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CBA talks implode as MLB issues another failed ultimatum

Just as the sides drew close, MLB demanded an international draft, throwing the whole process back on its heels once again.

Washington Nationals v Detroit Tigers Photo by Mark Cunningham/MLB Photos via Getty Images

It seemed that a new collective bargaining agreement (CBA) between Major League Baseball’s (MLB) players and owners was getting close again on Wednesday afternoon. The once huge gaps between the two sides had narrowed to just $2 million on the lowest tier of the competitive balance tax (CBT), and just $10 million on the minimum salary, with $25 million separating the parties on a pre- arbitration bonus pool. Seemingly chump change in the grand scheme of things.

However, after 97 days of the owners’ lockout, and after bargaining past midnight on Tuesday, MLB owners resurrected a ghost from the past, by tying elimination of qualifying offer compensation for elite free agent players to an international draft. The subject of an international draft has been discussed at points over the past year, but never got anywhere. It seemed an idea that was probably scrapped for this CBA until the owners raised it again as a point of contention.

As things snowballed, the international draft became the focus of negotiations, to the point where owners issued an ultimatum to the players. Either agree to both the draft and the elimination of compensation, or toss out both, or postpone the issue and let the owners reopen the entire agreement if players didn’t agree to the draft by November, 2022.

At 6:00 PM eastern time Wednesday, just as the players were giving MLB an offer in response to the ultimatum, Manfred declared that two more series of games had been canceled.

The commissioner had stated publicly on multiple occasions that the owners had agreed to eliminate free agent compensation, and while an international draft has been a wish of MLB since 2002, the subject has not been brought up in these negotiations for quite some time according to both the public proposals and MLBPA player rep, Max Scherzer.

Earlier in the day on Wednesday, the players had delivered a comprehensive proposal to MLB covering all topics to narrow the gap toward a settlement. The owners said that they would be delivering a complete counter offer, but instead issued the ultimatum, refusing to discuss any other subject until the international draft had been settled.

This is not the first time during these talks that the owners issued such preconditions. On December 1, 2021, just a day before the prior agreement expired, MLB was due to present a counter offer to avoid their threatened lockout of the players. Instead, they demanded that the players take three issues off the table- free agency, arbitration, and revenue sharing. When the players would not agree to their preconditions, talks ended after seven minutes and the lockout was ordered. MLB did not make a counter offer until after six weeks later.

This time, after two series had been canceled, MLB resumed talks apparently in an effort to restore a full 162 game schedule, only to have the talks terminated by the late game ultimatum. The players offer, for what it’s worth, was that the two sides continue to talk about the draft and free agent compensation and if they could not agree by November, things would be restored to status quo, just as they were last year.

The owners didn’t want to hear it. They wanted one of their three options, and no others.

Players have been adamantly opposed to an international draft every time the subject comes up, so that they were still opposed in this round was no surprise. The fact that it became the central issue just as the sides were on the cusp of an agreement has surprised a lot of people.

MLB had proposed the elimination of free agent compensation in 2017, if the players would agree to an international draft. A group of Latin players flew to the site of the negotiations to put a stop to it. One chief objection was the fear that players- who are mostly 16 years old, would be at the mercy of one team and would have to accept whatever was being offered rather than have the freedom to negotiate. So the deal was scrapped, and hard limits in the form of a strict bonus pool system were implemented instead.

The players’ position on the international draft was remarkable in that the association was making a stand on behalf of amateur players who are not members of the union. The players are often criticized for not standing up for minor league players who receive wages below the poverty line.

MLB’s proposal this time included guaranteed payments to players to address that objection. Jay Markle has an excellent breakdown of the MLB proposal here. For whatever reason, the players are still opposed but were willing to consider it over time. Compared to the current bonus pool system, the proposed draft is arguably a better, or at least a comparable deal, but could also seriously reshape the structure of youth baseball in many countries producing major league talent. We could speculate that the impacts on trainers and coaches who coached and represented many current major league players could be substantial, and it’s not surprising that the players would object to a sudden decision to implement it.

So there is no new CBA, the parties continue to talk about the international draft and free agent compensation, but another week of games has been canceled, through April 14.

Free agent compensation, at least this off season, could apply to five players who are free agents: Carlos Correa, Trevor Story, Michael Conforto, Nick Castellanos, and Freddie Freeman. Seven others have already signed and may or may not be subject to compensation depending on how bargaining goes. Teams who made the qualifying offers would surely receive compensation as they operated under the prior CBA.

It is difficult to imagine that the players would want to blow the agreement over compensation for these five players, although any team paying a penalty for signing a player is repugnant on it’s face.

There are a few gaps still to be closed, but they’re now all within reach. It’s hard to fathom that the issue of an international draft or free agent compensation, which has applied to just seven players per year over the past five years, could scrap the entire agreement. The IFA draft discussion could be postponed to allow some time for considering the consequences. Neither should be a reason to continue holding the regular season hostage. Assuming that MLB wants an agreement at this point.