Late on Monday night Evan Drellich of The Athletic reported some more on the meeting between the MLBPA and the ownership representation and there were a few pieces of key information worth noting within. The biggest one, though, was that Dan Halem – MLB’s deputy commissioner – said that MLB is willing to lose games over some of the outstanding issues between the two sides.

That the ownership group is basically taking this stance more than two months before the regular season is even set to begin probably isn’t great. Now, can it be a mostly empty threat as a part of negotiating? Sure, it can be. Maybe it is.

But that wasn’t the only part that stood out from the meeting. Dick Monfort, owner of the Colorado Rockies and the only owner directly in the meeting (he’s the head of a 7-owner labor policy committee) complained about the difficulty that some owners have affording teams and the ancillary costs of ownership.

Just a fun reminder here that Dick Monfort and his brother Charles Monfort bought the Colorado Rockies for $190,000,000 (including the expansion fee) in 1992 and it’s now valued at $1,300,000,000 according to Forbes. If you can’t afford it, fellas, sell it and take in your $1.1 BILLION dollars in profit that doesn’t account for any profit made during any season they’ve owned the team (which is probably in the hundreds of millions).

While it was reported earlier on Tuesday that the players dropped their ask of less time to reach free agency, there are still two rather big options on the table that the players want and that the owners have stated that they absolutely will not budge on: Lower revenue sharing and earlier entry into the arbitration system.

The players believe that the current amount of revenue sharing allows teams to not even try and compete and still be profitable. The league, however, argues that not having revenue sharing would hurt the competitive balance. There’s probably some truth in both sides. Not every team that gets revenue sharing checks are simply pocketing the money. But then there are teams like the Pirates….

The two sides are set to meet again this afternoon with the owners coming back to the table to make a limited proposal on some issues they want to see addressed. It’s not expected to be as big of a proposal as the one presented on Monday by the players, but that’s understandable given that the players had a little bit over a week to come with their counter proposal to the last ownership presentation, while the owners now have less than a day. Of course they have had plenty of time to come up with what they want to present – they know what their goals are – but if they are actually going to negotiate in good faith, they need to respond to what the players actually presented on Monday.

 

31 Responses

  1. realist

    In the history of Major League Baseball the one constant is that the owners are the bad guys.

  2. old-school

    I brought this up last month- that Bob would be willing to miss games in March and April and Im sure the Pirates/Rays/Tigers/Indians/Twins/Royals/A’s wont sweat missing those Tuesday night April games with 9,253 brave souls at the game. With Covid in full force, no team wants to open their spring training facilities and then have rolling blackouts and a “here we go again” frame of mind. Owners aren’t taking ANY risks for Covid in 2022

    Bob is going to hit the reset button and if it means starting games in May with Covid a quiet issue and not paying dead money for 1-2 months of Moose, Akiyama,Suarez or big money to Votto and a new crop of arbitration players…so be it.

    May 1 or later will be Opening Day with ST to start late March.

    • LDS

      COVID isn’t an acceptable excuse for the owner’s shenanigans. This is pure greed and power. The real solution is to eliminate MLB’s antitrust exemption and open the sport to new competition. Otherwise, the owners will continue to treat the players as chattel, well paid in many cases but still just property.

      • Kevin Patrick

        Yes… ownership has been given too much public policy support. Kind of funny how MLB has consolidated power over all baseball businesses. Bust the Trust.

  3. James K

    Owners should agree to earlier entry into arbitration, but add that the arbitrator should not automatically give a raise even when the player has under-performed.

    • Doug Gray

      I can get on board with this if players can earn $50M their first year of arbitration if they are MVP caliber players instead of getting like $4M if they are MVP caliber players.

      • James K

        Doug, I agree. From second year on, players should be paid what they are worth to the team–not less, not more.

      • BK

        And I can get on board with players earning $50M/year if all of the teams can afford to offer that contract. For the Reds this would mean they could trade for a good pitcher, work with him and have him win the Cy Young award and then not be able to afford him the following year leaving us feeling like the AAAA farm team for the Dodgers.

      • Doug Gray

        Every team CAN afford to offer that contract. Plenty of teams just don’t want to.

      • BK

        Sure they can, but at what cost? If the Reds signed Scherzer for $43M/year they would end up trading Castillo, Mahle and Gray and more to afford the contract. Or, they would take on a bunch of debt that would impact payroll down the road. So, possible yes. Feasible, absolutely not.

    • CFD3000

      This is a key point for me that I rarely hear discussed. Most MLB players get paid based primarily on seniority, and some also get paid based on performance, but almost always on past performance. Yes, some contracts include incentive clauses, but that’s not prevalent and even then it’s often just a modest boost to a larger base pay. I love the contracts that truly reward players for their contributions. But for the most part the system rewards longevity, which is a poor proxy for performance. It’s a weird system that creates some strange incentives. I am strongly in favor of a higher minimum salary (following much higher compensation for minor leaguers), earlier and longer arbitration that rewards performance rather than just seniority, and salary caps and floors that establish more competitive balance.

      But I admit I have zero expectations that the new CBA will be fair in any meaningful way. Players may get more money in total but it will still be ridiculously tilted toward a small percentage of veteran stars, and Owners may lose a few challenges but the rewards of ownership will still involve staggering profits. So what I really want is just two things: I want spring training to start on time and a full season of baseball every year. Every. Year. And I want a little progress toward competitive balance. The gap between the Yankees, Dodgers, Cubs and Red Sox of the baseball world, and the Reds, Mariners, Royals and Pirates is not healthy for the slowly dwindling fan base of Major League Baseball, or the very long term prospects of the oldest American pastime.

  4. wkuchad

    The owners want what’s best for their wallets. Players union wants what’s best for the player’s wallets.

    Does anyone in the negotiations want what’s best for baseball? Clearly teams tanking on purpose is not best for baseball. Clearly teams having double the payroll of many other teams is not best for baseball. Who’s looking out for the sport and its future? These massive TV contracts won’t exist if no one is watching.

    • MuddyCleats

      Agree Chad, and I think this is where the solution to this problem is?

      More $$$ have to be removed from the Owner/Player pie and put into Minor league baseball all the way down to the knot-hole level. Teams do a lot in their local communities already, but not so much in outlying – rural areas. In general, Kids are not as active as they use to be nor are as many playing youth baseball/softball. I think Owners and Players could agree to spend much more in this area IF they knew the other party isn’t getting the cash?

      In my community, at least 7 kids in the last 20 yrs have or still are playing ML baseball. However, I haven’t seen any new equipment, fields or field renovations take place. There is NO baseball academy or Boys and Girls Clubs w/ baseball/softball facilities. The problem is bigger than what these 7 guys could be expected to support.

  5. BK

    The average annual rate of return on the 1992 Rockies investment is 6.86% which is less than a commonly used benchmark, the S&P 500’s return over the same period with was 7.62%. In short, assuming they’ve banked some profits along the way, the Rockies has been a roughly average investment.

    • Old Big Ed

      I was going to post a similar thing. Under the Rule of 72, and assuming a 7.2% rate of return, the original $190 million would have doubled every 10 years, or 3 times over 30 years. The Rockies would be worth $1.52 billion under that assumption.

      However, that doesn’t take into consideration the amount of cash (if any) that ownership has taken out of the business in dividends, etc. over the years.

      As I have posted before, the valuations that Forbes places on the baseball franchises includes a substantial amount — I think at least $300 million per franchise — for the value that MLB’s investments have earned. Specifically, MLB bought the Expos franchise, moved them to Washington, and sold the franchise to the Lerner family for a very good profit. In addition, MLB developed streaming and other tech businesses; it sold some of those businesses in whole or in part, but still has some interest in at least one of those businesses. It distributed some of the profits from those transactions, but retained much more of it, in a fund that I understand to be north of $10 billion. The Reds have a 1/30th share in that fund, but it is a classic non-operating asset, because it has nothing to do with the Reds’ business operation, and Reds’ ownership cannot use or even leverage that asset. The Reds’ actual business operations are by the Forbes calculation worth about $700 million, and then there is the issue of debt, which would need to be deducted to arrive at the value of the total equity value of the Reds or Rockies or any other team.

      I continue to wonder why so many people are surprised that sophisticated parties would argue about how to divide up $10 billion a year. Amazon and Microsoft argue and file lawsuits about $10 billion government contracts, and Ford and the UAW go to the brink in their negotiations, so why should baseball be any different? I believe that the owners have the bigger risk here, because they can’t take the PR and enterprise risk of losing part of a season in the immediate aftermath of two Covid-restricted years. Management will have to make an arbitration concession that gets more money to the players earlier, such as agreeing to a variation of eliminating the year-of-arbitration restrictions on player awards.

      To me, MLB’s players have a lot better deal than the NFL’s players do. The NFL generates much more revenue but pays its players less for shorter careers (other than kickers and Tom Brady), and the players risk crippling injuries. Plus, the NFL has outsourced its player development costs to college football programs; Elly De La Cruz arrives NFL-ready, not several years later. The NFL Players Association is what Charles Barkley would call turrible.

      • Grand Salami

        Yes, and the NFL’s competitive balance is second to none. Setting aside MLB player leverage which is second to none, player projection in the NLF draft is much less guesswork. The idea that a stinky team can land Joe Burrow and suddenly be good is commonplace in the NFL.

        How on earth could MLB try to simulate that kind of turnaround? Should the minors be uncoupled from the teams and made independent? Then the draft be much smaller and of only ‘surefire’ type MLB players?

      • BK

        When MLB restructured the minor leagues, I wonder if they contemplated a scenario where only the AAA teams remained affiliated and the rest of the minors were not. Setting up a draft of each year where newly acquired minor league players would be expected to actually contribute at the big league level would go a long way to shortening the multi-season rebuild cycles that contribute to prolonged tanking.

  6. Jon

    Do players really care that much about service time manipulation, aka the Kris Bryant example? It wasn’t fair that he had to spend two more weeks or so in AAA at the start of the 2015 season, but it is what it is. There’s no system to prevent this issue that will be without flaws. Look at the Reds, who we all love calling cheap. They had India and Stephenson on the Opening Day roster. They could have easily sent India down for a couple weeks at the beginning of May when he was struggling and gained an extra year of control.

    It’s not great from a fairness or competitive integrity point of view, but keeping a top prospect in AAA for two weeks isn’t going to make or break a season. The issue should be focusing on preventing teams from clearly tanking, aka the Pirates, Orioles, etc.

  7. HOF - 13

    I think the players might be willing to give on some other issues if there was a league wide minimum salary per team. It wouldn’t have to be that high. I would probably start at 60 million (4 teams had lower last year) . Put that with a draft lottery for the non-playoff teams and that would pretty much end tanking I think.

    • old-school

      mlb owners and players between 775K and 615 K as of today for minimum
      Also agreed to pre-arbitration bonus pool for top 30 WAR players.
      Now need to agree upon how big that pool is

      • Doug Gray

        The owners offer 9% of what the players asked for in that bonus pool….. Just absolutely crazy. $10M split up between 30 guys is beyond laughable. It’s insulting.

      • old-school

        the mid-point between $10 mil and $110 mil is $60 million.

        That might be a starting point.

      • BK

        @Doug, it may appear absurd on the surface, but evaluating any single change must be done in the context of other changes. For example, if MLBPA prioritizes raising the CBT threshold to $240M or higher, expect the Owners to give little on the lower end on minimum salaries and second year arb players.

  8. JayTheRed

    One question I am thinking of is this.
    If there is a minimum payroll for teams are teams just going to overpay some guys that don’t deserve that contract to get to the league minimum?

    Basically doing the least amount of effort possible still. I truly feel if an owner feels he can’t run or support a team that is at least trying to make the playoffs then why is that person or ownership group even owning a team in the first place. Baseball needs to do some checks and balances if owners can’t afford to run a team that can compete.

    • BK

      I don’t think the union would have a problem with a team trading for another team’s bad contract as part of their payroll (perhaps they get a prospect(s) for taking on the contract). This frees a competitive team to sign a free agent and adds market competition.

      29 of 30 NBA teams are spending at or above their caps this year (Oklahoma is not). This includes the small market teams. You don’t see the small market/large market gap in the NFL either. San Fransisco (in the middle of the top 10) takes in about $200M more than the Reds do. That difference means each free agent signing carries less relative risk for their franchise and allows them to outbid smaller market teams. This leads to an inefficient market where most of the best free agents end up on the larger market teams and at higher price points than if everyone was on a relatively level field during the bidding.

  9. BK

    As a Reds fan, do I really want to see the Reds get less in revenue sharing from the large market teams? No. I understand and agree with MLBPA’s point that revenue sharing money should go to fielding a competitive team (typically payroll), but I don’t see how pulling money away from smaller markets will lead to more competition–the stated objective. In the end, this is about money the Owners are moving among themselves. I don’t see MLBPA holding out on this issue.

    That leaves when players achieve arbitration as the biggest sticking point. I’ve long thought the service time issue could be managed by lowering the threshold for what constitutes a full year of service by about 30 days. That would mean 142 days out of 187 days would constitute a full year for any partial year credit a player had. Would teams be willing to hold a player back 45 days for the sole purpose of getting another year of service from them? Much less likely if they are truly MLB ready.

    Another method of resolving this issue is to increase the percentage of players that get “Super Two” status above 22%. Perhaps the compromise is built around performance rather strictly service time for the additional percentage of players.

    The positive news, is both sides are beginning to focus on the issues that matter most to them. Still a long way from an agreement, but there have been earnest negotiations this week.

    • Grand Salami

      Good post, thank you. There are ways of addressing player concerns without reducing revenue sharing. That would be the worst way of trying to solve the problem. A lot of small market fans would be further discouraged.

  10. Rednat

    i think an “international draft” would solve a lot of problems with the league imbalances. there are just not very many good position players that come out of The United states college system anymore. the emphasis is totally on pitching it seems.

  11. Mark Moore

    The lack of actual progress is frustrating. Multiply that with owners who are willing to defer the start of the season (I always thought that would be the case) and it’s really sad to watch these “negotiations” play out.

    • BK

      If you can get past the headlines and rhetoric, both sides have actually made significant progress this week as they are beginning to narrow down areas that each side really wants to see meaningful change in the CBA. The relationship between MLBPA and the Owners is not good, and I think many would agree the basic framework of the CBA is the worst in pro sports–it has produced a widening competitive imbalance across teams and a widening gap between older, elite players and younger players in terms of pay. The lack of a revenue sharing mechanism between Owners and MLBPA fosters distrust and encourages both sides to guard their own interest above what is best for the game. In short, this was always going to be a tough negotiation and make no mistake, BOTH sides approached this negotiation prepared for a work stoppage, so I’m not surprised that MLBPA leaked that an owner vocalized this point in negotiations. It’s just late January and it appears actual negotiations have now commenced. That’s the first positive sign we’ve seen and it does give them a chance to hammer out an agreement over the next few weeks without missing games. I’m far more optimistic this week than I was last week.