Here is a bold prediction that shouldn’t be all that bold:
By this time next week, baseball’s lockout will have ended.
Recent headlines do not support this, and the general mood does not reflect this. The players are angry, the owners are entrenched and a second week of spring games may soon be whacked.
So why the optimism?
Because we’re nearing the point where owners stand to lose more by endangering the start of opening day, as opposed to the very modest concessions that would immediately end this labor battle.
The truth is, the owners have already won. The players have pretty much backed off demands that would have substantially changed the system and are now just fighting for specific dollar figures.
And practically any money the owners agree to give up will be recouped by expanding the playoffs and raking in more TV dollars.
We’re no longer talking about changing the timeline for free agency, and there seems to be little momentum for major changes to arbitration eligibility either. Those are the type of core issues that have led to prolonged work stoppages in the past.
So what are the issues remaining, and how difficult are they to solve?
Owners can unilaterally set the salary of most players with less than three years of service time at a minimum of $570,500. The players want to boost that minimum to $775,000 with increases that will reach $875,000 by 2026.
In the real world, that would be a major pay bump. More than 35 percent just in the first year of the deal. But in baseball terms, it’s a drop in the bucket.
Look at it this way: The Rays use more young players than almost any other team. If the minimum salary was $800,000 last season, it would have cost the Rays roughly an extra $3.7 million. With Tampa Bay’s payroll at $70 million, that’s about a five percent increase. For most teams, it would be even less.
Considering baseball’s revenues have nearly doubled in the past decade according to Forbes’ figures, that is not a major concession.
So, yes, this can be solved. Blame the owners if it isn’t.
Another issue designed to funnel money to younger players. Even if the minimum salary is bumped up to the $800,000 range, there are still a lot of 25-year-old players who are giving teams $10 million and even $20 million worth of value.
The union has proposed a pool of money that would be divided among the top performing pre-arbitration eligible players. The owners have sort of agreed to this. The problem is the players want $115 million in that pool. The owners initially offered $15 million.
That sounds like a huge gap but it should not be difficult to solve. Even if the owners cave and offer the players exactly what they want, that’s less than $4 million per team.
Again, not a high hurdle.
There is no salary cap in baseball’s rule book, but there is a competitive balance tax that does the same sort of thing. If a team went over $210 million in salary in 2021, it had to pay a tax. The tax rate increases with the size of the payroll and also goes up if a team is a repeat offender.
A few years back, teams such as the Yankees and Dodgers would regularly blow past the luxury tax threshold. They’ve grown more disciplined in recent seasons. Since 2018, only 2-3 teams have gone over the threshold in any given year and the total taxes paid have been in the $25 million-$35 million range.
Players want to increase the threshold to $245 million per year, eventually growing to $273 million. Owners want to keep it between $212 million and $220 million.
This issue could be harder to resolve because it has such a widespread effect on holding down salaries, but the owners will have a better chance of keeping the payroll tax lower if they make concessions on the pre-arbitration pool and minimum salary.
Considering the lockout has lasted more than 80 days and a bargaining session last week ended after 15 minutes, this optimism might seem unwarranted.
But now that the regular season is in sight, the urgency should kick up a few notches. And considering the owners could see an extra $100 million in TV revenues if the players agree to expanded playoffs, the increase in salaries through higher minimums and pre-arbitration bonuses would almost be negligible.
A deal can be had.
And the time is right.