Giveback demands in bargaining lead to work stoppages
NEW YORK — When baseball players agreed a decade ago to restraints on signing bonuses for draft picks, then-union head Michael Weiner said: “If it doesn’t work, we can always try something else.”
Getting a side to give back something it gained previously in collective bargaining can lead to difficult negotiations, which is why Major League Baseball has its first work stoppage in 26 years.
Free agency has been the central issue in baseball collective bargaining for a half-century, joined by the luxury taxes, salary arbitration and cost controls on amateur spending.
Following a rare decline in the average salary, these are some of the areas in which the Major League Baseball Players Association demands change. Major League Baseball has told the union there is no support among the owners for the union’s proposals on free agent and arbitration eligibility.
FREE AGENCY
Agreed to in collective bargaining in 1976 following the decision by arbitrator Peter Seitz, who ruled in the Andy Messersmith/ Dave McNally grievance that the reserve clause in the Uniform Player Contract meant a club could renew a player for just one season, not in perpetuity as management had long claimed.
Since the 1976 agreement, free-agent eligibility has been set at six seasons of major league service.
The players’ association, claiming teams deliberately have held back prospects to delay their eventual eligibility by a year (one season of service is 172 days, meaning an extra 15 days in the minors can keep a player under team control for an extra year), proposed that for the 2023-24 and 2024-25 offseasons it become six years of service or five years of service and age 30.5, whichever comes earlier.
For the 2025-26 offseason and later, eligibility would become six years of service or five years of service and age 29.5, whichever comes earlier.
Players lost a grievance over the timing of the Chicago Cubs’ decision to bring up Kris Bryant in April 2015.
“Fans want to come to the ballpark and see their team competing and playing well,” union head Tony Clark said. “Fans like to see a higher level of integrity in the system, such that the types of manipulations that we’ve seen don’t continue to manifest themselves.”
MLB would keep the existing provision or change eligibility to age 29.5 rather than six years, which it has been since 1976.
“We already have teams in smaller markets that struggle to compete,” baseball Commissioner Rob Manfred said. “Shortening the period of time that they control players makes it even harder for them to compete. It’s also bad for fans in those markets. The most negative reaction we have is when a player leaves via free agency. We don’t see that, making it earlier, available earlier, we don’t see that as a positive.”
Compensation for losing free agents led to a 50-day midseason strike in 1981 that caused the cancellation of 713 games. The current system requiring draft-pick
compensation for free agents who turned down qualifying offers has been in place since 2012. MLB has offered to eliminate compensation.
LUXURY TAX
First agreed to following the 232-day strike in 199495, the so-called competitive balance tax was an alternative to MLB’s proposed salary-cap system. The initial system that started in 1997 assessed a tax on 35% of the amount above $51 million for the five teams with the highest payrolls exceeding the threshold.
Rules were strengthened in the 2002 agreement, with a tax starting at 17.5% on payrolls above $117 million in 2003. Thresholds and rates have been raised, with this year’s threshold at $210 million and rates of 20% for a first time over, 30% for a second in a row and 50% for third or more.
The recently expired agreement also had surtaxes for exceeding the threshold by $20 million or more and $40 million or more. A maximum of six clubs have exceeded the threshold in a single season. Players have proposed lifting the threshold to $245 million and owners to $214 million.
SALARY ARBITRATION
Began in 1974, when players with two or more seasons of major league service were eligible. In the settlement of a two-day strike in 1985, the sides raised eligibility to three seasons starting in 1987, the first significant giveback by players during bargaining. As part of an agreement that followed a 32-day lockout in 1990, eligibility was restored to the top 17% of players by service time, with at least two years of service but fewer than three. That was raised to 22% in 2013.
AMATEUR CONTRACTS
Players agreed to signing bonus pool limits for the amateur draft starting in 2012, with financial penalties for exceeding a signing bonus pool and draft pick loss for teams exceeding by more than 5%. Since then, no team has exceeded by more than 5%. While the union has opposed management proposals for a draft of international prospects, it agreed to a hard cap on international signings starting in 2017.
Scott Boras, the most influential agent, claims capping signing bonuses for draft picks caused an erosion in the season’s integrity.
“It created an incentive for the race to the bottom,” he said, “because now we have half the major league teams at some time during the season being noncompetitive, trading off their players, making the game and the season very different than what it was intended to be, and that was having an incentive to win every game that you play.”
With greater ability to predict the costs for acquiring amateur talent, a higher percentage of teams went into rebuilding mode at the same time, which management says is a reasonable strategy and which the union calls “tanking.”
“We see major problems,” said Mets pitcher Max Scherzer, a member of the union’s eight-man executive committee. “First and foremost, we see a competition problem and how teams are behaving because of certain rules.”