Searching for positives in MLB's lockout mess
Pitchers and catchers should have been reporting this week. Clearly that’s not going to happen. So, uh, what is happening?
I guess we should talk about it…
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In the current war being waged on the Players Association by MLB, the league has justified their actions by citing concerns about teams’ ability to be competitive, most notably in Rob Manfred’s laughable “A letter to baseball fans,” which was published back in early December.
“This defensive lockout was necessary,” the letter reads, “because the Players Association’s vision for Major League Baseball would threaten the ability of most teams to be competitive.”
There were many outright absurdities in that letter. The lockout wasn’t defensive, nor was it necessary. Manfred claimed imposing the lockout “accelerates the urgency for an agreement with as much runway as possible to avoid doing damage to the 2022 season,” then the league waited 43 days to return to the bargaining table. However, there is a kernel of truth in the league’s use of the word “competitive” here.
Don’t get me wrong. MLB doesn’t seem to give a shit about whether teams put as competitive and as good a product on the field as possible. We see that with how little has been done to stop teams from tanking. We see it with how they try to suppress spending through the luxury tax. We see it with the paltry way that developing big leaguers in the minors are paid, housed, and fed. We saw it in the recent reduction of minor league teams — a move that provided minimal savings to clubs at a huge cost to the future and the grassroots of the game.
But what we do see when we look at the basic economic structure of the sport is that the league cares very much about limiting competitive advantages for teams that want to spend more, lest they compel the bottom-feeders to follow suit. This isn’t so much about teams’ ability to be competitive, though. Ultimately, the aim is to protect owners from themselves.
MLB may have been thwarted in its attempts to institute a salary cap in the 90s, but they have been successful in recent years at finding workarounds. We see in the reporting on the current CBA negotiations that the league is very concerned about plugging whichever few holes remain where money could potentially escape their pockets. This has been helped by an especially obedient class of owners. Most already view their teams as little more than a device for maximum profit extraction, so it doesn’t seem to have been especially difficult to get them to play along with having the luxury tax function as a de facto salary cap, severe caps on spending on international free agents and in the draft, or with not starting an arms race in terms of minor league pay.1
This week we found a league that was rather nakedly attempting make conditions even worse for minor league players, or even eliminating more their jobs altogether. It was reported by Evan Drellich of the Athletic back on Friday that the league argued in court, in an attempt to have a class action lawsuit over minor league pay dismissed, that minor leaguers shouldn’t be paid during spring training because they are in effect trainees. On Monday, Jeff Passan of ESPN reported that the league had offered in its most recent CBA proposal to give the commissioner the ability to unilaterally reduce the size of the “Domestic Reserve List” (i.e. the maximum number of minor leaguers a team can have under contract, excluding players in the Dominican Summer League) to as few as 150. Currently that number is at 180, and before last year’s major restructuring of the minors there had been no limit.
A team with money and a strong player development system could have “exploited” the previous system to gain a competitive advantage by signing a whole lot of minor leaguers, in the hopes of eventually turning more of them into real big leaguers. We can’t have that! Think of the cost!
Because minor leaguers aren’t in the union, issues involving them are not really at the forefront of the ongoing CBA negotiations, but this all actually connects in a rather interesting way. To get to that connection we need to back up a little bit.
The league didn’t need to impose this lockout. Had they not done so, the CBA that expired at the start of December would have remained in force and the off-season could have carried on as normal (with one key exception) while negotiations took place in the background. So why did the owners choose to lock the players out when they did?
They claimed it was about getting a deal done quickly, but obviously the fact that they waited 43 days to even come to the table very quickly puts the lie to that idea.
It would be easy to look back to 1994 and assume it was because the owners feared negotiations dragging into the season. This would have given the players the power to strike at a later date, potentially threatening the game’s biggest TV revenue prize, the playoffs. But that doesn’t actually make sense. Could the owners not have avoided that scenario by continuing to negotiate until the start of spring training, and then locked the players out?
A very interesting theory was put forth in a Twitter thread on Tuesday morning by labour lawyer Eugene Freedman. That key exception to the continuation of the CBA that I referred to above is the fact that the Competitive Balance Tax had a hard expiration date at the conclusion of 2017-2021 CBA. What that means is that, had the offseason proceeded without a lockout, there would have been no penalties for teams exceeding the current CBT threshold. Freedman argues that the lockout may, in fact, have been as much about preventing owners like the Mets’ Steve Cohen or the consortium that owns the Dodgers from signing more free agents without the threat of penalties — and presumably the cascading effect that would have followed.
This, according to Freedman, connects to the minor league issues by way of MLB’s anti-trust exemption. The exemption is one of the league’s key tools for limiting competition among teams in a number of ways. It’s what allows the league’s 30 clubs to collude on all kinds of things that would normally be subject to anti-trust laws — things like agreements on poverty level minor league pay scales, the unilateral moving or contraction of minor league franchises (or major league ones!), the ability of teams to block the movement of front office personnel, etc. (Major leaguers are largely unaffected by the exemption as the terms of their employment are collectively bargained.)2
“If the union agrees to limit the number of players entering the profession, it provides legal cover to MLB in future lawsuits (perhaps even current ones) by minor league owners who lost their franchises or will in the future,” Freedman writes. He adds that it also “provides cover against an Al Davis-type owner who wants to challenge the anti-trust exemption because he wants his team to gain a competitive advantage by spending more and hoarding minor league talent.”
The reason, he says, is because “a CBA is an automatic exemption from the anti-trust laws. Unions and employers are free to negotiate things that violate anti-trust laws and that's okay.”
As I am not a lawyer, I’ll have to take Eugene at face value on this stuff. But if his theory is right this adds a hell of an interesting wrinkle to the game MLB is playing, I think.
Could Cohen potentially be MLB’s Al Davis? Well, obviously the former NFL Raiders owner is a pretty wild name to live up to, but the fact that the Mets in 2022 are projected by Roster Resource to have a CBT payroll of $271 million at least says that he may not be willing to toe the MLB line the way most owners are. One could also imagine a team like the Dodgers quietly bristling at the league’s insistence on limiting rich owners’ ability to use their vast resources to their advantage.
Now, there are always going to be differences between the owners when it comes to economics. We saw in the 90s that revenue sharing was a contentious issue between large- and small-market teams. During these current negotiations the players initially attempted to poke at that wound by including a major reduction to the amount of revenue sharing money in their proposals — something I wrote about, among other things, last month. The league has been steadfast that this is one of the major elements of the CBA they will not reopen, and the players seem to have backed down, but could there be other potential fissures on the league’s side?
If Freedman is right that they’ve shown us here they’re worried about challenges from within to the anti-trust exemption, I don’ know… maybe!
There’s more, too.
Late last month, Craig Calcaterra made an interesting point to this end on his Substack, Cup of Coffee. Suggesting that some owners may be more vulnerable to missing games than is commonly thought, he wrote:
Yeah, they're rich and stuff, but way more of the current owners went into pretty big debt to buy their teams than their 1994-95 counterparts did. Many more of them have big investments in ancillary businesses and real estate and stuff like that which requires the money faucet to flow in order to keep up with debt payments and other costs for their little empires. They already took hits in 2020 and part of 2021 due to pandemic stuff. In light of that I suspect losing games because of a lockout is, with all due respect to (deputy MLB commissioner) Dan Halem, not super palatable for a good chunk of ownership groups. Indeed, in light of that I'd be tempted to view Halem's 'we'll TOTALLY lose games over this if we have to' comment as the sort of bellowing one does in an effort to hide this very vulnerability which (Rockies owner Dick) Monfort rather stupidly hinted at.
Monfort, you may recall, was the owner crying poor a few weeks back, to much derision from the players3 — including a member of the Blue Jays, as spotted by eagle-eyed Jays Twitter veteran, Ty Berry.
Indeed, the players — or at least the most vocal contingent of them online — have seemed incredibly unified through all this. And especially angry with the commissioner’s office. And with a few more Monforts tugging the owners in one direction, and a few more Cohens pulling them in the other, maybe the league’s position gets shakier. Maybe we start getting some real movement here soon. Maybe the loss of spring training revenue becomes a real issue. Maybe the attempt to get language into the CBA that would protect them from anti-trust lawsuits shows that the league is more scared here than it lets on. (On the other hand, maybe Joe Sheehan is right in his latest newsletter that we’ve reached a point where the players have agreed on most core concepts, the league has already won, and the factions are simply now haggling over “the differences between a 55/45 revenue split and a 57/43 one,” which shouldn’t be “enough to warrant losing games over.”)
But I suspect that’s all some extremely wishful thinking.
MLB has had an ugly few days. From the Skaggs trial4, to the revelations about not thinking minor leaguers deserve to be paid in spring training, to Brittany Ghiroli’s devastating look at the economic realities of being a minor leaguer, to the rejection of the most recent CBA proposal, to the resignation coming from guys like Evan Drellich and Ken Rosenthal that there’s no reason to believe the season will start on time. But you sort of have to have been really paying attention to notice all those things.
It doesn’t take much of a scroll through the replies on Drellich’s Tuesday morning tweet about the next CBA bargaining session being as yet unscheduled to see that a whole lot of people are not — or are simply not interested in the finer points of all this labour drama.
In a way that’s understandable. The media has done a better job than in any sports labour situation I can remember in not both-sidesing what’s going on, but that’s not setting the bar very high. There are still plenty of water carriers out there — usually with much bigger platforms than people on the pro-labour side of things.
The fact that making the union’s case is somewhat complicated doesn’t help matters in this regard either. Facile as it is, “they’re getting paid millions to play a kid’s game” is a much easier thing to understand than anti-trust law. “Their salaries are shrinking while revenues consistently break records” doesn’t elicit much sympathy when the league minimum is nearly $600,000 — even when that fact doesn’t give you anything close to the full picture.
In other words, MLB is probably not going to lose the PR war here, no matter how clearly odious the way they operate becomes. For now the players are merely holding the pro-owner sentiment somewhat in check — though that is maybe all they need to do. Public pressure to capitulate may eventually wear on the players in a way that owners — a much smaller and more insular group with much bigger individual stakes in all this — probably won’t feel. For the owners, it’s really just the eventual financial pressure that will end this.
That being the case, hoping for the big money ones to rebel is probably futile. But as fans, what on earth else can we do right now?
Frustration that nothing is getting done is palpable, and entirely understandable. Believe me, I know, it’s my livelihood! The people screeching for urgency in the replies on Drellich’s tweet have a point. But I think you have to respect the union’s solidarity, given that MLB has made this fight what it is and have yet to really get serious about it. Then you just have to hope that some of that wishful thinking is on the money.
The clock is ticking. Fingers crossed.
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It must be noted here that in 2019 the Blue Jays raised their minor leaguers’ pay by 40 to 56 per cent, though this move does not appear to have been the catalyst it was hoped to be. It also only brought the salary of a first-year Triple-A player up to $15,250 for a five-month season.
At the time, the Blue Jays’ Mike Murov spoke to John Lott of the Athletic about it, saying “It’s not a (collective-bargaining) issue. It’s not a union issue. It’s a change that somebody has to just do.”
Drellich provided a good explainer on some of the key aspects of the exemption back in April, when a bunch of Republican congressmen were sabre-rattling about taking it away as punishment for MLB moving the All-Star Game from Georgia because of the state’s new racist voting laws. (The ghouls were right, but for the wrong reasons. The exemption should go, but not because the league isn’t sufficiently supportive of voter disenfranchisement!)
Monfort may have also gotten himself a reprimand of sorts for this from his fellow owners, as he did not show up for the following day’s negotiating session. Freedman, in a Twitter thread at the time, wondered if his comments had potentially been more damaging than just simply innocuous.
“After some additional thought, it's possible Monfort was asked not to attend yesterday's negotiation because he opened management up to greater financial disclosure under the National Labor Relations Act," he explained in the first tweet of the thread. “Normally employers only have to furnish basic financial information in collective bargaining. But, when an employer says it 'cannot afford' certain proposals or even existing CBA language, the obligation shifts and it may be required to open up its books to the Union. It's the kind of thing you only read about in text books because it's so basic that employers don't make that mistake anymore. You cover it when briefing your management team — 'no matter what, don't say we can't afford it.' Monfort may have crossed that line, though. We don't know exactly what he said or in what context, but he wasn't back on Tuesday.”
ESPN’s T.J. Quinn has been doing an outstanding job covering the proceedings on Twitter and in print. Depressing, tragic stuff.
This whole situation pisses me off. I'm very sympathetic to the situation for minor leaguers, but it always seems that ultimately it's the fans that lose. I have a chance to get back to Toronto (from Australia) for the first time in about 6 years in April or May and while seeing a baseball game isn't a priority...geez it would be nice!