Collective Bargaining Agreement

MLB’s self-imposed deadline to reach an agreement with the Players Association is today, and Evan Drellich, Ken Rosenthal and Fabian Ardaya of The Athletic report that the league took a “more threatening” tone to the MLBPA today and voiced a willingness to miss a month’s worth of regular-season games (Twitter link). The first meeting between the two parties today lasted only 40 to 45 minutes, tweets Michael Silverman of the Boston Globe, though the expectation is that negotiations will continue throughout the day.

The players have, unsurprisingly, taken that as a clear threat, tweets ESPN’s Jeff Passan, although there’s been no indication to this point that the union’s solidarity has begun to wane. The players have generally taken an exceptionally united front, even in the wake of what was seen as a discouraging counterproposal from the league late last week. There’s been little expectation that the league and union would be able to avoid the “disastrous outcome” of canceled regular season games (as described by commissioner Rob Manfred himself), so the only notable component of that threat is the number of games the league is willing to miss.

The Associated Press estimates that each day of canceled games would result in a collective $20.5MM of missed salary for the players, although it’s worth emphasizing that the union has envisioned just such a hardline tactic from the league for years and has been stockpiling funds to weather this type of storm. MLBTR’s Tim Dierkes reported over the weekend that the league’s strike find is “exponentially” larger than it has ever been (Twitter thread). The MLBPA has been holding back full licensing revenues for years to safeguard against this type of scenario, and the players also spun their licensing department into a separate company, MLB Players Inc.

In doing so, the players afforded themselves the ability to take equity in other companies. Jared Diamond of the Wall Street Journal profiled MLB Players Inc.’s deal with Fanatics over the summer, and they’ve also taken an equity stake in OneTeam Partners. The result is a considerable increase in the union’s funds, and while an exact dollar amount isn’t known, there are a couple pieces of information that can provide relevant benchmarks. An Associated Press report earlier this month indicates the union had as much as $178.5MM at year-end in 2020. An LM-2 Form filed to the U.S. Department of Labor suggests the number was $171.4MM for the 2020 calendar year. Either figure is dated by now, and the size of the fund only figures to have grown.

Notably, players can apply for monthly stipends in the absence of collecting their salaries. The union had provided a pair of $5,000 stipends for February and March, and Drellich and Rosenthal report that the figure will jump to $15,000 beginning on April 1 (when the regular season would be underway). Not all players will apply for that stipend, of course, but in theory even if they did, the 1200 stipends would cost the union a total of $18MM. Add in a pair of (again, theoretical) $6MM payouts for February and March, and it still only taps into $30MM of the union’s funds. Realistically, even based on the 2020 numbers and not accounting for 2021 licensing revenues, the union likely has more than enough capital to make it through the whole season paying out those stipends.

While it’s true that the sport’s biggest stars won’t bat an eye at a $15,000 monthly stipend and may not even file to collect it, that figure is crucial for the union members on the lower rung of the pay scale. Consider players who were just added to 40-man rosters over the winter and those who’ve not yet solidified themselves as big league regulars. Those players could well be looking at spending much of the season in Triple-A, and the $15,000 stipend would largely account for that minor league salary — in some cases, with Double-A and Class-A players who’ve been added to the 40-man roster over the winter, the stipends may even exceed their would-be minor league salaries.

The prospect of lost salaries doesn’t sit well with the union, but the game’s star players who are on lengthy multi-year contracts can surely weather the loss, and those who are most vulnerable are generally taken care of via the monthly stipends. There’s an undeniable middle class who’d be getting squeezed — pre-arbitration players who are solidified on the MLB roster — but those players are among the ones the union is fighting for most ardently, insisting upon increases in minimum salary and pushing for earlier paths into arbitration. Broadly speaking, there’s good reason to believe that even amid the loss of salaries, MLBPA solidarity is likely to remain strong.

Representatives from the owners and the MLB Players Association met today for an extended series of talks, a day in advance of the league’s self-imposed deadline to avoid the cancellation of regular-season games.  More negotiations are scheduled for Monday at 9am CT, following multiple sessions today that took place over almost a six-hour time period.

This marks the seventh consecutive days of negotiations between the two sides, as the clock continues to tick towards both the owners’ February 28 deadline and the start of the regular season on March 31.  Some Spring Training games have already been canceled by the lockout, and if a new collective bargaining agreement was reached by tomorrow, teams would face a whirlwind of a month consisting of both an abbreviated Spring Training, and essentially three months of lost offseason business crammed into roughly a four-week window.

Given both the lack of progress and some open frustration emerging during yesterday’s talks, it seems like a longshot that a new CBA will actually be struck by tomorrow.  As Chelsea Janes of The Washington Post notes, the unofficial nature of the owners’ February 28 deadline means that it could be pushed back if there is actual movement towards an agreement, and the players are likely to make such a case if some noteworthy progress is made tomorrow.

A league official told multiple reporters (including The Boston Globe’s Michael Silverman) that today’s talks were “productive,” as the two sides discussed both core economic issues and other CBA items not directly related to economics.  However, the league and the MLBPA are still “far apart” on many of these issues, according to USA Today’s Bob Nightengale (Twitter links), and today’s talks included “a lot of hypotheticals” under discussion and no actual proposals from either side.

One detail from the league’s side relates to the luxury tax threshold, as The Athletic’s Evan Drellich and Ken Rosenthal report that the owners have “indicated willingness” to raise the levels of the Competitive Balance Tax thresholds beyond their past offers.  It wouldn’t be a big raise, however, past the $214MM that the league submitted yesterday as the initial tax threshold.

Past reports indicated that the owners’ offers to eliminate the qualifying offer (and thus eliminating the draft-pick penalty for teams who signed a QO-rejecting free agent) was linked to the CBT negotiations, specifically with the league looking for higher taxation rates for teams who exceed the CBT tiers, according to Drellich/Rosenthal.  Presumably, owners see the elimination of the qualifying offer as a significant enough concession to counter the MLBPA’s demands for much higher luxury tax thresholds, though the union clearly doesn’t see the two matters as a worthwhile trade-off.

The topic of an expanded postseason has also been a key part of CBA talks, as MLBTR’s Anthony Franco explored back in December.  With the owners eager for more teams (and thus more games and more TV revenue) in the playoffs, the MLBPA has been trying to leverage this desire into making gains on other economic issues.  Most recently, the expanded playoffs also factored into the February 28th deadline, as the union has said that they won’t agree to a larger postseason field whatsoever if the owners withhold pay due to canceled regular-season games.

Rosenthal (Twitter links) has some details on the MLBPA’s offer for a new playoff format, which includes an increase in the number of postseason teams from 10 to 12.  The owners have been pushing for a 14-team postseason, though in both 12-team and 14-team scenarios, the union’s offer includes the concept of a “ghost win” in the first playoff round as a reward to teams who win their division.  For example, a division-winning team would only have to win one of the first two games of a first-round series in order to advance, while the wild card opponent would have to win both contests.

In short, the idea would to incentivize winning a division title, which would theoretically entice teams to spend more on player salaries in order to be more competitive.  The MLBPA has seen the concept of a larger playoff field as a possible drag on spending, as teams have less urgency or a bigger margin for error in reaching the postseason.  The league’s 14-team offer did propose awarding a first-round bye to the teams with the best records in the AL and NL, and the other four division winners would have the benefits of both hosting the entire wild card series in their home ballpark, and also choosing which of the wild card teams they’d want to play.

7:19PM: The MLBPA and the league have agreed to resume talks at noon CT on Sunday, according to multiple reports.

4:39PM: Today’s negotiating sessions between the league and the MLB Players Association have concluded for the day, after a pair of separate meetings between the two sides.  After each group conferred privately for an extended period of time, MLBPA reps presented a new proposal to the owners during a 15-minute session.  The ownership group then took time to mull over the offer before another meeting with the players that lasted roughly 45 minutes.

The union’s proposal was a “comprehensive” offer that addressed several core economic issues, according to ESPN’s Jeff Passan and Jesse Rogers (Twitter links).  Perhaps most importantly in terms of finding common ground on a new collective bargaining agreement, the MLBPA is now “backing significantly off” some of its most noteworthy asks in previous offers.  This includes changes to the players’ previous demands about the luxury tax, an expansion in Super Two eligibility, and cuts to the amount of revenue-sharing funds allocated to smaller-market teams.

Despite these concessions, the owners still “reacted badly” to the latest union offer, The Athletic’s Evan Drellich reports.  This led to an “outraged” reaction from the players and a “hostile” tone in the second meeting between the two sides.  As per Chelsea Janes of The Washington Post, the “players are currently considering walking away from the table” altogether, rather than take part in meetings that were slated for tomorrow and Monday. 

As reported by ESPN’s Enrique Rojas (Spanish-language link) and The Associated Press, the MLBPA is now seeking to expand Super Two eligibility to 35% of all players who have between two and three years of service time.  This represents a major decrease from the players’ previous ask of 75% of all players within that service-time window, and yet apparently it isn’t enough to change the owners’ stance.  The league has been steadfast in refusing any expansion to the Super Two structure — in the last CBA, the top 22% of players with between two and three years of service time received an extra year of arbitration eligibility.

Likewise, the league has refused any discussion of changes to the revenue-sharing structure.  The union initially sought a $100MM cut in revenue-sharing funds, and later dropped that demand to $30MM.  Today’s proposal altered that number further, as teams receiving revenue-sharing wouldn’t lose any money, but would still be incentivized to increase local revenue with the offer of extra money made available from MLB’s central fund.  However, the owners are still not willing to budge whatsoever on the topic.

Discussions about the competitive balance tax have at least led to some back-and-forth negotiations, albeit without much progress.  The players made a $2MM reduction for each of the second, third, and fourth years of luxury tax thresholds, breaking down the numbers as follows: a $245MM tax number in 2022, $250MM in 2023, $257MM in 2024, $264MM in 2025, and $273MM in 2026.

The league made only one change to its base tax thresholds, with a $1MM increase to the second year of the CBA.  The owners’ proposed luxury tax thresholds are $214MM in 2022, $215MM in 2023, $216MM in 2024, $218MM in 2025, and $222MM in 2026.

In regards to the penalties for exceeding those thresholds, Major League Baseball again made only slight adjustments from its previous offer.  In today’s proposal from the league, teams exceeding each of the three levels for the first time would pay a 45% tax on the overage of any dollar spent between $214MM-$234MM, a 62% tax on overages from $234MM-$254MM, and a 95% tax rate on the overage for anything spent beyond the $254MM mark.  Previously, the league wanted respective tax rates of 50%, 75%, and 100% for each of the three thresholds.

These are obviously still sizeable jumps over the overage tax rates in the last CBA (20%, 32%, and 62.5%), and the league has compounded the penalty by asking that teams that surpass the second and third tiers lose draft picks.  The MLBPA has been adamantly against the owners’ luxury tax asks, viewing the demands as essentially the creation of an unofficial salary cap.

As reported yesterday by Drellich and Ken Rosenthal, the league has been looking shorten the amount of time required before unilateral on-field rule changes can be imposed.  The previous CBA had a one-year grace period between a league’s proposal and (whether the union agreed to the rule changes or not) the implementation of said new rules, though the owners are now looking for a grace period of only 45 days.  The MLBPA has been resistant to this shorter window of time, and the league needs the players’ approval in the next CBA to agree to the owners’ ability to implement unilateral rule changes of any kind.

Returning to the issue of service time, the league has agreed that players who finish first or second in Rookie Of The Year voting will receive a full year of service time.  (Derrick Goold of the St. Louis Post-Dispatch was among those to report the news.)  This counts as a minor win for the players, even if the MLBPA has been looking at a WAR-based formula for multiple players who excel in their rookie seasons to receive service time.  The league had been looking instead address the service-time manipulation issue by offering extra draft picks to teams who have players with top-three finishes in the ROY/MVP/Cy Young voting during their first three arbitration-eligible seasons.

If there is any other minor glimpse of good news from today’s meetings, one CBA issue has apparently been settled.  The owners and players agreed to a new rule on minor league options, as USA Today’s Bob Nightengale reports that players can now be sent to the minor leagues a maximum of five times per season.

Unfortunately, progress has apparently been lost on the topic of a draft lottery.  Reports from yesterday’s negotiating sessions indicated that the two sides were at least coming close to settling the exact number of teams involved in such a lottery, though the owners attempted to make a larger lottery (as per the MLBPA’s demands) contingent on the acceptance of a 14-team postseason.  That same offer was floated by the league today and turned down by the players, who had previously expressed a willingness to expand the playoffs to 12 teams.  Given the amount of extra revenue involved in extra postseason games, it isn’t surprising that the union isn’t willing to make such a major concession to the owners without tying it to an issue of greater import than the draft lottery.

Saturday’s sessions mark the sixth consecutive day of talks between the two sides, yet this increase in negotiations has yet to produce much in the way of concrete progress.  MLB has stated that without a CBA in place by Monday, some regular-season games will have to be canceled, though the union has remained skeptical that the league truly sees February 28th as a firm deadline.

However, some Spring Training games have already been canceled, and it becomes increasingly unlikely that Opening Day will proceed as scheduled on March 31.  If the hard feelings reportedly generated in today’s meetings actually do result in a breakdown in talks, it will only lead to more dismay and frustration among baseball fans who are more than ready for the lockout to be over.

Under the terms of the 2016-21 collective bargaining agreement, Major League Baseball had the authority to unilaterally implement on-field rules changes one year after formally proposing them to the Players Association. Even in the event the MLBPA rejected the specific idea under consideration, the league could put that provision into place one season later.

As part of this week’s negotiations on a new CBA, MLB has pursued a shorter ramp-up period for its ability to implement rules changes, report Evan Drellich and Ken Rosenthal of the Athletic. The exact grace period the league was targeting remains unclear, but MLB evidently doesn’t want to have to wait an entire year to implement rules adjustments without the union’s approval. The league would need the MLBPA’s approval to include the broad authority to expedite rules alterations in the next CBA, though, and Drellich and Rosenthal hear the union responded negatively to the league’s initiative.

While the league could leverage a shorter grace period to more quickly pass any number of rules changes, it seems the current motivation for trying to speed up the process is to more quickly implement one provision in particular: the pitch clock. The Athletic writes that the league specifically cited a pitch clock as a possible alteration it’d be interested in making.

MLB commissioner Rob Manfred voiced support for a pitch clock in November, saying it was a feature “owners remain very interested in” implementing. The league has been testing pitch clocks in the minor leagues as part of its initiatives to quicken pace of play and shorten game lengths, and it’s clear MLB has a desire to carry that over to the big league level.

The precise impact a pitch clock would have is a matter of some debate. Jayson Stark of the Athletic examined the possible impact of the Low-A West’s implementation of a 15-second pitch clock midseason last year, finding that average game length dropped 21 minutes after the clock was put in effect. However, J.J. Cooper of Baseball America pointed out that the implementation of 20-second pitch clocks in Double-A and Triple-A in 2015 had mixed results. Those levels saw an immediate significant drop in average game time, but game length gradually rose over time and eventually exceeded pre-pitch clock levels. There are myriad explanations for why games continue to take longer — more time between pitches, fewer balls in play leading to deeper counts — but the trend in the high minors indicates that merely instituting a pitch clock may not be a panacea in the league’s efforts to shorten games over the long haul.

Fans’ opinions on the pitch clock figure to vary. Some will embrace any opportunity to cut dead time out of the game, while others will recoil at the notion of timing a sport that has traditionally proceeded without clocks. Regardless, it seems MLB is intent on implementing a clock at some point. The players’ opposition to shortening the period for rules changes may be rooted in a broader unwillingness to centralize more power in the league office than in opposition to the pitch clock specifically. Either way, it seems they’re none too keen on the idea of allowing the commissioner to more rapidly change the game’s rules.

The league has used its authority to implement rules changes without union approval in the past. Most notably, MLB implemented the three-batter minimum rule for pitchers (another pace of play initiative) over the 2019-20 offseason. The MLBPA never formally agreed to that change, although they did assent not to challenge MLB’s installation of it as part of a broader package of alterations mutually implemented heading into the 2019 season.

Whether the league and union will discuss any other rules adjustments in the coming days and weeks remains to be seen. Upon announcing MLB’s implementation of the lockout in early December, Manfred indicated on-field rules changes might be tabled while the league and union dealt with core economics problems. Many of those economics issues remain, and time is dwindling for the sides to agree to a new CBA if the league is to start the regular season on time. Limits on defensive shifting and the automated strike zone are among other topics of possible discussion whenever MLB and the union circle back to considering changes to the on-field product.

7:39 pm: Drellich adds that MLB attempted to tie changes to the draft order to the league’s desired 14-team playoff. Unsurprisingly, the union didn’t view that as a favorable tradeoff. The MLBPA has been amenable to a 12-team postseason, but has thus far been against a 14-team playoff, fearing that a broader field could reduce the incentive for teams to upgrade their rosters via free agency.

7:22 pm: Major League Baseball announced they’ve canceled all Spring Training games through March 7, as Jesse Rogers of ESPN was among those to relay (Twitter link). MLB had previously announced the cancelation of all exhibition contests through March 4.

Today’s news is little more than a formality. It became increasingly apparent as talks between MLB and the Players Association dragged on with little progress throughout the week that a new collective bargaining agreement wouldn’t be in place for games to begin next Saturday. The earliest games will get underway is now Tuesday, March 8 — and that’s contingent on having a new CBA finalized by next Monday, February 28.

Discussions between the league and MLBPA continued for the fifth consecutive day. The meetings lasted until the early evening, and the parties reportedly made progress on one issue — albeit one of comparatively lesser import than some others. Evan Drellich of the Athletic reports (on Twitter) MLB and the union exchanged proposals regarding the lottery to determine the amateur draft order. While the format wasn’t definitively agreed upon, Drellich hears they “made gains” in talks and there’s optimism they’ll find a mutually agreeable solution on that question soon.

The sides have exchanged proposals regarding the draft lottery throughout the week. MLB has offered to determine the top four picks by lottery, while the union has sought to randomize the first seven selections. A lottery would encompass all non-playoff teams from the previous season, with their odds of landing each pick likely weighted by inverse order of the previous year’s standings. Whatever picks are not determined by lottery would then be set by the reverse order of the prior season’s winning percentage, as had been the case for all selections under the last CBA.

Derrick Goold of the St. Louis Post-Dispatch reports (Twitter link) that the league’s latest proposal remains a four-pick lottery but includes various limits on how many consecutive seasons a team may be eligible for entry. That’s a key goal of the union, which has sought to discourage clubs from embarking on long-term rebuilds by capping how often a team can remain near the top of the draft. The MLBPA has proposed limiting teams’ eligibility for high choices based on both a) in how many consecutive seasons they finish near the bottom of the standings and on b) club market size.

Given the utter dearth of progress towards a midpoint on any issues throughout CBA discussions, that the sides are seemingly closing the gap on the lottery is welcome. That said, it’s worth keeping in mind that the lottery always looked to be one of the easier points for the league and union to find a solution. Issues like playoff expansion (a key goal of the league’s), the competitive balance tax, the bonus pool for pre-arbitration players and the union’s push for broader arbitration eligibility all remain unresolved and seem to be quite a bit more contentious.

Neither side made a formal proposal today on any issue other than the lottery, according to Joel Sherman of the New York Post. That said, Drellich tweets that the parties have had conversations about all other issues — even the CBT, on which neither side has made a formal offer in recent days. This afternoon, MLB commissioner Rob Manfred appeared at the negotiations for the first time of the week, meeting one-on-one with MLBPA executive director Tony Clark. Goold adds that Manfred’s appearance was unscheduled and came as a surprise to the union, though the commissioner did not speak with any current players. It marked the first known, in-person individual conversation between Manfred and Clark since 2020, as Drellich points out.

There’s obviously still plenty to hammer out, and we’re now only three days from MLB’s imposed February 28 deadline for a deal before the league begins to cancel regular season games. That continues to look like a tall task, although today’s reports come with a hint more optimism about the tenor of conversations than those from earlier in the week. They’ll meet again tomorrow and are expected to sit down every day through the end of the month in hopes of reaching an agreement.

The owners and players held their fourth consecutive day of meetings as the two sides continue to try and work out a new collective bargaining agreement, yet once again, “no substantial progress” came from the session, according to The Athletic’s Evan Drellich (Twitter links).  Representatives from the league and the MLB Players Association are scheduled to meet again tomorrow.

As outlined by Drellich and The Washington Post’s Chelsea Janes, the union made two minor concessions based on past proposals.  Whereas the MLBPA had sought to give an extra year of service time to 29 players considered to be victims of service time manipulation over the last five years, the union dropped that number to 20 players today.

The other new wrinkle related to the concept of a draft lottery to decide the first several picks of the amateur draft.  The league offered a lottery covering the first four picks while the union wanted the lottery to cover the first seven picks, and today’s MLBPA proposal retained that seven-pick concept.  However, the union altered its proposal to remove punishment for teams who had consecutive losing seasons.  It “had been a league concern that [the] system would punish teams that were just bad and not tanking,” Janes writes.

MLBTR has learned more specifics regarding the union’s proposal for the draft lottery, which would take effect in 2023. All non-playoff teams would be included in the lottery. The odds of landing the first pick would be weighted by inverse order of the previous season’s standings as follows (assuming a 12-team playoff, as the MLBPA has proposed thus far):

• Team 1: 15% (the team with the worst record in baseball)
• Team 2: 15% (the team with the second-worst record in baseball)
• Team 3: 15%
• Team 4: 12.5%
• Team 5: 10%
• Team 6: 8%
• Team 7: 6.5%
• Team 8: 5%
• Team 9: 3.25%
• Team 10: 2.25%
• Team 11: 1.5%
• Team 12: 1.25%
• Team 13: 1.12%
• Team 14: 1%
• Team 15: 0.88%
• Team 16: 0.75%
• Team 17: 0.625%
• Team 18: 0.375%

The MLBPA is also proposing competitiveness adjustments.  Revenue sharing payors that finish in the bottom eight in winning percentage in each of the two previous seasons or in the bottom 12 in each of the three previous seasons would pick no earlier than 10th.  Additionally, any team that does not receive revenue sharing that finishes in the bottom 12 in each of the four or more previous seasons would have their pick moved to #18.

Also, beginning with the 2024 draft, any revenue sharing recipient finishing in the bottom eight in each of the three previous seasons would pick no earlier than 10th.  Any such club in the bottom eight in each of the four or more previous seasons would have their pick moved to #18.

The union also made a slight modification in its efforts to grant rookies bonus service time based on performance, as Drellich first reported (via Twitter). Under the MLBPA’s proposal, infielders/catchers/DH’s who finish in the top five at their position in their respective leagues in WAR would receive a full year of service, while outfielders, starting pitchers and relievers who finish among their league’s top fifteen in WAR would as well. That’s a slight reduction from the union’s previous ask, which would’ve granted a full year of service for infielders/catchers/DH’s who finished among the top seven and outfielders/pitchers who finished among the top twenty.

The union is still pursuing a full year of service for top five finishers in Rookie of the Year balloting, all-MLB placement and a top three placement in Reliever of the Year voting. MLB has thus far been opposed to the idea of players “earning” service time, instead offering teams additional draft choices for promoting high-performing players at the start of the season.

Bigger-picture CBA topics (such as the luxury tax thresholds, minimum salary increases, salary arbitration eligibility, etc.) still remain up in the air, with today’s talks apparently yielding no movement on any of these issues.  As has become a regular feature of these talks, both sides left a negotiating session feeling frustrated.  According to Michael Silverman of The Boston Globe, the “players [are] upset with how far apart sides remain,” and “MLB negotiators told union they have run out of ideas and that owners are upset with players.”

February 28 remains Major League Baseball’s stated deadline for reaching a new CBA, or else the league has said it will start canceling games from the regular-season schedule.  As Janes notes, “the union doesn’t exactly agree to [February 28] as a deadline,” so it remains to be seen whether any urgency will finally be shown by either side in tomorrow’s session, or in any talks that might be scheduled for the weekend or Monday.  Considering the huge differences of opinion that remain between the league and the MLBPA, it is hard to believe that an entire new collective bargaining agreement could even be close to settled by Monday, let alone a fully agreement reached.