extended the pact for 10 years, through 2030, although it contains allowances for the players’ percentage of revenue to incrementally increase if TV revenues increase by more than 120%. Don’t expect baseball to seek a deal of similar length: The past five years have seen sweeping changes to the game that would make both sides loathe to lock in a new deal for a significantly longer term.
Players feel their earning power has been marginalized by over-reliance on analytics and owner indifference to competition. And while national TV rights continue to skyrocket, owners have their own concerns with regard to long-term viability of multi-billion dollar local TV rights.
In short, expect to do this again in five years.
Largely because this is a fight five years in the making. After decades of significant improvement in working conditions – commencing with the eradication of the reserve clause in the 1970s that paved the way for free agency and remade the landscape of professional sports – players suddenly saw their fortunes reverse in the wake of 2011 and 2016 CBAs. Incremental gains made by ownership – a hard slotting system for draftees, onerous draft-pick penalties for signing free agents and/or exceeding the luxury tax – put governors on spending from the time players sign as amateurs through their prime earning years. As a result, even as revenues increase annually, the average player salary has fallen every year since 2017.
All but one of the previous reductions in average salary came in the wake of work stoppages or when owners were found guilty of collusion in 1987.
And this particular downturn in salaries, from a player’s perspective, results from a cocktail of CBA losses and owner behavior. The rise of “tanking” – intentionally losing to procure high draft picks without the intent to win for several years – paired with the suppression of service time for its brightest young players and a collective franchise behavior to offer veteran players virtually pro forma contracts – take it or leave it – has the MLBPA steeled to make gains.
This is not as simple as other sports labor disputes, with clearly delineated lines in the sand, such as an NFL battle over revenue sharing in which players may shout “Forty-eight percent!” and owners reply with “Fifty-three percent!” No, this is a fight nearly as much visceral as it is objective.
For instance, players for decades have been generally fine with a six-year path to free agency – but not when teams so blatantly manipulate the service time of budding stars to suddenly make it a seven-year slog. And in the most celebrated and blatant example – the Chicago Cubs’ optioning of overly qualified Kris Bryant in April 2015, months before he won Rookie of the Year and a year before he was NL MVP – the MLBPA filed a grievance, which was denied.
RANKING THE BEST FREE AGENTS:From No. 1 (Correa) to 106 (Foltyniewicz)
Players have lived with enhanced revenue sharing since the 2002 agreement and continued to get paid – until the luxury-tax threshold began serving as a de facto salary cap. Even the largest-market teams, such as the New York Yankees and Los Angeles Dodgers, scramble to duck under the luxury tax at least every three years in order to reset their penalty rates. As a result, the Yankees’ 2021 payroll of $206 million for its 40-man roster is virtually identical to its 2005 payroll for its 25-man roster – despite its franchise value rising from an estimated $850 million to $5.3 billion in that span. MLB industry revenues have more than doubled in that span, from less than $5 billion in 2005 to more than $10 billion in 2019, the last pre-pandemic season.
The money is there – but the players are no longer accessing it as they once did. Thus, the consistent rallying cry has been, get players paid sooner. As front offices and ownership groups align in their indifference for the veteran non-superstar, the MLBPA is aiming for its so-called club-controlled players to capture salaries commensurate with their on-field production.
In early bargaining, that has taken the form of seeking salary arbitration for players after two years of service instead of three, and a quicker path to free agency for others. More quietly, players would also like to see a loosening of the luxury tax, which increased to just $210 million in 2021 – once again, a level not commensurate with industry growth.
Seven of the top 20 players among our 106 best free agents have already signed – not bad for late November.
Yet the tippy-top of the market (think: Correa) and the very bottom of it (think: Buckets of fungible relievers) will largely have to wait, and that’s a decent indication of what’s at stake. The Semiens and Gausmans aren’t re-setting any bars, nor are they borderline veterans who might be easily replaced by a minimum-wage rookie. Those deals tend to occur on the back end of free agency – and signing teams may want to survey the state of play in a new CBA before making any moves.