Is MLB’s Bargaining Proposal a Step Toward Avoiding a Work Stoppage?

As everybody knows by now, MLB has made a proposal to the MLBPA regarding the game’s basic economic structure.  It’s interesting that the proposal leaked so quickly.  I’d guess MLB wants to reassure its broadcast partners that it’s trying to get a deal.  Anyway, the basics are easy enough, although little detail is known.  MLB would agree to a $100M salary floor (it’s actually a payroll floor, but the misnomer “salary cap” has gotten thoroughly entrenched), while the luxury tax threshold would drop to $180M and the lowest tax bracket would rise to 25%.  Tax proceeds would be distributed in some manner to help lower-revenue teams (“deadbeats” for short) shell out the minimum $100M.

The baseline reality the two sides are dealing with starts with the union’s strong dissatisfaction with the current deal.  The union got itself hosed as the result of its laser-focus on getting the biggest possible deals for a handful of elite players, as well as on silly perks like locker room amenities.  After many years of selling out amateurs, minor leaguers and 0-6 major leaguers, this time the union sold out non-elite veterans.  It’s belatedly become aware of the analytics that have taught teams that non-elite, 30-something players just aren’t a decent value on multi-year, eight-figure contracts.

Another baseline reality that fans should recognize is that neither MLB nor the union gives a s*** about competitive balance.  In fact, I’m absolutely convinced that it’s the last thing MLB wants, and I don’t think the union wants it, either.  Everybody is well aware of where the money comes from with MLB’s wildly exaggerated revenue disparities.  The national broadcasters are only interested in pushing the big-market teams, as is MLB itself, which becomes clear if you watch the MLB Network for five minutes.  Both MLB and the union no doubt figure that there’s more money for everybody in selling Aaron Judge and Clayton Kershaw jerseys than in selling tickets to PNC Park.  It would behoove fans to remember, regardless of the corporate rhetoric they hear from MLB, that competitive balance is closer to the chopping block than the agenda.*

Within the confines of the narrow priorities of the two sides, MLB’s basic proposal, excluding the exact numbers, probably makes a certain amount of sense.  The floor would force deadbeats to employ more “middle-class” players rather than loading their rosters with players making the minimum.  That would mean more money to the players.  The extreme deadbeats — the Pirates ($62.9M) and Cleveland Somethings ($63.2M) — have payrolls barely over 60% of the proposed floor.  Seven teams are currently under $100M and would have to spend an additional $145.7M, collectively, to reach the floor.

Of course, the exact numbers don’t make a lot of sense.  MLB’s position, apparently, is that the deadbeats would need help from luxury tax proceeds to get up to $100M in payroll.  I don’t believe for a minute that they’re not all capable of spending that much without help beyond what they currently get from revenue sharing and central revenues.  Again according to Cot’s, all 30 teams, including even the Pirates and Rays, have managed to fund nine-figure payrolls in multiple seasons.  A viable deal, acceptable to both sides, would certainly require much higher dollar figures at both ends, but this might be a starting point.

For the Pirates, in theory this would mean going into the free agent market to sign a few (hopefully) solid veterans instead of limiting themselves to super-ultra-cheap deadenders, as they have for years now.  Having more guaranteed contracts on the roster, in turn, would cut down on the never-ending random waiver claims and cash-consideration deals, which have accomplished . . . uh . . . what, exactly?  I’m pretty sure I won’t miss the Sean Poppens and Ildemaro Vargases.   On the other hand, having more veterans on guaranteed deals could lock down roster spots that would be better used on products of the team’s farm system, which we certainly hope is about to become much more productive.  Considering the Pirates’ apparent notions of veteran tenure, this could be a destructive development.

Another element that could come into play with this sort of economic structure would be sharply increased minimum salaries, which the union reportedly wants to see.  That’d be a matter of basic fairness, considering how much production some teams get out of 0-6 players.  If the minimum salary was, say, $2-3M instead of roughly $600K, a roster made up entirely of pre-arbitration players would be more expensive than the Pirates’ current payroll.  That would eat up a good deal of the difference between the deadbeats’ payrolls and MLB’s proposed floor.  It also might result in teams like the Pirates valuing the players on the edges of their rosters more, rather than running an endless stream of deadenders through there.

So I think MLB’s proposal might help move the sport toward the changes it really needs, although those really aren’t things that either MLB or the union wants.  Drastically reduced payroll disparities supported by drastically increased revenue sharing are the only things that’ll inject some semblance of competitive balance into a sport that has increasingly little of it.  But I doubt this would go nearly far enough.

*I’m always bemused by fans and sportswriters who believe that MLB won’t push hard for a salary cap out of fear of the union.  The owners, including Bob Nutting, don’t want a salary cap.  Because the sport’s revenue disparities are so vast compared to the other sports, to achieve any sort of playing-field-leveling the cap would have to be set so low that the Yankees and Dodgers would be able to spend only a tiny fraction of what they’re capable of spending.  That would create two problems for MLB and the union.  First, it would dramatically decrease the players’ share of the pie, which the union obviously would never, ever agree to.  Second, it would threaten the ability of the Yankees and Dodgers to stay in contention every single year, which in turn would threaten the revenue from Judge and Kershaw jerseys.  In short, it ain’t happenin’.