Lockout Lowdown

The current MLB Lockout between the Team Owners and the Player’s Association has unfortunately exposed the fact that this game we all love, operates first-and-foremost as a business. As you may have heard, the millionaires (the MLB Players) and the billionaires (the MLB Owners) are arguing over who should make more money during the next few seasons while us baseball fans pay the expense. There are several significant MLB Rule related topics involved in the current Collective Bargaining Agreement negotiations and while The Hum Now blog would love to present solutions to all of them and just get back to playing ball, it’d probably be best to just introduce the main agenda items first and explain a little of what’s going on.

One of the bigger frustrations among baseball fans, is the cloud of mystery that hovers over the CBA negotiations. What do the players want to change? What do the Owners want? What is the current rule for MLB Service Time and why is it a topic of conversation right now? Before we dive too far down any of those rabbit holes, here are the highlights that should bring you up to speed:

Collective Bargaining Agreement (CBA)

– CBA: DEFINED

A formal agreement between MLB Team Owners and the MLB Players Association that defines the rules of how the MLB operates for a certain period of time.

– CBA: RECENT HISTORY

The 2011 CBA … moved the Houston Astros to the AL West Division, introduced the one-game Wild Card Playoff format, introduced Super Two players to Arbitration, raised the Salary Floor value, increased the minor league minimum salary amount, adjusted the CBT, etc.

The 2016 CBA … added four off-days to the overall MLB schedule, raised the Major League minimum salary and minor league minimum, introduced MLB games located outside of the US/Canada, revised determination of World Series home field advantage from the All-Star Game winner to highest winning percentage, adjusted the CBT, adjusted draft pick impacts of Qualifying Offers, shortened the 15 day DL to a 10 day duration, etc.

Failure to negotiate a new CBA before the December 2021 expiration of the 2016 CBA started the current Lockout.

– CBA: NOTABLE CURRENT NEGOTIATION TOPICS

Player Service Time, Arbitration/Free Agency

Competitive Balance Tax (Luxury Tax)

Draft Order/Tanking

Universal DH

Playoff Format

Service Time

– SERVICE TIME: DEFINED

The number of calendar days that a Player has served on a 26-man MLB Roster.

– SERVICE TIME: HOW DOES IT WORK?

There are one hundred eighty-six (186) calendar days, start-to-finish, in an MLB Season

A player needs one hundred seventy-two (172) days to earn one year of Service Time

– SERVICE TIME: WHY IS IT IMPORTANT?

Service Time affects when a Player becomes eligible for Arbitration and Free Agency (or simply put, when a Player gets their big pay raises)

Additional things currently determined by Service Time:  10-and-5 Player Rights for a No Trade Clause, Rule 5/Rule 4 Draft, Player Pensions, etc.

– SERVICE TIME: WHAT’s THE DEBATE?

The biggest issue with the current Service Time rules is that it can be manipulated, and there are several recent examples to prove it (Kris Bryant being the most notable)

Teams can keep a prospect down for 15 calendar days to start a season and delay their Arbitration eligibility and Free Agency eligibility for a full season

Competitive Balance Tax (CBT)

– CBT: DEFINED

How the MLB enforces their version of a “Salary Cap”

Teams that exceed a predetermined threshold (Salary Cap that changes season-to-season) pay a Luxury Tax on every dollar they spend over the threshold

The Tax percentage increases with each consecutive season that a Team exceeds the threshold

The purpose for the CBT is to increase “Competitive Balance” or fairness, between Large-Market Teams and Small-Market Teams

– CBT: RECENT HISTORY

Rumors of a true Salary Cap being imposed was one reason that Major League Baseball experienced the 1994 Strike; the 1996 CBA introduced baseball’s the first luxury tax as the solution – the CBT.

Initially the top five payrolls in baseball each season paid a 34% luxury tax on the dollars they spent above and beyond the 5th and 6th highest payrolls (the average of those two)

In 2003 the CBT was revised to set a predetermined threshold, giving teams better opportunity to avoid the tax

The 2003 threshold was $117 million, and that has steadily increased over the years, most recently to $210 million for the 2021 season

The tax percentage imposed is 20% for first time offenders, 30% for teams that exceed the threshold two seasons in-a-row, and 50% for three consecutive seasons (on each dollar above the threshold)

In 2021 the Yankees, Dodgers and Mets exceeded the threshold and each paid a tax bill ranging from $2M to $19M

– CBT: WHAT’s THE DEBATE?

Recent negotiations have seen the MLB Team Owners present ideas such as lowering the threshold, while introducing a Salary Floor for the first time

The Players Association would rather see significant increases in the CBT threshold and encourage teams to spend more money on players and other forms of revenue generation

The CBT is a portion of what baseball calls “Revenue Sharing” and falls within the core economics of the Collective Bargaining Agreements

Draft Order & Tanking

– DRAFT ORDER: CURRENT REALITY

Determined by the inverse order of Win-Loss record from the previous season

This has caused teams to “Tank” or intentionally lose games (whether they admit it or not) in order to get better draft picks

– DRAFT ORDER: WHAT’s THE DEBATE?

There’s some level of agreement that tanking should not be rewarded, there are numerous differing opinions on how to best accomplish that via Draft Order determination

Some feel that small-market teams should be given an advantage in Draft Order determination (60% Win-Lose record, 40% market size)

Others feel that the best team that didn’t make the playoffs should get the best draft pick, giving the worst MLB Team approx. the 20th pick

Universal DH

– UNIVERSAL DH: DEFINED

Would introduce the Designated Hitter lineup position to the National League, instead Pitchers hitting

– UNIVERSAL DH: WHY HASN’T IT HAPPENED YET?

A large percentage of baseball would be in favor of the Universal DH and has been for quite some time

Rumored to be a bargaining chip that the Owners want to give the Players Association, only if in return for another negotiation topic

Playoff Format

– PLAYOFF FORMAT: HISTORY

The first World Series was in 1903 (2 playoff teams), no ALCS or other Playoff Rounds

MLB expanded the format to include the ALCS and NLCS in 1969 (4 playoff teams)

MLB expanded the format to include the Divisional Series for each League in 1995 (8 playoff teams)

Expanded format to include Wild Card Play-In Game in 2012 (10 playoff teams)

The Shortened MLB Season in 2020 used a playoff format that included sixteen (16) teams

– PLAYOFF FORMAT: KEY HISTORICAL TAKEAWAYS

There is a clear trend of the MLB expanding the postseason format to include more teams as time has progressed

Increasing the number of teams in the postseason is directly correlated with increased Revenue for Major League Baseball

– PLAYOFF FORMAT: WHY CHANGE IT NOW?

Major League Baseball and Team Owners would see increased revenue, and the MLB is a business after-all.

In the spirit of “Competitive Balance,” it would theoretically be harder for any one team to win multiple World Series in consecutive years

Arguments against expanding the playoffs lean on rewarding the best teams over the MLB’s uniquely long 162-game Regular Season, instead of opening it up to teams that had just an above-average Regular Season

Post Season baseball certainly has increased viewership when compared to the Regular Season, but at some point, including too many teams would water-it-down. Question is, where is that turning point?

Final Thoughts

The Owners and Players are reportedly returning to the negotiation table today (January 12th, 2022), which is encouraging news – certainly better than the radio-silence of late. Nonetheless, we are still a couple weeks away from seeing a new CBA get finalized.

In those coming weeks, The Hum Now will dive down some of the rabbit holes of these topics and make an attempt at finding solutions. Should you have any suggestions, comments or questions for the future conversation please reach out via the comments below or send TheCommissioner an email – HumBabeDynasty@yahoo.com.

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