Things didn’t quite go as planned, or as hoped over the weekend and on Monday between the Major League Baseball owners and the Major League Baseball Players Association. There was some movement on both sides towards each other’s requests on more than a few subjects. There was also, reportedly, some attempted shenanigans on the part of the owners to sneak things in at the last second, too.
With the owners planning to keep the players locked out until a new collective bargaining agreement is reached – and to be clear, this is not something that must be done as lifting the lockout would simply mean that they would operate under the same rules as the previous CBA with the exception of the luxury tax existing as it was written into the last one that when that CBA expires that it would not carry forward – there will be no games played in Major League Baseball.
So exactly how far apart are the two sides? It’s been written about by more than a few smart people in the last few days. While we haven’t been able to see the exact language or details in offers from either side in totality, there are some reasonable assumptions that can get us there. Joe Sheehan estimated in his newsletter on Wednesday that the two sides were somewhere between $215M and $265M apart on all of the monetary differences. At this small of a difference, he is seemingly of the belief that these numbers are so small overall that the players may just need to admit overall defeat, again, and move more towards the owners.
— Joe Sheehan (@joe_sheehan) March 2, 2022
Ben Clemens also took a look at things on Wednesday over at Fangraphs. He concludes that the “new money” to the pre-arbitration players between a higher minimum salary and the bonus pool works out to be a difference between the two sides of less than $3M per team each year. The luxury tax issue still has a decent gap between the two sides asks, too. That number is tougher to figure out though because most teams simply aren’t going to get close to it and it’s not at all guaranteed money in any way. In the end, Clemens is estimating that it’s about $5.5M per team to get things done.
Joe Posnanski wrote in his newsletter on Wednesday, which you can read for free right here, about how we got to where we are, and what the fight is truly about in his opinion. There’s a lot more to it, but here’s what be believes the fight is really over:
No, the truly galling and appalling part is the future — the owners propose to raise the tax threshold by less than 5% and keep it there OVER THE NEXT THREE YEARS. That is the whole ballgame here. Everything else is smoke and mirrors and lights shining in your eyes. All the other proposals won’t cost the owners any real money. They could raise the minimum salary and put in a bonus pool for young players and pinky swear promise to not manipulate the service time of their most gifted prospects and pay for all that and more just with the extra bucks from their latest get-rich-quick expanded playoffs scheme.
But the real money, the owners know, is in the luxury tax. The owners — and by “owners,” I do mean the ones who don’t own teams in New York, Los Angeles, Boston and maybe a couple of other metropolitan hotspots — have come to understand as long as they keep that luxury tax in place, they will keep salaries right where they are. The luxury tax will prevent the aggressive clubs from spending to their full capabilities or desires. The luxury tax will stifle the free market.
And the owners will never have to pay the players more than they are already paying them. They can keep all that juicy gambling money and crypto money and rising franchise value money and advertising patch money for themselves. Also bottom-feeding teams can keep crying poor and cashing revenue sharing checks. Win-win!
When looking at an industry that’s probably on the verge of topping $12B in yearly revenues, the amount of money that’s stopping an agreement from taking places is tiny. Players start losing game checks when the regular season was supposed to start (though the MLBPA has a fund set up to begin sending checks to players – though not at the amount they would get if games were taking place). Owners have already started losing ticket revenue from spring training games. And they’ll also start losing revenue from regular season games when we get there. While spring games are money makers because players aren’t paid, early regular season games in many cities may not be due to lower attendance due to weather being, uh, not great and still needing to pay the players.
But while the owners may actually save some money by missing some regular season games, there is a breaking point. Once there are 24 games missed teams have to start paying back the sports networks for missed games (though let’s be sure to note that many teams in Major League Baseball are also at least partial stakeholders in the regional sports network that broadcasts the game – so they are paying themselves back a little bit, though in accounting because the two are technically separate businesses, it’s a loss for the team even if the owner is a part of the company he’s paying). Pressure from television partners, radio partners, and the newly aligned gambling companies could start to come quicker than late April when teams would have to start sending rebates back to the television broadcasters.
Maybe it won’t get to that and there’s a deal to be reached soon. Let’s all hope that’s the case because every day that goes by without baseball it’s likely to cost the sport even more in the long run and that’s not good for anyone.