In November, I wrote about the issues that MLB faced heading into the CBA negotiations and twelve solutions that both sides would have to compromise to resolve the CBA. You may want to read both of those articles before reading this. I am going to summarize a lot of the details here.
This is the follow-up to yesterday's article about the five CBA issues the MLB and MLBPA should be able to resolve as soon as this week.
As a reminder, the table below shows five categories relative to the viability to reach an agreement for each of twelve solutions I presented in November.
The line in blue is essentially already done
The lines in green were the focus of the first article yesterday. These are the issues that the two sides should be able to agree upon quickly- even this week, if they tried.
The line in yellow CAN be resolved IF both sides are reasonable.
The lines in red are the issues where I think we are going to have the biggest challenge over the next two months or longer.
The lines in purple are the issues I do not expect will be addressed in this round of the CBA negotiations. I knew in November that some of my solutions were too radical for both sides, at least right now.
This article will address the far more challenging issues in yellow and red.
These issues MAY prevent the season starting on time; and if both sides remain stubborn, could ruin the 2022 baseball season. After the COVID impacted years of 2020 and 2021, this could spell financial doom for some of the owners and the league. I DO NOT expect the worst case scenario to happen, but I DO EXPECT the delayed and slow progress in negotiation to impact this season.
How bad will the impact be? How stubborn will both sides be in sticking to their position on these three issues?
First, the owners MUST realize they have taken advantage of the current framework in a way that the players did not expect them to nor agree to. I covered why the players union is so upset in the issues article from November. Whether the players SHOULD have seen the owner's manipulation of the framework agreed to is another issue. They didn't and now they are entrenched in demanding change. They are NOT likely to get all that they really want.
In November, in the more comprehensive solutions article, I proposed I included two seemingly radical ideas
Altering the Rule 5 draft eligibility and options by adding a year, and
Revamping the very nature of fully guaranteed MLB contracts
Both of these I saw as large wins for the owners but they would enable large wins for the players on the key issues below. It would have required both of these sides to have been talking for the last six weeks to even approach these two ideas. I have showed them both as purple now above. There is no way the players union will accept either of these ideas given the limited compromise I think the owners are going to make on these core three issues.
So what are these three issues that hold the very viability of the sport?
A reasonable CBT AND a floor
An accelerated path for players to reach Free Agency
Addressing and eliminating service time manipulation in the pre-arbitration and arbitration years
I no longer believe the more player favorable proposals I made in November are fully viable at this point. The owners have won to a certain extent already, but the labor war between these sides may last for most of the 2020s now. (Through at least another contentious CBA negotiation in 3-6 years.) I will reset what I think both sides can accept now given the current environment.
The solution for the issues as listed in the package of twelve in November
Solution two- Implementation of a Stronger Luxury Tax Cap AND a Salary Floor
The Owners laughably offered to LOWER the CBT from $210M to $180M. The Players have reportedly proposed a $245M CBT. Both have been unconstructively posturing here.
I proposed a $215-225M CBT that rises with revenues with much stronger penalties. This is fair to both sides.
Given the tanking situation and some team's propensity to not spend even 40% of the CBT their must be a floor implemented as well. The floor that should make the most sense and reduce tanking is a 50% floor- $105-115M with similar strong penalties for not spending to the floor.
Will both sides agree to this? It is so obvious that one can hope, but there is nothing to indicate either side is willing to compromise.
If that solution is hard, the next two are seemingly impossible. These two sides need to consider if winning the labor war is worth losing a large percentage of revenue or salary because they are refusing to compromise and delaying the season.
Solution three- Three paths to Free Agency Defined. The current system to be phased out and sunset.
The players' biggest issue is to get players to reach Free Agency before they are 30+ years old. Both articles in November detail why that is so important.
I proposed a three path system. A player reaches free agency on whatever path gets them to Free Agency first.
A. Player is 29.5 years old
B. Player was drafted or initially signed
Domestically
Eight years prior as a 21-year-old or older (college)
Nine years prior as a less than 21-year-old (high school or junior college)
Internationally
Eight years prior as a 21-year-old or older
Nine years prior as an 18-year-old to 21-year-old
Ten years prior as a less than an 18-year-old
C. Player has six service seasons
Players not hitting free agency until after their window to get one large contract is the key manipulation the owners have worked the system to their favor. This would swing the pendulum a little back towards the players.
Solution four- Adjustments to Arbitration timing
If the revising the rules for Free Agency is not the biggest issue, Arbitration timing is.
I originally proposed a day counts as a season idea. while this would completely eliminate service time manipulation as we know it, I don't think the players will get that any longer. Perhaps a season can be defined as 90-100 service days instead of the 172 it is now. Front offices need to be be thinking is this a prospect who is so good that it is worth having him here the entire year or one that we should let stay down for half the season before starting his service time clock.
I also think the players push to eliminate the Super Two rule.
I do not think an adjustment to pre-arbitration years nor arbitration years will be made now. However, if the three paths to free agency is approved with the half year rule, then service time time manipulation will be significantly reduced.
Why would the owners agree to these three proposal that favor the players? I am not sure they will. If they don't, expect this lockout to last into the season, some owners to face severe financial hardship, and prepare yourself to revisit the legal challenges of the mid-1990s. THIS is the biggest hindrance to the owners negotiating too hard with the players. If these negotiation issues hit the Supreme Court, the owners could lose extremely badly up to losing their anti-trust exemption. This is why the owners are going to compromise in the player's favor this year. The owners need to not have their anti-trust exemption face judicial review. Remember that among all of the posturing.
So what happens next? Will both sides compromise? Yes they will eventually. How bad does it get first? I think pretty bad now. All of our CBA articles have tried to warn of the challenges ahead. Stay with us here for more analysis.
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