Nationals Baseball: Locking the Doors when the store is closed

Thursday, December 02, 2021

Locking the Doors when the store is closed

 MLB is now locked out and I forgive you if you don't care because it doesn't mean all that much.  

Especially as we head toward the holidays, which are typically quiet, and have come off of a especially active period of FA signings, this won't really effect anything for a while. Some Winterfests, some access to off-season facilities for a couple guys, some derailing of what would be occasional GM or manager quotes about the upcoming year to fill time, some weird website changes. You may not notice it at all. 

And because of that there isn't really impetus to get anything done for... like 2 months or so. Not until arrangements start to have to be made for pitchers and catchers in mid February.  So don't expect any movement for a good 6 weeks, because there doesn't have to be movement. 

This has been spurred on by the recent spate (last few years but not this one) of cool FA periods as teams realize the vast middle that they've been paying for of sort of expensive veteran players 30+ can be replaced pretty effectively by guys 22+ under their control. There's a bit more variability there but it's a TON cheaper. If the rest of your team is pretty solidly built or if you don't care if you crash to 70 wins instead of 80 because you aren't trying it's a way to save millions.

What are they actually arguing about to address this shift? Not much.

In brief, the players want more money and want it faster - so an increase in the luxury tax cap and a quicker start on FA for younger players. 

The owners want to reign in giving the players more money as much as possible, more playoffs and ads as additional revenue sources, and some rules changes that may not work but might make the game move faster. 

Both seemingly want the DH, but the players want it more so the owners can negotiate a little off it.

 Here's a good run down of everything 

A couple owners of course have a more hardline stance, which is why you may have seen  earlier proposals that were bad for players once you put them under any scrutiny.  The owners offered up a salary floor - which would raise the payroll of a bunch of teams and the money currently in the system - but with a lower and harder cap, which very quickly (a year? two?) would hurt the players as MLB revenues are still going up.  The owners also offered up no arbitration at all, which sounds good, but ties it to a weird fixed budget for players under control and stretches control through an age (29.5 yrs) rather than a number of years. The likely effect would be an team having a bunch of very young players, as that's the most efficient way of splitting that money and having a player give the team the most for the least for the longest time. A lot of mediocre 24yo costing something tossed to the curb for complete question mark 19yos costing nothing.

These aren't serious discussions.

If you want to break it down to one thing - they are arguing about the increase in the luxury tax and everything else is just negotiations based on that. 

Expect an increase in luxury tax (no floor or some very nominal number set only because some owners don't like others not spending), a very slight change in how fast players get to FA, a bump on minumum salaries, DH, expanded playoffs, ads on jerseys


Anonymous said...

Good summary, Harper.

To my mind, the easiest single thing that would do the most good is to up the minimum salaries significantly. Say to $2M.

It changes the tradeoff between the unproven guys and the veterans. It will create a de facto floor. And, most importantly, it will raise the cost of fielding a team that is non-competitive.

I'd love to see more changed to make sure teams are incentivized to win regardless of a their expected record. But those changes (eg a massive overhaul in how revenues are shared) seem pretty complicated and I'm not very optimistic anything meaningful is going to get done there.

Cautiously Pessimistic said...

I like Anon's idea of raising the min salary. If we want to make it a little more favorable to owners, you can tie min salary to age or service time, but still having the league minimum be substantially higher.

Realistically what needs to happen, though, is to incentivize owners to spend more. How you do that, though, is a wild unknown. Average team profits are on the order of $80M per year (, so if everyone's salary increases by $2M on average, profits drop down to zero for a 40 man roster. That's untenable for an owner, so you have to bump revenue in other ways. Best way to do it, obviously, is increasing viewership, but Manfred's idiotic rule changes aren't helping there. So yeah, ads on jerseys and the like are going to end up being the ways to get things done, unfortunately.

Lou said...

Love the high min salary idea -- though it would be really tough on players bouncing up and down to AAA.

Maybe a pipe dream, but it would seem to be in both players' and owners' interest to have some luxury tax exemption for re-signing their own free agents. Soft increase in the luxury tax for the players = more $$; retaining more homegrown players = improved marketing opportunity and better chance for small market teams to compete

TwoGloves said...

Oh Lord, PLEASE no uniform ads!!! I already hate the nike logo on the front of the jerseys. The last thing they need to do is make the uniforms more like NASCAR, or god forbid, soccer!!!

Anonymous said...

I love the idea of luxury tax carveouts, like a 30% discount in luxury tax accounting to any player still playing for their first major league team. Or a discount for players on the IL.

I wonder if the owners would be more amenable to creating those kind of exceptions, and still keeping the headline number at $210 or $220 or whatever their latest offer is, instead of upping the number to $250.

Harper said...

CP - wouldn't be 2 million more per players. It'd be bumping that minimum from like 500K to 2M.

Lou - Larry Bird rule for baseball? Hmmm,

Sorry Two Gloves. We hate it but the owners don't and the players don't.

SM said...

One of the less reported negotiating points is the players' proposal to end revenue sharing among franchises.

It's the kind of small-market/big-market revenue (ergo, competitive) discrepancy (as small-market owners have incessantly argued) that would doom baseball as "we" (meaning small-market owners, of course) know it. Previously, the luxury tax was an additional way of addressing the issue. But like Jeffrey Loria had in Miami, certain small-market owners tended to pocket the shared revenue rather than spend it on player payroll.

If revenue sharing is scrapped or significantly amended downward--and no realistic payroll floor raised--then the so-called "Superleague" scenario may very well unfold.

If @TwoGloves is worried about the soccerization (is that a word?) of baseball, MLB divided into a hierarchy of leagues with promotion and relegation would be either soul-crushing or bracingly hilarious.

Anonymous said...

@CP and Harper

You also only pay the MLB minimum to active players. The other folks on the 40-man (with some rare exceptions) are on split contracts, and they get paid like $80,000 for their year in AA/AAA plus ~$500k/172 per day they're on the 26-man.

So it's not 2*40; it's more like 1.5*30 (to account for the folks on the IL who do get paid Major League salaries).

Also, and I think we've talked about this before, but we as fans don't have to accept owners taking profit out of the game. This isn't like a typical business, where customers need to pay enough money so that the capital returns are attractive enough to sustain the investment.

Sports teams are (well, can be and should be) vanity toys and not sensible business investments. Every owner is already extremely rich when they buy a team, and I think the sport would be in a much better place if it was competing with Monets and mega-yachts for the "coolest thing to own" money and not with every other business in the world for the "most profitable place to invest" money.

TwoGloves said...

@SM my reference to NASCAR and soccer was simply about ads on the uniforms. Those two sports are basically advertising for their sponsors.

PotomacFan said...

Not that it matters to the owners' calculations, but the owners typically make A LOT OF MONEY on the appreciation in the value of their teams -- if and when they sell. And if the team does well, it will appreciate more in value.

Regardless, I agree with Anonymous that owning a baseball team is all about vanity -- even more than the big yacht or Gulfstream. There are a finite number of sports teams. More yachts, more Gulfstreams can be built.