More Marathon CBA Negotiations Push Back “Real” Deadline to Play 162 Games

Remember back on March 1, when Rob Manfred canceled Major League Baseball’s March 31 Opening Day and the first week of games? And the week before that, when a league spokesperson threatened that canceled games would not be rescheduled, saying, “A deadline is a deadline. Missed games are missed games. Salary will not be paid for those games”? Apparently that wasn’t the real deadline to fit a full 162-game season into the calendar. No — and we’ll pause here so as to be heard over the sound of goalposts being dragged — that deadline was apparently Tuesday, and it’s been extended yet again. After lawyers for the league and the union huddled on Monday, MLB offered its latest formal proposal, and the two sides went back and forth for over 17 hours on Tuesday before pausing around 2:30 AM ET on Wednesday morning so that the union could speak to its board and respond with a counterproposal.

The two sides have converged on monetary issues, but significant gaps remain both there and on other matters, most notably the international draft. It’s possible that a deal could come Wednesday… or that the whole thing could fall apart, with more finger-pointing, and Manfred announcing the cancellation of more games.

Before digging into the details, it’s worth noting again that the length of the season and the ramifications that carries for salaries, incentives, and service time isn’t something that Major League Baseball can decide unilaterally. It’s subject to negotiation, which was why the passage of the March 1 deadline felt so significant, as any attempt to shorten the season would add another layer of complexity to the already contentious proceedings. Complicating matters — or calling the league’s bluff, depending upon how one looks at it — the union has indicated that anything less than pay and service time based on 162 games could mean that they won’t approve an expanded playoff format for 2022.

For at least one more day, a doomsday scenario would appear to be on hold, with the example of the 1990 lockout looming large. That year, the owners locked the players out of spring training for 32 days; the resulting settlement included an Opening Day pushed back by a week, a season end date extended by three days, and all but two of the 26 teams playing 162 games. Via doubleheaders — perhaps of the seven-inning game variety, though there’s no official word on that — and reshuffled off days, a similar resolution appears possible:

If an agreement is reached today, the tentative plan is for Opening Day to be April 6-7, with the regular season extended by three days. The other missed games from the week-long delay would be made up in doubleheaders during the season.

— Bob Nightengale (@BNightengale) March 9, 2022

Via The Score’s Travis Sawchik, MLB’s proposal was reportedly based on a 12-team playoff format, with no ghost wins. The players have indicated a willingness to consider 14 teams, but only if the format includes ghost wins so as to incentivize winning the division as opposed to qualifying as a Wild Card. A ghost win grants the division winner the equivalent of a 1-0 advantage in a best-of-three or best-of-five series. More from Sawchik:

A 12-team playoff creates 4 tiers of playoff teams:
*No. 1 seed – bye, home field (+ a re-seed advantage?)
*No. 2 seed – bye
*Top wild cards (home field in WC round)
*Lower WCs (nothing and like it!)
(A 14-team playoff only creates 3 tiers)https://t.co/M8VuFqfCAD

— Travis Sawchik (@Travis_Sawchik) March 9, 2022

In their previous proposal, MLB had tied the size of their pre-arbitration bonus pool and minimum salary offers to that of the playoff field. Presumably that’s still the case, though again the numbers are converging. As with last week, before summarizing where things stand with the major issues under negotiation, it’s worth applying the caveat that the league leaked its side of things to the media in time for the next day’s news cycle, with the players, wary of being pressured into accepting an agreement in the wee hours, hitting the pause button before responding and likely to counter with a proposal illustrating that substantial hurdles remain, and that an agreement may not in fact be so imminent. Once more, with feeling…

Competitive Balance Tax

The Athletic’s Evan Drellich reported that on Monday the league proposed higher CBT thresholds than before. On Tuesday, they raised them slightly further, with a starting point of $230 million (up from $220 million in their March 1 offer, and $210 million last year, a one-year jump of 9.5%) and an ending point of $242 million (up from $230 million in their March 1 offer, a gain of 15.2% over the five-year term). While those start and endpoints are still lower than those of the union’s March 1 proposal — which were reiterated on March 6 — for the first time the twain have met, sort of: the players proposed a $238 million threshold for 2022, rising to $263 million in ’26, an increase of 25.2% over the life of the CBA.

Drellich characterized the owners’ CBT offer as having “strings attached.” One of those is the creation of a fourth tier that kicks in when a team goes $60 million or more above the base level in a given year, as a means of deterring owners determined to outspend other teams. That’s in addition to the base rate and then surcharges on amounts at least $20 million and at least $40 million above the threshold. The tax rates for the new structure aren’t known, but in their March 1 proposals, both sides had been working with the previous CBA’s marginal tax rates: 20% on the first $20 million over the threshold, 32% on the next $20 million, and 62.5% on anything above $40 million. Expect a rate that’s even higher to apply to that top tier.

The St. Louis Post-Dispatch’s Derrick Goold termed the new tier the Cohen Balance Tax, after Mets owner Steve Cohen, whose roster already has 11 players whose total salary for CBT purposes surpasses $203 million, with RosterResource estimating its total payroll after signing its arbitration-eligible players at $271 million, and further additions (a fifth starter? another outfielder?) still possible once the transaction freeze ends. The new tier is clearly also aimed at the Dodgers, who finished 2021 with a $285.6 million payroll for tax purposes and were one of only two teams penalized (the Padres were the other). With $176 million worth of AAVs already committed to 13 players and an estimated tax payroll of $233 million, they’re almost certainly headed higher as well given their need for starting pitching, Clayton Kershaw or otherwise.

Pre-Arbitration Bonus Pool

An additional string, according to Drellich, is the counting of pre-arbitration bonus pool money against the CBT threshold. The owners boosted their proposed pool money to $40 million, up from $30 million in their March 1 proposal, but still well short of the $80 million proposed by the players on March 6 (down from a high of $115 million in late February). That $40 million amount would remain flat over the life of the CBA, meaning that its actual value would decrease over time.

The bonus pool money comes out to $1.33 million per team and would count as part of their payroll for tax purposes. As best I can tell, it had not previously been reported whether the bonus money would count against the CBT threshold; perhaps that’s been the case all along. Regardless, some teams might wind up getting more bang for their buck, as in more than $1.33 million in bonus money for their players, and given how few teams are likely to cross the threshold in a given year, most of that money would be inconsequential for tax purposes — but it could reduce the wiggle room of teams nearing the salary cap, er, tax threshold.

Minimum Salary

In its proposal, MLB once again inched towards the union in terms of the minimum salary, leaving relatively little ground between them. The owners offered a starting point of $700,000 for 2022, the same as in their March 1 proposal, and up 22.7% from last year’s $570,500. Instead of growing by $10,000 per year to $740,000 by the end of the CBA, the minimum under their plan would grow to $770,000, making for a 35% increase relative to the end of the last CBA. In the players’ March 1 proposal, they offered a starting point of $725,000 (a 27.1% increase from last year), increasing by $20,000 per year to $805,000, for an overall gain of 41.1%.

Draft Lottery

MLB’s latest proposal calls for the top six picks to be included in this anti-tanking effort, one more than their previous proposal. Via Drellich and Ken Rosenthal, in MLB’s version, small-market teams would be allowed to participate in the lottery for two straight years before sliding to the 10th pick, while large-market teams would only be able to do so for one year before sliding to 10th.

Service Time Manipulation

Via Drellich and Rosenthal, MLB is offering incentives to discourage service time manipulation that are tied to awards voting, though the full details aren’t known. The top two finishers in each league’s Rookie of the Year voting would be granted a full year of service time, and teams bringing up players for Opening Day would be able to “net 3 draft picks over time, one pick per year, if that player does well in voting.” While I can’t speak for other BBWAA voters, and in fact haven’t voted for any of the major seasonal awards yet (unlike colleagues Dan Szymborski and David Laurila), tying a player’s compensation to such a vote isn’t something I’d be particularly comfortable with. That said, such a system would have sent Kris Bryant into free agency after the 2020 season despite the Cubs keeping him down just long enough in ’15 to forestall his reaching six years of service time. It would also have rewarded the Mets for promoting Pete Alonso to be their Opening Day first baseman in 2019 (not that a September call-up the year before wasn’t merited).

Rule Changes

The players have agreed to grant the commissioner the power to unilaterally implement three specific rule changes for 2023 with 45 days of notice instead of one year, namely a pitch clock, larger bases, and restrictions to the defensive shift. Note that the list does not include the automated strike zone, which will be tested at the Triple-A level this year. The 45 days of notice would apply to the offseason; the league could not change the rules in-season.

Qualifying Offer and International Draft

MLB proposed removing the qualifying offer system, something the players have long viewed as a major drag on free agency, but tied that provision to acceptance of an international draft, which the players have opposed in the past and which is hardly a minor issue, or even an equivalent one. Indeed, the whole framework for the emergent agreement could hinge upon such a draft.

Updating a few details reported by MLB.com’s Anthony Castrovince on Saturday with more recent reporting from The Athletic’s Maria Torres, the draft would be 20 rounds, with over 600 picks including competitive balance selections. It would have slot values that would guarantee a signing bonus amount, starting at $5.5 million for the top pick, comparable to the 2021 slot value for the seventh pick in the domestic amateur draft, and totaling $181 million. Via Torres, “the bottom 100 slots in the international draft would be allocated about $3.3 million, for an average of [$33,000]. Per MLB calculations, an average of $1.78M was spent on the bottom 100 bonuses” in 2019-20 and ’20-21.

Additionally, teams would have the ability to trade picks, and the draft order wouldn’t be tied to team records; rather, each team would be randomly assigned to a group of six that would rotate through the draft order over the five years of the CBA. Updating figures that Castrovince cited with more current ones from the latest proposal, MLB estimates that this system would represent an increase of $23 million in international spending above the $166 million spent in 2020-21. There would be no limit on the number of undrafted players who could sign after the draft in the $50,000 to $100,000 range for as much as $20,000; the league estimates that would add an additional $9 million worth of spending.

The international draft is a very tricky area. The status quo — which includes handshake agreements regarding kids as young as 12 years old and is rife with corruption, coercion, exploitation, and PED use — isn’t good, but the union’s reservations about cost controls aren’t unfounded. The MLBPA has looked to its Latin American players for guidance. From ESPN’s Marly Rivera:

https://twitter.com/MarlyRiveraESPN/status/1501570678549590017

Fernando Tatis Jr. is among the players speaking out on the issue:

https://twitter.com/hgomez27/status/1501545530656186369

Newly-elected Hall of Famer David Ortiz, a native of the Dominican Republic, outlined his issues with such a draft to ESPN’s Jeff Passan. The whole thread is worthwhile, but the take-home is the slugger’s belief that implementing such a system immediately would be difficult and ill-advised:

“The system in the Dominican is not ready to have a draft next year. The Dominican is not the U.S. You can’t snap a finger and everything lines up to operate the right way. We’ve got a new president who’s trying to improve things. We need to do this slowly.

“Taking time — that makes more sense. OK, guys, let’s keep up this pace to do it three, four years from now. We sit down with the big-time players. We listen to what they have to say. If we’re going to do it, let’s do it right. Rushing it like this is not right.”

… “I understand MLB wants to have control over everything they do, but you’re not going to change the system overnight.”

Newsday’s Tim Healey reported that the league would look to implement the draft starting in 2024.

As Nightengale put it on Wednesday morning, the draft “appears to be the last big remaining obstacle to reach a labor deal today.” Again with the caveat that the union may still have very strong feelings about the gaps that need to be closed in other areas, and that this whole thing could still fall apart and result in more cancellations and more acrimony, there’s room for some optimism regarding a deal. Let us hope that it does not prove to be unfounded.