MLB lockout, what is it, why is it still going, walkout, dispute between owners and players, will games be lost, season start date
The clock is ticking for the 2022 MLB season. But that clock might as well melt as a Dali painting.
Baseball owners and players are no closer to a new pay deal — a contract, to be exact — than they were on Dec. 1, when MLB locked out players.
It didn’t help that the two sides barely met for the first two months of this work stoppage, but they stayed far apart, and with spring approaching in the northern hemisphere, the question is… shall we go? play this year or what?
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At this point there is no doubt that the season will be affected in some way; it just depends how much.
Pitchers and catchers should report this week for spring training, the traditional month-long training camp that sees teams relocate to the warmer climates of Arizona or Florida. They could not.
With no quick lockdown solution in sight, Spring Training will be lost in part, or more likely entirely. That in itself is a loss for owners who have made exhibition play another source of income, while most experienced players find the length unnecessary.
The regular season is scheduled to start on March 31 (April 1 AEDT), but players would need at least a couple of weeks to ramp up before then – so if an agreement can’t be reached by mid-March, games will be lost and almost certainly not invented.
So what exactly is the argument that could lead to MLB games being lost for the fourth time in history?
There are a couple of issues. One thing has been resolved – the designated batsman is brought in for the National League and joins the American League, meaning NL pitchers no longer have to bat.
While traditionalists aren’t happy, this is a good change, as pitchers have become so utterly useless at batting that there’s no intrigue as to whether they’ll make a difference on the scoreboard.
Refueling is a problem. The teams know that they will make a lot of money every year because of their TV deals. Whether you’re a Pittsburgh — who seems to accept not being competitive — or a Tampa Bay — who keeps fighting for the World Series and pays less money than almost every franchise — overall spending has come down.
Houston’s success in tanking at extraordinary levels and then pulling off a big hit (banging on a trash can helped, but let’s not get on the cheating saga) has empowered other teams to go years without winning to to win a World Series in half a decade. And that, unsurprisingly, has left many fans frustrated.
A draft lottery, like the NBA, can be instituted to partially restrict fueling, but it doesn’t quite work that way in baseball. If you draft a top prospect in basketball, he may be able to turn your team around instantly. In baseball, you don’t expect an impact for at least two or three years.
There’s also the question of expanding the playoffs – the owners want to sell the extra games, and players seem happy to get in as long as they get something in return.
Unsurprisingly, this lockout is largely about money. The growth in the amounts paid by television networks over the past two decades has led to an explosion in team earnings and values - after all, baseball teams play 162 games a year plus the playoffs, so many games are broadcast.
But the sports leagues constantly bicker over how to split money. Why has this lockdown become so problematic and dragged on for so long?
Well, the public comments from MLB commissioner Rob Manfred — who has quickly become widely unpopular for his aggressive focus on growing the game’s short-term finances, with the perception that he doesn’t even like baseball — aren’t helping.
Manfred claimed last week to support owners that owning a baseball team is a worse investment than simply placing money in the stock market. That’s a lie and he would know it.
As the athlete As reported in January, all four major US sports leagues have outperformed S&P 500 companies in the stock market since 2002, with an MLB team’s return on investment a whopping 669 percent — better than owning an NFL team.
Thanks to the tremendous expansion of TV deals and the opportunity for teams to make massive profits from real estate around their stadiums, the average value of an MLB franchise was $286 million ($399 million) in 2002 increased to US$1.9 billion (US$2.6 billion) in 2021.
Just look at the LA Dodgers, owned by Frank McCourt from 2004 to 2012. He bought the glamor team in 2004 for $430 million, in a deal funded mostly by debt. Seven years later he filed for bankruptcy and quiet managed to sell the team for $2 billion.
Again, McCourt bought the team, ran it questionably and had little success, earning $1.6 billion (US$2.24 billion) over eight years. And that’s not a big investment, according to Manfred.
Comments like Manfred’s get to the heart of the problem: the owners cry poorly when they have obviously done very well in recent years and understandably want to protect their investments.
From the player’s perspective, they’re trying to rebalance baseball’s financial framework, which has been largely out of control.
For decades, teams have awarded big contracts to seasoned free agents with a proven track record, because that’s what you’ve done. But then came the Moneyball era, and the realization that not only could you afford to ignore many free agents, you could perform similarly — or better — with cheaper, younger players.
In 2018, for example, batters under the age of 25 accounted for 27.6 percent of all major league plate appearances — the highest percentage for young players in four decades.
Why is that important? Because the average age of a Rookie of the Year winner is 23 – and young players basically never make the most money on a team.
If a player is drafted to baseball, he will almost certainly spend two or three years earning next to nothing in the minor leagues – living off his draft signing bonus when he gets it, and earning wages in many cases, which is below the US poverty line.
If they make it to the big leagues, they’ll be on a structured contract path. For the first three years, they must earn at least the MLB minimum ($570,500 in 2021 dollars). Then they can enter arbitration for the next three years, where they and the team argue over a prize based on the player’s performance.
When a player reaches the actual free hand, they are on average 31 years old. The heyday of her career is mostly over; You have to hope that they can make money from that point on, and many do, making hundreds of millions if they’re lucky.
But therein lies the problem, because teams now know that they can field young players cheaply, get good to great performances out of them, and then when they go expensive there’s another generation of young cheap players to field.
Let’s look at where both sides sit in negotiations right now, using this article by longtime baseball author Joe Sheehan as a point of reference.
The MLB players’ union represents all players, so they’re not proposing to throw the entire structure of baseball’s payment system out the window. They want the minimum salary to be raised to $775,000, rising to $875,000 over the life of the deal.
In response, the owners have proposed a minimum salary of $615,000 – the projected difference is at least $100 million per year, taking into account the number of players earning the minimum.
Here’s a problem with the owners’ proposal – it’s barely, if ever, keeping pace with inflation.
The sides will be split an additional $85 million per year for a proposed player bonus pool before arbitration based on their performance.
Another important issue is a soft salary cap — a “payroll tax” where teams are heavily taxed for every dollar they spend over a certain amount.
Players want that limit to be raised to $245 million, rising to $273 million by 2026. The owners want the limit to be raised by a small amount, from a current estimate of just over $200 million to $212 million in 2022 and $220 million in 2026.
Sheehan’s article estimates that players are looking to allow for an additional $254 million in spending in 2022, rising to over $400 million by 2026.
So let’s just take the 2022 numbers: The sides are about $440 million ($614 million) apart in 2022 alone. Gosh, that sounds like a lot, doesn’t it?
That’s four percent of baseball’s projected earnings. That’s how much money baseball is making right now – at a time when teams are reaping profits In spite of the pandemic.
“The two sides have a basic understanding of what baseball should look like in 2022: pretty much like 2021. They’re splitting marginal dollars right now,” Sheehan wrote.
“There are no structural changes on the table: agency and arbitration will remain the same, and the minimum wage will still be low enough to make tank building profitable.”
That’s the difference where games are lost?
Three times in history have strikes or lockouts cost MLB games – periods in 1972 and 1981 and most notably 1994 when the World Series was not played. The latter two harmed the sport and drove fans away.
But it was about important issues – a player pension system, free agency or a salary cap. This time it’s about how baseball’s massive profits are to be divided up.
So the clock keeps ticking. By not playing games, enough damage is done to the sport itself and money is lost on both sides that a deal is sure to materialize.
There is a second possibility. MLB will stop locking out players — it’s the league’s call — while negotiations continue in the background and a season is played under an interim agreement.
Given the course of the negotiations, that may be the common sense option, but there hasn’t been much common sense so far.