CBA negotiations turn sour one day before MLB-imposed deadline

MLB’s imposed deadline is just one day away, and after a long weekend of negotiations, a deal being finalized by end of day Monday is not looking promising. MLB has been clear that Monday is the deadline for a full season of baseball, though players have stood their ground on their refusal to take a bad offer from the owners.

After Friday, it felt like some progress was starting to be made, as the league and players made headway on the draft pick lottery and service time manipulation. However, Saturday’s talks took a turn for the worse.

As reported by Jeff Passan, the players provided a comprehensive proposal that included concessions in several areas such as arbitration eligibility, revenue sharing, and luxury tax. The league rejected it, and returned a proposal that felt like a slap in the face to the players. MLBPA moved towards the league’s positions significantly in their most recent proposal, though the owners are tunnel-visioned into spending as little money as they possibly can — regardless of how it affects the game.

The only relatively positive piece that has come out of the last two days is that both sides are prepared to continue talking and attempting to make progress, especially since it was reported that players were ready to walk out of Saturday’s negotiations.

As there are so many moving parts (and also a lot of non-moving parts) to the CBA negotiations and proposals, let’s recap the status of current proposals and break down the progress made over the last week.

---

Luxury Tax/Competitive Balance Tax

The CBT is a payroll threshold for clubs as a limit for clubs to keep a competitive balance to the game, and teams are taxed for how much they exceed the threshold by.

Current CBT: $210 million

• Up to $20 million over threshold: 20% tax
• $20-$40 million over: 32% tax
• $40 million+ over: 62.5% tax

MLBPA proposal:

Players originally requested the CBT to be raised to $245 million, and increase each year through 2026. That would put the luxury tax at $245 million in 2022, $250 million in 2023, $257 million in 2024, $264 million in 2025, and $273 million in 2026. Players have conceded slightly, dropping just $2 million in years two, three, and four — similar to how the league presented their proposal:

• 2022: $245 million
• 2023: $248 million
• 2024: $255 million
• 2025: $262 million
• 2026: $273 million

The union would also like to keep the tax rates the same as the current CBA. Given inflation and how MLB’s revenue continues to grow year over year, it’s not outlandish for the players to want to increase the tax, though it is certain MLB will not meet this number.

MLB counteroffer (February 26):

The owners have also been stubborn in not wanting to increase the CBT, and have only raised their offer by $4 million, bringing their offer to $214 million in 2022 and 2023, increasing by $2 million each year through 2026. On Saturday they increased their proposal by just $1 million in 2023, and updated their tax thresholds slightly, but still essentially doubling them from the expiring CBA:

This was simply a bad counteroffer by the league. Something has to give, but adding only $1 million, and barely touching the exorbitant tax rates, is not going to work. Evan Drellich also reported that MLB doubled down and tied elimination of draft pick compensation to increased CBT rates, which the players did not take well, given the progress that had been made on Friday.

---

Arbitration Eligibility and Service Time

The pre-arbitration bonus pool was originally proposed by the players, splitting the sum of the money in the bonus pool to top players with two to three years of service time. This is a topic that both sides have agreed to, though there is a stark difference between the amount the owners and players are requesting.

MLBPA proposal:

• $115 million in bonus pool
• 35% of top Super Two (2-3 years service time) players eligible for arbitration — down 45% from their proposals earlier in the week
• One year service time awarded to Top 5 WAR finishers (C, IF, DH) (reduced from Top 7)
• One year service time awarded to Top 15 WAR finishers (OF, P) (reduced from Top 20)

MLB counteroffer (February 26):

• $20 million in bonus pool
• 22% of Super Two players eligible for arbitration, same as current CBA, which players have regarded as a “non-starter”
• One year service time awarded to Top 2 ROY finishers
• Draft picks for keeping top prospects on Opening Day roster (same as previous offer)
• Agreed to five options for minor leaguers

Sure, it’s good that the league has started to listen and discuss some pieces further, but the two sides are still very far apart on this issue — plus, MLB’s proposal includes notably less player eligibility than the unions.

During Friday’s meetings, The Athletic reported that MLB tied this offer to being allowed to implement on-field changes after just 45 days of notice to players, as opposed to one year of notice as currently imposed. This also frustrated the players, because the league is trying to just get the union to agree to anything at this point, and Manfred had previously mentioned that these types of changes would fall to the side while other larger topics are being discussed.

---

Revenue Sharing

Currently, the larger-market clubs contribute some of their revenue to smaller clubs in an attempt to maintain competitiveness and fairness in spending. The league also refers to this topic as a non-starter, knowing the small-market teams can team up and refuse this offer, as they outnumber the big-market clubs. The players want a reduction in revenue sharing, as the economics of sharing revenue doesn’t provide as much incentive to win, while the current draft order provides incentive for tanking to obtain one of the highest picks. During Saturday’s proposal, MLBPA withdrew its request to cut revenue sharing by $30 million, conceding even further towards the league.

---

Draft Lottery

The players have been passionate about incorporating an NBA-style draft lottery, which would keep the worst team from automatically getting the top pick each year, in an attempt to combat “tanking.” Small-market teams would never go for a CBT floor, as it forces teams to spend a certain amount on payroll, and it can be difficult to compete with wealthier teams.

The MLBPA proposed on Thursday having the bottom seven teams be entered into the draft lottery, while also letting up on previous draft penalties. On Saturday, both sides were able to meet in the middle and settle on six teams for the lottery. However, MLB also took the initiative to tie their request of a 14-team expanded playoff to the draft lottery picks. This is nowhere near an equal issue, given that expanded playoffs is the players’ biggest bargaining chip. This connection left the MLBPA frustrated, just as the two sides were finally able to make some progress. The league is continuing to play hardball by attempting the force the players to concede even further on an already fair proposal.

---

Expanded Playoffs

Expanding the amount of teams to be included in playoffs has been a hot topic for both sides. There is a significant amount of potential revenue tied to this portion of the deal, making it a crucial bargaining piece.

MLB is dead-set on a 14-team, expanded playoffs, though the union hasn’t changed its original offer of a 12-team format, noting a lack of incentive to winning the division. As Ken Rosenthal outlined, the players floated an idea with a concept of incorporating a “ghost win” for division winners in a wild card series — giving a one-game and home-field advantage.

There is a lot of work to be done on this front, as including nearly half of the league into the playoffs seems a bit aggressive, and the “ghost win” concept is way out of the box. (So far out of the box, it seems like a Rob Manfred idea, frankly.) The owners have tried to leverage other portions of the CBA by refusing to concede in a certain area unless the players agree to 14 teams.

As Bob Nightengale notes, the league stands to miss out on $100 million of potential revenue if the players pull expanded playoffs off of the table, which would be an economically unwise decision to shut down relatively small increases, especially in comparison to market changes since the previous CBA.

---

Minimum League Salary

Since the previous update from the league earlier this week, there has been no additional movement on minimum league salary. The current minimum salary is set at $570,500.

• MLBPA’s proposal starts the minimum salary at $775,000, increasing by $30,000 each year through 2026 (to $895,000).
• MLB’s proposal starts at $640,000, increasing $10,000 each year through 2026 (to $680,000).

The minimum salary for the MLB is the lowest among the four major sporting leagues (NFL, NBA, NHL), which is pretty wild when you consider the vast difference in amount of games baseball plays each season. Yes, each sport is totally different, but to barely even keep up with inflation playing 162 games in a season isn’t going to cut it. Before getting dunked on, Jim Bowden pointed out the salary differences between each league, though taking a dig at the union for their proposal.

Many immediately did the math, pointing out how much a player makes per game in each respective league, leaving MLB at ~$3,500 per game, almost $6,000 less than the NHL. When you sit and think about the math a bit, the players are essentially low-balling themselves with their offer, as an equitable minimum salary should probably be around the $1 million range, making takes similar to Jim’s questionable at best.

---

Sunday, both parties met for nearly six hours, and while the talks were reportedly “progressing,” there was still zero movement made in terms of getting a CBA signed. As you can see, there is a lot of work to be done. It’s extremely unlikely we will see a deal signed on Monday, and even more likely we begin to see 2022 games canceled.

It is very apparent that the players are working hard to meet the league somewhere in the middle (actually, well on the owners’ side of the middle) to get the season kicked off, conceding in places that already don’t keep up with revenue growth. If the owners continue to provide bad-faith offers, making all of their most important pieces contingent on another to coerce the players into signing a deal, we will be writing labor updates this well into the summer, meanwhile covering the Chicago Dogs or Northwestern baseball.

With one more day left to preserve the full 2022 season, it’s time to prepare for the fact that we will have another shortened season, bringing up new issues such as potential injuries to players due to lack of preparedness. As White Sox fans, we all likely have PTSD from hamstring injuries, so given the uncertainty with the 2022 roster as it is, we get to ruminate further in the unknown.

One thing can be confirmed though: Unless we witness a miracle, we will not have baseball on March 31.