Major League Baseball is in the middle of a lockout with the potential to miss Spring Training and possibly regular season games. From the fan’s perspective, the “millionaires fighting with billionaires” narrative has been thrown around as the motto for these negotiations between owners and players, and it’s not inaccurate. The common fan does not want to see major league players and owners deprive the nation of baseball over dollars and cents. However, the issue runs somewhat deeper than that.
So how did we get here? Well, the MLB and MLB Players Association’s (MLBPA) Collective Bargaining Agreement expired on December 2, 2021. The Collective Bargaining Agreement (CBA) is a contract between the MLBPA and MLB establishing the structure of employment and financial compensation[1]. The MLBPA is made up of an Executive Director and four Associate Representatives who will negotiate on behalf of all major league players. The MLB side of these negotiations is constructed of the 30 owners of each MLB team respectively. To simplify it; the players and the owners are disputing what labor terms, salary structure, and general rules of baseball should be for the next 5 or so years.
The main demands on the players’ side include an earlier opportunity to enter free agency and arbitration, an increase to the luxury tax, higher salaries for rookies and young players entering the league, and some policies to discourage teams from “tanking”[2]. That’s a lot of baseball jargon so let’s break each one down.
Free agency and arbitration in baseball is a complicated topic and could be an article on its own, however in the simplest terms; a player brought up from the minor leagues must spend 172 days on the major league team’s roster to gain one year of service time. After three years of service, the player gets the minimum salary ($570,500/yr) and then following that year they become eligible for arbitration, where salary is increased or decreased based on the player’s value/contributions, for at least the next three years unless the team wants to bypass arbitration and sign the player long-term[3]. Finally, after a minimum of six years of qualified service time, the player may enter free agency. Teams can further their control over a player by keeping them below the 172 days of service by optioning them back and forth between the major and minor leagues. As you may see, the players are somewhat justified in their gripes in this area. A team may control a player for at least six years before they can obtain a long term or more lucrative contract. Young players who rise quickly to stardom such as Aaron Judge or Juan Soto are compensated far below their value and with no guarantee of long-term financial security.
In the most recent proposal, the MLB proposed draft pick rewards for teams that do not manipulate service time and give more money to all players with two or more years of service. The MLBPA was reportedly unhappy with the proposal and rejected it[4].
An increased luxury tax and policies to discourage tanking go hand in hand. Tanking is a team’s lack of effort to win and succeed, either to secure high draft picks or save money in salary. The luxury tax is a percentage tax on a team if their payroll exceeds different thresholds (210 million, 230 million, and 250 million). An increased luxury tax and the implementation of a salary floor (minimum amount of money spent on salary) would appease the players and discourage tanking, but likely aggravate owners who do not want to be forced to spend a certain amount of money nor pay players more per year.
As probably evident, the MLB lockout is a well that runs quite deep. The fundamental issue is player compensation and their ability to control their financial gains. Fans are left in the dark on an issue that could deprive them of the very sport they pay to watch. Prepare for a long winter and possibly a longer spring as each side counters negotiations and hopefully finds a middle ground before the start of the season.
Evan Mattel is a 1L at Hofstra Law and a 1L Representative of the Sports and Entertainment Law Society. He can be found at @Evan_Mattel21 on Twitter.
[1] “Collective Bargaining Agreement,” Collective bargaining agreement - BR Bullpen, accessed January 14, 2022
[2] Halicke, Chris. “Report: MLB, MLBPA TO RESUME CBA Negotiations on Thursday.” Sports Illustrated Texas Rangers News, Analysis and More. Sports Illustrated Texas Rangers News, Analysis and More, January 11, 2022.
[3] Velayos, Diana. “Who Is the Lowest-Paid Player in the MLB? Is There a Minimum Salary?” AS.com. AS En, January 13, 2022.
[4] Passan, Jeff. “Why MLB's Labor Negotiations Have Gone Nowhere -- and Baseball's Path Back.” ESPN. ESPN Internet Ventures, January 5, 2022.
