Larry Brooks, writing for the New York Post this past week, penned a pretty good summation of what is going on with the Major League Baseball lockout:
“When ownership does not care about playing games, the union essentially has no chance.”
To affirm, they don’t, and they don’t.
This has become obvious, hasn’t it? Commissioner Rob Manfred has assured fans that the first two series of the season have been canceled. That’s just the beginning. Most people feel there will be a season after the lockout is over, but what form that season is going to take is completely unknown as of now. And from a betting standpoint, this impacts anyone who is going to venture into putting money on futures. After all, because of the freeze on free agency transactions, who knows where everybody is going to be playing?
CBT Might Be the Whole “Ballgame”
We concede that the two parties are far apart when it comes to pre-arbitration stars and the amount of dollars in the bonus pool that is available to them. But when it comes down to it, the issue that trumps everything is something else.
If you’ve been following things, you may have noticed that it’s the Competitive Balance Tax (CBT), otherwise known as the “luxury tax.” Basically, it penalizes teams that exceed a certain threshold in their overall payroll.
The lower the threshold figure, the better it is for the owners.
Right now it is $210 million, and the owners have offered to boost that to $220 million for the first three years of the agreement, then $230 million afterward. The players want this to start at $238 million, with an eventual increase to $265 million.
Players Believe a “Cap” Would Be Deadly
The difficulty with all of this goes beyond numbers. The Players’ Association believes that the CBT itself is a thinly veiled, de facto salary cap, and that the current and proposed figures, without any tie-in to revenues, only serve to tighten that cap.
If you’re looking at the major sports leagues in North America, the NHL, NBA and NFL all have a salary cap. Major League Baseball doesn’t, at least not officially. Until recently this was considered to be a sign of strength on the part of the MLBPA. And the players fear that if they cave in, accepting what everyone agrees is the equivalent of a cap, that strength will evaporate.
How Did the Padres Get to Be Bigger Spenders Than the Yankees?
One of the players who has been vocal about it is Max Scherzer, which is ironic, since he just signed the most lucrative per-season deal for a pitcher (three years, $130 million with the Mets). He points out that it’s, well, just not natural that the San Diego Padres have a payroll that is higher then the usually free-spending New York Yankees. And that’s actually true, when you take a look at those figures as they relate to how the luxury tax is derived, which means “Payrolls that calculate AAV (Average Annual Value) of multi-year contracts along with player benefits.”
The Padres are second-highest by that standard, behind only the Los Angeles Dodgers. Those are the only two teams that went over the $210 million threshold. Teams with high franchise value and plenty of money fell below that, including the Mets, Yankees, Boston Red Sox, Los Angeles Angels and Philadelphia Phillies. All told, MLB payrolls were $168 million less in 2021 than they were in 2020.
Is There a Chance for a Middle Ground?
Well, it doesn’t look good. In fact, there were reportedly four owners who weren’t even interested in increasing the luxury cap threshold to $220 million. So one would have to project that more owners would balk at a higher figure. And one could make the argument that things are going backward; the owners are looking to apply per diem allocations and other player stipends toward the CBT limit. That amounts to an insult.
But, referencing the Brooks quote at the top of the story, maybe they’ll indeed get away with the insult. It could be that the owners couldn’t care less if there were any more negotiations, or are, at the very least, not in any kind of a hurry. The players, in an effort to get the other side back to the table, have offered to soften their stance against a 14-team playoff format. Such a setup would produce more revenue for MLB, although not enough to move the needle much on the issue that would seem most critical.
And as the clock keeps ticking, the clubs now have missed service time as a bargaining chip when talk moves forward.
The point is, the owners see this as an opportunity to smash the union; a chance to set the clock back to a time when they really had the upper hand.
Marvin Miller, who started the whole players’ rights movement, would be rolling over in his grave if that ever happened.
But it may happen nonetheless.
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