poor baseball players…they get paid to play a kid’s game and, at worst, make more than ten times the US median income in any given year” trope. But when you think they have just a few years to make that salary, and then the rest of their lives to live (who amongst us is considered old for our profession once we turn 30, let alone 35?), the players’ plight is not that outrageous.

And that is all a red herring. Professional athletes’ salaries should not ever be measured against lunch pail carrying Joes and Janes. They, by virtue of their talents, are simply different. No one pays $50 plus parking to watch me negotiate contracts all day – just sayin’.

The Long Road to Change 

With that as the backdrop, the players went about doing the absolute best they could – and for the right people. The negotiations were centered (not exclusively) on the youngest players and those in the middle class. Max Scherzer and his $43M/year and Marcus Semien and his 7/$175M deal sat at that negotiating table and fought for everyone else. And when the owners said, “Fuck you, that’s why,” and then locked out the players to “jump-start negotiations” and then didn’t offer a response for six weeks, and then began setting artificial deadlines to finalize the deal or the players would begin losing paychecks, the players had to pick their battles and fight the fights they could win.

They did better than that. 

Set forth below, in simple terms, is what the players were able to achieve in the face of complete intransigence and an apparent total lack of care:

I. Minimum Salary

Who amongst us wouldn’t like to get a 23% raise? The players were able to increase the minimum salary (in year one) from $570,500 to $700,000. To put this in context, roughly one-third of the league made the minimum salary last season, and 62% had salaries of less than $1M. This change alone may ultimately impact more players than any of the other issues. It was a huge win.

II. Limitation on Options

Related to the minimum salary, but not getting nearly enough press, is the limitation of the number of times a player can be optioned to the minors in a given season. A team can now only do that five times. So, players like Tanner Houck of the Red Sox will not be optioned seven times, being sent down after each start during July and August. Houck accrued 64 days of service time and was paid approximately $275,000 – less than half the 2021 MLB minimum – even though he was one of Boston’s most effective pitchers. Will teams utilize all five? You bet. Will some players be stuck in the minors due to this limitation? No doubt. But, if a player is performing, and the team is trying to win, this will ultimately be a net positive for young players (especially pitchers).

III. Pre-Arbitration Bonus Pool

As if conjured out of thin air, the players were able to obtain an additional $250M for the players over the life of the deal. With the $50M/year pre-arbitration pool, exceptional players (and many not so exceptional players) will receive additional monies that simply never existed before. 

The Jayson Stark article referenced above does a nice job of explaining who gets paid for what. To give this some context, when Pete Alonso won the 2019 Home Run Derby, he nearly tripled his salary. And by winning again in 2021, Alonso has now earned more from the Home Run Derby ($2M) than he has in three seasons with the Mets ($1.47M, due to his rookie contracts). Something about that just doesn’t seem right. 

But with this new pool, players who are not yet eligible for arbitration will get paid bonuses for their performance. As Stark pointed out, Vlad Guerrero, Jr. would have netted an additional $1.75M last season (2nd in MVP voting), which is more than three times his salary. The $50M will be given for various awards, and then allocated amongst the best remaining 100 players (which means that even not-so-exceptional players will reap the benefit of this hard-fought MLBPA win).

IV. Thwarting Service Time Manipulation

Players who excel have a chance to thwart the owner’s ability to manipulate their service time. In fairness, this provision does not go far enough, nor will it truly compel teams to stop this heinous practice, but it does afford players like Kris Bryant (for whom this new rule is all but named) from getting hosed by teams utilizing financial calendars.

If a player finishes first or second in Rookie of the Year voting, he gets a full year of service time, whether he was rostered for 150 days, or 15. Would a team keep a player in the minors for so long that he has no realistic ability to win ROY, maybe – never underestimate the audacity of MLB front offices. But that would be a serious tank job, and a result that no amount of bargaining could ever eliminate, and one sure to be the topic of a grievance.

V. Universal Designated Hitter

It took 50 years for both the AL and the NL to have the same positions in their starting lineup every day. And while the addition of the designated hitter in the National League will most likely benefit older players rather than younger ones, as guys like Nelson Cruz and Albert Pujols will now be able to cash at least a few more checks before their lack of defense ends their careers, any change that essentially adds a roster spot is good for the game and potentially good for young and middle-class players.

VI. Expanded Playoffs

Increasing the playoff pool from 10 to 12 teams means an additional $85M in television money for the teams, which was sprinkled out to the players in the form of the increased minimum salary and higher CBT thresholds (more about those below). Now, baseball purists who were just digesting the Wild Card and the expanded Wild Card are having none of this, but the truth of the matter is that more playoff baseball is more baseball, and more baseball is good for baseball…and baseball players.

With the new format, there are four additional teams coming into your living room each October. With young (and old) players now afforded the chance to play on the biggest stage, in front of the largest viewing audience, they get more exposure and more opportunity for financial gain. Mike Trout may not need the playoffs to get another Subway sponsorship or increase his value, but Bobby Witt, Jr. sure might. And if the Royals can sneak into a 12-team playoff where they would have been left out of a 10-teamer, and the Midwesterner gets to play in primetime in the fall in front of millions of viewers – and millions of impressionable kids – and he performs as we all expect he will, well then Bobby, Jr. may be the guy to get the next Subway deal. 

VII. Increased CBT Thresholds 

I have covered this one last even though, by all accounts, it was the most contentious issue in the labor negotiations. Quite obviously, the increased amounts are a win for all players. For years teams have worried about exceeding the “soft cap,” so much so that only two exceeded it last year, and another half dozen double-checked their abaci to make certain that they spent within $5M without going over.

But now, with an additional $20M (in year one), teams may not be as concerned about throwing an extra million or two to that middle reliever who will be an asset down the stretch. And where this may become really beneficial (and which I have not seen written about), is teams’ willingness to make trades at the deadline. In years past, teams wouldn’t make a trade that jeopardized their CBT situation, even if it gave them a better chance to win. With that additional $20M to play with (more in later years of CBA), teams will have more wiggle room to take on salary and give their team a chance to play in the expanded playoffs…which will give players more exposure…which will open up additional opportunities…which will potentially be a financial boon (in fairness, to both the players and the owners).

Moving Mountains

The MLBPA moved mountains over the course of the past four months, but really in the past few weeks. They won the social media battle. They won the PR battle (Rob Manfred didn’t help the owners’ cause by lying about profitability, setting artificial deadlines, laughing at somber moments, and practicing his golf swing while players, ticket takers, and hot dog vendors were staring down the gauntlet of being out of work). And they won the negotiating battle. At no point did it seem that the owners wanted to make a deal. At every turn they threw up another obstacle: one day it was an international draft; the next it was refusing to take “yes” for an answer because it came past the 6 pm deadline; lastly, it was a requirement that the players drop two grievances against the owners as a condition to closing (one of which the players agreed to drop). 

But in spite of all of that, the players held together and got way more than any reasonable observer would have thought possible. The players went into these negotiations with wide eyes and great aspirations. But they had to know, at a visceral level, that there were no 8-run homers available; they could not make up all of the ground lost in 2011 and 2016 in one CBA negotiation. They quickly made concessions where they could; they gave up on redefining the sport; they remained focused on protecting the most vulnerable amongst them. And by a vote of 26-12, they prevailed. Hopefully, one day, we will learn why all eight Executive Subcommittee members voted “no,” and why four other player reps felt the same. But, for now, the players won, and baseball is back.

And we, as fans, are nothing less than elated. But before we start booing Gerrit Cole for another lousy outing, or Manny Machado for not running out a grounder, remember the work that these guys did – collectively – to protect the sport. Because there were many times when it seemed like the players were the only people at the table who cared to do so.

Mountains were moved. And, as per usual, it was labor that did the work. I cannot wait to hear, on April 7th: