Q+A: Could Baseball Be Headed for Its First Labor Stoppage Since the Season-Ending Strike of 1994?

Major League Baseball (MLB) pitchers and catchers report to Spring Training in February 2022. That is, if negotiations for the new MLB collective bargaining agreement (CBA) go smoothly. The current collective bargaining agreement is set to expire Tuesday, December 1 at 11:59 p.m. EST. But MLB and its players union, the Major League Baseball Players Association (MLBPA), don’t see eye to eye. There is speculation as to whether there will be a work stoppage – either led by the MLB owners or the players – if an agreement is not met.   

Joel Maxcy, PhD, a professor in the LeBow College of Business, spoke with the Drexel News Blog about what the MLB and its players union disagree on and the likelihood of a lockout or strike.

Can you explain some of the current tension between the MLB and the players’ union in regard to drafting a new CBA?

The current CBA expires on December 1, 2021. Typically, when CBAs approach their expiration there is some public jockeying with both sides making a case for what needs to be changed and threatening a work stoppage – lockout, led by the owners, or strike, led by players – if the other side won’t yield in the negotiations.

In the 2000s, these disagreements have arisen just preceding CBA expiration dates and lockouts have resulted at least once for each of the other three major sport leagues (National Football League, National Basketball Association and National Hockey League). MLB on the other hand has always resolved their issues before the end of the CBAs and negotiated new ones without incident during this time frame (ex: 2002, 2006, 2011, 2016). Although once having the most contentious labor/management relations of any league, MLB has not had a work stoppage since the 1994-95 strike that canceled the 1994 playoffs and World Series.

What are some of the main issues each side would like to resolve with the latest CBA negotiations?

The players’ union is putting forth the primary complaints. Despite no salary cap, the players have seen their share of total league revenue steadily decline. According to Forbes, the average MLB player’s salary has fallen four straight years, from $4.1 million in 2017 to about $3.6 million this year. It is very unusual for average salaries to decrease in major league sports. In fact, a drop in average salary had never happened in the MLB in two successive years since the union began tracking salaries in the 1960s.

The luxury tax on high club payrolls that the union initially agreed to in the 1997 CBA, as a compromise to the owners’ demand for a salary cap, has actually proved quite effective as a de facto salary cap as typically only a team or two exceeds the threshold. The union is also not happy that small market teams are “tanking,” or willfully not competing, for the purpose of reducing their payrolls. These teams are not competing in the players labor market and that puts downward pressure on all salaries. 

There are also charges of teams manipulating players’ service time, with late call ups to the majors for young minor league stars. This tactic is used in order to extend the time to reach free agent status. The owners propose to rectify the service time issue with an age rather than experience criteria. They’ve proposed that all players be eligible free agency at 29.5 years of age, instead of after six full years of major league experience. That could be a better deal for rank and file players who enter the majors at age 24-25. But for superstar players, such as Bryce Harper, who make the majors before age 20, it is a far worse deal. The union would prefer the current system, as it is the superstars who drive the free agent market salaries. There are other less controversial issues such as extending the designated hitter (DH) rule to the National League and rule changes designed to speed up the game.

Do you think they’ll come to an agreement before the deadline for the current CBA to expire or do you anticipate seeing a work stoppage? 

The two sides are quite far apart on the fundamental issue of the split of revenue and the structure of compensation. Thus, I will not be surprised if they do not reach an agreement before the expiration date. But the agreement can expire, and negotiations can continue with no work stoppage.

The timing in this case is interesting. Typically, the side with the most grievous objections to the current CBA, or the most to gain from a major revision, initiates the work stoppage. In this case, that clearly seems to be the players union. However, it is to the union’s strategic advantage to wait and strike mid or late season, as they did in 1994, because the potential cancelation of playoffs and World Series has a much more severe effect on owners’ finances.

Lockouts by the owners are better strategy before or early in the season, which is what we’ve seen in the other leagues, because that is when the players are under the most financial stress. I expect to see a lockout this winter with the owners looking to gain the upper hand and force a CBA in their favor before the players can take advantage of a strike.

What would be the consequences of a work stoppage? 

It depends on the timing of the CBA agreement. The worst case, especially for fans is that games are cancelled. The NHL’s entire 2004-05 season was cancelled by lockout. Of course, that is also player salaries and owners’ profits that are permanently foregone, so really no winners in the short term. However, the long-term result could be very beneficial for the side that meets their demands.

Media interested in an interview with Maxcy should contact Annie Korp at 215-571-4244 or amk522@drexel.edu.

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