Just after midnight on Thursday, MLB’s owners voted unanimously to lock out the players. As much as this outcome has seemed inevitable for years now, it’s unfamiliar territory. Not only has it been more than 26 years since MLB’s last work stoppage—the 1994-95 strike—but the spree of lockouts that hit the NFL, NBA, and NHL in rapid succession was itself almost a decade ago. Because it’s been so long since we’ve gone through this, let’s go over what exactly a lockout means, what’s at stake in negotiations, and how all of this might play out.
What is a lockout?
All unionized workplaces are governed by collective bargaining agreements that set the parameters for pay and working conditions at the organization. Under the National Labor Relations Act, when a CBA expires—as MLB’s did Wednesday night—the mandatory conditions of the agreement remain in force until a new deal is signed. But most CBAs include a no strike/no lockout clause, which prevents either labor or management from initiating a work stoppage while the CBA is in effect. Once it expires, though, that no longer applies, so on Wednesday the owners voted unanimously to lock out the players indefinitely.
In an open letter to fans on Thursday morning, MLB commissioner Rob Manfred explained why he and the owners chose to lock out the players. “Simply put, we believe that an offseason lockout is the best mechanism to protect the 2022 season,” Manfred wrote. “We hope that the lockout will jumpstart the negotiations and get us to an agreement that will allow the season to start on time.” Manfred also said the league was “forced to commence a lockout,” which is not true. The league and the union could have continued to operate under the previous CBA indefinitely while they negotiated a new deal, as the MLBPA pointed out in its own statement.
Statement from the Major League Baseball Players Association: pic.twitter.com/34uIGf762W— MLBPA Communications (@MLBPA_News) December 2, 2021
Labor agreements carry tremendous inertia, and in order to get anything significant to change, either side would need to exert tremendous pressure on the other. And the greater the change desired, the greater the leverage needed to achieve it. The two championship-canceling labor wars of the past 30 years—the 1994-95 MLB strike and the 2004-05 NHL lockout—both hinged on the issue of instituting a salary cap. Nobody’s shutting down a multibillion-dollar industry over trivial issues, but when the entire financial structure of the game is broken, that’s worth breaking out the big guns over. By locking out the players now, the owners not only increase pressure on the MLBPA, they also eliminate the union’s ability to strike at a more inconvenient time—say, mid-August, as the union has done in the past, most notably in 1994.
What are the major issues at stake?
Under the just-expired CBA, players generally made more money as their careers progressed: Rookies make the league minimum or close to it; players with three to six years of experience get gradual raises through arbitration; and players with more than six years of service time become free agents. Only these established veterans have the freedoms afforded workers in almost every other sphere of American commerce: the freedom to choose the organizations for which they work and to sign the largest deals they can find.
Over the past 15 years or so, the game has changed. First, baseball’s empirical revolution revealed that players are at their most productive far earlier in their careers than previously thought. Players are most productive in their mid-to-late 20s, yet get paid the most in their 30s. And many teams have simply opted not to participate in the second half of that process. Top free agents like Max Scherzer and Corey Seager will always get paid because they’re irreplaceable, but a team in search of a no. 4 starter will generally choose a cheaper rookie rather than a veteran on a multiyear deal.
That natural economic tendency of capital finding cheaper labor has been exacerbated by extrinsic policies that place a thumb on the scale: the competitive balance tax (which imposes cash and draft-pick penalties on teams with payrolls greater than a certain threshold), the draft (and caps on amateur spending), and draft pick compensation for teams that lose free agents.
Meanwhile, the norms that have kept the sport’s flawed compensation system in balance have eroded. Teams have refused to promote talented young players specifically in an attempt to delay their free agency. They’ve used artificial salary depression early in players’ careers as leverage to convince those same players to sign away their most lucrative earning years for pennies on the dollar. And teams like the Pirates and Orioles have used the guise of rebuilding as an excuse to run rock-bottom payrolls, lose 100 games a year, and turn a profit by cashing revenue sharing checks. As of the start of the lockout, those two teams have less money committed to their total 2022 payroll than the Mets have committed to Scherzer alone.
Owning an MLB team is a lucrative business not just because of cash turnover from TV deals and ticket sales, but because the team itself is an appreciating asset. For instance, in 2002, Jeffrey Loria bought the Marlins for $158.5 million and 15 years later sold the team for seven and a half times that amount. Other owners like the Ricketts family, which owns the Cubs, and Liberty Media, which owns the Braves, are using their respective teams as tentpoles for real estate development.
In other words, MLB’s economic system was set up to reward the players who perform the best over time, and to reward teams that draw fans and win games. The MLBPA says that’s not what’s happening in practice, to the detriment not only of fans, but of players—particularly young players.
So the MLBPA wants restrictions to revenue sharing, which would make it less economically viable for a team to run out a roster of minimum-salary nobodies, as well as a higher competitive balance tax threshold and tweaks to the free agency timeline that would get players paid earlier.
Scherzer, one of the leading voices in the union as a member of the MLBPA’s eight-man executive subcommittee, gave as good a two-line summary of the issue as you’ll find to The Athletic. Said Scherzer: “Unless this CBA completely addresses the competition (issues) and younger players getting paid, that’s the only way I’m going to put my name on it.”
How do negotiations work?
Since there are dozens of owners (including minority shareholders) and more than 1,000 MLBPA members, both sides have appointed teams to speak for them at the negotiating table. The key figures on the ownership side include Manfred, deputy commissioner Dan Halem, and Rockies owner Dick Monfort, chair of the league’s labor committee. For the players: MLBPA executive director Tony Clark, senior director and chief negotiator Bruce Meyer, and the aforementioned executive subcommittee, which includes Scherzer, Andrew Miller, and others. Those two teams will meet regularly to try to reach a deal palatable for both sides.
In the hours leading up to the lockout, there was some public consternation over the form of the negotiations, with the two bargaining teams meeting for only a few minutes at a time before breaking. This is normal—both bargaining teams represent large constituencies with varied and sometimes conflicting interests, and will be very careful to speak with one voice at the table. And because what’s said formally across the bargaining table can have legal consequences, bargaining tends to be a very formal process. Both sides will take frequent breaks to talk among themselves, and when one side presents a proposal, the process of crafting a counteroffer isn’t as simple as writing numbers on a napkin and sliding it across the desk—sometimes it can take weeks to settle on such an offer. According to Manfred, there are no new bargaining dates currently on the calendar.
In short, this will be a very long, very deliberate process.
How does this affect the offseason?
Frankly, it will be about three months until the effects of the lockout are obvious to casual observers. Because it’s starting now, no games have been canceled, and no player paychecks are being missed. But official league business has come to a halt.
Under the conditions of the lockout, no contact is allowed between union players and club employees. Those club officials are also not allowed to talk about players, both for purposes of message discipline and to avoid running afoul of labor law. This has some awkward consequences, including the fact that players rehabbing from injuries are no longer able to consult team training and medical staffs. The Winter Meetings have been called off and the major league portion of the Rule 5 draft has been postponed indefinitely. Trades and free agent signings have also come to a halt.
In fact, part of the reason we’ve seen so much activity over the past week is a furious rush to conclude business before the lockout. Players that signed term sheets over the weekend could take physicals and have the I’s dotted and T’s crossed on their full contracts earlier this week, but not everyone made it over the line in time. That reported four-year, $20 million deal Nick Martinez signed with the Padres, for example, won’t be official until after the shop opens back up.
How and when will this end?
Ownership is in a strong position here. The current deal is quite favorable to them, so it will take a mammoth effort from players to move very much in their direction. Also, the owners have the advantage in the PR battle, as it’s very easy to flatten this disagreement into one between millionaires and billionaires without interrogating (1) how big of a difference that is, and (2) the respective contributions of the players and owners to the game at large. And the same timeline pressures that give teams the advantage in contract negotiations apply here: Corporations have more money than their workers, and a greater window in which to earn it, which allows them to be patient if need be.
So what can the players do?
First, even if it will be an uphill struggle, the MLBPA is more up for a fight than at any point since at least 2002. Almost every player has gone through poverty wages at the minor league level, and many of them have had their service time manipulated or been nickel-and-dimed in arbitration. Plus, the 2020 fight over how to restart the league amid the pandemic illustrated just how tough MLB is willing to be in order to squeeze every last penny out of its workforce.
And while this is not the first sports work stoppage to take place in the social media era, the MLBPA is better equipped than any previous sports union to bypass league-affiliated media outlets and get their message out directly. We didn’t have to wait long to see evidence; in response to MLB.com scrubbing news stories involving current players, several players changed their Twitter avatars to generic placeholder images.
The other major negotiating advantage the union has is that the league wants to expand the playoffs. That’s where the most lucrative TV money is (a league presentation to the union last year put the value of postseason baseball at $787 million in national TV money alone, a number that would only increase with more games), and since players don’t get paid their normal salaries during the postseason, it amounts to almost pure profit for the league. But because a revamped playoff format would represent a change to working conditions, the league needs the union to agree to the change. In exchange, the MLBPA would naturally want the league to make concessions.
As inconvenient as a lockout is for the players, they’ve prepared for this for years. Not only has the union advised players to put away money for a rainy day, it also has a formal lockout fund to help tide players over if the season gets pushed back and they do start missing paychecks.
Labor negotiations are about pressure and deadlines; both sides will tend to hold out for a better deal unless there’s some incentive to compromise. With the CBA lapsed and a lockout in effect, the next big deadline is the start of spring training. That means we’re unlikely to see a resolution for the next three months—but the more the lockout threatens the start of the season, the greater the incentive to reach a compromise.
It might be frustrating for fans to wait that long for a resolution, but that’s just how labor negotiations go.