When money is involved, philosophies and core beliefs can become more flexible than pipe cleaners in an arts and crafts project. Principals will bend and abandon their principles for expediency.
That’s the case for Major League Baseball owners in this lockout of their creation, and it’s the most distasteful part of a labor dispute that has now led to MLB announcing it’s canceling essentially its first two weeks of games.
It’s amazing to see that the same cartel of multimillionaires who in their real business lives would be clamoring for an unfettered free market without constraints, advocating survival-of-the-richest capitalism, and demanding self-reliance without economic subsidies are suddenly against all of those things in their baseball business. That’s why we’ve been subjected to collective bargaining theater for 98 days. It’s pure hardball hypocrisy.
You would like to think that the balance sheet that matters most to a sports team owner is the one showing wins and losses — the standings. You would hope that would be how they measure the success and viability of their franchises. Nope.
In a legalized monopoly with an antitrust exemption — a huge government handout — the owners want their teams to be foolproof profit centers. That’s what matters most.
MLB owners are seeking a system that insulates them against losses or at the very least severely limits them. Led by MLB commissioner and crafty labor lawyer Rob Manfred, the owners want to be subsidized by the players by depressing player costs through several mechanisms, chiefly the euphemistically named competitive balance tax, without guaranteeing a certain percentage of revenue to the players like other sports leagues.
MLB got the best of both worlds in the last collective bargaining agreement, crushing Players Association executive director Tony Clark. It got a de facto salary cap without any required minimum spending. So, as profits rose in what was nearly an $11 billion industry pre-pandemic, player costs did not accordingly. In fact, according to the Associated Press, MLB as an industry spent $4.05 billion on player salaries in 2021, the lowest level since 2015.
That’s a sweetheart of a position that’s hard for owners to cede. It’s also why the players are digging in their cleats to restore balance.
MLB has masterfully engaged in cost-cutting and player market suppression over the last five-plus years. It has taken control of the minor leagues and cut teams. There are spending limits with penalties attached on both international spending and the draft — which has been trimmed — via prescribed spending pools.
Long gone are the days of a Japanese phenom like former Red Sox pitcher Daisuke Matsuzaka sparking a massive bidding war and forcing the Sox to pay his club $51.1 million just for the right to sign him to a six-year, $52 million deal.
Now, there are pre-calculated amounts that go to the Japanese team, based on the player’s MLB contract.
MLB is the Mark Twain of sports leagues. Rumors of its demise have been greatly exaggerated.
This week, MLB struck streaming deals with Apple and Peacock worth a combined $115 million per year at the same time it’s crying poor mouth with the players.
MLB’s latest offer caps out the CBT at $242 million, a significant increase from the $210 million threshold last season and MLB’s previous fake-deadline offer of $230 million. The players’ counter on Wednesday of $250 million in the final year of the deal (2026) narrowed the gap to just $8 million.
MLB’s offer on the luxury tax is tied to yet another salary depressant, an international draft, starting in 2024. It’s a concept with merit to clean up the cesspool of graft intrinsic in player procurement in some Caribbean and Latin American countries, unfortunately. But that altruistic aim isn’t why MLB is pushing it in tandem with higher CBTs. It’s to lower the expense of tapping one of its most fertile talent bases.
The terms of engagement from owners are disheartening, because while these teams do require real money and real cost expenditures, they’re not intended to be treated like real businesses. They’re toys for the wealthy, like a helicopter, a yacht, or a private jet.
Otherwise, owners should acknowledge that MLB should work like the other businesses they’re involved in as part of a capitalist system. You don’t have enough money to field a competitive team or turn a profit? Sell your team.
If you can’t rouse your market to support your baseball team financially, then the team should be relocated to a market that can. Nashville, Charlotte, and Montreal are clamoring for Major League Baseball.
That’s how capitalism works. Therein lies the contradiction of the owners’ position. They want their teams to be treated like regular businesses, just not when it comes to the potential negative consequences.
The owners may win this round of labor roulette — although not as decisively as they planned — but they’re losing the public relations battle. A recent poll of fans shared by the Globe’s Michael Silverman saw 45 percent blaming owners for the stalemate.
Encourage you to read all the polling results from @MorningConsult survey on labor dispute taken at beginning of this week of 1,300+ self-identifying MLB fans.— Michael Silverman (@MikeSilvermanBB) March 8, 2022
Key: 45% hold owners responsible for failed CBA talks.
34% don’t know/no opinion.https://t.co/PEMnAZrmpd
One of the claims from MLB is that the CBT is the governor that keeps the game’s competitive balance in place, preventing teams like the Red Sox, Yankees, Dodgers, and Mets from running away from the field.
There’s a hole in this Chicken Little notion: Payroll discrepancy has actually worked in favor of MLB owners.
Necessity is the mother of invention. You don’t get the Moneyball A’s or the Rays Way, philosophical approaches adopted to some degree by all of MLB, without financial disparity. It’s a copycat league. You could argue that finding creative ways to overcome the resource gap has helped all MLB teams depress player costs.
That’s why this cry rings hollow, as hollow as MLB’s baseball brinkmanship, which continues as the sides keep playing deal or no deal.
MLB made its latest pitch to the players during another marathon negotiating session Tuesday that leaked into Wednesday. It was centered around another artificial deadline implemented by MLB, which threw a changeup.
It turns out last week’s deadline was fungible. Before it issued more cancellations, MLB claimed it could rescind its cancellation of the two series previously nixed to still accommodate a 162-game season, but only if the players agreed to a new CBA, ASAP.
The bedrock of any agreement is trust. Based on how pliable the facts and economic ideologies are for MLB owners, it remains hard for players and fans to take them at face value.