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Owners’ newest proposal little changed from previous offers

Owners will keep the players locked out, and major league spring training is now delayed.

MLB: World Series-Washington Nationals at Houston Astros Troy Taormina-USA TODAY Sports

Representatives for the Major League Baseball Players’ Association gathered with MLB executives on Saturday to hear the owners’ latest proposal for a collective bargaining agreement (CBA). Contrary to Commissioner Rob Manfred’s claims in his Thursday press conference, the proposals were not substantially different from their last offer, moving the two sides no closer to an agreement than they were months ago.

While not surprising at this point, the lack of progress was particularly irritating after the commissioner’s comments on Thursday. Manfred emphasized that the loss of major league games would be “disastrous” and refused to concede that spring training would be delayed. He made claims about the league’s new proposal that sounded promising but were quickly debunked. And ultimately the proposal turned out to be another stalling tactic.

MLB’s proposals include:

  • Minimum salary, $615,000 for first year players, $650,000 for those with 1- 2 years of service, and $725K for those with over two years who are not yet eligible for arbitration. The proposal for the first two years hasn’t changed. Only the third year number is increased over the previous proposal. They added an option for a flat $635,000 minimum salary which would not be fixed.

There is no increase over the term of the contract, even for inflation, and converting the minimum to a maximum, fixed salary is still part of the three tiered plan.

  • The same proposal for competitive balance tax thresholds, at $214 million for two years, then $218 million in 2024 and $222 million in 2025, 2026. The amount is still just a one percent increase over the life of the agreement.

Owners still propose increasing the tax rate from 20 percent to 50 percent at the lowest tier, the first year over the threshold, which they know is a complete non starter for players. It’s not a serious effort to reach an agreement. The tax rate on the lowest CBT tier has never been more than 20 percent.

  • An increase in the bonus pool for pre arb players from $10 million to $15 million. Unfortunately, this is the owners’ idea of substituting for earlier eligibility.
  • The possibility of a team receiving two bonus draft picks if they put a top prospect on an opening day roster and he ranks among the top three players in key categories.
  • MLB presented the players with a calendar identifying when an agreement would need to be reached in order to start the season on time.

Players have seen the average salary decline each of the five seasons since the last CBA took effect in 2017, and the median salary dropped over 30 percent in that span as teams shifted payroll dollars from veterans eligible for free agency to those earning in the minimum salary range. At the same time, MLB revenues have skyrocketed, and new television contracts with Fox, Turner, and ESPN begin in 2022. Players want a share of the proceeds.

Manfred “Optimistic”

Manfred addressed reporters in Orlando, Florida on Thursday following an owners meeting, declaring that there was no change in status on the start of spring training. Reality is, however, that spring training, which is due to start this coming week when pitchers and catchers are due to report, is going to be delayed, and the start of the season on March 31 is in doubt at the rate that negotiations are proceeding.

The commissioner said that he is optimistic that a deal can be reached to start the season on time and that it would be “disastrous” for the game to delay the start of the season. He rattled off a number of “concessions” that the owners have made, including:

  • The universal designated hitter to be used in all game
  • An increase in the minimum salary
  • An end to payment of compensation by teams that sign free agent player
  • Agreement to the principle of a bonus pool for pre- arbitration eligible players
  • A draft lottery “to deter teams from not trying to win”
  • Incentives for teams to not manipulate service time

Certainly some of these minor concessions have been made on both sides of the table. But on the core economic issues, the owners continue to hold firm. On Thursday, Manfred even declared, incorrectly, that the tax rates for teams that exceed the competitive balance payroll threshold would remain the same in the league’s offer. The league later released a statement saying that the commissioner had misspoken.

In fact, the owners were proposing a dramatic increase in the tax rates, from 20 percent to 50 percent on the first threshold, with new severe penalties that include loss of a third draft pick and loss of an international draft pick (there isn’t an international draft yet). All of those items hurt player salaries.

The new draft related penalties, he said, were to offset the elimination of draft penalties for signing free agents. Players will be far more offended by a hardening of the de facto salary cap than they ever were by draft compensation, which affects an average of seven players per year. So the two proposals do not amount to a concession at all.

The owners have consistently demanded a number of measures that would more than wipe out any concessions to the players they might make elsewhere. While proposing an increase in the minimum salary, they also propose to convert the minimum into a fixed salary so it also serves as a maximum.

The gap in proposals for increasing the minimum salary is also substantial. The players are asking for $775K, up to $875K over five years.

The owners have abandoned proposals to abolish arbitration and now support keeping the super two cutoff for the top 22 percent of the 2- 3 year class.

Owners have also refused to engage in discussions regarding the players proposals to reduce the amount of revenue sharing by $30 million per season, or to adjust the eligibility for free agency to two years.

At all points, the league strategy has been to stall long enough to turn this into a game of chicken with the regular season. That hasn’t been much of a surprise, but it has also made many of Manfred’s public statements look downright divorced from reality, and the league certainly doesn’t seem to be winning the public relations war this time around. MLB refused to make an offer to players in December unless they withdrew proposals regarding free agency, arbitration, and revenue sharing. Then MLB declared a lockout and a freeze on all transactions, claiming it would “spur negotiations”. They then proceeded to refuse to make a proposal for over six weeks.

When the two sides finally sat down in late January for a comprehensive exchange, MLB said they would respond to players proposal in two days, then did not and requested mediation instead. The union was never going to accept that, asserting that it was pointless when the league had yet to engage in serious negotiations in the first place. Mediation would’ve helped the owners stall things out a few more weeks, and mediation during the 1990’s had left a bad taste in the players’ mouths. The league presumably knew it was a non-starter to begin with.

Everyone close to the game has realized from the start that the league was unlikely to start negotiating in earnest until the regular season was in jeopardy, at the earliest. But in the meantime, public support for the players’ position has increased, while overall frustration with the league, and with Manfred has only increased. Major leaguers should be showing up for spring training this week, but the owners won’t allow them to, and show no signs of ending the lockout. Meanwhile, the players seem unified in trying to get the owners to meet them in the middle. Let’s hope the owners “strategy” has a realistic endgame in the next few weeks. Right now, things continue to look questionable for major league baseball starting on time.