MLB and the MLB Players Association (MLBPA) will meet again – and again – this week. They plan on holding daily meetings, if necessary, to discuss a new round of collective bargaining agreements (CBA) negotiations, as the current lockout has been in place for more than two months. Spring Training is expected to be delayed and there are rumors of Opening Day not meeting its expected March 31 date with fans.
MLB Owners Riding Players
MLB advised the union that if the start of the 2022 regular-season season is not to be delayed, a new CBA must have been in place by February 28, according to Jeff Passan of ESPN and Jesse Rogers from ESPN. At this past Saturday’s meeting, owners set the deadline for making a deal in order to salvage Opening Day as February 28.
Opening Day won’t be until March 31, but there will still be at least three weeks’ worth of Spring Training to get players ready for the season. Many unsigned players are still available on the market and would require time to sign a contract. It is likely that the market will move quickly once a deal has been reached.
Both the union and league have already reached an agreement on parts of the next CBA. This includes a universal designated hit and draft lottery.
Economics Continues to be an Issue
Players are unhappy that they get less of the revenue they generate. Despite MLB’s revenue increasing each year, and 2020’s COVID-impacted seasons, payrolls around MLB have been falling by almost 5% since 2017.
Although owners have claimed that increasing salaries and reducing service time before free agency would have negative consequences for smaller clubs in the market, they have not made public their financial information to support this claim.
Each MLB team will be eligible for at least $100 million each year from MLB’s new TV rights agreement, which is set to start during the 2022 season.
In addition to the TV deals, MLB teams also get extra money through revenue sharing. Each team pooled 48% of the revenue earned and then the total amount is divided equally (3.3%) and given to each team. Revenue sharing allows teams to receive more than $110 million.
The previous CBA provided revenue sharing to each team for their team’s improvement. However, nearly half of the league’s payroll was below $100 million in the last season. The clubs have used loopholes to put the money in their scouting, player development systems, and other areas that don’t directly impact their field team.
Show Me the Money
The league increased the competitive balance tax thresholds in MLB’s last offer by $2 million in its final three years. This brings the totals up to $214 million, $216 million, $216 million, $218 million and $222 million.
MLB proposed that the third-round draft pick be removed from teams that exceed the first luxury threshold. This would make it unlikely that the players would agree to the proposal.
The previous CBA had teams who exceeded the luxury threshold first paid 20% tax, 32% tax at the second threshold and 62.5% at the third threshold.
MLB’s current proposal would see first-time offenders pay 50% tax on the first threshold, 75% on the second and 100% on the third. In addition, teams that exceed the second or third tier will lose their second- or first-round draft picks.
However, the MLBPA isn’t accepting the terms in the 130-page proposal. Just like before last season, and the year before that, they continue to threaten a walkout if the league doesn’t offer them a better deal. Also like in the last two seasons, the league may cave somewhat again this time. However, now, the CBA is on the line, which gives players more bargaining power.