The MLB Lockout – – Looking At A Bleak Future

The MLB lockout continues into its third week of existence.  Since there is not yet a serious threat to the detriment of the normal baseball calendar, lots of people are simply focusing attention elsewhere; if this mess is not settled – or if at the least there are not reports of negotiating progress to reach a settlement – by February 1^st, lots of fans will start to try to catch up on how this mess came to be and to choose sides.  I already know that there is enough to dislike about both the owners’ side and the players’ side of this stand-off that my preference would be for both sides to lose.  The problem with my wishful thinking is that the only way for both sides to lose is for me to lose too; they would have to cancel the 2022 season.

I read a report right after the lockout was announced on December 2^nd that said the two sides met for 7 minutes and then adjourned to do whatever each side is wont to do when there is no CBA and there is a need for a new CBA – – but they are not negotiating.  That report cemented in my mind that I want both sides to lose and suffer at the end of these negotiations even though I am pretty sure that will not happen.

Dwight Perry had this observation in the Seattle Times back when the lockout was fresh:

“Baseball owners locked out the players when their CBA expired Dec. 2.

“Things got so heated, one union rep was credited with an exit velocity of 120.8 mph leaving the last bargaining session.”

So, after 25 years without any lockouts or strikes, how did things get to this stage?  I will not pretend to know the inner workings of either side in this matter, but I do think that a work stoppage of some kind – – lockout or strike – – was foretold by the “COVID negotiations” back in 2020.  Back then, here is a sequence of events that did not put an aura of “good will” over and around the interactions of the owners and the union:

• In March 2020 when things were initially locked down and events like March Madness had to be canceled, the owners and players agreed that players’ salaries for 2020 would be pro-rated to the number of games played.  That agreement seemed to me to be clear and obvious and never hinted to me that it could be hugely problematic.
• By the time it became clear that most jurisdictions were not going to allow fans to attend MLB games for much if not all the whole of the 2020 season, the owners sought to renege on that agreement and wanted the players to take less than a pro-rata share of their salaries.  Unsurprisingly, that did not go down well with the players and the union.

[For the record, the 2020 regular season was 60 games meaning players were paid 37.04% of what their contract called for.]

• As soon as the owners used that gambit, the union began to push for as long a season as possible for the obvious reason that would put more money in the pockets of its members.  The owners – looking at next to zero ticket revenue – obviously objected to that and tried to minimize the number of games to be played.
• The two sides could not even come to a compromise on the issue of the length of the 2020 season and the only way it was fixed at 60 games is that Rob Manfred as Commish issued a fiat that it would be 60 games – – period, exclamation point.

In retrospect, I should have realized at that moment that there was no way on the planet that the two sides were going to agree on a new CBA without some sort of aggressive labor action by one side or the other.  However, I naively thought [hoped?] that as functioning adults who are partners in a business with annual revenues of $10B, the two sides would see their way clear to getting a deal done.  Forget that…  there is obviously no deal in place, and I am beginning to wonder about that assumption of the existence of “functioning adults”.

As time passes and there is reporting on the negotiations and on the lack of progress in those negotiations, you will certainly read reports about the owners’ finances.  Because MLB teams are not owned by publicly traded corporations, the degree of transparency into teams’ finances is severely limited.  In the NFL, fans can get a tiny peek through the curtains because the Packers are publicly owned and must report a lot of specifics because of that public ownership.  That does not obtain for MLB.

And that lack of transparency will become a major stumbling block in the negotiations with the union claiming huge profits for owners based on whatever and however they do the math while the owners will “cry poor” and use their own math to demonstrate their plight.  When things get into that phase of reporting on negotiations, please keep this in mind:

• Using perfectly legal accounting practices, it is possible for accountants to make profits appear as losses and vice-versa.  Items such as “amortization” and “depreciation” and “recapture” can turn simple cash-flow calculations into a labyrinth of numbers.  Pay no attention to the man behind the curtain.

I bring that up because when all of this becomes front and center in the reporting, what you must remember to do is not to believe either side when they represent profits and losses.

• The owners are highly motivated to minimize their gains and they have the cover to make things look the way they want them to look.  Do not be surprised or offended when they take advantage of the situation here.
• The union cannot be trusted in this realm either because they too have a vested interest in the bottom line AND remember they do not have all the numbers because the owners have not shared them.  The union cannot complain about lack of transparency and simultaneously claim to know enough details to present credible figures.
• BOTH sides are prevaricating here and the only way either side presents an accurate picture is either by accident or by dumb luck!

I have suggested this before and I continue to believe that this is a path to stability for MLB and the MLBPA even though I know it will never happen.

• Baseball needs a salary cap and a salary floor.  That means owners will need to do revenue sharing similar to the way the NFL does it and it means that the NFLPA will have to tell the myriad player agents to go suck eggs.  I shan’t hold my breath waiting for either of those two things to happen.
• A cap-and-floor salary structure will improve competitiveness and will discourage tanking .   It will also create new forms of baseball contracts that are adaptable to the new cap-and-floor structure.
• This regimen works in football, basketball and hockey; I think it will work in baseball too – – but neither side will even pretend to consider it.

Finally, I’ll close today with an observation by George Orwell:

“Serious sport has nothing to do with fair play.  It is bound up with hatred, jealousy, boastfulness, disregard of all rules and sadistic pleasure in witnessing violence; in other words, it is war minus the shooting.”

But don’t get me wrong, I love sports………