CBA Negotiations Hit Stumbling Block, and More Games Are Postponed

© Patrick Breen / USA TODAY NETWORK

At least from the outside, on Wednesday it appeared possible that after another marathon session of negotiations the owners’ self-imposed lockout might end in time to meet commissioner Rob Manfred’s umpteenth deadline and squeeze in a full 162-game season. The dollar figures from proposals by the league and the union pertaining to the new collective bargaining agreement’s core economic issues had converged into “split the difference” territory. Yet since Tuesday night, it had become apparent that the path to a deal suddenly hinged upon the union agreeing to the implementation of an international draft, in exchange for which the qualifying offer system (a.k.a draft pick compensation) would be eliminated. Long sought by the league, and long reviled by the players, the international draft was suddenly of vital importance for one side and simply too complex for the other to agree to under the pressure of deadlines and ultimatums. And so, around 6:30 pm ET on Wednesday, Manfred snatched defeat from the jaws of victory by announcing the postponement of Opening Day to at least April 14.

Manfred didn’t actually use the phrase “officially canceled,” as he did on March 1, nor did he hold a press conference. This time, he said via a statement, “Because of the logistical realities of the calendar, another two series are being removed from the schedule, meaning that Opening Day is postponed until April 14th.” Given what transpired in the days leading up to this week’s artificially-imposed and then delayed deadline, it’s clear not only that the schedule still has a bit of wiggle room via potential doubleheaders (likely with seven-inning games) and juggled off-days, but that the league understands that it can’t unilaterally dictate the length of the season. The ramifications for shortening the slate with regards to salaries, incentives, and service time will require another layer of negotiations, guaranteeing more headaches — particularly with the union having indicated that anything less than pay and service time based on 162 games could mean withholding approval an expanded playoff format for 2022.

As noted in my coverage on Wednesday, the now-familiar pattern — MLB leaking details of its proposal to the media in the dead of night, in time for the next day’s news cycle but before the players, wary of being pressured into accepting an agreement in the wee hours, could consult their executive board and respond — had the potential to create unfounded optimism about a deal. The international draft, which on Wednesday morning USA Today’s Bob Nightengale called “the last big remaining obstacle to reach a labor deal today” proved to be no small hurdle, either.

As proposed and then revised, a 20-round draft with over 600 picks including competitive balance selections would replace the chaotic international signing period. It would have slot values that guarantee a signing bonus amount, starting at $5.5125 million for the top pick, with a draft order determined on a rotating basis (in pods of seven or eight teams) instead of team records, and teams able to trade picks. Via The Athletic’s Maria Torres, the league had estimated that the new format would increase international spending by $23 million above the $166 million spent in 2020-21; that was before the league increased slot values by another 5%, adding another $1 million or so to the first figure. With teams additionally allowed to sign an unlimited number of undrafted free agents for as much as $20,000, that could yield another $9 million in spending.

The league believes that such a draft would clean up a system rife with corruption, coercion, exploitation and PED use. Players, agents, and others within the industry believe that those problems have spiraled out of control due to MLB’s lack of enforcement of its own rules, such as prohibiting teams from becoming involved with players below the age of 15, and kickbacks to scouts and trainers. They also object to the imposition of another form of cost control, as well as the loss of the right for such players to choose the franchise they will join. The union has looked to Latin players for guidance on the issue, and many such as Fernando Tatis Jr. and David Ortiz have spoken out against it.

While the draft has been discussed since last summer, the players nonetheless feel as though its emergence as a deal-breaker has been sprung upon them at the 11th hour. Via the Washington Post’s Chelsea Janes:

The owners began introducing the international draft into proposals as early as July 2021, according to an MLB official. MLB argues that, though the union repeatedly rejected the draft, redirecting negotiations and the public conversation to issues such as the competitive balance tax and minimum salaries, the international draft was always important to the owners.

But to the union, pitting the international draft against draft pick compensation represented a strategically timed negotiating ploy, one that forces the players to choose between something they believe suppresses free agent spending and a draft setup many of its members do not support.

From Max Scherzer, a member of the union’s eight-man executive committee:

On the other side, the players have long sought to eliminate the qualifying offer system, as the resulting direct draft pick compensation that penalizes the team signing that free agent can act as a drag on a player’s market. Sometimes, the threat of losing a pick becomes such a deterrent that a free agent doesn’t sign until after the following year’s draft, once there’s no longer a pick to be lost; notably, this happened to Dallas Keuchel and Craig Kimbrel in 2019.

The issue affects only a handful of players per year; over the past three offseasons, a total of 30 qualifying offers were given (10 after the 2019 season, six after the ’20 season, and 14 after ’21), with 26 players rejecting them. For top dollar free agents, the attachment of a lost pick has little effect; it didn’t stop the Rangers from signing Corey Seager for $325 million and Marcus Semien for $175 million, and it won’t affect the pursuit of Carlos Correa. But for a player like Michael Conforto, coming off a subpar year and expected to land only a one-year deal via our Top 50 Free Agents crowdsource, it can be a real problem.

As Drellich put it, “It is difficult to know what dollar values the sides attach to the international draft or eliminating qualifying offer. Industry sources estimate QO to be worth $50m-$100m annually. Just because one side links two issues does not mean they are identically valued.”

The conjoining of the two issues ground negotiations to a halt on Wednesday. According to multiple reports, just before 2 PM ET the union contingent left MLB’s offices after presenting their counter to the league’s proposal from Tuesday night. In that proposal, the MLBPA lowered its numbers on the Competitive Balance Tax thresholds, minimum salary, and the size of the pre-arbitration bonus pool. However, after consulting with Latin players, the union indicated that it considers the international draft “a non-starter,” but that it still wants the qualifying offer system eliminated.

The union expected the league to respond with a counterproposal on all of the issues at hand, but instead the league replied that it would only do so if it agreed to one of three options. Via ESPN’s Jesse Rogers, the choices were these:

[1] “Sign the CBA, including eliminating draft pick compensation [the qualifying offer system], and take some time to examine the international draft. If the union won’t implement within a couple years (by ’24?), the league can re-open the CBA.

[2] “Do the entire package without the draft which means without draft pick compensation.”

[3] “Take the original deal. League gets the international draft and draft pick compensation is eliminated.”

Via Drellich, the union would have until November 15, 2022 to agree to an international draft that would begin in ’24. If at that point the players still don’t want the draft, the league could reopen the CBA after the 2024 season, thus turning this CBA into a three-year deal rather than a five-year one and probably inducing Drellich and the other tireless reporters who have diligently covered these endless negotiations to find a new line of work.

Via Rosenthal, MLB gave the union a deadline to pick one of those three options, but less than an hour later, Manfred made his announcement and the MLBPA responded with a statement of its own, calling the owners’ decision to cancel games “completely unnecessary”:

If there’s good news, it’s that unlike last week when the two sides retreated to their corners for two days after Manfred’s first cancellation announcement, representatives continued to discuss the draft/QO issue into the evening. Via ESPN’s Jeff Passan, the players did offer a counterproposal that blended the aforementioned choices, removing the qualifying offer for 2022 but restoring it for ’23 if the two sides don’t reach an agreement on an international draft by November 15, returning those two matters to the status quo.

Update: Shortly after this article was published, Drellich reported that the two sides have agreed to negotiate on the international draft until July 25, with draft pick compensation removed if they reach an agreement, and a return to the status quo on the two matters if no deal by then. “The union says it is awaiting a counterproposal from MLB,” added Drellich.

As for the figures exchanged on Wednesday:

  • The MLBPA proposed Competitive Balance Tax thresholds starting at $232 million in 2022 and increasing to $250 million in ’26, down from their endpoints of $238 million and $263 million, respectively, and not far off from MLB’s latest proposed endpoints of $230 million and $242 million.
  • The MLBPA lowered its pre-arbitration pool ask to $65 million (down from $80 million), growing by $5 million annually; the league proposed $40 million, flat across the five years of the CBA.
  • The MLBPA proposed a minimum salary starting at $710,000 and rising to $780,000 for 2026, down from a range of $725,000–$805,000 and within sight of MLB’s $700,000-$770,000 range.

The two sides plan to continue “constant” communication on Thursday in the hopes of finding a compromise and quickly salvaging a deal. By now we should know enough not to raise our expectations, but it beats contemplating the even bigger headaches that await if the two sides don’t close this deal soon.

Brooklyn-based Jay Jaffe is a senior writer for FanGraphs, the author of The Cooperstown Casebook (Thomas Dunne Books, 2017) and the creator of the JAWS (Jaffe WAR Score) metric for Hall of Fame analysis. He founded the Futility Infielder website (2001), was a columnist for Baseball Prospectus (2005-2012) and a contributing writer for Sports Illustrated (2012-2018). He has been a recurring guest on MLB Network and a member of the BBWAA since 2011, and a Hall of Fame voter since 2021. Follow him on Twitter @jay_jaffe... and BlueSky

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2 years ago

Well that last part is the first bit of good news I’ve heard in a while. I could use a little baseball to distract me from (quite literally) war, disease, and possibly famine too.