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Players Turn Down “Best and Final Offer”, Now What?

Pirates Business
PNC Park June 18, 2019 -- David Hague/Pirates Prospects

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Reading time: 36 min.

Monday and Tuesday were a roller coaster ride of emotions.

I spent the majority of Monday night—to 2:30 am—on Twitter, following the seemingly ups of the negotiations, all but convinced there was going to be an agreement announced Tuesday morning at earliest.

As it turns out, it seems that’s just what the owners wanted us to think.

Looking back, it’s easy to see now—given the sources of the leaks—that it’s quite likely that owners were “funneling optimistic whispers to anyone who would relay them to the public” most of Monday night, as Jeff Passan of ESPN put it.

Upon waking up Tuesday morning, my timeline was filled with “not so fast” declarations from players—sources and players themselves, claiming that the sides were still very much far apart on some of the key issues—mainly the Competitive Balance Tax, pre-arbitration bonus pool, and minimum salaries. Despite these pleas for realism, reports then began to surface throughout the day that the tone of the union from the previous night had changed significantly, followed by the league claiming they were ready to hand down their best and final offer—aside from the fact that no one can seem to agree if that was actually said and what it meant if it was. The implication here seemed clear—“we thought we had a deal, but now you don’t want to play ball, so here it is, take it or leave it.”

Players insist their tone never changed—that they were hopeful but acknowledged wide gaps that continued to exist—and there’s no real reason not to believe this was the case, given the owners haven’t seemed interested in making a deal from the start.

Consider the tactics carried out by the league throughout the process:

  • Initiated a lockout at 12:03 am when the last deal came to an end at 11:59 pm, having a statement ready to go and league websites immediately shut down
  • Despite the stated desire to jumpstart negotiations, there were 42 days between the lockout and the league’s next proposal
  • Refused to directly address that delay with an answer that makes any sense when asked about it publicly not once, but twice
  • Attempting to tie proposals together that have no business going together
  • Blatant attempts at making the players look bad—twice requesting mediation and the aforementioned attempt to make it look like a deal was done
  • Setting arbitrary deadlines that aren’t actual necessary
  • Squeezing last minute changes in the fine print under those deadlines

In an effort to try and ascertain just what the players have done wrong in these negotiations to deserve equal blame in the eyes of some fans, the best reasons I can seem to get are that they haven’t been asking for the right things and they didn’t simply accept what they are were being given because they are “greedy”.

Imagining the negotiations in one’s head, wish casting what you think the players should want because you know what’s best for them—lacking the information they have, may I add—and calling it bad negotiating when they don’t do what you want them to because you think it’s really just best for you is completely different than analyzing the negotiations that are actually happening and what is on the table. Aside from that, calling players greedy is a misunderstanding of economics, negotiating, and the business of baseball as it stands right now.

One would think that employees asking for more money would be a universally understood and backed cause, but apparently that right is lost somewhere along the way when too many zeroes get involved. Aside from the fact that that their bosses have many more zeroes than they do.

I digress—we’re here, and now the question is just how long can or will this last?

Not that it wasn’t before, but over the last few days, it’s become fairly obvious that owners have little interest or need to play games—their bigger goal is to break the union. If their goal was to simply win, they could have taken any of the unions’ offers from the last several weeks—they would have stood to make out in all of them:

They could have happily taken their last known offer, as they already forced the union out of some of their most impactful requests, leaving them with nothing more than asking for a little more money. However, why would ownership want to spend even a little more money, the on-field product without which there would be no business?

Owners seem to view this whole negotiation as a zero-sum game—if one group does better, another inherently must do worse. As if gobs of new money aren’t flooding into the game and will continue to do so.

Here is a summary of the new television agreements the league has just signed from Maury Brown of Forbes:

Seems like there’s room to spend on minimum salaries and up the Competitive Balance Tax threshold simultaneously, no?

Apparently not, according to Andy Martino of SNY, who reported that at last month’s owners meetings “some owners vowed to ‘not go up one penny’ from the current CBT threshold of $210 million”.

It’s obvious negotiating isn’t on their minds:

Unfortunately, for the players, it’s hard to negotiate with someone who doesn’t need to.

The prevailing theory seems to be that April just isn’t important to many owners. Cold weather and schools in session keep attendance down, but the bigger ace up the owners’ sleeves is how their TV contracts are set up. Ken Rosenthal of The Athletic reported the following saving grace of the owners:

Local television contracts generally do not require clubs to issue rebates to their networks until about 25 games are missed, according to a source with knowledge of such deals. And the big money in the league’s national-television contracts comes from the postseason.

Ronald Blum of the Associated Press echoed similar thoughts:

Fitch Ratings [one of the Big Three credit rating agencies] said the cancellation will not impact MLB and stadium-level debt ratings for now due to liquidity that included dedicated debt reserve funds sufficient for a season-long stoppage. Fitch said MLB’s media contracts are structured for continued payments in 2022 during a lockout, with the possibility of repayments due later.

Under a one-month cancellation, we expect MLB will be able to preserve national media revenue at levels close to those agreed to under contract.”

If the league can play roughly five-sixths of their season and still receive full payment from their biggest revenue stream, while possibly saving on roughly one-sixth of their biggest expense—do you see them rushing to make a deal?

So, if the players hope to gain anything that they feel they deserve, their best recourse is likely holding out, at least through April.

As a “veteran of MLBPA labor fights” put it—via Travis Sawchik of theScore— “to win major victories, [players will] have to be comfortable with being uncomfortable… Resolve requires sitting through missed games…Empty stadiums don’t generate revenue for the owners.”

While we aren’t there yet, an extended period of missed games certainly isn’t out of the question.

Since we aren’t there yet, just what does this “best and final offer” look like from the league, and where does the union stand on it?

As was made clear Monday into Tuesday, these deals were fragile, with one point built off another, and like a Jenga tower, one loose brick can bring down the entire structure. While we were able to get a pretty good idea of the league’s proposal through their propaganda arm website, very few details were released on the proposal the players made to the league early Tuesday.

Since I think it would be foolish to assume we know what definitively is or isn’t in the deal right now, given the rapid fire back-and-forth of the sixteen and half hour bargaining session from Monday into Tuesday, I’m going to try and parse out the main details we know, leaving the rest of the proposals that have leaked over the last few months out, sticking to what we know for sure, based on reports that is.

As before, included in bold text are changes that were made since the last update, as well as new pieces of the proposals that have since come to light. Also, I’ve attempted to break the topics up into subtopics, hopefully providing a better flow and making this all more easily digestible.

First, here is a list of topics I removed due to no confirmation of their inclusion—it doesn’t mean they aren’t in there; we just don’t know about them— or to them being settled. This is then followed by details on everything else.

Miscellaneous:

Advertising Patches

Draft:

Rule 4 Draft Rounds

Draft and Follow

Rule 5 Draft Eligibility

Core Economics:

Earlier Free Agency

Minor League Minimum Salaries

Arbitration

Salary Cap/Floor

Miscellaneous

Optional Assignments

Players: Limit to five per season

Owners: Limit to five per season

This was in the proposals, then the league took it back when they removed the proposal asking for the right to reduce the Domestic Reserve List—more on that in a second—and it seemingly made its way back again.

The players originally asked for four, but reportedly met the owners at five on Saturday, February 26th.

While we have no idea who initially proposed this, it certainly benefits players more than owners, thus can be point one in their favor.

Domestic Reserve List

Players: “Please stop trying to take our jobs”

Owners: Withdrew the request to control amount (maybe?)

Reportedly, the league backed off this request on Monday the 21st; however, as I mentioned above, that was seemingly tied to the option proposal (five optional assignments for 900 minor league jobs—seems fair).

Currently, it’s not clear whether the league tried to get this back into the proposal or not, because it wasn’t reported anywhere. With the way MLB opening celebrated their proposal, I’m weary of anything they didn’t include, especially aspects that paint them in a bad light.

While this would be a win for the players if it weren’t included, we can’t know for sure right now, so it’s undecided.

Pension Plan

As I said, Mark Feinsand was really peddling hard, and while it wasn’t in his writeup, he did tweet that there was an “increase in pension payments to retired players and improvements to healthcare benefits for players and families”.

If this is truly the case, it’s obviously a good thing.

Rule Changes

Players: Willing to discuss changes, but declined timeline

Owners: Ability to implement rule changes unilaterally after 45 days, looking to implement shift restrictions, pitch clock, and larger bases

Where to even start here?

As I covered last week, it was first reported on Friday the 25th that the league was trying to shorten the period of time between making a rule proposal and being able to unilaterally implement said rule.

Then, on Saturday, it became known that the time was proposed to go from a year to just 45 days.

An innocuous 2:14 am Tuesday morning tweet from Jon Heyman then insinuated rule changes were at least being discussed:

Then, later in the day, it was reported that this was more than just talks, and that turned out to be the case:

According, to Feinsand, included in Tuesday’s proposal was “the formation of a joint Competition Committee comprised of active players, individuals selected by the Office of the Commissioner and an umpire, which would be responsible for recommending and adopting changes to playing and scoring rules (Pitch Timer, Automated Ball-Strike, shift restrictions, and bigger bases).”

Tony Clark, MLBPA Executive Director, didn’t seem to take too kindly to the last-minute barrage:

While Rob Manfred has been loath to use such power in the past, it seems the union may not get much of a choice in the matter:

Given the apparent power-play ran here by the league, I would be inclined to call this a point for the owners, if such a proposal were to be implemented.

Draft

Signing Bonus Increases

Players: ???

Owners: Add an additional $23 million in Rule 4 and International Draft slots

This isn’t new, but it was included in the league’s proposal.

As I explained before, while it sounds nice out of context, this is MLB simply playing catch-up for raises that were never included for the 2020 or 2021 drafts, so it’s not really a new perk.

Still technically a give for the players though.

Pre-Draft Physicals

Players: ???

Owners: If a player submits, the team that selects them must offer at least 75% of their slot value and player can’t be failed due to post-draft physical after passing pre-draft physical

Again, nothing new, simply confirmed as included.

The league even went so far as to call it the “Kumar Rocker Rule”, as his ordeal with the New York Mets in 2021 led to this. They did add that it’s for “Top-300” players, but not by whose ranking.

While on a smaller scale, this is probably a win for the players, unless one disagrees with the idea of being forced into a pre-draft physical to get the benefit.

Draft Lottery

Players: ???

Owners: Lottery for top five picks

This seems to be another proposal that has seen several different iterations over the last week or so.

On Thursday the 25th, the players tweaked their proposal, staying at seven teams—down from eight earlier in the week—but pulling back on penalties against small-market teams who lose for any number of consecutive seasons, but still included a lot of other qualifiers. This was at the request of the league, given the possibility that the teams could be trying but just not be very good.

Reportedly, the league viewed the lottery as just that—the top picks and nothing else. This is an important point to remember.

For a refresher, here is a primer from Jeff Passan:

Then, on Friday, it was reported that solid progress was made on the topic—to the point it was close to closed—despite the fact the league was trying to tie changes to the draft to the implementation of their 14-team playoff. This is another important detail, as it seems they dropped this request, given they finally settled on a 12-team playoff.

Finally, on Saturday, the sides apparently agreed to a lottery for the first six selections, a mid-point of sorts between their two proposals.

Despite this history, we don’t know the current stance of the players, but we do have what the league proposed.

According to the league, they moved down to the top five selections being determined by lottery, with the bottom three records receiving the same 16.5% chance at winning. Also, teams that receive revenue sharing would be ineligible to be in the lottery in three straight years, while teams that pay revenue sharing would be ineligible for two. Ineligible teams couldn’t pick higher than eighth.

If the league truly was against these kinds of qualifiers, it seems they moved closer to the players’ requests, as these rules hew fairly close to the ones in Passan’s tweet from above.

One final note that bares mention—many are of the opinion the draft lottery is nothing more than “eye wash”, in that it won’t solve any of the problems the union is hoping it will. It’s one thing when that is a random person’s opinion, another when it comes from inside the game:

Again, this is troubling to hear from front offices, the ones responsible for the actions in need of changing, but given this was an ask for the players, there’s no other way to view it than another win for them.

International Draft

Players: ???

Owners: Included in most recent proposal

This is another aspect of MLBs’ proposals we knew were on the table, but in their release they provided reasoning for the inclusion:

The International Draft would increase spending on international amateur players and maintain the number of players signed, while addressing corruption in multiple ways (including eliminating early deals and introducing mandatory drug testing).

I wanted to attempt to break this statement down, at least form the cost side, as that’s all I considered at first. It turns out I was missing something obvious, as Mike Axisa of CBS Sports logically pointed out. Basically, his argument is that MLB has the total power to enforce rules they already have to “address corruption”, but they only choose to when it’s in their benefit, like when they banned Atlanta GM John Coppolella several years ago. Instead, this is only a guise to cut costs, just as any draft is.

So, what are those costs, as MLB claims they would go up as a result of a draft? According to Baseball America, the total amount of allocated pools for the 2021-22 International Signing Period—for January 15, 2022 to December 15, 2022—is $167,231,800.

While we don’t know the specifics of the draft, one would assume it would mirror the Rule 4 Draft, especially given that the league has been including picks for the draft in their proposals alongside Rule 4 picks.

According to MLB.com, the total pool for the 2021 Rule 4 Draft was $265,769,400. So, while it would take a large hike—there’s no way they’re getting to domestic amateur totals, that’s for sure—it’s possible they increase it slightly from 2021 and fulfill that promise. It would be interesting to see, however, just how the first pool would compare to this current signing bonus total.

While the amount of money spent may make sense, it’s hard to imagine how a draft would “maintain the number of players signed”.

If you remember, the players apparently proposed making the Rule 4 Draft twenty rounds permanently, and it’s hard to imagine the international draft wouldn’t mirror it in that way. Again, this is just conjecture, but that’s roughly twenty players per team, and plenty of teams sign more international free agents than that every period. We aren’t that far removed from the 2017-18 signing period, when the Pittsburgh Pirates brought in 74 players.

Sure, teams could sign undrafted free agents, but with the draft as an excuse, it’s completely possible classes would reduce in size.

Given this is something the union doesn’t and hasn’t wanted—and claimed they would only accept it if offsets were great enough—this would have to be chalked up as a get for the league.

Update: Because no one actually wants me to ever finish this, MLB.com reported new details from the league proposal Saturday morning. Here are some of the highlights, along with my initial reaction:

  • 20-round Draft with more than 600 selections (regular picks, plus competitive balance selections) – I had this one pegged.
  • Each slot in the Draft would also carry a guaranteed signing bonus amount (the first pick would be worth $5.25 million – The obvious implication here is only one player can now sign for at least $5.25 million in the draft, whereas as many as 14 could have during this current period, if teams so chose. Also, are these slot amounts fixed, or can a higher or lower amount be paid, which would be more of a pool system? The article certainly seems to imply the former.
  • There would be no limit on the number of players who could sign, if they were not selected in the Draft. Thus, the Draft should not affect the total number of players signed – As I said, I’m still skeptical that teams would keep signing players in droves now that they have a draft to cap it – it’s not as if undrafted free agent signings for the Rule 4 Draft are plentiful.
  • The signing age — and the countries from which international players could sign — would remain the same
  • All players would be subject to mandatory drug testing
  • Each club would be randomly assigned to a group of six clubs, and each group would then rotate through Draft order over a five-year period. So the Draft order would not be tied to team record. – This is certainly novel, and the league is pushing this as an opportunity to spread out talent—a feature that is already available.
  • Draft picks could be traded between clubs
  • A signing deadline three weeks after the Draft
  • In an effort to grow the game, clubs would receive supplemental selections for drafting and signing players from non-traditional international baseball countries. – I’m not necessarily implying anything, but it’s curious why MLB seems willing to institute systems in this draft that they aren’t in the Rule 4; is it a precursor, or do they just view this draft as different in some fundamental way?

The article really hammers home the idea that the system needs fixed, and the draft is the way to do it. As stated above, the league could fix the problems with the system tomorrow if they wanted to, and it wouldn’t take a draft to do so.

Core Economics

Universal Designated Hitter

Players: Will agree to Universal Designated Hitter

Owners: Included in most recent proposal

As promised, the league included this in their recent proposal, a benevolent gift to the players in the form of high paying jobs.

As already stated, a lot of numbers were floated around MLB’s proposal to prove how good it was, and a $9.2 million average salary for primary Designated Hitters in the American League in 2021 was listed as this justification, with the implication that “the change could add $130 million in player salaries”.

This was easy enough to check, so I did.

If you take fifteen roster spots at $9.2 million, you get $138 million total. However, you obviously need to back out the minimum salary, as this would take the place of a minimum salary player. If you multiple fifteen by $570,500—the 2021 minimum— and back it off, that’s $129,442,500, or basically the league’s $130 million number, one would assume.

However, is this the right thinking? In their proposal, the league offered a minimum of $700,000—more to come—meaning that’s what would be replaced in 2022, not $570,500. Multiply that by fifteen and subtract it off and you get $127,500,000, a difference of about $2 million.

Is the league simply rounding, or is it something more?

MLB littered their release with numbers that are nearly impossible to verify, claiming how grand the proposal was. If one of the only ones that can at least be somewhat verified can’t hold up to scrutiny, it at the very least brings into question the veracity of the rest.

No one gets a win for this, no matter what the league claims. Both sides wanted this, and it’s not a concession to either side.

Draft Pick Compensation

Players: Seeking to eliminate draft pick compensation attached to free agents

Owners: Suggested to eliminate in most recent proposal

While this was supposedly in the proposals for a while, it appeared to at least not be a possibility as of Sunday the 27th.

Whether MLB’s strategy was to keep tying proposals together only to go back on them to look better, or actual bargaining, in the end the league ended up repealing the Qualifying Offer and lowering their asks on tax rates—more to come.

Again, this was and has been a big ask for players, so it’s a point for them.

Revenue Sharing

Players: No current changes

Owners: Have not submitted changes in any proposals thus far

On Saturday the 26th, the players finally gave up on this change, offering to withdraw their proposal on reducing revenue sharing, which started at $100 million originally and eventually went down to $30 million.

Apparently, they were still asking for a slight modification that wouldn’t have affected total revenue sharing, just incentivized small markets to grow local revenue:

Also, there was the presented change of wanting to make the Oakland A’s revenue sharing recipients again, something I noted before.

Finally, for a brief second, it looked like the league was looking to get out of some pending legal matters related to revenue sharing:

Heyman then issued a follow up, stating “Word is this won’t be part of the CBA deal being negotiated. Bigger fish to fry.”

While it could certainly be seen as an admission of guilt, I’d probably consider it more of a plea bargain. It allows the owners in question the opportunity to avoid being found guilty in exchange for something the other side wants.

Also, given the history of success in grievances like these—the Florida Marlins of 2010 are the closest example of losing I know of—makes one wonder if the teams in question are actually sweating it out.

Given the players had to fold, this is an obvious win for management.

Service Time Manipulation

Players: Add service time to players who were called up after the start of the season based on accomplishments

Owners: Reward up to two draft picks to teams that roster Top-100 prospects from the start of the season who go on to achieve certain accolades in their pre-arbitration seasons. In addition, extra service could be retroactively rewarded to players based on Rookie of the Year voting.

Nothing officially new here, but the obvious notable inclusion on MLB’s part is finally giving at least some ground to the players in retroactively crediting service time.

Under the league’s proposal, “Players finishing first and second in Rookie of the Year voting would receive a full year of service time regardless of days spent in the Majors.” One of the only questions is whether top prospect status plays into the extra service or not. The Associated Press reported that the player had to be among the Top 100 prospects, while MLB never mentioned it.

While it’s not as extensive as the union was hoping, the league’s willingness to at least meet the union part way should probably be called a win for them. They still should have probably done more to try and not allow it as opposed to simply incentivize for not doing it.

Expanded Playoffs

Players: 12-team playoff

Owners: 12-team playoff

This appears to be a major win for the players, as the league was pushing—and continues to push—for 14 teams, but the players stood their ground and got this included—for now.

Reportedly, the players turned down better monetary offers from the league under proposals with 12 and 14 teams in the playoffs:

Why was the league willing to offer such differences? Extra playoff money, of course—to the tune of $75 million over the life of the deal:

So, why did the players turn this down? Mainly, they are concerned with the implications to the competitive environment a pool that large would create—the thought process being why would teams try harder (i.e. spend) when a mediocre record could still produce a playoff appearance. However, the players didn’t necessarily totally turn down the idea—they just wanted to be sure competitive integrity stayed intact as much as possible:

For now, the players can consider this a win, as the owners relented on their ask, but it’s a temporary victory, or one possibly traded off for something better.

Buster Olney of ESPN reported on Friday night that the union is open to 14-teams as a way to reignite negotiations and get some further gains on the CBT:

Don’t etch this one in stone yet.

Competitive Balance Tax Penalties

Players: Proposed to keep tax rates the same

Owners: Agreed to keep tax rates the same

Here’s a major win for the players, at least in terms of past proposals in the negotiations.

Owners agreed to return to the status quo instead of cutting spending off at the knees with draconian increases—both percentage and draft pick wise.

As previously mentioned, the league was trying to create an ultimatum between repealing the Qualifying Offer or lowering the rates, and for now, the players were offered both.

Super 2

Players: No current changes

Owners: No current changes

To close us out, I intentionally ordered the proposals this way, as it starts a run of issues the union had and is probably where any anticipated agreement started to break down.

At first, the union started with essentially doing away with Super 2 and making every player with 2.000 plus years of service arbitration eligible. As negotiations proceeded, it subsequently moved down: 80%, 75%, 35%, finally returning to the status quo on Monday the 28th (22%). This was at the behest of owners, who insisted the votes were not there to make this pass so there was no point in discussing it.

News then started to filter out Tuesday morning that this may not have gone over well with everyone:

At first, this was a big change that the players were hoping for, looking for major change in accelerating arbitration and getting more players more money faster. As time went on, 35% equated to “about 15-18 players annually”, a pittance that probably shouldn’t have made the league so hung up on it.

Were agents upset—something I’ve never understood fan anger towards is agent feedback, given it’s literally their job—with going from 35% to 22%, or with the greater drops beforehand?

Also, it was reported that “the MLBPA [was] willing to drop proposal to expand arbitration if rest of numbers work out”, so maybe it was simply a matter of the rest of the numbers not working out.

Either way, this was a loss for players and a win for owners.

Minimum Salaries

Players: $725,000 in 2022, $745,000 in 2023, $765,000 in 2024, with raises in 2025 and 2026 based on the Consumer Price Index

Owners: $700,000 minimum salary, escalating $10,000 in each year of the deal

There doesn’t really seem to be much to complain about when it comes to the league’s offer here, even when comparing it to the 2006 and 2011 agreements—as the 2016 agreement was awful as far as increases go.

Sure, one can quibble with the smaller raises, no Cost-of-Living Adjustments on the back-end—something included in at least the previous three agreements—or the fact that the final difference is as small as it is. However, it’s hard to not see this as a win for the players—but I don’t know if they were or were not hung up on this specifically.

Pre-arbitration Bonuses

Players: Implement a pool of $85 million to pre-arbitration players based on accomplishments

Owners: Offered a pool of $30 million to be allocated based on “mutually agreeable WAR statistic”

Since my last update, the league moved from $15 million in $5 million increments until they ended up at $30 million, while the players went from $115 million all the way to $85 million in one big jump.

Also, the league increased the number of players compensated under the pool from 30 to 150, matching the union request. Finally, the league’s proposal was static, while the players wanted to raise it $5 million per season.

In their release, MLB claimed that “[o]n average, the top 30 pre-arbitration players would increase their salaries by 79% under the pool”. By my math, a 79% increase of $17,115,000 ($570,500 * 30) is $13,520,850, leaving $16,479,150 for the 120 remaining players, or an average of $137,326 per player.

Due to the dramatically increased size of the pool, this is down from my previous calculation of an $390,581 average for the bulk of the remaining pool.

It’s likely the union wants to see this raised, and it’s probably one of the reasons they turned down the deal. While $85 million may be too high for a brand-new venture, it’s still probably safe to say $30 million is too low, especially for 150 players.

However, getting the league to implement a completely new avenue for pre-arbitration compensation has to be considered a win for the players.

Competitive Balance Tax Threshold

Players: Rates starting in 2022 — $238, $244, $250, $256, $263 million

Owners: Rates starting in 2022 — $220, $220, $220, $224, $230 million

As anticipated, this appears to be the biggest issue among all of them—the players insist the levels need raised, while ownership is fighting back hard.

Andy Martino of SNY originally reported that four owners rejected the leagues final proposal to players, and Evan Drellich of The Athletic later confirmed the report, revealing the four who opposed the CBT increase: Bob Castellini (Cincinnati Reds), Chris Ilitch (Detroit Tigers), Ken Kendrick (Arizona Diamondbacks), and Arte Moreno (Los Angeles Angels).

In his March 1st press conference where he announced the cancellation of games, Manfred suggested the levels offered were reasonable based on recent precedent:

While this is true, it implies that the last two agreements were reasonable.

It’s been widely accepted that the owners definitively won the last two agreements, and yes, it’s true it’s partly the fault of the players for letting it happen. Below are the CBT thresholds by year, along with yearly increases:

Year Total (Millions) % Inc. Prev. Inc. 2 Prev. Inc.
2003                        117
2004                        121 3.0%
2005                        128 6.2%
2006                        137 6.6%
2007                        148 8.4%
2008                        155 4.7%
2009                        162 4.5%
2010                        170 4.9%
2011                        178 4.7% 30% 52%
2012                        178 0.0%
2013                        178 0.0%
2014                        189 6.2%
2015                        189 0.0%
2016                        189 0.0% 6% 38%
2017                        195 3.2%
2018                        197 1.0%
2019                        206 4.6%
2020                        208 1.0%
2021                        210 1.0% 11% 18%
2022                        220 4.8%
2023                        220 0.0%
2024                        220 0.0%
2025                        224 1.8%
2026                        230 2.7% 10% 22%

As you can see, the problems really started in 2012, when the threshold didn’t go up at all, and only grew 6% from the prior agreement. The 2017 agreement was almost just as bad, and this is of course what Manfred is holding up as reasonable, considering the owners are more than happy with their wins, ignoring the precedent from the two prior agreements and the significantly higher raises within.

Revenue growth has significantly outpaced the CBT thresholds, and as the MLBPA said in their statement following the events of Tuesday, “Against the backdrop of growing revenues and record profits, we are seeking nothing more than a fair agreement.”

There’s really no other way to describe their ask other than fair, given rising revenues, team valuations, and inflation. Comparatively, based on the estimates of others, the players are asking for well below where the CBT should be if it rose commensurate with league revenues over the last few agreements.

There’s no reason the players must be resigned forever to their prior missteps—if not now, when will they try to make up for it? It certainly won’t be in 2026, when revenues dictate a CBT north of $300 million and the owners offer $234 million. And why blame the players for making the stand now many blame them for not making then?

In Manfred’s letter to fans, he extoled the league’s proposal, claiming they “offered a significantly larger first-year increase than in the last two agreements,” but wanted to be sure it was kept “in mind that the Competitive Balance Tax is the only mechanism in the agreement that protects some semblance of a level playing field among clubs.”

This is little more than an excuse not to spend or stopping others who wish to. Teams wouldn’t be threatening to not let it go up one penny if it were actually about balance.

New TV money alone eclipses $248 million per year—over $12 billion total:

And as Joel Sherman of the New York Post points out, there is likely additional streams of revenue coming soon that we don’t even know about:

Also, there is legitimate player concern that MLB is just waiting for the ink to dry on a new CBA before signing deals with streaming services, gambling operations, NFT outfits, etcetera, which promise billions of additional dollars not fully accounted for in the present negotiations.

Central revenue, revenue sharing, local revenue: there is more than enough money for teams to at least attempt to keep up with those who have more.

When income goes up, but expenses don’t, that’s simply nothing more than saving money. There’s nothing more to it.

Right now, this is a loss for players, but as already stated, players are willing to discuss a 14-team playoff for gains on this issue.

Maybe that extra $15 million will finally be enough to convince the owners to spend.

Return to Play

While the league would seemingly like you to believe they have unilateral power to dictate these aspects of the season, that is not the case. As parts of the agreement, they would need bargained and negotiated in order to return to play, which is why I’m adding this new section.

Remember 2020 and these aspects of the agreement? By “cancelling” games, the owners have potentially made these negotiations even more messy than they already were.

Length of Schedule

Owners: “Games are cancelled, and we’re not making them up”

Players: “Not so fast”

Salary

Players: “And you won’t get paid for them”

Owners: “Not so fast”

Service Time

Players: “And why would you get service time?”

Owners: “Not so fast”

Obviously, all of these tie together, as no games means no pay and fewer days on the calendar means less service time.

As I’ve mentioned before, no matter what the league says, games can’t just be unilaterally cancelled, and 2020 shows that. These need to be bargained, and that is obviously the union’s plan at this point:

But it’s not just games and pay— “the union will insist on players accruing full service time for the 2022 season, no matter how many games are played”, however, “MLB is expected to fight for the opposite”.

The most recent precedent, 2020, would imply that if games are ultimately cancelled and not made up, players would receive service but not pay, as Tim Dierkes of MLBTR surmises as well.

All of this might not matter if an agreement can be hashed out quickly and just a few games are missed, but if this extends too long, get ready for an even bigger fight.

**********

So, a quick count of my extremely informal tally of player versus owner wins has the players winning out eleven to five, with one draw and one undecided.

If my perception is to be agreed with, what is it that the players are waiting for—why didn’t they sign the deal?

First of all, I would make the case that this deal seems so player friendly in part because the majority of the information came from a MLB press release—why would they report the parts that look bad? There are inclusions we don’t know about, just as Ross Stripling, the Toronto Blue Jays player rep and financial advisor, alluded to:

One example just came to light late Thursday, when Evan Drellich of The Athletic reported that teams were trying to get meal allowances included in the CBT calculation—which the league says was “grossly mischaracterized”.

As illustrated, it could be—and probably was—any number of the following that gave the union pause: not getting enough in return for their concessions (Super 2, expanded playoffs, International Draft), sudden rule change inclusions, a pre-arbitration pool that wasn’t high enough, and most certainly a CBT that they feel needs to go up.

If it’s not somehow abundantly clear, I’m totally with the players here and I’m not sure how else one could see it another way. However, Joe Sheehan—another player advocate—shared an excerpt from his newsletter that really got me thinking:

Based on what we can see—sorry, but I can’t read the whole thing—he’s positing that, given what the players currently are asking for, is it fair to ask if they even have anything left to fight over and hold out for, much the same argument as some would make about the owners?

Gone are the biggest—and arguably most groundbreaking—asks of the players: accelerated free agency and arbitration, Super 2, revenue sharing. It’s possible that one could argue that if players were really trying for a better deal, they would have continued fighting for some of these aspects instead of more money.

I’ve said from the beginning that the players may be going for too much, and others have echoed the sentiment that it could take gains over two to three agreements to get the change they are hoping for. In fact, if I were to try and pick even one thing that the players did wrong in negotiations, it was ask for too much.

Yes, they needed to pare down their requests if they wanted to get anything done, and since it’s easier to bargain for higher wages than a four-day work week, they decided to go for the former.

Once they hit that brick wall, were these secondary measures truly worth holding out over? They got a draft lottery and pre-arbitration pool, two totally new features to past agreements. They got rid of the Qualifying Offer, something they’ve been trying to do for a long time. Couple the pool with significantly higher minimums, and it’s probably fair to say that one of their main goals—get younger players paid—was definitively met.

I’m sure it could be argued to take those wins—along with expanded playoffs and what comes with those—evaluate the pros and cons over the next few years and come back to the table in 2026 with a new, streamlined, definitive plan. Maybe player development has become even more effective and efficient over the next few years, and it’s truly time to reassess the three-years to arbitration, six-years to free agency paradigm that’s existed for so long, as Travis Sawchik has been banging the drum for. Maybe it’s something completely unforeseen, but whatever it is, be ready for it.

Is the CBT offer good enough? In my mind—and theirs—the answer is absolutely not. If it goes up, are there the bones here for a reasonable deal? To me, probably, but I’m not on the inside of the negotiations and I can’t speak for them and what they want.

This is the path they chose, and I know I’m not going to try and tell them what’s right or wrong.

It will just be interesting to watch how it plays out.

Ethan Hullihen
Ethan Hullihen
A longtime Pirates Prospects reader, Ethan has been covering payroll, transactions, and rules in-depth since 2018 and dabbling in these topics for as long as he can remember. He started writing about the Pirates at The Point of Pittsburgh before moving over to Pirates Prospects at the start of the 2019 season. Always a lover of numbers and finding an answer, Ethan much prefers diving into these topics over what’s actually happening on the field. These under and often incorrectly covered topics are truly his passion, and he does his best to educate fans on subjects they may not always understand, but are important nonetheless. When he’s not updating his beloved spreadsheets, Ethan works full-time as an accountant, while being a dad to two young daughters and watching too many movies and TV shows at night.

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