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How MLB, MLBPA Can Reach Agreement to End Lockout

MLB and the MLBPA will resume bargaining sessions this month. Here's a proposal that could favor both sides.

Major League Baseball (MLB) is preparing its latest proposals to submit to the MLB Players Association (MLBPA), meaning collective bargaining sessions will resume sometime this month. While fans eagerly anticipate the end of baseball's ninth work stoppage, many expect labor negotiations to continue until there is a legitimate threat of lost revenue.

Collective bargaining is a game of chicken—both sides remain in gridlock, waiting for the other to budge. However, neither MLB or the MLBPA wants to lose money, and a lockout that cuts into spring training could begin to affect revenue. This is why most in the industry believe there will still be a full 162-game season in 2022 (though rising COVID-19 cases could threaten regular season games as well).

The chasm that must be bridged between MLB and the MLBPA revolves around core economics. After the owners had their way in the previous two Collective Bargaining Agreements, players have seen the average salary go down every year since 2017 (scrap the truncated 2020 season) and want significant change.

We've already done a deep dive into the issues between the owners and players, and I urge you to read it for better context before continuing on. In short, the two sides are far apart on free agency, salary arbitration, revenue sharing and the competitive balance tax (CBT, or also known as the luxury tax).

While MLB and the MLBPA have yet to schedule a bargaining session to discuss any of these issues since the lockout began on Dec. 2, we are providing a pathway for the two sides to come to a deal on several points. This isn't an exhaustive list, but should hit on many of the sticking points that will be covered while the two sides attempt to strike a deal.

Minimum Salary proposal: $800,000

I'm not fully convinced the owners will agree to raise the league minimum quite this much (it was $570,500 in 2021). However, it needs to be significantly raised. MLB brings in twice as much revenue as the National Hockey League, yet their 2021-22 league minimum is $775,000. This makes little sense.

Realistically, the owners could go for a league minimum between $700-750K. Players obviously want a higher league minimum, and owners have already indicated an openness to give it a serious bump. My proposal at least puts it higher than the NHL, which it should be already.

Free Agency proposal: Six years or 29 1/2 years old, whichever comes first

This one is tough. Players want to get to free agency as quickly as possible while owners want to have control over players as long as possible. Players want to hit free agency after five years, but owners consider that to be a non-starter. 

This seems like a good compromise.

Take a look at the Rangers roster. A player like Isiah Kiner-Falefa, who will be going into his age-27 season in 2022, has four years of MLB service time. He would need the six years to qualify for free agency, just like before. However, here are the 40-man players that could realistically reach 29 1/2 years old before six years of service time:

  • Willie Calhoun (27 in 2022, 3.033 MLB service)
  • Taylor Hearn (27, 2.140)
  • Brett Martin (27, 2.151)
  • Jose Trevino (29, 2.063)
  • A.J. Alexy (24, 0.035)
  • Joe Barlow (26, 0.103)
  • Dane Dunning (27, 1.083)
  • Adolis García (29, 1.095)
  • Yonny Hernandez (24, 0.060)
  • Spencer Howard (25, 1.088)
  • Andy Ibáñez (29, 0.122)
  • John King (27, 1.067)
  • Nathaniel Lowe (26, 1.145)
  • Spencer Patton (34, 1.126)
  • Dennis Santana (26, 2.095)
  • Josh Sborz (28, 1.113)
  • Nick Snyder (26, 0.045)
  • Nick Solak (27, 2.028)
  • Brock Burke (25, 1.065)
  • Demarcus Evans (25, 0.143)
  • Sam Huff (24, 0.158)
  • Glenn Otto (26, 0.038)
  • Zach Reks (28, 0.015)
  • Eli White (28, 1.065)

That's quite a list. 

Under the old system, pre-arbitration players have their salaries renewed at or just above league minimum. This would force clubs to pay significantly more to keep the younger players they like under contract. It would also allow players not getting a fair shake to prove themselves an opportunity elsewhere, while clubs would have access to players they covet earlier than they would have before. And keeping six-year free agency would still give clubs the advantage on players who break into the big leagues at a young age and have success early.

A system like this would make free agency far more competitive, which is great for the game. It would make the offseason far more interesting and player salaries would rise because of it.

Competitive Balance Tax Threshold proposal: $240 million in 2022, with incremental raises each year

The CBT threshold was $210 million in 2021. Clubs treat the luxury tax like a cap, with usually just a couple teams willing to exceed it annually. Raise it and see how many more teams have deeper pockets than they claimed before. However, increase the penalties for those who exceed it. Not by much, but it would still be a way to help fund the clubs on the other end of the spectrum.

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This is another compromise. Players want the CBT threshold raised, owners want harsher penalties for those who exceed the threshold.

Revenue Sharing proposal: similar formula, but force teams to reinvest in on-field spending

If the penalties are harsher for those who exceed the luxury tax, that's more money in the pockets of small-market teams. If the revenue sharing formula is adjusted so clubs have to take a significantly higher percentage from the money earned and reinvest it in the club, it would incentivize spending, which should naturally discourage tanking—something that would make the players ecstatic.

Small market teams may not like this particular part of the proposal, but we've seen teams like the Pittsburgh Pirates decrease payroll after three straight postseason appearances, including a 98-win campaign in the final year. That's an awful look for the sport, and it's horribly unfair to the fans in those markets. If fans pour their hard-earned money into the team, the team should pour it right back into the on-field product. That's not too much to ask.

Salary Arbitration proposal: run it back

Due to the significant changes to free agency, players might have to settle for the status quo on salary arbitration. If free agency is changed to the proposal above, players will get paid more earlier in their careers.

In addition, the owners will only agree to so many changes. Most likely, players would be thrilled to win one or the other, preferably free agency. For now, we'll have arbitration stay the same.

This still provides a way for clubs to manipulate service time for players who make their debuts at a young age.

Other Changes

Remove Qualifying Offer

Draft pick compensation can put a damper on free agency, and the owners seem open to remove it.

Universal DH

It's coming, like it or not.

Expanded Playoffs

Again, it's coming. Whether it's 12 or 14 teams has yet to be seen. Since the proposed changes favor the players so far, we'll go with the owner's preferred choice of 14 teams.

Pro: More revenue. 

Con: It waters down the regular season, which is already a long 162-game campaign.

NBA-Style Draft Lottery

If the postseason is expanded to 14 teams, then put the 16 remaining teams in a draft lottery similar to what the NBA has. This would discourage tanking for the highest draft pick possible since it would not be guaranteed.

Final Thoughts

Yes, this proposal would favor the players, especially the changes to free agency and revenue sharing. Naturally, after the owners won the last two CBA negotiations, the players will likely come out on top in some form or fashion.

However, if the players are to get their way on some of the key issues, it could impact spring training. With little to no talks between the two sides after 40 days, the chances for a full slate of Cactus or Grapefruit League games decreases. However, it still won't likely come to lost regular season games.

At least, not yet.

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