Major League Baseball and the MLB Players Association are barreling toward a lockout, which would take effect when the current Basic Agreement expires at midnight on Wednesday night.
This despite the spending frenzy—$1.41 billion promised to 27 free agents—in the four weeks since the end of the World Series. That includes middle infielder Corey Seager and Marcus Semien, who both signed with the Texas Rangers for a combined $500 million over the next 10 years, as well as 37-year-old right-hander Max Scherzer, who went to the New York Mets for three years at $130 million.
Amid all the agreements and record setting contracts- Scherzer’s pay actually climbs to nearly $170 million over its span thanks to deferred money from his prior Nationals deal- baseball is marching to a halt.
“Having a seat at table and hearing a bunch of the negotiations, the lockout seems like a very likely scenario,” Scherzer, a member of the union’s executive subcommittee, said Wednesday during his introductory video media call with the Mets.
A lockout freezes all player movement, including trades and free agent signings, until a new deal is in place. Since players won’t be paid until the regular season begins, next March 31, and owners don’t start generating real revenue until then either, there’s little incentive right now to reach a deal.
A lack of motivation isn’t the only reason the two sides are heading into their first labor dispute in the last 27 years:
The players have been seeking changes in the economics that concern compensation for younger star players and their service time, and a restructuring of the amateur draft to utilize an incentive-based system so each of the 30 teams compete for wins on the field instead of tanking to receive guaranteed high picks.
The paramount concern, however, is compensation for all players. The issue involves MLB’s complete control of young players for the first three years of their big-league careers, before they are eligible for arbitration. It then takes six years before a player can enter free agency. The players association is ardently opposed to a clubs’ ability to manipulate control over that timeline by holding a player in the minor leagues longer.
The owners—coming off two seasons of curtailed revenue due to games lost and attendance restrictions—wouldn’t mind keeping the status quo. They have sought to put further restrictions on when a player can file for free agency. Their proposal addressed service time by calling for an end to arbitration and imposing an age minimum of 29 1/2 to become a free agent. They also are seeking to substantially lower last season’s $210 million luxury tax threshold.
MLB is the only major North American pro sports league without a salary cap or floor, and player salaries are not tied to revenue growth or loss. The players are paid their guaranteed contracts no matter how much revenue the sport generates. The National Football League, for example, has a salary cap targeted at 48.5% of gross revenue and most contracts are not guaranteed. MLB has historically paid the players between 48% and 54% of what the owners define as national and local revenue.
Players won’t strike, but owners can put all baseball operations on hold if no games are in peril. The real target date is Feb. 15, when pitchers and catchers are slated to begin reporting to spring training camps. The two sides continued talking up to the deadline, but until this week there hasn’t been an exchange of viable economic proposals in months. The two sides could also extend the deadline.
There are some owners who still want a salary cap—and a floor—which has always been a non-starter for the players who fought that battle and won during the strike that ended the 1994 season, canceled that postseason, and delayed the start of the 1995 season.
“That was pretty devastating,” former commissioner Bud Selig said in a phone interview. Selig, who presided over baseball’s last work stoppage, vowed it would never happen again under his watch.
That led to almost three decades of labor peace.
“I’m proud of that,” Selig said.
Current commissioner Rob Manfred told the media after a recent owners’ meeting in Chicago that a lockout wouldn’t be the worst thing that could happen.
“We’ve been down this path. We locked out in 1989-90,” Manfred said. “I don’t think 1994 worked out too great for anybody. I think when you look at other sports, the pattern has become to control the timing of the labor dispute and try to minimize the prospect of actual disruption of the season. That’s what it’s about. It’s avoiding doing damage to the season.”
This year’s pending lockout led to a weekend flurry of free agent signings, including pitcher Kevin Gausman to the Toronto Blue Jays for five years, $110 million; Semien and Seager to the Rangers for seven years at $175 million and 10 years at $325 million respectively; and Scherzer to the Mets for an average salary of $43.3 million, the highest in history.
“I leave the [labor] negotiating to the commissioner and our negotiating committee,” Mets owner Steve Cohen said recently. “They’re obviously doing what they need to do, and we’ll see what happens. I’ll let them handle that.”
The Mets, under the stewardship of new general manager Billy Eppler, are in the midst of rebuilding, signing Scherzer and three mid-level offensive players—outfielders Starling Marte and Mark Canha, and infielder Eduardo Escobar—for a total of $244.5 million.
A lockout halts Cohen’s project.
“If we are faced with a period when we have to move that order of operations around, there’s still plenty to do,” Eppler said. “For me just coming in, I’ll have a lot of time for listening and learning [about the organization]. That’s how I’ll be spending my time.”
Other clubs and free agents seem content to wait until a new deal is in place before making any long-term moves. The Los Angeles Dodgers and New York Yankees, the top two payroll teams of 2021, have decided to sit on the sidelines. The Dodgers just watched as two of their marquee free agents, Scherzer and Seager, signed elsewhere.
There seems to be some animosity held over among the ranks of the players after last year the coronavirus pandemic caused Manfred to open the current Basic Agreement, and after tense negotiations, implemented a 60-game season.
“They wanted to pick a fight during COVID, and we were ready for a fight,” Scherzer said in a prior interview. “We handled that fight extremely well from the players’ side.”
The owners claimed to have lost $3 billion in operating revenue in 2020, and the players, paid on a per game basis, lost 67% of their salaries.
This year, the owners wanted to delay and shorten the season until local health and safety protocols allowed them to play games at near-to-full capacity in the 30 ballparks, asking the players again to take a pay cut.
The players rejected that proposal and demanded a 162-game season, which eventually took place. The union also rejected the notion of tying the universal designated hitter to expanded playoffs. Neither happened, but both are back on the table in the current collective bargaining.
So is the possibility of a draft lottery among the teams that finish with the worst records. Expanding the playoff field could address the competitive balance issue, incentivizing more teams to spend money on their on-field product.
“Players as a whole are frustrated by the lack of competition around the sport,” Scherzer said. “We definitely want to see changes in that. When the league has fewer bad teams, when all these games matter, when pennant races are highly competitive, fans are engaged with that.”
(This story has been updated in the headline and in the fourth paragraph with a quote from Max Scherzer. It has also been clarified in the tenth paragraph to separate the relationship between a salary cap and player revenue contributions.)