Good morning, folks.
It is Wednesday, March 9, 2022. The MLB lockout is still ongoing. However, there appears to be news that is somewhat more on the encouraging side than we are used to.
The two sides talked into the wee hours of the morning before breaking. The players’ side is slated to meet with the full MLBPA board this morning and then respond to MLB’s last proposal.
This piece by Evan Drellich (who has been all over the labor situation) and Ken Rosenthal at the Athletic, that went up at 2:23 a.m. Central, noted that talks ended at 1:30 a.m. Central time yesterday, and provides an overview of the state of talks, including detail on the “Steve Cohen Tax” — a tier that kicks in when a team passes $290M with an even higher surcharge level for those who go way, way beyond the Competitive Balance Tax threshold.
Per the Athletic, this is the high-level summary of MLB’s proposal on the major issues:
MLB’s proposal, sources tell The Athletic’s Evan Drellich and Ken Rosenthal:
Luxury-tax thresholds: $230 million, $232 million, $236 million, $240 million and $242 million
Prearbitration pool: $40 million, flat over time
Pool counts against CBT ($1.33 million per team)
Minimum salary: $700,000; $715,000; $730,000; $750,000; $770,000
Draft lottery at six picks. (MLB was at five previously)
There’s more, of course, but the CBT, the pre-arbitration pool, and the minimum salary have been perhaps the biggest sticking points.
On minimum salary, it appears the two sides are just about there. The players had proposed $725K, $745K, $765K, and increases for the final two years based on the Consumer Price Index.
There is still a significant gap in regards to the pre-arbitration pool, with the players having previously asked for $80M, though they reportedly have indicated they are willing to come down on that number.
I have said before that I don’t understand why the owners haven’t moved more on the pre-arb pool — even if they jump it up to $60M, that is just $2M per team, and teams will simply factor that into their budgets, so it is something that will likely just shift money from one group of players to another, rather than increase the amount the owners are paying.
The CBT, meanwhile, continues to be the bugaboo. The owners have moved on the threshold levels, though that still doesn’t come close to reflecting the increase in revenues that the sport is experiencing. The players had previously moved significantly, coming down to $238M* for the 2022 season, with the level rising to $263M in 2026.
* As a reminder, the CBT calculation includes player benefits which total around $17-18M per team, so when looking at a team’s payroll, you have to add that amount to determine whether they are at the tax level of not.
This would not be a good deal for the players. Even if the league splits the difference on the bonus pool, say, and bumps the CBT threshold up, it isn’t a good deal for the players. It is certainly not a “win” for the players, something I argued about last night on Twitter.
But this may be the least-bad deal that the players can make without canceling games and losing paychecks. What the players have to decide is how much more movement they could get from the owners by standing firm and not agreeing now, once games start getting canceled, and how many paychecks they are willing to miss to try to get to that point.