Why MLB's labor negotiations have gone nowhere — and baseball's path back
Jeff PassanESPN
ESPN MLB insider
Author of "The Arm: Inside the Billion-Dollar Mystery of the Most Valuable Commodity in Sports"
MORE THAN A month into Major League Baseball's lockout, well aware that the league and players haven't had a single substantive negotiating session since the work stoppage began and that spring training is fast approaching without an iota of progress toward a new collective bargaining agreement, a longtime baseball man very calmly said into his phone earlier this week, "What the f— are we doing?"
This man is not an alarmist. He has intimate knowledge of how the relationship between the league and the players' union works — or rather, doesn't work — and he has grown increasingly cynical about the parties reaching a deal anytime soon. He's not yet ready to say baseball will lose games on account of its labor war, but he's not ready to say baseball won't lose games, either.
He sees it happening again — the same thing that happened in 2020, when an attempt to strike a deal for the season fell apart. Then and now, the players and league don't negotiate so much as talk past each other. For all the rhetoric about the animosity between the parties not mattering as much as the substance of the issues they're discussing, they can't even get to the substance of the issues because the relationship is so toxic.
"We're in such a place as an industry that it's kind of like politics," the man said. "Everyone is so obsessed with winning this narrow game we've prescribed for ourselves. There's no practicality. No moderation."
He's not at the point of saying there's no hope, though on some days, it certainly feels that way. Baseball, at the moment, is frighteningly irrelevant. In a normal winter, players would be signing and teams would be making trades, and the promise of pitchers and catchers reporting would provide enough fuel to keep the hot stove lit. Today, there is nothing. MLB's official website looks like an old GeoCities page, and its TV network is in permanent rerun mode. Pitchers and catchers reporting in mid-February gets less likely by the minute, and after 36 days of silence since the lockout began, there remain no plans for the sides to talk about the core economic issues that cleave them.
The longtime baseball man is very real, but he is also a proxy. He is you, your friends, your family. He is everyone you know who loves baseball and is wondering whether the owners and players will allow what's heretofore been a dispute with no casualties to spiral into something that could deeply scar the sport. He is also frustrated. He is annoyed. He is over this.
And this might be what most aggrieves the man: He's not the only one that knows there's a path to a deal. Everyone in baseball does. But so far, they're all walking right past it.
PERHAPS NOTHING BETTER illustrates how far apart MLB and the MLB Players Association remain than their last bargaining session on Dec. 1. Over the previous few months, both believed they had offered concessions. Both sneered at the other's proposals. This session at a luxury hotel in Dallas offered one last opportunity. It might take a miracle, but at least they would try.
That afternoon, the sides talked for seven minutes before the meeting broke up. At midnight, the owners locked out the players.
The consequences continue to reverberate. Earlier in the day, MLB had said it wanted to talk about core economics, but only on the condition that those discussions not include any changes to the six-year reserve period of free agency, the arbitration system or revenue sharing. The union would not agree to that condition. Seven minutes in, there was nothing left to discuss. MLB left the hotel and did not return.
And now, five weeks later, the fallout of the failed discussions remains unresolved, according to sources. The union believes it's the league's turn to make an offer and, according to a source, MLB is working on proposals to bring to the table. Five days into the new year, there still isn't a bargaining session on the calendar.
The lack of urgency — particularly considering the sport's history of failed negotiations — is the cause for most concern among the 27 people with whom ESPN spoke in recent weeks, including officials from the league and union, players, owners, agents, club executives and others familiar with the current state of affairs. That the two parties have fallen into the same habits they exhibited during the disastrous back-and-forth that ended with commissioner Rob Manfred implementing a 60-game season in 2020 has done little to foster optimism.
In November, Manfred played down those early-coronavirus-pandemic shutdown negotiations as anomalous, and certainly, they were under different circumstances. But to suggest they're not instructive is simply wrong. The chasm between the sides today is not dissimilar from the one that wound up with Manfred implementing a season because no deal could be struck. Even that declaration took 27 days of negotiating. And almost everyone with whom ESPN spoke believes the earliest negotiations will ramp up this time is late January.
These discussions are significantly more complicated than the COVID-shortened season, too, with far-reaching implications. The collective bargaining agreement is baseball's fascia, connecting everything in the sport and bringing disparate systems together as parts of a whole. It is where change happens, and this time around, the players want change almost everywhere.
They're asking for earlier free agency, earlier arbitration, a rejiggered draft system, more money going to younger players, a higher minimum salary, less revenue sharing and a higher luxury tax threshold, among other things. These are major changes, but not necessarily paradigm-shifting ones — even though Manfred, in a letter to fans posted immediately after he locked out the players, dramatically claimed they "would threaten the ability of most teams to be competitive." (He provided no evidence to support the idea that players becoming free agents after five years or reaching arbitration after two years would ruin the sport — because no such evidence exists. All is fair in labor war — including bogeymanning.)
The league, warding off major changes and content with the status quo, is pursuing expanded playoffs — but really is most interested in continuing its curtailed spending.
Player salaries dipped to $4.05 billion in 2021 — a $200 million drop from the record high in 2017 and the lowest since 2015, when the league still hadn't crossed the $4 billion mark. It's not just the total spending that chapped players. While two teams went beyond the $210 million competitive balance tax threshold, the Phillies ($209.4 million), Yankees ($208.4 million), Mets ($207.7 million), Red Sox ($207.6 million) and Astros ($206.6 million) came right up to the edge without exceeding it.
Baseball does not have a salary cap, though having five teams tippy-toeing toward $210 million certainly looks like a soft one. It's no surprise, then, that according to sources, the threshold is emerging as a potential focal point in any deal. From 2011 to the last full-revenue season, 2019, the threshold rose from $178 million to $206 million. Industry revenues in that time jumped from an estimated $6.3 billion to $10.7 billion, according to Forbes. That's a nearly 70% bump in revenue, compared to a CBT threshold that went up 15.7%.
One of the league's most recent offers included raising the CBT threshold from its current $210 million to $214 million in 2022 and ending at $220 million. The union's most recent first-year-threshold offer: $245 million. MLB argues that an increase in the CBT threshold will exacerbate the disparity between large- and small-payroll teams. The union simply wants more room for big-money teams to spend.
We've got the latest on MLB's first lockout since 1990 — plus where things stand on the (currently frozen) free-agency front. Full coverage »
• FAQ: Everything you need to know about MLB's lockout »
• Free-agency tracker »
It may be too early to call CBT discussions the bellwether of a deal, but even the most vociferous union members acknowledge the MLBPA's suite of asks will not be met. So discussions are likeliest to move forward when the players rank their importance. That, ownership-level sources said, was the goal of attempting to narrow discussions during the Dec. 1 meeting. Is "competitive integrity" — a phrase repeated by players who say tanking is an existential threat to the sport — truly their greatest concern? Is it getting players paid earlier in their careers? Or raising the CBT so it stops cosplaying as a salary cap?
Eventually, the answer will reveal itself, and how soon it does is vital to the season starting on time. Two players said they are steeling themselves for missing games, not simply because it could happen, but because they believe it will. Others are more optimistic, believing that the possibility of missing paychecks and game revenues will spook both sides toward a deal. One official who has lived through multiple negotiations looks at it even more cynically — and practically.
"The only thing that's gonna move either side," he said, "is mutual assured destruction."
IN THE SPIRIT of avoiding a winter more nuclear than the one already underway, ESPN asked more than a dozen major league sources what they believe a path to a deal looks like. Most of the group — a mixture of one owner, two league officials, two general managers, one assistant GM, four players, one union official and two agents — offered a version of an agreement that looked something like this.
1. Raise minimum salaries to around $650,000 — a 14% bump
2. Add a performance bonus pool for pre-arbitration players
3. Implement the universal designated hitter
4. Expand the postseason from 10 to 14 teams
5. Remove indirect draft-pick compensation for free agents
6. Make significant changes to the draft to disincentivize tanking and reward small markets
7. Raise the CBT threshold into the $230 million-plus range and remove other restraints, including nonmonetary and recidivism penalties
If this looks like it's weighted in favor of the players, it is. After suffering through financial losses during the pandemic in 2020, owners do not want to relive that damage, and if a slight change in the current system — and this would still amount to slight, considering what would remain in place — is the price, that easily beats the alternative.
Which, of course, is games lost, revenue plummeting, gambling deals wasted and players who just wanted to emerge with a few Ws increasingly angrier and willing to hold out longer. Getting a deal done allows the league to avoid wearing the blame of games lost — much of which would fall on Manfred, who has proven a quite-capable scapegoat for the extremely online. And, crucially, a new five-year deal would also give MLB and players time to dream up mutually agreeable, sustainable long-term changes, assuming they actually figure out how to talk with one another between now and then.
The deal most sources proposed would mean players give up seeking free agency and arbitration earlier, which would bother groups of them, certainly. And there is real concern that a 14-team playoff would have disastrous consequences, if teams were to decide not to spend in free agency and try to sneak into the postseason even with an average roster, although it could also incentivize more below-.500 teams to spend in hopes of grabbing a playoff lottery ticket. Those potential pitfalls, the majority of people who tried to conjure a path said, are well worth what players would gain.
Keep up with the latest moves, grades and analysis — all in one place — from the first half of baseball's 2021-22 hot stove season. Tracker »
As good as the players have it — and the massive guaranteed contracts and $1.7 billion spent already this winter are undeniably good — that shouldn't preclude them from making progress in some of these areas. Wanting the CBT threshold raised and asking for competitive integrity is not hypocritical. Past agreements have not sufficiently raised the CBT; past agreements have allowed tanking to fester. Allowing a system to thrive in which teams actively lose because it behooves them to do so is far more of a threat to the game than big-market teams spending more. And if the latter is indeed existential to MLB, perhaps it introduces more levers that benefit the small-market teams that somehow still subsist on $50 million payrolls.
Owners will chafe at the idea of a deal that guarantees more money to players via minimum salaries and bonus pools, plus ostensibly enriches them with a raised CBT and fewer restraints. Here's the truth, though, one that frustrates players because it is the deepest flaw of the free-market system they espouse: Nothing in this sort of deal prevents owners from spending less in free agency to make up for it. Draft spending is, and would still be, capped. International amateur spending is capped. Arbitration spending is predictable. The one area in which owners can change their approach has always been free agency – and a big reason why salaries are down in recent years is because they have.
It's a lot to consider with spring training theoretically approaching, and when one high-ranking source says "no one's getting serious until late January and early February," well, it doesn't exactly instill hope of a timely resolution. But certain dates remain important, and even if some see this going in the wrong direction, it's imperative not to play prisoner of the moment.
So, yes, Feb. 1 is still the first litmus test. If they haven't made progress by then, chances are spring training will be delayed. Which isn't a huge deal. It's March 1 that sets off the alarm. If there is no progress by then, only a quick agreement will save games — and even that might not get it done. There is still free agency to finish and arbitration to adjudicate and algorithms for teams to rejigger based on all the new inputs from an agreement. Players, who haven't been allowed to talk with teams, need to set up travel. Those in foreign countries will need help getting visas to return. Shoehorning that and three weeks of spring training in is nobody's idea of a good time.
Time and a path, at this point, are all those who want to see baseball can rely upon. The personalities of Dan Halem and Bruce Meyer at the negotiating table, the steadiness of Manfred and Tony Clark's hands in leading their sides, the volatility of the players and owners — all are variables with history, sure, but they can't always foretell the future.
Baseball has the opportunity to show that this isn't 2020, that the two parties can make a deal, that the words Manfred uttered a week before the lockout — "an offseason lockout that moves the process forward is different than a labor dispute that costs games" — aren't hollow. Because for now, the process is not moving forward. It's stuck where it's been for the last five weeks.
On top Down Under: Djokovic ties men's record
Trade grades: Horvat fills a need for the Islanders — but at a high cost
NBA roundtable: All-Star starters surprises, snubs and reaction
Sources: Harbaugh, Broncos meet but no deal
Virat Kohli Shares Photo Of Trekking. Internet Can't Keep Calm
Lakers' LeBron James moves to fourth place on NBA's all-time assists list
What does the hiring of Sean Payton mean for Broncos and Saints?
Blue Bay LPGA canceled for third time in 4 years