MLB: CBA Negotiation Overview, Revenue, Schedule and the Qualifying Offer
On December 1 the current Collective Bargaining Agreement between Major League Baseball and the MLB Players Union is set to expire. While the two sides continue to negotiate to avoid a work stoppage, here’s some of the hot topics at hand.
Major League Baseball Commissioner Rob Manfred and his team of MLB lawyers are working with the Major League Baseball Players Union (MLBPA) to reach an agreement on a new Collective Bargaining Agreement (CBA) before the December 1 deadline for the first time during his tenure as commissioner. There are a few pressing issues that fans should look for, as well as some things that we would like to see change.
The largest issue between the two sides right now is what baseball executives call “baseball related income” or in other words, revenue sharing. Basically the debate is that the MLBPA is not receiving its perceived “fair share” of the revenue from Major League Baseball.
In 2016, Major League Baseball’s gross revenues nearly reached the $10 billion dollar mark, and according to Kevin Hisey of Field of Greens, Nathaniel Grow of Fangraphs reported that in 2014 the MLBPA received just 38 percent of the league’s gross revenues, the lowest share it has ever received. By comparison, in the early 2000s the MLBPA was receiving nearly 55 percent of the league’s gross income for any given operating year.
Kevin Hisey also pointed out in his article that one of the deciding factors in Major League Baseball’s push to keep the majority of the revenue has been the insane success of Major League Baseball Advanced Media (MLBAM), which of course operates MLB.TV, Major League Baseball’s subscriber-based streaming service. MLBAM is expected to see revenue near the one billion dollar mark this year. Tony Clark, President of the MLBPA, will have a tough task with getting the revenue sharing pie more balanced for the players in the next few weeks.
Another issue at-large in the CBA negotiations is the regular season schedule, which now stands at 162 games per season. The MLBPA would like to see the schedule reduced to anywhere from 154 to 160 games per season, obviously favoring the 154 end of the spectrum. The current regular season calendar consists of 183 total days, in which the current number of 162 games is to be played, whereas a reduction of games down to 154 would give the players and clubs 29 days off during the course of the regular season.
The desire behind the additional time off in the schedule is fueled by players complaining of things like travel demands, odd game start times and other performance-impacting things. MLB Commissioner Rob Manfred said this in regards to the desired shortened work days:
"“Can something be done? Yeah, things can be done. There are ways to produce more off days in the schedule. Some of those have very significant economic ramifications that if in fact we’re going to go down those roads, those economic ramifications are going to be shared by all of the relevant parties. You want to work less, usually you get paid less.”"
To which MLBPA President Tony Clark obviously stated that the players would not accept lesser salaries. Clark has stressed that a shortened game schedule within the 183-day period would provide the fans with a better product on the field, and argues that the improved product would increase viewership and gross revenue. Personally it seems like arguing over an eight-game difference in the schedule pales in comparison to the importance of something like the aforementioned revenue sharing dispute, or even the flawed qualifying offer system, but to be fair I have never had to play a 162-game schedule, so it may truly be of the utmost importance to the players.
The league’s drug testing policy has been another often discussed matter in the new CBA, as 2016 has seen a spike in players testing positive for various substances. Major League Baseball seems dead-set on their current drug testing policy staying in place, with Commissioner Rob Manfred saying, “All I can say to you on that is we are really confident [in the drug-testing program]. I don’t know how [the banned substance] got there. Maybe the player doesn’t know how it got there. I know it’s there. And I know it’s against our rules.”
Given the damage that the PED era had on MLB not too long ago, I highly doubt that the commissioner will be willing to make any changes to the league’s drug testing policy in the near future. Rightfully so in any case, the league should be stringent and diligent on drug testing to protect the integrity of the game and the product sold to the fans. Major League Baseball is trying to grow again after years being dragged through federal courtrooms in relation to the use of illegal substances, and it can’t afford to take another blow in that matter.
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The topic up for debate in the current CBA negotiations that may very well be of the most interest to the fans is the qualifying offer compensation system. The formula for the compensatory picks, who is eligible for a qualifying offer and who is not, is a fluid system. Basically, a free agency eligible player, who has played for his club for one or more full seasons is eligible to receive a qualifying offer from that club. A player who arrived with that team at some point within the recently ended season is, however, not eligible to receive that offer from the club and would become an unrestricted free agent.
So if you want to sign a free agent, who has been extended a qualifying offer and has declined that offer, you stand to lose an early round draft pick in the next year’s MLB Draft. Unless, of course, you hold a pick within the top ten, in which case you have a protected pick and you can sign said player free from penalty. Yeah, it’s a wacky system that is not really profitable for anyone at the end of the day.
Instead of protecting small market teams from losing their prized players to big market teams, as the system was designed, we have seen large market teams offer players the Q.O. because $16-$17 million per year is chump change for the likes of the Dodgers, Cubs, Nationals and Yankees. While small market teams avoid signing players with Q.O.’s extended because they value the early draft pick too highly, and players’ market values plummet because very few teams want to pay them a long-term deal, and in the process forfeit an early draft pick.
Everyone has been a loser in a way with the current Q.O. system; it really does nothing but cripple player value and slow down the free agent market significantly.
So what’s the fix? Eliminate the system altogether, making it a virtual unrestricted free agency? Model the system after the one in place in the NFL, making teams eligible to gain mid-round draft picks, while also ensuring that teams cannot be penalized by losing picks for signing a player?
The NFL system would seem to be a better way, but certainly not a complete fix to the problem. The best solution is the most obvious one in this case: just scrap the system altogether for the new CBA, see how it works, and maybe revisit the idea of a reworked system in the next CBA. That move would be a quick and effective fix, while basically throwing the MLBPA a bone in the negotiation process, and giving MLB the upper hand in another bargaining facet, like say the schedule topic.
If the MLBPA gets its way on the qualifying offer system by scrapping it, and the MLB gets its way by keeping the schedule the way it is, or at most minimally reducing the schedule to 160 games, that would make the revenue sharing debate the last major hurdle in the new CBA.
If Major League Baseball would be willing to fork over somewhere between 40 to 50 percent to the MLBPA annually, I could see that being a compromise that both sides would be comfortable with.
Seems simple enough, right? Unfortunately it’s usually not that simple when billions of dollars are at stake in the negotiations. One thing is for certain: the two sides have to hammer out a new deal, because another work stoppage would be a fatal move for the growth of the sport that they may not be able to recover from.