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The Value Of The MLBPA’s Super Two Proposal

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In its most recent proposal, the Major League Baseball Players Association asked that 80% of players with at least two years of MLB service be considered arbitration eligible.  This is up from 22%, which has been the cutoff since 2013 when it was increased from 17%.  In the ongoing CBA negotiations, MLB has shown no interest in any change to the 22% figure.  The MLBPA started these CBA talks at a position of making all 2+ players eligible for arbitration, which had been the case from the inception of salary arbitration in 1973 up until 1985.

I thought it might be interesting to attempt to quantify the MLBPA’s request.  First, we should get an idea of how many additional players would be thrown into the arbitration system each year.  As I mentioned on Twitter last week, the 80% request, if in effect this offseason, would mean changing the current Super Two cutoff from 2.116 (two years and 116 days of MLB service) to 2.028.  Keep in mind that the Super Two cutoff is always a moving target.

By my count, under the 2.116 cutoff, 26 players currently qualify as Super Two this offseason, led by Vladimir Guerrero Jr., Austin Riley, and Bryan Reynolds.

Under a cutoff reduced to 2.028, 79 additional players would qualify as arbitration eligible.  I’ve listed them below along with projected arbitration salaries from Matt Swartz.  Note that our arbitration projection model sometimes spits out a number below the league minimum, in which case we set the projection equal to the minimum.  For this exercise, we’ll use a minimum salary of $700K.

To calculate how much additional money MLB teams would be paying under this system in 2022, I found the difference between the projected arbitration salary, and a hypothetical $700K minimum.  So, for example, Yordan Alvarez and Bo Bichette would gain the most, an additional $3.9MM each in ’22.  Note that it’s possible a few star players might make more than the league minimum even as a pre-arbitration player, like when Mookie Betts was renewed for $950K in 2017, but we aren’t modeling that in.

So, for these 79 additional Super Two players under the MLBPA’s proposal, we estimate that teams would pay an additional $72.4MM in 2022.

By itself, MLB might be willing to stomach something of that nature.  They’ve shown a willingness to put $15MM into a pre-arbitration bonus pool, and I assume they could be pushed up higher if the players drop their request to change Super Two eligibility.

But there’s the rub: MLB doesn’t want any additional players thrown into the arbitration system.  Doing so, particularly for star players, would increase that player’s total arbitration earnings by a significant amount, and also help push up the pay scale.

To illustrate this, we asked Matt Swartz to model out a couple of players who have been through the arbitration system already.

The first is Francisco Lindor.  Lindor went through arbitration three times, earning salaries of $10.55MM in 2019, $17.5MM in 2020, and $22.3MM in 2021, for a total of $50.35MM.  Under the MLBPA’s proposal, Lindor would have been arbitration eligible four times.  This means he would have earned a lot more than the $623,200 he did in 2018 – 10.7 times as much, in our estimation.  Here’s how our model saw a Lindor who went to arbitration four times, keeping his actual statistics the same:

  • 2018: $623,200 -> $6.7MM
  • 2019: $10.55MM -> $14.9MM
  • 2020: $17.5MM -> $20.7MM
  • 2021: $22.3MM -> $23.4MM
  • Total: $50,973,200 -> $65.7MM
  • Difference: $14,726,800

Our other example is Josh Bell.  He’s also set to go through arbitration three times, earning $4.8MM in 2020, $6.35MM in 2021, and a projected $10MM in 2022 for a total of $21.15MM.  Here’s how that might have played out had he gone through arbitration four times:

  • 2019: $587K -> $2.8MM
  • 2020: $4.8MM -> $8.1MM
  • 2021: $6.35MM -> $9.6MM
  • 2022: 10MM (projected) -> $13.2MM
  • Total: $21,737,000 -> $33.7MM
  • Difference: $11,963,000

The Pirates traded Bell in December 2020, knowing he was set to get a bump from $4.8MM to $6.35MM.  MLB might argue that the Pirates would have traded Bell a year earlier if he was slated to jump from $2.8MM to $8.1MM.  They might say that not only would expanding Super Two be bad for their pocketbooks, it’d be bad for “competitive balance.”  I imagine the MLBPA would argue that the Pirates could have afforded Bell in either scenario.

There’s also the chance that shifting the arbitration pay scale a year earlier for a good number of players would simply result in them getting non-tendered a year earlier and hitting the free agent market.  If you look at the list of 79 players above, you can be assured that many of them will not make it all the way through arbitration even if they earn the league minimum in 2022.

Looking at a player like Bell, if he was coming off a poor 2020 season and was set to earn $9.6MM instead of $6.35MM, he might have simply been non-tendered.  As we’ve seen with an example like Kyle Schwarber, this is not necessarily a bad scenario for the player, since Schwarber earned more in free agency than he was projected to get in arbitration, and he’s set to parlay a strong bounceback year into a good multiyear contract.

If you wanted to model out the MLBPA’s 80% request further, you’d have to retroactively apply it to all the players who would’ve been affected and see how much money moves toward the players in that scenario.  But it’d be impossible to guess who would’ve been non-tendered when, so it’s not an exact science.  At any rate, we may learn this week whether MLB truly has any willingness to move off the 22% Super Two cutoff, even if it’s not to 80%.

Poll: Has Your Lockout Prediction Changed Recently?

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Just over a week ago, MLBTR ran a poll asking for your predictions on when the season would start. The most optimistic option, that the season would start on March 31st as scheduled, was selected by just over 16% of respondents. The next most optimistic choice, that the season would begin between April 1st and 15th, garnered just over 18% of the vote. That means that almost two-thirds of voters expected a delay of two weeks or more.

Whether the situation has meaningfully changed in that time is a matter of opinion. For those on the pessimistic side of the spectrum, they could point to the fact that the two sides remain far apart in their respective positions, the most recent meeting lasting just 15 minutes and MLB announcing that Spring Training games won’t begin until March 5th at the earliest.

For those looking for glimmers of hope, they could point to the fact that both sides are planning to meet with greater frequency, perhaps daily, perhaps as soon as tomorrow. Maybe the stall tactics have been exhausted and the time for serious engagement has begun. Ben Nicholson-Smith hears that the MLB is willing to be flexible on some issues and that the MLBPA has said that there won’t be expanded playoffs if a full season is not played. Given that the owners are known to be seeking the extra revenue from those added playoff games, perhaps this ticking clock scenario will finally provide the urgency needed to make real progress.

Are the sleeves getting rolled up? Or is this all just for show? Is the ice about to crack? Or are we just seeing PR moves? After almost three months of mostly wasted time, can the next five years of baseball be ironed out in the next week or two?

What say you? Are you drowning in despair or does your hope spring eternal? Let us know in the poll below.

(link to poll for Trade Rumors iOS/Android app users)

MLB: Spring Training Games Postponed Until At Least March 5

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Major League Baseball announced Friday that Spring Training games will not begin until at least March 5. A delay to the start of Spring Training was a foregone conclusion amid the ongoing labor strife between the league and the players association, but today’s announcement now makes the delayed schedule official.

“We regret that, without a collective bargaining agreement in place, we must postpone the start of Spring Training games until no earlier than Saturday, March 5th,” MLB said in a statement. “All 30 clubs are unified in their strong desire to bring players back to the field and fans back to the stands. The Clubs have adopted a uniform policy that provides an option for full refunds for fans who have purchased tickets from the Clubs to any Spring Training games that are not taking place.”

There’s no clear timetable for when the two parties might reach a resolution. Headway of any kind has been nonexistent to this point, with yesterday’s meeting between MLB and the MLBPA reportedly lasting just 15 minutes. The league confirmed in today’s statement, however, that the parties will be back at the table on Monday and expect to negotiate daily throughout the week.

“We are committed to reaching an agreement that is fair to each side,” MLB’s statement reads. “On Monday, members of the owners’ bargaining committee will join an in-person meeting with the Players Association and remain every day next week to negotiate and work hard towards starting the season on time.”

Daily meetings between the two sides next week would be the closest thing to urgency displayed since the lockout was implemented on Dec. 2. Commissioner Rob Manfred described the lockout as a means of “jumpstarting” negotiations, but the league then waited more than six weeks to send a counteroffer to the union. In total, since the lockout was implemented more than 11 weeks ago, the two parties have had a reported six in-person meetings. Meeting on a daily basis next week nearly doubles that total.

Fans, of course, have rightly expressed considerable frustration with the lack of progress and, perhaps even more confounding, the lack of actual negotiating between the two parties. The delay to the beginning of the spring schedule is the clearest indicator yet of a legitimate possibility that regular-season games will be lost to the discord. Manfred last week called the potential for lost regular-season games a “disastrous outcome for the industry” before expressing optimism that Opening Day would take place on March 31, as scheduled.

Manfred added that the league would “ideally” like to get in a four-week Spring Training, though the chances of that appear slim. An agreement would likely need to be reached at some point next week, which would then give teams and players a week (or a bit more) to report to camp and gear up for games beginning on or around the March 5 date cited in today’s announcement. Even that would leave clubs with a bit shy of four weeks of exhibition games, but a March 5 kickoff for Cactus League and Grapefruit League play would ultimately “only” result in about a week’s worth of lost spring contests. Spring Training games had been scheduled to commence on Feb. 26. Pitchers and catchers were scheduled to begin reporting to camp this week.

The MLBPA issued the following statement in response to the league’s announcement:

“MLB announced today that it ’must’ postpone the start of spring training games. This is false. Nothing requires the league to delay the start of spring training, much like nothing required the league’s decision to implement the lockout in the first place. Despite these decisions by the league, Players remain committed to the negotiating process.”

MLB Suggests New CBA Would Need To Be In Place By End Of February To Begin Regular Season On Time; Parties Plan To Meet More Frequently

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Last weekend, Major League Baseball made its most recent collective bargaining proposal to the MLB Players Association. Evan Drellich of the Athletic tweeted at the time that MLB had informed the union of what it viewed as the latest possible date to work out an agreement for the regular season to begin on March 31 as scheduled. This afternoon, Bob Nightengale of USA Today reported that date as February 28. In the league’s view, if no collective bargaining agreement is in place by the end of February, the regular season start date will have to be pushed back.

It’s not clear whether the MLBPA agrees with that assertion. Perhaps the union thinks a deal could be worked out a few days into March without interruption to the beginning of the season. Yet simple math dictates that a new CBA would need be in place within around two weeks to avoid a delay. Opening Day is scheduled for exactly six weeks from now. Teams will need time to conduct the remainder of their offseasons while players will need some exhibition play to work back into game shape. MLB commissioner Rob Manfred said last week he viewed four weeks as an appropriate amount of time for Spring Training. Players had a three-week training period during 2020 Summer Camp, and Manfred suggested repeating that process would be insufficient.

MLB could also lift the lockout and allow the games to proceed in the absence of a new CBA. The league certainly isn’t going to take that course of action, though, leaving little time for an agreement if they’re to avoid delays. Manfred expressed optimism about that possibility last week, but the latest developments on the CBA front seem to leave little reason to believe there won’t be some form of delay.

In the week since Manfred met with the media, both MLB and the MLBPA have made one core economics proposal. Each party came away generally dissatisfied with the other’s offer, and the chances of them bridging the still-significant gaps within the next two weeks seem very slim.

With time dwindling, Jeff Passan of ESPN reports (on Twitter) that MLB and the MLBPA are planning to conduct multiple bargaining sessions next week, perhaps meeting every day beginning Monday. Ben Nicholson-Smith of Sportsnet hears (Twitter link) that MLB has expressed some willingness to move towards the union’s demands on the competitive balance tax and efforts to get players paid earlier in their careers.

Notably, Nicholson-Smith adds in a second tweet that the union has informed the league they’d be unlikely to agree to playoff expansion in 2022 if the regular season were shortened. Expanding the postseason is a key objective for MLB, which would stand to benefit greatly from the ability to market extra games to television partners. The league has sought a 14-team playoff, while the union has expressed a willingness to go to 12 teams. However, Nicholson-Smith’s report indicates there’s some chance the MLBPA will refuse to go beyond 10 postseason teams this year if any regular season games are lost, thereby costing players game checks.

MLBPA Drops Push For Universal Two-Year Arbitration, Expands Pre-Arb Bonus Pool In Latest CBA Offer

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4:47 pm: MLBTR’s Tim Dierkes observes (on Twitter) that the union’s proposed Super Two expansion — had it been in effect this winter — would have gotten around 79 more players to their first year of arbitration. However, Dierkes notes that MLB seemingly remains unwilling to alter the existing Super Two setup in any form.

1:18 pm: Today’s collective bargaining meeting between representatives from the league and the MLB Players Association lasted only 15 minutes, though deputy commissioner Dan Halem and MLBPA chief negotiator Bruce Meyer continued speaking in a side meeting for about 20 minutes afterward (according to The Athletic’s Evan Drellich).

The session appeared to center around two new proposals put forward by the union, as per several reporters (including ESPN’s Jeff Passan and The Washington Post’s Chelsea Janes).  The MLBPA had been looking to move the qualifying threshold for arbitration eligibility to two-plus years of service time rather than the current threshold of three-plus years plus all Super Two-eligible players.  Now, the union has now dropped that demand and replaced it with a large increase in the number of players who would be eligible for Super Two status.  In the previous CBA, the top 22 percent of players who had between two and three years of service time became Super Two-eligible, and thus eligible for a fourth year of salary arbitration — today’s proposal saw the MLBPA ask that 80 percent of players now qualify as Super Twos.

In addition, the union also actually increased the amount of the bonus pool it wants devoted to pre-arbitration players.  Whereas the MLBPA began with a $105MM figure and lowered it to $100MM in subsequent talks with the owners, the union has now bumped that asking price up to $115MM.  This number reflects the larger number of players that the MLBPA wants to be eligible for extra money in this bonus pool, with the union wanting the top 150 players as averaged by fWAR and bWAR.  In the owners’ previous offer, the top 30 pre-arb players would be eligible for a $15MM bonus pool.

Whether these changes by the MLBPA constitute a significant move in MLB’s direction will, of course, lie in the eye of the beholder.  Simply moving from all two+ players being arbitration eligible to 80% of them could move a large amount of money toward MLB, and likely is viewed by the players as a significant concession.

Given how the league has been adamantly against any changes to arbitration eligibility, the MLBPA’s request for such a big increase in Super Two eligibility is likely to be flatly denied.  Where this might lead, however, is some increase in the Super Two threshold whatsoever.  Even if the 80% number is viewed by MLB as an extreme ask, if the owners counter with a smaller increase, the two sides might eventually find some level of acceptable common ground between 22% and 80%.

Getting the league to budge even slightly off their position of not altering the arbitration eligibility would count as some level of a win for the union, as it would help achieve their goal of getting more money to players at an earlier point in their careers.  It would also set impacted players up for more money through the arbitration process as a whole, given the larger number of players getting a fourth arb year and then subsequent raises in their other three arb years.

The increase in the bonus pool figure is tied to both the Super Two ask and that broader “get more money to more younger players” goal.  Because that $115MM would now be spread over 150 players instead of $100MM over 30 players, more pre-arbitration players would get some extra cash.  However, as observed by Jeff Jones of the Belleville News-Democrat, this overall proposal from the union actually counts as a concession to the owners, since it would somewhat lower the bar for future arbitration cases in general.

The MLBPA did not alter their previous demands for increases to the luxury tax (to $245MM for the initial threshold) and to the minimum salary (to $775K), according to The Score’s Travis Sawchik.  Beyond the 80% Super Two demand and the $115MM bonus pool, it doesn’t appear as if the union made any other changes from its previous offers — and as for today’s new proposal, the league “was not excited,” Janes tweets.  It isn’t known when the two sides will next meet in regards to the bigger-picture economic issues or when MLB might counter the players’ current offer, though Janes reports that the league and MLBPA are slated to meet tomorrow to talk about non-economic issues.

CBA Negotiations Set To Resume Thursday

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Major League Baseball and the Player’s Association have scheduled a negotiation session for 1:00pm ET on Thursday in New York, per USA Today’s Bob Nightengale. For those keeping score at home, Nightengale adds that tomorrow’s meeting will be the sixth session between both parties to discuss the sport’s next CBA since MLB instituted baseball’s lockout 78 days ago.

As disheartening as the frequency of these negotiating sessions has been, it could be an encouraging sign that tomorrow’s session will take place just five days after the two sides last convened. Last Saturday’s meeting revealed some minor concessions but didn’t yield much cause for optimism, as it lasted less than an hour and left both sides some mix of “unimpressed” and “underwhelmed”.

One reason for last weekend’s uneventful session was a continued disparity between how each party would like to alter the Competitive Tax Threshold. MLB proposed the luxury tax threshold increase to $222MM by 2026, with disincentives that would likely stop teams from crossing that threshold. The Player’s Association meanwhile would like to see team spending incentivized, not punished, and have been seeking a new tax threshold ending at $273MM in 2026.

As large as that $51MM gap between each side’s tax threshold proposal may appear, it pales in comparison to the $85MM gap between exchanged bonus pool figures. A bonus pool funded by central revenues to reward high-performing, pre-arbitration players has been one concept already agreed to by both parties, though how much these players should be rewarded is clearly a divisive subject. The Player’s Association lowered their bonus pool number by $5MM to $100MM to be divided amongst pre-arb performers, while MLB raised their proposal from $10MM to $15MM.

Further discussed topics included a raise to the league minimum, limiting the amount of times players can be optioned in a single season, and changes in the signing process of drafted and international amateurs. Fortunately, there seems to be mutual amenability to adjusting all three of these topics in the next collective bargaining agreement. However, as we’ve seen with previously suggested CBA changes like implementing a universal DH, even when both sides generally agree on a subject it’s no slam dunk they’ll see eye to eye to the point of implementation.

As is often the case with negotiations it may only take one new concession to start a chain reaction of agreements that, in this case, will ultimately lead to a new CBA. For either side to concede much of anything, they’ll need to meet at the bargaining table. Tomorrow’s sit-down then is certainly a welcome sight for the droves of fans who are skeptical a new CBA can be reached in time for the season to begin when originally scheduled on March 31.

MLB Is Trying To Trade Draft Pick Compensation For A Much Tougher Competitive Balance Tax

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In a recent article, I tried to make the point that MLB, in general, wants something resembling the status quo in these CBA negotiations.  But there’s one area where I was wrong and MLB’s proposals have been clearly worse than the status quo, and that’s the competitive balance tax.

Let’s look at how MLB’s proposed tax rates compare to the status quo from 2017-21.

MLB’s goal here is clear: make teams much less likely to exceed the base tax threshold at all.  However “soft” of a salary cap this was in the 2017-21, MLB is attempting to harden it.  These tax rates say, “If you go over the tax thresholds, we’re really going to make you pay.”

MLB doubled down on the goal of hardening the CBT as a cap by adding new draft pick penalties.  The status quo: any club that exceeds the second surcharge threshold ($250MM in 2021) would have its highest available selection in the next draft moved back ten spots.  If a team is set to pick in the top six, that is left alone and the second-rounder is moved back ten spots.

MLB’s latest offer is far more extreme than this: a team in the second tier (MLB proposes $234-254MM for 2022) entirely surrenders its second round pick, and a team in the third tier ($254MM+) forfeits its first round pick.

I don’t think anyone would argue with this: MLB’s current proposal is for a much more restrictive competitive balance tax, without even getting into the matter of the thresholds.  So, how would they defend it?  The answer is that MLB likely feels it’s proposing an even trade by eliminating draft pick compensation for signing free agents.

Every winter, somewhere between six and 20 players at the top of the free agency class receive a qualifying offer.  Under this system, the worst possible penalty for signing a qualified free agent is forfeiture of a second and fifth round pick and having your international bonus pool reduced by $1MM.    The Yankees, for example, made this sacrifice to sign Gerrit Cole.  MLB’s pitch may be that under their new CBT plan, teams would have forfeited fewer draft picks than they gave up to sign free agents during the most recent CBA (something I intend to explore).  I think that in MLB’s eyes, they are offering to transfer the burden that a certain number of players at the top of each free agent market bear under the qualifying offer system to the team level as a CBT penalty.

Elimination of the qualifying offer system would remove the Craig Kimbrel/Dallas Keuchel type situations, where those players waited until after the June draft to sign because of the drag caused by draft pick compensation.  It would also remove the dynamic where a player accepts a qualifying offer and ultimately earns less in his career as a result, like perhaps Neil Walker.

I would guess that the MLBPA doesn’t consider this an even trade whatsoever, and has likely told MLB as much.  The MLBPA likely takes major issue with drastically increased CBT penalties.  Consider Giants pitcher Alex Wood, who tweeted,”If penalties increase under the CBT/Luxury tax IT DOES NOT MATTER WHAT THE THRESHOLD IS MY GOD. Make the threshold a billion dollars it doesn’t matter. Teams already don’t spend bc they use the current penalties as an excuse not to. Imagine if the penalties got worse. SMH.”

In a theoretical sense, I disagree with Alex.  One could argue that the thresholds matter more than the penalties, because more teams stop right before the base tax threshold than actually pay the tax.  In recent years, only two or three teams have typically paid the tax.  To take Alex’s example to the extreme, if the base tax threshold actually was a billion dollars, and the penalty for exceeding it was that the team needed to play defense with only eight players on the field at all times, the MLBPA should take that deal because the penalty is irrelevant if teams don’t exceed the base tax threshold.

However, there’s a slippery slope concern here on the side of the MLBPA.  History has shown us that once the players surrender something to MLB, it is very hard to claw any of it back.  Case in point, the players moved arbitration eligibility from three years to two in 1980 and gave that back in 1985.  Since then they’ve only managed to win back 22% of the 2+ class, and MLB is currently drawing a hard line on a return to the pre-1985 arbitration structure.

That’s why the MLBPA will likely draw their own hard line and refuse to further increase the tax rates or the draft pick penalty for exceeding tax thresholds.  That might be one of the MLBPA’s non-starter stances.  And if the MLBPA thinks elimination of the qualifying offer system is of modest value, keeping it in place would not be a major problem.

MLB should stop proposing this supposedly even trade.  It’s like in a fantasy baseball league where a guy keeps making you the same offer over and offer, telling you it’s fair.  It’s just not conducive to making a larger deal.

MLB should take increased CBT penalties off the table entirely, and should also propose leaving the qualifying offer system completely intact from the previous CBA.  That would be, literally, the status quo.  Then, with the clock ticking, the two sides can get down to solving the $51MM gulf between where they think the CBT thresholds should land by 2026.

Why MLB Players Went On Strike In The Past And What It Tells Us About The Current Lockout

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A lockout is not a strike.  You probably already knew that, but in all of my in-person conversations with casual to moderate baseball fans since the lockout began, none of them knew the difference.

A lockout is a work stoppage initiated by ownership.  MLB teams locked out the players back in December, and that’s why we aren’t seeing pitchers and catchers reporting to spring training today.  If players were to show up at the stadiums, they’d literally find themselves locked out.

A strike is when employees cease going to work as a group.  Since Marvin Miller created the Major League Baseball Players Association 56 years ago, the players have gone on strike five times.  Let’s take a look at why they elected to do so.

1972 strike – 86 games lost

The union itself was only six years old.  The issue at stake is what Miller called a “modest request” of increases in the players’ pensions and health care contribution to keep up with inflation, part of which meant using an existing surplus in the pension fund.  In spring of 1972, Miller felt that an agreement was within reach.  Then, ownership surprised the players by taking a position of no increase on the pension, and a reduction on health care.  Miller saw this as an “unmistakable signal” that “management was baiting us into a strike.”

Two days prior to the expiration of the pension agreement, Miller proposed solving the dispute by using an independent arbitrator, in an attempt to avoid a strike.  The owners declined.  Miller was concerned the “still young Association” wouldn’t be able to sustain a strike, and advised the players to postpone it and negotiate during the season.  Miller found his players to be “positively militant” about going out on strike, however, so that’s what they did.  After 13 days of lost revenue, the owners folded and the first strike in professional sports was over.

1980 strike – 92 exhibition games lost

At this point, free agent compensation was the issue at stake.  Free agency had only been around for four years, and the owners felt they needed to add restrictions to it.  Specifically, owners felt that signing a free agent should require giving up a Major League player as compensation.  Faced with this issue, the players voted to cancel the final week of spring training, return to play Opening Day, and possibly strike on Memorial Day weekend in 1980.

Instead, Miller and MLB negotiator Ray Grebey settled all the other issues, including dropping the salary arbitration requirement from three years to two (something MLB considers a non-starter in these 2022 negotiations).  The two sides were able to avoid a regular season strike by kicking the can down the road on free agent compensation, forming a study committee.  As part of announcing the 1980 agreement, Grebey “poisoned the bargaining well” (in the words of John Helyar in Lords of the Realm) by telling the press the owners’ compensation plan would go into effect in 1981, which was untrue.

While the cancellation of a week of spring training makes this technically count as a strike, no regular season games were missed, and it was more of a prelude to the 1981 strike.  Helyar called it “a lull until the next battle.”

1981 strike – 712 games lost

This was the first major strike in baseball history.  The aforementioned free agent compensation study committee produced nothing of value.  Miller described ownership’s proposal thusly: “A club signing a free agent could very well lose an established player more valuable than the free agent, or lose a prospect with All-Star potential.  The scheme was designed to end free agency and would certainly had succeeded if it had gone into effect.”  After the committee issued a report with “two diametrically opposed opinions,” the two sides had 30 days to hammer out an agreement in early 1981.  That didn’t happen, allowing owners to unilaterally adopt their free agent compensation proposal.  The players were only offering a draft pick as compensation, and over this gap, they went on strike.

Miller called the 1981 strike “the most principled I’ve ever been associated with” and “the Association’s finest hour.”  He notes that the union was not making demands; it was ownership seeking what he considered excessive free agent compensation.  As the strike dragged on, federal mediator Ken Moffett “never got past first base” with his proposals, as Miller put it.  Instead, the MLBPA proposed a system where each team could protect 25 players, and all other players would become part of a pool from which teams losing certain free agents could choose.  With the owners’ strike insurance running out, this “pool” free agent compensation plan led to a settlement after 50 days.  Four years later in 1985 the owners were already asking for the pool compensation plan’s removal.

1985 strike – no games lost

This two-day strike is similar to 1980 in that it technically counts, but no regular season games were lost.  By 1985, Marvin Miller was retired “but remained a power in the union,” according to Helyar.  Still, Don Fehr was in charge of negotiations for the MLBPA.  With the union under new leadership and solidarity of the players waning, the players’ union agreed to “give-backs” for the first time, as arbitration was rolled back to three years instead of two and the pension formula was changed to the players’ detriment.  As Miller put it, “For the first time in its almost twenty years of existence, the Players Association took backward steps.”  He added, “Either you push forward or you’re going to get pushed back.”  Miller felt that Fehr’s error was “in not instilling in the players the determination to fight the good fight.”

1994 strike – 938 regular season games lost, plus cancellation of the playoffs

In 1994, as Helyar put it, “The players rejected a salary cap as repugnant at any price.”  Nonetheless, owner of the small market Brewers and acting commissioner Bud Selig was convinced a salary cap was necessary and convinced the other owners to fight for it.  Helyar explains, “The players had to go on the offensive, if only for defensive purposes. If no contract was reached by collective bargaining, the Lords could eventually shove the salary cap down their throats. Federal labor law allowed employers to declare a bargaining impasse, after a decent interval for negotiations, and impose employment terms.  The players had to try forcing a deal when they still had some leverage – during the season, when lost games meant lost money for the Lords.”

So, the players went on strike on August 12, 1994.  Ultimately the rest of the season, including the playoffs, were canceled.  Fehr and Selig wound up in court, and Justice Sonia Sotomayor granted an injunction blocking Selig’s intended use of replacement players to start the ’95 season.  The status quo was returned and the strike ended.

Why The Players Went On Strike

I worked through this little history lesson to explain the circumstances under which the players went on the three significant strikes in the 56-year history of their union.  In 1972, it was because the owners tried to test a young MLBPA by moving backwards on an issue that was key to players at the time, their pension and health care benefits.  In 1981, players went on strike because owners demanded a compensation system that would significantly devalue their newly-won right to free agency.  In 1994, players went on strike because Bud Selig attempted to force a salary cap.  The common thread: in each instance, ownership was attempting to move the players significantly backward.

How The Owners Have Justified The 2022 Lockout

Now let’s tie this into the present dispute.  MLB’s lockout is already affecting spring training and could well lead to canceled games in April, so it’s important to understand why they did it.  In his December 2 “letter to baseball fans,” Commissioner Rob Manfred provided two reasons why MLB was “forced to commence” a lockout of the players:

  1.  “We hope that the lockout will jumpstart the negotiations and get us to an agreement that will allow the season to start on time.”
  2.   “We cannot allow an expired agreement to again cause an in-season strike and a missed World Series, like we experienced in 1994.”

It’s pretty easy to dismiss the “jumpstart the negotiations” angle, given that MLB waited 42 days between its lockout and its next proposal.  In my opinion, some credibility is lost when you say that and then wait that long to make your next offer.

But let’s examine the second point, about how we can’t allow another strike like ’94.  I have already established that historically, MLB players going on strike has been rare, and pretty clearly provoked by ownership each time.  However, ownership has not done anything to provoke a strike in 2022.

As Manfred put it, “Baseball’s players have no salary cap and are not subjected to a maximum length or dollar amount on contracts. In fact, only MLB has guaranteed contracts that run 10 or more years, and in excess of $300 million. We have not proposed anything that would change these fundamentals.”  Emphasis mine.  This is completely true.  The MLBPA has plenty of concerns right now with various causes, but they’re not the result of something radical MLB is trying to impose.  MLB wants something resembling the status quo.  The difference of opinion is on whether the status quo is acceptable.

The Current Issues Are Not Strike-worthy

It’s my opinion that the current differences of opinion, which are mostly in in degrees and not concepts, are not compelling enough to cause the players to strike.  Sometimes the degrees of difference are large, like in the case of the competitive balance tax, but it’s still mostly haggling over numbers.  To be clear, the idea that the players wouldn’t strike is guesswork based on the historical precedent I’ve laid out in this post.  Publicly or even privately, if the players are disinclined to strike over the current differences, they cannot admit it.  To do so would be to lose their leverage.

MLB could lift the lockout today and everything would start on time, with negotiations continuing during the season.  So for them to keep the lockout in place and risk canceling games, under the justification Manfred provided, MLB really has to feel a midseason strike would have been likely.  Let’s game that out and envision a hypothetical strike announcement by MLBPA executive director Tony Clark.  For this exercise I’m using the current gaps, even though six months from now those gaps would presumably be smaller.

August 12, 2022: Hypothetical Press Release From Tony Clark On Behalf Of MLB Players

“On this the 28th anniversary of the 1994 strike, I’m devastated to say that MLB players have no choice but to go on strike due to the unreasonable positions of the owners.  Our differences are large enough to risk losing the rest of the 2022 season and the World Series if the owners don’t move significantly within the few weeks.  Here are the reasons we’re going on strike.

We believe all 30 teams should try to win every year.  While we have agreed with MLB on the implementation of a draft lottery, we differ on how many picks should be subject to it (three vs. eight)  and whether teams should be penalized for being bad in consecutive years.

We want the best players to be promoted as soon as they’re ready for the Majors.  Service time manipulation meant MLB stars like Kris Bryant and Vladimir Guerrero Jr. had their debuts delayed past the point of readiness.  Perhaps more importantly to the union, this practice allows teams to control players for nearly seven years instead of the agreed-upon six.  MLB has proposed extra draft picks to incentivize teams to put MLB-ready stars on Opening Day rosters, but we don’t think it’s enough to move the needle.  We feel that rookies should have the opportunity to earn a full year of service time based on factors like awards voting and WAR.  We’re also seeking a $30MM cut in revenue sharing, as we feel these transfers of wealth allow small market teams to be profitable without investing in players and trying to win.

We also believe large market teams should have fewer payroll restrictions.  When we agreed in the previous two CBAs to the competitive balance tax increasing by $32MM over a ten-year period, we didn’t anticipate large market teams would treat the base tax threshold as a de facto salary cap.  MLB has proposed moving the tax threshold by only $12MM by 2026, but we feel a $63MM increase to $273MM over the next five years is necessary.  MLB has proposed increasing the tax rates on overages as well.

As teams have de-emphasized free agency, we need to get players paid earlier in their careers.  One key is the minimum salary, which we feel should increase from $570,500 in 2021 to $775,000 in ’22.  MLB has proposed $630,000, leaving us $145,000 apart.  On a related note, we’re also looking to change salary arbitration so that all players with at least two years are eligible.  This would add dozens of players into the arbitration system each year who previously would have been making a salary close to the league minimum.

The third way we’re looking to increase pay for players earlier in their careers is by the implementation of a pre-arbitration bonus pool.  MLB has agreed to this concept.  We’re proposing each team contribute $3.33MM per year to this pool (a total of $100MM), but MLB is offering only $500K per team (a total of $15MM).

Though the MLBPA is not seeking playoff expansion, we are nonetheless willing to grant MLB an increase to a 12-team field.  They’re seeking a 14-team field.  We feel that expanded playoffs, plus MLB’s proposed addition of advertising to uniforms, would bring significant additional revenue to the teams.

We find the universal designated hitter to be mutually beneficial, and MLB has agreed to implement it.  MLB has also agreed to eliminate the qualifying offer system, which we concede would benefit several players each offseason.

Collective bargaining has been ongoing for nearly 16 months, and we’ve played out the 2022 season without an agreement in place.  While we were cautiously optimistic when MLB lifted the lockout six months ago in February, we now feel that our differences are too significant to be resolved through further bargaining.  Regretfully, a strike is our only recourse, and we hope it will prompt the required movement from MLB to lead to an agreement and save the ’22 playoffs.”

A Possible Third Motive For MLB’s Lockout

Maybe you’re like me and you can’t see Tony Clark issuing a strike announcement statement similar to the hypothetical I wrote above.  Though they wouldn’t admit it, maybe MLB also finds a strike on these grounds to be unlikely.  That leads to a third, unstated possible motive for MLB initiating a lockout in December 2021: they did so mainly to gain financial leverage over the players and get a better deal for themselves.

That’s what I think is happening, and it’s MLB’s right to do so.  In that case, the current situation boils down to MLB being willing to cancel games in April to get a better agreement.

I know it’s easy to “both sides” the current labor dispute.  Feel free to choose from among these commonly-used phrases:

  • A pox on both your houses
  • Millionaires vs. billionaires
  • Where is the fan in all of this

However, only one side can implement a lockout, and only one side can go on strike.  Currently, we’re in a lockout, and I don’t think it’s reasonable to blame the players for going on strike unless they actually do, you know, go on strike.  If the lockout is lifted and the players go on strike over these issues, then yes, the players would shoulder the lion’s share of responsibility for missed games and/or canceled playoffs.  Until then, missed games fall on ownership.

Required baseball labor reading:

MLB’s CBA Proposal Included Ability To Reduce Number Of Available Minor League Roster Spots; MLBPA Planning To Reject

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10:11 pm: Passan tweets that the union is planning to reject MLB’s proposal to possibly shrink the number of minor league roster spots. He adds that the MLBPA has declined similar offers by the league in the past.

8:29 pm: Major League Baseball put forth its latest collective bargaining proposal last weekend. Among the provisions included in that broad offer: a clause that would allow the commissioner’s office to reduce the amount of minor league roster spots available to teams in future seasons, according to a report from Jeff Passan of ESPN.

Currently, teams are permitted to carry up to 180 minor league players in their organizations during the season; that number expands to 190 over the offseason (not including the Dominican Summer League). According to Passan, MLB’s proposal would leave that 180-player limit in place for the upcoming season but would provide the league the flexibility to set the limit of minor leaguers per club at under 150 players at some point during the term of the next CBA. Passan hears from a league source that they’re not currently envisioning cuts to minor league membership at any point in 2023 but value the opportunity to implement stricter roster limits down the line.

MLB has made efforts to contract the minor leagues over the past few years. Over the 2019-20 offseason (prior to the start of the pandemic), the league eliminated 42 teams from affiliated ball, turning them into independent clubs or amateur summer ball teams. As part of the COVID-19 protocols, the league shrank the 2020 first-year player draft from 40 to five rounds. It was set at 20 rounds last year, and Passan writes that the league and union agreed last July to keep a 20-round draft in place going forward.

MLB’s proposal could affect different organizations to varying extents. Passan reports that five franchises currently roster more than 180 MiLB players, while two already have fewer than 150. Given that wide discrepancy in roster count between teams, there’s certainly some logic in tighter regulations to balance the field. Yet MLB no doubt also values the potential to reduce the number of minor league roster spots for cost-cutting reasons. Stricter limits on the number of spots available, if implemented, could involve many or all organizations having to release players.

Whether the Major League Baseball Players Association will sign off on changes to the minor league roster setup remains to be seen. Minor league players are not members of the MLBPA, nor are they members of a union of their own. Yet the MLBPA does play a role in some decisions involving amateur or minor league players. In addition to the aforementioned league-union agreement on cutting draft rounds, the parties have also discussed the possible implementation of a draft lottery, for example.

The treatment of minor league players is an issue that has garnered a fair bit of attention in recent years. The league suggested that improving conditions for remaining minor leaguers provided a compelling justification for cutting teams in the first place. Whether they’ve indeed made significant enough strides to justify those cuts has been a matter of debate. The league is requiring teams to provide housing for their farmhands, starting next season. Yet there remain concerns about the sufficiency of player pay during the season, and MLB continues to battle to keep minor league Spring Training unpaid.

MLBPA “Unimpressed” By MLB’s Latest Offer In CBA Negotiations

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In a meeting this afternoon, Major League Baseball presented its latest offer to the Players’ Association as part of the ongoing collective bargaining negotiations. The meeting lasted less than an hour, according to Joon Lee of ESPN, with the players coming away “unimpressed” — a word used by Lee, Tim Healey of Newsday and Bob Nightengale of USA Today. On the other hand, Michael Silverman of the Boston Globe reports that the league is “underwhelmed by underwhelmed MLBPA.”

Some of the details of MLB’s 130-page proposal are shared by The Athletic’s Evan Drellich and ESPN’s Jesse Rogers.  There was very slight movement on the bonus pool issue, something that had come up in previous bargaining sessions. The league had previously agreed to the MLBPA proposal for a bonus pool, funded by central revenues, to reward pre-arbitration players. Despite agreeing on the proposal, the league and the union have remained far apart on the size. The players initially proposed a total of $105MM, with the league countering by offering $10MM. The players later dropped their ask to $100MM, with the owners today increasing their offer to $15MM.

There was also slight modification to MLB’s proposal regarding the Competitive Balance Tax thresholds. Previously, the plan was to have a limit of $214MM for 2022 through 2024, increasing to $216MM in 2025 and $220MM in 2026. Today’s proposal retained that $214MM number for 2022 and 2023, bumped to $216MM in 2024, and then $218MM and $222MM in the final two years of the deal. The players, on the other hand, have been looking for the threshold to be in the $245MM-260MM range for the five years covered by the deal.

The proposed tax rates for surpassing these thresholds hasn’t changed since MLB’s last proposal, although the draft pick compensation was slightly modified. Under the previous proposal, teams surpassing the first threshold (spending less than $234MM on a proposed $214MM tax threshold) would have to surrender a third round draft pick, though that was dropped to no draft penalty for today’s offer. However, teams would still be paying the same 50 percent tax on every dollar spent within that $214-$234MM area.

As for the league minimum salary, the league made two proposals, one of them involving a flat amount of $630K for all pre-arbitration players. The second proposal involved a tiered system, with players making $615K until they reach one year of service time, $650K for between one and two years’ service time and $725K for those between two and three years’ service time. This is only a slight modification of the previous proposal, in which the tiers were $615K, $650K and $700K, meaning the last tier was the only one to change.

Another proposed change was in relation to MLB’s previous proposal for dealing with service time manipulation. Under the previous proposal, top-100 ranked prospects that were selected to a team’s Opening Day roster could net their team an extra draft pick by finishing in the top five in voting for a major award (the MVP, Cy Young, or Rookie Of The Year) during one of his arbitration-eligible seasons. Under the league’s latest proposal, a team can receive two picks if the player finishes in the top three of voting for multiple major awards. Rogers uses the example of Kris Bryant, as if the Cubs had kept Bryant on their roster for their entirety of the 2015 and 2016 seasons, Chicago would have earned two bonus picks for Bryant’s awards success (the 2015 ROY, the 2016 NL MVP).

In some smaller proposed changes, MLB also proposed a limit on how many times a player could be optioned each year at five. There is currently no limit on how many times a player with options could be shuttled between the majors and the minors, and teams have increasingly taken advantage of this non-rule by constantly moving pitchers back and forth from Triple-A to always ensure fresh relievers are available for in-game maneuvers.

While a five-option cap would still allow teams quite a bit of flexibility for promotions and demotions, it would at least cut down on extreme situations, like how the Rays recalled and demoted right-hander Louis Head 12 times last season. MLB’s proposal for a five-option cap comes with some as yet unknown strings attached, Drellich tweets, which concerns the MLBPA. The union is in favor of a limit to the number of options in general, but their proposal would cap the number of moves at four.

In regards to the amateur draft, the league’s new proposal would reintroduce the “draft and follow” concept, where teams could draft a player and send them to junior college for a year before signing them. In addition, prospects who submit to a pre-draft physical would be guaranteed 75% of their slot value and cannot be “failed” by the physical. This is seemingly in response to Kumar Rocker, who was drafted by the Mets with the 10th overall pick last year, but the two sides didn’t reach a deal since the Mets were concerned by an elbow issue that arose in a post-draft physical. Bob Nightengale adds that the proposal includes an extra $23MM for bonuses given to drafted players and international signings.

If one wants to be optimistic about all of this, it can be said that progress was made and that the league made clear which items it considers negotiable and which it won’t budge on, thus laying the groundwork for the players to come back with their next counter. On the pessimistic side of things, the two sides remain far apart, and the league’s proposed changes in this latest offer are very modest, especially considering the ticking clock that is the scheduled start of Spring Training. Prior to the lockout, pitchers and catchers were scheduled to report this week and games were set to begin on February 26, and the possibility of a deal coming together before then is difficult to fathom.

This inevitably leads to the question of whether or not the regular season will begin as scheduled. It’s often been speculated that a deal would need to be in place by around March 1, in order for teams to have one month to conduct their remaining offseason business and for the players to have a proper Spring Training in advance of Opening Day on March 31. In relation to all this, Drellich reports that the MLB today presented the MLBPA with a calendar outlining when a deal would need to be in place in order to avoid such delays or cancellations. The exact specifications of this calendar aren’t known, though as Drellich notes, it’s unclear if the players would agree with this outlay from the league. As for next steps, Nightengale said that the MLBPA “is expected to submit counter proposals within a week.”

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