Negotiations between MLB owners and players began talks for a new collective bargaining agreement recently, as I detailed in this article last month.
Wednesday, the MLBPA sent out a press release with a very detailed description of the proposal they had made to ownership. This alone is a change from past negotiations — the union clearly wanted to get these granular details out to the public so that fans can see what they’re asking for. I present them to you here, with some comments from MLBPA Executive
Director Bruce Meyer and player representatives Brent Suter and Chris Bassitt:
“Today, the MLBPA presented a comprehensive set of economic proposals designed to advance the rights and benefits of players at all levels,” Interim Executive Director Bruce Meyer said. “Our goal is to preserve and improve baseball’s market system, rewarding competition on and off the field. Additionally, the players’ proposals provide increased revenue sharing initially guaranteeing every small market Club a minimum of $240m in revenue every season. This enhanced revenue sharing includes added protections to ensure Clubs prioritize winning over profiteering. Ultimately, our proposals are designed to build upon the incredible momentum and popularity of our sport world-wide.”
Among the key components proposed by the MLBPA:
- Significant increases to 40-man minimums, including a Major League minimum salary of $1.5m beginning in 2027
- Expanded Pre-Arb Performance Bonus Program distributing more dollars to more players
- Expansion of salary arbitration eligibility
- Enhanced compensation and contract guarantees for players in salary arbitration
- Expansion of rules aimed at combating service time manipulation
- Elimination of the qualifying offer as well as the penalties for Clubs that sign free agents
- Increased benefits for lower revenue Clubs who lose players to free agency
- Qualified free agency for players with five or more years of service who have reached age 30
- “Luxury Tax” threshold increases and removal of non-monetary penalties
- A new “Competitive Integrity Tax” applying to Clubs that fail to meet minimum payroll benchmarks
- Expanded draft lottery to further disincentivize tanking
Additional MLBPA Proposals that are designed to improve competition while also supporting lower revenue Clubs include:
- Increased revenue sharing that initially guarantees every small market Club a minimum of $240m in revenue every season, subject to requirements that funds be used to compete on the field. Beyond that guarantee:
- Clubs will be able to keep more of the stadium-related revenues they generate
- Tens of millions in extra revenue sharing will go to low-revenue Clubs that qualify for the playoffs or have a winning record
- Significantly increased sharing of local media revenues from high to low revenue teams
- Curbing revenue sharing dependence by barring excessive transfers
- Penalties for Clubs that neglect to spend revenue sharing payments on team payroll
- Draft picks and other benefits for low revenue Clubs active in free agency and other signings
“Players across the league are engaged and involved,” Executive Subcommittee Member Brent Suter said. “We’re committed to leaving our game better for every generation of player that follows us onto the field – just like the players who came before did for us.”
“We all see the momentum in our game,” Executive Subcommittee Member Chris Bassitt said. “Amazing players and incredible fans. Attendance, viewership, interest – by any measure you want to use, our game is moving in a positive direction. We’ve put forward proposals designed to continue that trend. Support, incentivize, and reward Clubs who are committed to competing, especially small market Clubs. Compensate players fairly for the work they are doing. Preserve the rights that generations of players have fought for and grow the game all of us love.”
These proposals are quite comprehensive. Of course, as you might expect, there was an immediate negative reaction from ownership:
This sort of proposal and response is actually fairly typical for most labor negotiations. As many of you know, I worked in TV for many years and was (and still am) a member of the Directors Guild of America. I sat in on a negotiating session once and after a proposal was made to us, our lead negotiator said, “This is the most insulting offer in the history of collective bargaining.” Well, of course it wasn’t, and eventually a deal was made, but that’s the sort of posturing that happens all the time in these sorts of negotiations.
In The Athletic yesterday, Evan Drellich wrote this long article detailing exactly why MLB owners are going to take the hard-line position on a salary cap that everyone expects them to take. And here’s that specific reason:
Many issues are at play, but none supersede the long game owners are playing. Their mission is to maximize the worth of their teams.
Baseball has always been a business, yes — but not like this. Private equity has flowed into the sport for the better part of a decade, and someday, those investors will want a return. And even though every team continues to grow in value, many owners believe that their clubs should command still-higher prices.
The average baseball team is worth $2.9 billion, more than double MLB’s $1.3 billion average from a decade ago, per Forbes’ annual estimates. But some franchises are appreciating at a much slower rate than others. When they put their teams up for sale in recent years, the owners of the Los Angeles Angels, Washington Nationals and Minnesota Twins were disappointed by the bids that came in.
What’s perhaps most irksome to baseball owners, however, is that they keep getting trounced by owners in other leagues. The average National Basketball Association team is worth $5.4 billion, and the average National Football League team $7.1 billion, per Forbes.
Ah, ha. So now we know. Owners might nickel-and-dime, and make brave talk about wanting a “level playing field,” but according to Drellich, franchise values are driving this entire salary-cap effort. The article notes that the NFL, NBA and NHL all have various forms of salary caps and MLB doesn’t.
The article does note one recent MLB franchise sale:
The San Diego Padres are about to change hands in a deal that values the team at $3.9 billion overall, a record price for an MLB club by about $1.5 billion. To some, that increase might seem like significant growth. But for competitive billionaires, “good enough” isn’t always part of the lexicon.
And so if you were wondering why owners are so adamant about a cap, this is apparently why. Are they really willing to torch an entire season to get what they want?
Presumably, there’s a number of canceled games that owners would deem to be too many. Now, players could cave before that magic number is reached, but baseball’s history says they’re willing to take on a lengthy fight.
A lengthy stoppage, however, wouldn’t bode well for the national TV deals MLB needs to negotiate soon.
“The key to me is the impact on spectators and viewers,” said [Kevin] Kaiser of the University of Pennsylvania. “The risk isn’t that you don’t make money in the business, because making money in the business (year-to-year) isn’t really how these businesses work.
And that’s really the crux of this entire matter. Do owners want franchise values to increase enough that they would risk potentially lucrative national TV deals (which come up after the 2028 season)? To anger fans and sponsors?
Those are the questions that will be answered over the next several months of negotiations. Meanwhile, Drellich wrote up some analysis of the players’ proposals which is worth reading (and that link is unlocked). Of note from that article:
The current five-year CBA expires after this season, at 11:59 p.m. ET on Dec. 1.
If a new deal hasn’t been reached by then, the owners are expected to begin a lockout, just as they did in the 2021-22 negotiations. A deal in those talks was struck in March 2022, with just enough time to hold a shortened spring training and play a full 162-game regular-season schedule.
The industry expectation is that the sides will take at least as long as last time to reach a deal, if not longer.
As always, we await developments.
