No Joy in Mudville, No CBA Deal in Jupiter, and No Opening Day on March 31

So much for commissioner Rob Manfred’s stated desire to avoid a “disastrous outcome,” and so much for the urgency of the owners’ “defensive” lockout, which was supposed to jumpstart negotiations towards a new collective bargaining agreement — albeit in a most curious manner, with 43 days of radio silence and just one formal proposal to the players over a 71-day span. On Tuesday evening, the commissioner canceled the first two series of the regular season — a total of 91 games, constituting five to seven for each team — after the players union and the owners failed to meet his artificially-imposed deadline for a new CBA in time to preserve the season’s scheduled opening on March 31.

“I had hoped against hope I wouldn’t have to have this press conference where I am going to cancel some regular season games,” said Manfred on Tuesday. Citing the two sides meeting in Jupiter, Florida for nine straight days, he added, “I want to assure our fans that our failure to reach an agreement was not due to a lack of effort by either party.”

If indeed those games are lost, they would be the first regular season games missed due to a work stoppage since the 1994-95 players’ strike, and the first due to a lockout by the owners. When the owners locked the players out of spring training for 32 days in 1990, 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. The 91 games would instantly leapfrog the 86 missed at the start of the 1972 season due to a players’ strike. As in that year, Manfred has said that games won’t be made up, even if that means competitors playing uneven numbers of games — a situation that helped to decide the AL East that year, with the Tigers (86-70) finishing half a game ahead of the Red Sox (85-70).

It’s worth reiterating that any attempt to reduce the number of games below 162 and thus salaries, service time (including eligibility for free agency), and bonuses would be subject to collective bargaining as well, opening a can of worms that could affect both sides’ positions on other issues; as we saw in 2020, this is not a simple matter. As MLBPA chief negotiator Bruce Meyer said during the union’s press conference on Tuesday, “We would be asking for compensation and/or to have those (canceled) games rescheduled.” The union has previously indicated that if games were canceled, it might not agree to expanded playoffs for 2022.

While there was some optimism on Tuesday morning following a 16 1/2-hour marathon negotiating session and an extension of Manfred’s original February 28 deadline, over the course of the day it became clear that the gaps between the league and the union regarding core economic issues such as the Competitive Balance Tax thresholds, the league minimum salary, and the pre-arbitration bonus pool had not been closed to the union’s satisfaction. The owners declared that they would make their “best offer” before the new 5 pm ET deadline, but that offer was swiftly and unanimously rejected by the players, raising the specter of an uglier and more complicated situation.

During his press conference, Manfred was careful in characterizing the owners’ previous offer given the implications it has in collective bargaining, saying, “We never used the phrase “last, best final offer” with the union. We said it was our best offer prior to the deadline to cancel games. Our negotiations are deadlocked right now… but that’s different than using the legal term ‘impasse,’ and I’m not going to do that right now.”

Meyer disputed Manfred’s claim on the language, though he made clear that he understood “best and final” to be in relation to today’s deadline, rather than indication that the league was done bargaining. “I assume they’re not done negotiating,” he said. “I hope they’re not done negotiating, they have a legal obligation to negotiate. So I assume it’s not ‘best and final’ forever.”

Calling Tuesday a “sad day” and citing a need for “significant improvements” in the CBA, MLBPA executive director Tony Clark pointed to the owners’ 43-day delay in starting negotiations as causing difficulty. Via the Washington Post’s Chelsea Janes:

“You understand that you need as much time as possible to work through [the changes you want made],” Clark said. “…It’s why we stood ready for six weeks after the lockout on December 1, ready to have a discussion. It is remarkably interesting against the backdrop of the things that needed to be worked through to find ourselves on February 28th and the course of the last week … working through the issues that needed to be, could have been and should have been discussed in more depth much earlier than they were.”

In its statement, the MLB Players Association said it is “not surprised” by the outcome, and accused the owners of trying to break the union:

Statement from the Major League Baseball Players Association: pic.twitter.com/rmpciPsQm4

— MLBPA Communications (@MLBPA_News) March 1, 2022

So what happened, given that the framework for a deal appeared to have emerged as of Tuesday morning? Quite simply, while the owners were able to leak the major details of their proposal from the wee hours of Tuesday morning, the two sides packed up for the night without the players offering a counterproposal that illustrated just how far apart they still were. Subsequently, the owners offered spin that on Tuesday the MLBPA had taken “a decidedly different tone” that halted momentum towards a deal, a characterization the players disputed:

FWIW MLB has pumped to the media last night & today that there’s momentum toward a deal. Now saying the players tone has changed. So if a deal isn’t done today it’s our fault. This isn’t a coincidence. We’ve had the same tone all along. We just want a fair deal/to play ball.

— Alex Wood (@Awood45) March 1, 2022

While it’s unclear what happens next, here’s where the two sides landed on the major issues in their most recent proposals.

Minimum Salary

Comparatively speaking, the two sides weren’t miles apart after Tuesday’s exchanges, with the owners increasing their offer to a starting point of $700,000 for 2022 (up 22.7% from last year’s $570,500) and growing by $10,000 a year, and the players decreasing their offer to a starting point of $725,000 (a 27.1% increase from last year) and growing by $20,000 per year. Here’s a more detailed breakdown that includes a look back at the minimums from the past two CBAs:

Both proposals still leave the minimum salary below those of the NBA ($925,258) and NHL ($750,000), while being ahead of the rookie minimum for the NFL ($660,000), though not its second-year minimum ($780,000). MLB is more reliant upon minimum-salary labor than those other sports; per Ben Clemens, last year 47% of all service time went to players making the minimum salary.

Competitive Balance Tax Threshold

On this issue, which still appears to be central to the union’s goals, the owners did not revise their early-morning offer, which includes thresholds that run from $220 million in 2022 (a gain of 2.8% relative to last year) to $230 million in ’26 (a gain of just 4.5% over the ensuing four years) and marginal tax rates in line with the previous deal (20% on the first $20 million over the threshold, 32% on the next $20 million, and 62.5% on anything above $40 million). The players lowered their proposed threshold to $238 million for 2022 (down $7 million from previous proposals but a 13.3% increase on 2021), growing to $263 million for ’26 ($10 million lower than their previous proposals but a gain of 11.4% over the ensuing four years):

As of Tuesday morning, the two sides appeared to be in agreement regarding marginal tax rates, retaining the structure from the expired CBA (20% on the first $20 million over the threshold, 32% on the next $20 million, and 62.5% on anything above $40 million). It’s not clear whether this iteration of the tax structure would retain the last CBA’s repeater penalties (MLB’s previous proposals had dropped it), or whether the league’s current proposal has draft-pick penalties. The players’ proposals have not included them, but the owners’ recent proposals included a second-round pick lost by teams that go over by $20 million to $40 million and a first-round pick by those over by $40 million or more.

Pre-Arbitration Bonus Pool

The owners’ final offer on Tuesday was to contribute $30 million to the bonus pool, up $5 million from Tuesday morning’s offer, while the players came down from $115 million to $85 million. It’s not clear at the moment how many players are covered by each side’s proposals, but as of last week, the owners’ plan covered just 30 players, while the players’ plan had grown to cover 150 players.

Arbitration Eligibility

Initially, the union sought to make every player with at least two years of service time eligible for arbitration, up from the 22% eligible via the Super Two system since 2013. In last week’s proposal, the union lowered that to 75% of all players with between two and three years of service time, coupling it with an increase to their minimum salary and pre-arbitration bonus pool offers, and over the weekend they came down to 35%. As of Tuesday morning, they reportedly were willing to dial back to 22% — a number off which the league steadfastly refused to move — “if [the] rest of [the] numbers work out.”

[narrator voice] The rest of the numbers did not work out.

Playoff Structure

While the owners have pushed for an expansion of the playoff field from 10 teams to 14, the players held the line at 12, and as of Tuesday morning, the two sides appeared to be going forward with the latter number. Via ESPN’s Buster Olney, the top two teams in each league would get first-round byes, with the other four teams, including the third-best division winner, playing best-of-three series. It’s unclear whether that third division winner would get any additional incentive to win the division rather than merely eking out a playoff spot as a Wild Card, or any advantage to distinguish it from the Wild Card teams in the subsequent series, such as a “ghost win” that effectively gives it a one-game-to-none advantage, a practice used in the first round of KBO postseason series.

Via the New York Post’s Andrew Marchand, the gap between the 14- and 12-team formats amounts to only a $15 million difference in what ESPN has offered the league ($100 million for a 14-team format, $85 million for a 12-team one), a very small amount on top of a seven-year, $450 million package for Sunday Night Baseball and select regular season games. It’s telling that the $15 million dollar gap was less than the one between the two bonus pool alternatives that had previously been proposed by MLB based upon the size of the playoffs, to say nothing of the two minimum salary options within that plan:

Sources: Deal not close, but not impossible. CBT thresholds, prearb pool big issues, among others. MLB has proposed two choices:

A: 14-team expanded postseason, minimum of ~$700k, ~40m into prearb pool

B: 12-team expanded postseason, ~$675k minimum, ~$20m into prearb pool

— Evan Drellich (@EvanDrellich) March 1, 2022

Draft Lottery

Via MLB.com’s Mark Feinsand, the owners’ proposal to make it more difficult for teams to tank and then secure top draft picks put the first five picks into the lottery, with revenue-sharing status factored in as well:

MLB proposal for draft lottery was for top five picks. Equal odds for bottom three record (16.5%). Revenue-sharing payees ineligible to be in lottery 3 straight years; non-payees ineligible in consecutive years. Ineligible teams can't pick higher than 8th overall.

— Mark Feinsand (@Feinsand) March 1, 2022

Last week, the players proposed including the first seven picks within a system that accounted not only for revenue sharing but also market size:

There's a lot of talk about tanking and how to fix it. This, according to sources, was part of the MLBPA's proposal today — similar to what it has proposed in the past. The league's counter has been simple: the top four picks are subject to a lottery with no other adjustments. pic.twitter.com/Ikz41Wk36h

— Jeff Passan (@JeffPassan) February 25, 2022

Additionally, prior to the deadline, the two sides had agreed on a universal designated hitter, and on the number of times a player can be optioned during a season (five). They had not yet agreed regarding an international draft, changes to revenue sharing, on-uniform advertising, service-time manipulation, and the amount of time needed to notify the players of rule changes. MLB Trade Rumors’ Tim Dierkes has summarized each side’s position on those matters here.

As for where the talks go from here, Clark said in his press conference, “We’re willing to stay here and have the conversation tomorrow.” For now, there’s no baseball, and there won’t be any for awhile, a fact that’s still on the owners. Manfred now joins a very small fraternity of commissioners who have presided over games lost to work stoppages that includes Bowie Kuhn and Bud Selig.

“The reason we are not playing is simple,” said Clark. “A lockout is the ultimate economic weapon. In a $10 billion industry, the owners have decided to use this weapon against the greatest asset they have: the players.”