Dueling Proposals: Where Each Side Stands Mid-Lockout

We are on day 55 of the Major League Baseball Lockout, and it seems proceedings are a tad bleak at the moment.

Hopes aren’t high for the season to start on time, and at this point, we can’t be sure that isn’t by design. Owners intrinsically have more staying power than players, April is a notoriously slow month for business, and 2020 has proven that a season can be cut short, so long as the golden playoff goose is at the end of the rainbow.

The owners made their last proposal on January 14th, and as with everything else up to this point in the lockout, I did not take the time to recap it for you, dear valued reader. As anticipated, my second child has sucked up a lot of my free time, and while I certainly won’t apologize for that, I simply couldn’t help myself from summarizing where both sides stand after the players volleyed yesterday and both sides have made their first proposals post-expiration of the Collective Bargaining Agreement.

Below, I will recap the most important and public facing aspects of the proposals that we know, with up-to-date information on where each side stands on the matter, at least based on the public reporting. Some feel this reporting is likely biased and incomplete, and while that’s certainly possible, it’s the best information we have to work from. Also, while the sources may have their own agendas, I find it hard to imagine that, for example, proposed minimum salaries are actually double what the current reporting says.

So, just what are the two-sides arguing over, is there anywhere they see eye-to-eye, and where do we go from here? Let’s have a look.

Draft Lottery

Players: Lottery for top eight picks

Owners: Lottery for top three picks, ineligible for lottery in three consecutive seasons

When the owners made their latest proposal, all the reporting suggested that they made “tweaks” to this aspect, but the best I can tell, the only change from past reporting seems to be not allowing picks in three consecutive years from Top-5 to Top-3.

As for the players, while there are other aspects to their lottery proposal, their main sticking point seems to be a larger lottery than the league is proposing.

There are significant concerns as to whether this would do enough to satisfy some of the players’ concerns with tanking teams, but it definitely seems there’s going to be common ground on a lottery, it’s just a matter of where the middle is.

Service Time Manipulation

Players: Add service time to players who were called up after the start of the season based on accomplishments

Owners: Reward draft picks to teams that roster Top-100 prospects from the start of the season who go on to achieve certain accolades in their pre-arbitration seasons

First, I think it should be pointed out that this was originally one of the aspects of the players’ requests that the league would not listen to.

Whether it’s a serious offer is another question entirely.

It’s possible that the league’s sticking point was retroactively crediting service—now, they seem to be asking to be rewarded for behavior that many feel they should be practicing already.

Now, I personally take this with a grain of salt, considering the source, but Bob Nightengale is the only reporter I’ve seen that laid out the league’s actual proposal:

[T]eams who have a top 100 prospect will be rewarded a first-round draft pick if the prospect wins the Rookie of the Year award the first year, or a second-round pick if he finishes among the top three in voting. Teams would also receive a first-round pick if the player finishes in the top three in the MVP or Cy Young races or a second-round pick for finishing in the top five in his first three years.

Now, it has been reported that the players turned down this proposal, likely for several rational reasons.

The question exists of just who would determine the Top-100 prospects? The obvious answer would be MLB Pipeline, and while no one’s work is being called into question, an obvious conflict of interest would exist there. This doesn’t even factor in the idea of outside systems and evaluators determining pay structures, a job they were never intended to do and likely none of them want.

Also, as J.J. Cooper at Baseball America pointed out, if you take away the Top-100 aspect the effect is still the same, as players who teams hold back and place in these award races are already Top-100 prospects.

While the league deserves credit for trying to move off one of their original hardline stances, this idea was kind of half-baked from the start, and it’s hard to imagine anything like this ending up in the final agreement.

Competitive Balance Tax Threshold

Players: Raise from $210 million in 2021 to $245 million in 2022

Owners: $214 million in 2022, raising to $220 million by the end of the agreement

No changes here, as both sides remain at the same place they were when the last proposals were made pre-lockout.

There is a lot of speculation that once the players finally make the order of their concerns clear, this could be their main sticking point. They have witnessed the steady rise of revenues over the years, while the threshold has hardly risen, certainly not in concert with revenues. Their hope would be that a significant increase would spur spending around the threshold, as five teams finished within $4 million of the 2021 line of $210 million, obviously treating the threshold as a cap.

While the league can claim they are increasing the ceiling, a 1.9% increase in 2022 isn’t even coming close to touching inflation, which was at 7% in 2021.

Competitive Balance Tax Penalties

Players: Reduce/Eliminate penalties, including nonmonetary (draft picks and international pool space)

Owners: Increase first level to 50% tax and a loss of third-round pick, repeal repeater tax

The AP suggested the original proposal for the $100M floor would be funded by a 25% tax on the $180M ceiling, but that offer is off the table and the league can’t be making any friends with their latest proposal.

Not only are they suggesting minimal raises to the CBT threshold, but these penalties would likely only serve to make teams even more hesitant to spend past the ceiling.

This is also a far cry from what the players are seeking, which hasn’t been plainly reported yet, but their hope is spending would be spurred by reducing or totally eliminating penalties for spending on payroll.

Draft Pick Compensation

Players: Seeking to eliminate draft pick compensation attached to free agents

Owners: Suggested to eliminate in most recent proposal

We knew the league was open to this, and it seems they have officially offered it.

Expect this to come to pass, as both sides can agree on this change to the system.

Minimum Salaries

Players: $775,000 starting in 2022, ending with $875,000 by the end of the agreement

Owners: Three tier system ($600,000 for less than one year of service, $650,000 for 1.000 to 1.171, and $700,000 for 2.000 to 2.171), rising $10,000 annually

This is another aspect of the proposals that isn’t new.

Of note, the league would be instituting a minimum for their proposed formula…

Super Two

Players: Eliminate the Super Two designation, instead making all players with 2.000 plus years of service eligible for arbitration

Owners: Eliminate the arbitration process for this class, replacing with a formula-based payment plan for players between 2.000 and 3.000 years of service

This is another aspect of the league’s newest proposal in which they believe they are meeting the players’ asks, by way of paying more money to younger players.

While it’s not entirely clear whether the new system would be for all players between 2.000 and 2.171 years of service or only the Super Two class—the former seems more likely—the payments would be based on a formula. Per the league’s proposal, players with prior service could choose to be grandfathered into old system.

Afraid that opening this door could lead to expanding the premise in future seasons and preferring, when possible, to have a say in their salary, players rejected this proposal yesterday.

Pre-arbitration Bonuses

Players: Share a pool of $105 million to pre-arbitration players based on accomplishments

Owners: ???

I looked at this in a little more depth already, but while we know owners are open to this, reporting hasn’t indicated what, if anything, they may have proposed thus far.

Expanded Playoffs

Players: 12-team playoff

Owners: 14-team playoff

Again, nothing has changed from previous reports.

It will be interesting to see where this falls, seeing as this is probably the owners’ biggest asks and the players have a bargaining chip, if they so choose to use it.

International Draft

Players: ???

Owners: Included in most recent proposal

This is a new aspect of the owner’s suite of recommendations, as they suggested it in most recent proposal.

As I indicated before, this is something that the owners could want, but the players fought tooth and nail against this in 2016.

After agreeing to the new international bonus pools the same year, will they acquiesce now? It’s possible the players could also use it as a bargaining chip, as they’ve never been shy of selling away rights of amateurs before.

Universal Designated Hitter

Players: Will agree to Universal Designated Hitter

Owners: Included in most recent proposal

This is all but a foregone conclusion and assured at this point.

Revenue Sharing

Players: Reduce pool by $30 million

Owners: Have not submitted changes in any proposals thus far

I’ve saved the next three for last, as they are currently understood to be no-goes for the owners right now.

At this point, the owners don’t appear to want to change anything about revenue sharing—despite what you may hear about them actually wanting to increase it—however, it had been a major ask for the players.

Yesterday, the players significantly lowered their ask of a $100 million cut to revenue sharing funds to $30 million. As discussed before, the players likely want big-market teams to stop funding rebuilds for small-market teams—and probably would like more money available for big-market teams to spend—but they made a pretty big change here.

It will be interesting to see if the owners will accept what’s essentially a cut of $1 million per team into the pot, or if this will still be considered a major sticking point for them.

Arbitration

Players: Reduce arbitration eligibility from 3.000 years of service to 2.000

Owners: No current changes

After originally suggesting replacing arbitration with an fWAR payment systemv, owners went back to the current arbitration system in their newest proposal. However, they are still unwilling to decrease the time it takes to reach arbitration.

Players, on the other hand, did not make any changes in their proposal yesterday, so one has to wonder where the middle ground is here, if there is one.

Earlier Free Agency

Players: No current changes

Owners: “No way”

Originally, players were requesting an age-based system in which a player could reach free agency starting at 30.5 years of age or six-years of service, whichever was earlier. This would have eventually worked its way down to 29.5 years of age.

This is obsolete now, as they backed off this proposal yesterday. Of three remaining, this can be seen as the players acquiescing to at least one of the owners red-line issues.

Salary Cap

Players: “Don’t ask”

Owners: “We won’t ask because we know you’re going to say no”

Right now, despite what some may want you to believe, there’s zero movement towards any kind of salary cap being instituted. The owners moved off their original pseudo-cap proposal and made subsequent changes that made that movement clear.

The only way I could even see it as possible that it comes back around is if the players continue to disregard the red line issues of the owners. Having completely dropped their free agency request and significantly dropping their revenue sharing one, that only leaves arbitration, as the owners have at least started to budge on service time.

It’s possible they would see the players continuing to ask for these changes as disrespectful when they’ve respected the players’ stance on a cap, but I still don’t see that series of events as likely.

Now, we can wait for any of this to become outdated and obsolete, as the owners are reportedly going to respond to the players today.

It may mean different things for different people, but for now, there’s movement.

Analysis
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