CBA Musings (2/25): What’s Happening and What’s Next

[Ted Schwerzler]

This week could be argued as the most significant of the entire Major League Baseball offseason. It’s the first in which the owners and union have committed to interacting every day. Unfortunately, it’s produced a whole lot of nothing.

A contingent for both the owners and players arrived at Roger Dean Stadium in Florida on Monday. The respective sides have spent time meeting both separately and together. A handful of notes have been cycled through the days that have come and gone. Most notably, we’ve seen the players continuing to move ever so slightly on their already negotiated proposals. The league has done little to counter and close the gap, but there has been no movement on the suggestion that February 28 is a hard deadline for Opening Day to go as planned.

 The league has suggested that any games missed will not result in rescheduling and that players will simply lose pay with the schedule picking up where it left off. Before spending 42 days with no action, Rob Manfred penned a letter to fans saying the lockout he instituted was designed to jumpstart negotiations and was done with the utmost desire to protect the integrity of the schedule. As we sit not, that letter doesn’t look good (to be fair, it didn’t then either). 

After being let go from MLB Network due to minor criticisms of Major League Baseball’s Commissioner, The Athletic’s Ken Rosenthal has continued to produce excellent writing. This week he took the kid gloves off, put out a framework for a deal, and called the league out for the lunacy that is taking place.

Further tilting the scales towards the already known realities, financials for the Atlanta Braves ownership group were released today. Despite Rob Manfred suggesting owning a team is not all that profitable and the stock market producing better returns, every bit of data continues to laugh at that idea. There’s no denying the owners will come out ahead in any CBA, and they probably should, but clawing for every dollar in an effort to win over the players have only the consumers losing.

Although the next two days are non-business days, it would benefit both sides to continue with their discussions. Monday’s deadline looms large, and while the only real leverage the players have is lost games, fans watch as a season hangs in the balance.

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[Major League Ready]

The Braves had $250M more in revenue than the Twins and spent $33M more than the Twins on Payroll.  That will produce some profit but suggesting this example is representative of all teams is financial ignorance.  The Brave simply don't spend like a very top revenue team.  This is probably the difference between a team being owned by a corporation vs an individual.

[4twinsJA]

If the deadline is Monday Feb. 28, I guess Friday March 4 at 10pm ET for resolution.

[Employee No. 4210]

Cities with publicly-funded stadiums should sue the teams' owners (if any games are canceled) for lost revenue on behalf of: residents who work at the stadium; surrounding bars, restaurants, parking ramps, public transport; and city taxes list on sales and income. 

[dxpavelka]

Alex Wood:  The owners aren't the only ones not making real offers.  Takes two sides.  The other side isn't gonna roll over and play dead any more than your side is.

[The_Real_Nick_Gordon]

I was wondering if anyone has any opinions on how to watch the Twins. Any really economical deals where you can see every game and it is good quality? Just wanna hear some ideas!

[Major League Ready]

16 hours ago, Employee No. 4210 said:

Cities with publicly-funded stadiums should sue the teams' owners (if any games are canceled) for lost revenue on behalf of: residents who work at the stadium; surrounding bars, restaurants, parking ramps, public transport; and city taxes list on sales and income. 

I think it's absurd any stadiums have been funded in the past 25-30 years.  Given the increases in revenue it has become very viable for teams to fund their own stadiums but who benefited most?  Had the teams assumed that expense, they would have reduced payroll by roughly the equivalent of their facilities cost just like any other business.  In other words, they would not have been able to pay the average player $4M/year.  The tradeoff would have been players would have been paid less and we tax payers would not have footed the bill for stadiums.   How absurd is it that a business that can afford $300M contracts for a single employee is subsidized by tax payers that make 1/100 of those employees?

[tony&rodney]

The Twins and 28 other MLB clubs would never open their books and I don't expect them to do so. The Braves are required to do so. Anyone can argue, persuasively, that Atlanta is not a typical MLB team in terms of their finances and they will always be correct because we cannot accurately compare figures between teams. All businesses are savvy (or should be with a halfway decent accountant) with their financial shenanigans. Learn the ropes and play within the rules to gain every advantage allowed. 

Liberty and their numbers have displayed the full folly of the owner's positions. The owners fight over trivial figures when they know that they will win any negotiation. To offer a $10K increase for minimum salaries just pushes the younger players more toward whatever positions the Players' Association advocates. The PA needs to be more in tune as well but the news today leveled any idea that the owners have any motive other than power in mind with the current CBA. 

On a separate note - I wondered if anyone else would like to see a reduction in the number of teams that qualify for the postseason? Four per league seems like more than enough to me. 

[Major League Ready]

7 hours ago, tony&rodney said:

The Twins and 28 other MLB clubs would never open their books and I don't expect them to do so. The Braves are required to do so. Anyone can argue, persuasively, that Atlanta is not a typical MLB team in terms of their finances and they will always be correct because we cannot accurately compare figures between teams. All businesses are savvy (or should be with a halfway decent accountant) with their financial shenanigans. Learn the ropes and play within the rules to gain every advantage allowed. 

Liberty and their numbers have displayed the full folly of the owner's positions. The owners fight over trivial figures when they know that they will win any negotiation. To offer a $10K increase for minimum salaries just pushes the younger players more toward whatever positions the Players' Association advocates. The PA needs to be more in tune as well but the news today leveled any idea that the owners have any motive other than power in mind with the current CBA. 

On a separate note - I wondered if anyone else would like to see a reduction in the number of teams that qualify for the postseason? Four per league seems like more than enough to me. 

We don’t need to have full disclosure to understand that the percentage of revenue the Braves spent on payroll was very low in comparison to other teams.  They spent $153M on player salary with $568M.  Of course, they also had player benefits and draft bonuses of roughly $28M but those inclusions are normally not considered when payroll percentage is discussed.  The $153M is 27% or at least 15% below MLB average which equates to additional profit of $85M.  Of course, the fact they won the WS also provides incremental revenue that should be accounted for when comparing to other MLB teams.  These facts show “the folly” in using these numbers as representative of the league norm.  What it may demonstrate best is that it’s fortunate for players almost all of the teams are owned by individuals.  They would appear to be much more willing to spend than corporations. 
The argument about league minimums is equally ignorant.  It suggests the players only ask for prearb players is a raise in league minimum.  If you ask your employer for a 10% raise in your base salary and a bonus of 15% and another bonus of 20% is the ask 10% or 45%?

The players are asking for a 36% increase in the minimum which would be substantial in itself.  In addition, they are asking for a $115M bonus pool.  Obviously, only 1% of players would be included but how it’s divided does not diminish the payout. (the total net increase paid to prearb players)  The net effect is roughly a 56% increase for every prearb player on opening day rosters plus an allowance of 3 FTEs per team for injury replacement.  They are also demanding the number of super-two to increase from 22% to 80%.  There were 36 super twos in 2021 so that equates to roughly another 80 players getting arbitration.  The average increase is roughly $1M a year so let’s call it another $80M or an additional 41% for a total increase of around of roughly $850M per pre arb player.  Of course, the arbitration increase will also be seen in future years so the increase has a multi-year affect.  Without the multi-year effect this brings the total ask to roughly 133%.

The fact that players or fans would point to the league minimum as the ask for prearb players without considering the ask for the bonus pool and 3rd year arbitration illustrates either ignorance or extreme bias.  The prearb ask itself is absurd.   Then, we add a huge increase in the CBT, lowering revenue sharing and all of the other demands and you have a situation that is not getting resolved until players get realistic.  I would bet they could get a 50% increase in league minimum if that was their actual ask for prearb players.
 

[Whitey333]

It's ridiculous.  If the owners aren't making enough (absurd) then they should sell their franchises.  They don't sell because they know they are too valuable.  If the players don't feel like they are making enough money or don't like their working conditions get a different job there is plenty out there. We know that won't happen,  they already have the best CBA in sports.  The game has become unwatchable as it is.  The time is now to work together quickly to resolve this situation.  Then maybe they can fix the game and return it to a watchable game at an affordable price.

[Nine of twelve]

A friend of mine sent me this two-sentence email:

I love this time of year, when lawyers and owners report to spring training. Takes my mind off the weather.

[Major League Ready]

Another omission is these calculations is the cost (bonuses) paid to prospects.   In 2021 teams paid out $437M in bonuses.  Why don't we quit paying the Mark Appels huge money for failing?.  Let's give every player a 100K bonus.  That would cost each team $3M leaving $11.8M.  Let's take that money and pay every Milb player an extra $40K/year.  That would cost roughly 7.2M leaving 4.6M to add to prearb players.  If each team averages 9 prearb players that would equate to a raise of $511K to 1.08M or roughly a 90% increase. 

[Trov]

Today will determine if we have a long lockout.  The MLB deadline that the players do not agree to will cause even more division for a return to play.  Remember 2020, when we had a huge divide of how to pay in a return to play?  They never reached an agreement really and the pro rated pay was just done.  I can see it now, the owners will say we will not pay you for games we cancelled, and the players will say you cancelled them you locked us out.  The owners would say, well you would have struck, and the players will say you never know.  

The players will demand some level of back pay for missed games to return, the owners will not want to agree to it.  I know they need a deadline, but this will just add another issue that the two sides will be far apart on.