MLB lockout: The logical flaw in the MLBPA negotiating stance
For public consumption, the MLBPA has consistently framed its focus in the current labor negotiations as a fight for competitive balance. MLBPA leadership had devoted the preponderance of its public statements to the need to upgrade lower-end salaries.
It has presented that case mostly as a matter of equity. Although the headline-grabbers are the mega-contracts signed by the game’s elite, those players are in the vast minority both numerically and in terms of value produced.
The 2021 roster of the San Diego Padres offers an illustration of this that can be replicated virtually across the game. At $171.11 million, the team’s opening day payroll ranked among the top third.
Four Padres — Manny Machado ($34 million), Yu Darvish ($23 million), Wil Myers ($22.5 million) and Eric Hosmer ($21 million) — earned more than $20 million. Plainly this was a club that was willing to spend big to chase glory.
Yet those four stars produced only 8.2 of the team’s cumulative 35.6 WAR. That’s less than one-quarter of the overall value flowing from players who picked up nearly 60 percent of the proceeds.
In fact, among the 54 players who wore a Padres uniform some time during 2021, 34 — that’s more than 60 percent — got less than $1 million in compensation, the vast majority of those 34 working for the MLB minimum.
Three Padres — Jake Cronenworth, Trent Grisham and Nabil Crismatt — matched the collective 8.4 WAR of Machado, Myers, Darvish and Hosmer, and did so while earning a total of $1.76 million. That’s less than 2 percent of the salaries of Machado, Darvish, Myers and Hosmer for an identical production.
The situation in San Diego — paying a lot of players less even though they produce the same or more — is a pattern replicated across the game’s landscape. And in a sense, it only represents a good business practice. Any competent office manager — whether in baseball, plastics, accounting or entertainment — seeks to generate the highest value at the least cost.
Still, the MLBPA makes a strong point when it argues that less-experienced players tend to be compensated unfairly relative to their production. For decades the sport has under-compensated its young stars relative to their on-field production.
That’s why it has made a large case out of obtaining increases in both the minimum salary and in pre-arbitration scales. It’s also why it has sought to reduce the number of years required to qualify for arbitration, and why it has lobbied to set up a bonus system for high-performing young players.
The flaw in the union’s position is the logical inconsistency of demanding changes in the name of competitive balance at the lower end of the salary scale while simultaneously demanding changes at the higher end of the scale.
If your issue truly is competitive balance, then it only stands to reason that you should support restraints on higher-end spending as a means of limiting the team-by-team financial inequities that exist today.
The MLBPA very aggressively and openly, and for very obvious reasons, has no use for competitive balance limits at the high end. It sees them as an unnatural restraint on spending that would work to the detriment of the game’s stars…which it would.
This is not to defend the owners’ stance, which for most of these discussions has proposed small or no increases on the Competitive Balance Tax. Atop the existing threshold, the notion of a $220 million threshold to impose a luxury tax — with no increases over the life of the agreement — was, in a word, chintzy, and the union rightly saw it that way.
Bu the Union’s alternative was to argue for a sharply higher Competitive Balance Tax with elimination or steep reductions in penalties. Adopting the Union’s position would afford a select handful of teams the option to accelerate the rate at which they are out-spending the majority of teams with few or no financial impediments to doing so.
It is an open question the extent to which extreme spending on players actually influences performance on the field. In 2021, the correlation between a team’s payroll and its record was 40 percent. But on a season-to-season basis, that correlation has varied wildly in recent years, from an inconsequential 3 percent in 2018 all the way to a stifling 62 percent in 2016 and 2017.
So the correlation data will allow either side to make whatever it wants of the relevance of spending limits to competitive balance.
Next. 3 possible landing spots for Eric Hosmer. dark
The problem with the Union’s argument is that it has a two-faced Janus element to it. It seeks at the same time to accelerate low-end salaries in the name of improving competitive balance while simultaneously opposing high-end restraints that are designed to do the same thing.