Even With Face-to-Face Meetings, a New CBA Isn’t Getting Much Closer

Though the owners could end their self-imposed lockout of the players at any time and allow the baseball season to proceed on schedule, the first week of spring training games has been scrubbed. Odds are that more cancellations are to come, and commissioner Rob Manfred’s February 28 deadline to reach an agreement on a new collective bargaining agreement that would preserve Opening Day is fast approaching. With a newfound sense of urgency that stands in marked contrast to Major League Baseball offering one formal proposal in the lockout’s first 10 weeks, representatives for the owners and the players union have been meeting on a daily basis in Jupiter, Florida this week to discuss core economic issues — and those meetings have lasted more than 15 minutes at a time! But even with the more frequent back-and-forth and some minor movement here and there, including a formal proposal from the players on Tuesday, the two sides still appear to be far apart on the most central issues.
If there’s optimism to be had, let us know, because we could sure use some. In the meantime, here’s an attempt to capture where things stand as of Wednesday morning.
Competitive Balance Tax
The lack of optimism regarding an impending resolution to the lockout centers on the players making the tax “the lodestar” of negotiations, to use Jeff Passan’s term, and so far this week, neither side has budged from where things stood as of the owners’ February 12 proposal. I broke down the recent history of the CBT — the threshold for which has not kept pace with the growth of revenue over the past decade — in my previous analysis in the wake of that proposal.
The short version is that the players believe the CBT functions as a salary cap. With teams’ total payrolls down 4.6% from 2017 (from about $4.25 billion to $4.05 billion), and with most of the biggest-spending teams pulling up just short of the threshold in 2021 — the Phillies, Yankees, Mets, Red Sox, and Astros were all within $4 million of the $210 million bar, with only the Dodgers and Padres paying the tax — one can understand their frustration. In Tuesday’s proposal, the players didn’t budge from their previous position from January 24. While generally preserving the previous CBA’s tiered penalties for teams exceeding the thresholds by more than $20 million and more than $40 million, they’ve sought an increase in the base threshold from $210 million to $245 million, growing to $273 million by 2026. That jump in part makes up for the threshold’s meager growth over the life of the last CBA (from $195 million to $210 million over five years, an average of 2.1%), while revenues grew at a quicker rate. The only real difference in that aspect of their proposal is that there’s no draft-related penalty involved, where the previous CBA bumped the draft place for the highest pick of any team with a payroll at least $40 million above the threshold down by 10 spots (unless it was a top-six pick). Read the rest of this entry »