Major League Baseball’s lockout, explained – Reuters

There may not be a 2022 baseball season in America.

In early December, Major League Baseball’s collective bargaining agreement with the players’ union expired before any serious negotiations began on a new one.

Instead of extending the old deal until a new contract could be ratified, MLB – that is, the owners of all 30 major league teams – decided to institute a lockout, essentially ceasing all baseball operations until there is a new negotiation agreement.

Since then, negotiations have continued intermittently, without major breakthroughs. In mid-February, the players would normally have started spring training. With no contract at the end of February, the deadline the league had set for the season to start on time in early April, Major League Baseball commissioner Rob Manfred, announced that it was canceling the first week or so. of the 2022 season.

In the week since that announcement, the two sides appear to have drifted even further apart on key issues, raising serious questions about when or when the season will begin.

It’s the most high-profile work stoppage in American professional sports in nearly 20 years since the National Hockey League locked out players in the mid-2000s. And it’s happening at a a time when a range of industries are seeing increasingly empowered workers (and unions).

But the MLB lockout should be of particular interest to people who don’t play sports, due to baseball’s unique legal status. For more than a century, Major League Baseball has been formally exempt from federal antitrust law, making it an explicitly legal monopoly. And baseball’s labor relations have long been tied to that monopoly status — and to the federal courts.

The time Sonia Sotomayor saved baseball

Major League Baseball won its antitrust exemption after being sued by a start-up league in the 1910s. The judge handling the case tried to sit out for a year because he feared it would hurt baseball he had to decide. (That judge, Kenesaw Mountain Landis, became baseball’s first commissioner a few years later.) The case eventually went to the reactionary pre-New Deal Supreme Court, which ruled that baseball was not subject to laws passed by Congress because did not engage in interstate commerce.

Over the next few decades, the court’s view of interstate commerce expanded significantly, but the baseball exemption was maintained.

The Court twice heard challenges to the antitrust exemption and twice upheld the exemption. Both times, a key part of his argument was that if Congress had wanted to pass a bill bringing baseball under antitrust law, it would have — and because it didn’t, Congress basically approved the exemption. (This argument is, frankly, a bit bizarre, since in the late 1950s, MLB pushed Congress to pass legislation codifying the antitrust exemption, and Congress did not.)

The second and last time the court heard a challenge to the antitrust exemption, in 1972, was in a labor relations case. Curt Flood, an outfielder, has sued the league over the ‘reserve clause’ – which gave a player’s current team contractual rights indefinitely, preventing him from seeking more money elsewhere or pitting veto a trade with another team. After Flood lost the suit, the players’ union changed tack and successfully got rid of the reserve clause, ushering in the era of free agency, when a player could exhaust their current contract and then force the teams to bid against each other to maximize winnings. of her again.

The rise of free will has changed the public perception of sports unions. Often union struggles in sport are seen as millionaires versus billionaires because the best players make so much money. But even though baseball has never had an official salary cap, there has never been the arms race over player salaries that Econ 101 would predict.

If you want to know why there are labor disputes in baseball right now, here’s a good answer: While major league team revenues (i.e. owners) are at record highs, the amount of money paid out to players in recent years has fallen.

In the past, major league owners engaged in explicit collusion to keep player deals low. The league eventually paid the union a settlement after losing three consecutive collusion arbitration cases in 1985, 1986, and 1987. The losses were so embarrassing that Atlanta Braves owner Ted Turner told his peers, ” We have the only legal monopoly in America, and we’re screwing it up.

Then, in early 1995, the owners tried to force the union to agree to a salary cap. When the National Labor Relations Board (NLRB) ruled against MLB in the dispute and the union lifted its ban on bargaining with teams, MLB immediately banned all teams. to sign players. The about-face prompted the NLRB to send the labor dispute to federal courts in a bid to salvage the 1995 season.

The judge who got the case, Sonia Sotomayor, was initially characterized in the press as not being a baseball fan — a description she took umbrage at (Sotomayor was and remains a Yankees fan).

She issued a very quick and elegant injunction forcing the league and the players to return to play under the old collective bargaining agreement, an act that White Sox fan president Barack Obama upon his Supreme Court nomination, would later call “saving baseball”.

What are the stakes of the negotiations and why it is important

In the years that followed, the owners quietly implemented a “soft” salary cap by forcing teams with payrolls over a certain amount to pay a fraction of that payroll as a “tax” to the league.

This “competitive equilibrium tax” is the key issue in the current negotiations: the owners want to make it even more costly for the teams to exceed the threshold, thus making a “harder” salary cap.

Even though the league and the players are still a long way from where they want the threshold to be, some owners feel the league is already giving in too much by proposing too high a threshold.

The problem, according to players (and a player-friendly baseball outlet), is that the status quo incentivizes owners to engage in anti-competitive behavior. The balance tax encourages both wealthier and poorer teams to cut costs. Meanwhile, revenue sharing subsidizes teams that make less money, either because they’re in a smaller market or simply because the team isn’t worth paying to watch.

Put them together and it is extremely easy to make money owning a baseball team without worrying about improving the product, i.e. paying for better players.

This is the explanation usually given in the sports media to explain the current divide between management and players: that professional baseball players are competitive guys by nature who got angry when they saw owners making money without try to compete (and have a handy foil in Manfred, a commissioner who often seems a little indifferent to baseball).

But that understates how impressive it is that the players are so united.

When Manfred called off opening day, league players spoke out and blamed him by name — including Mike Trout, a future Hall of Famer who is best known to say nothing of controversial (or even really interesting). Hall of Fame inductee David Ortiz reportedly called a meeting of Dominican players and urged them to hold the line.

One of the union’s chief negotiators is pitcher Max Scherzer, who shortly before the lockout signed a three-year, $130 million contract with the New York Mets. The superstars are giving up their own salaries as long as the lockout continues to fight for a deal that will help people who aren’t millionaires. It’s an impressive feat of organizing, but there are other factors at play as well.

The other key question is the future of free agency. Over the past few years, teams have learned to maximize the time before a player can become a free agent by waiting a few months into the season to bump minor stars. By doing this, teams aren’t just buying themselves an extra year of a rookie contract with a young star. They shorten the time the player will have on a more lucrative contract before their skills decline. In theory, for more physically taxing positions, a player could already be on the downhill slope of their career when they first become a free agent – ​​so they will never capture the value they generated at the top of their game. .

Given the professionalization of youth sports in recent decades, the fact that college athletes still cannot be paid to play, and the fact that even the most promising baseball players spend a few years in the minor leagues ( where non-union players are underpaid and even undernourished by their teams), a baseball player might have put decades of unpaid work into a major league career in hopes of winning a big contract so that everything is worth it.

Maybe that’s what millionaires see when they look at the billionaires on the other side of the bargaining table: the people who get years of free, cheap labor from people promised a big salary later, and now balk at the prospect of paying.

This article is adapted from Vox’s The Weeds newsletter, a weekly briefing for understanding politics and its impact, from housing to healthcare to, yes, baseball! If you are not yet a subscriber, you can register at vox.com/weedsletter.