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Spring fever for Major League Baseball may seem a little subdued this year, with a small number of free agent contracts signed during baseball’s offseason.
That paucity in big paydays has led to sparring between players and their potential clubs. Players allege that team owners are colluding to keep the lid on pay, but owners say players and their agents are turning their noses up at good deals. The average MLB player salary came to nearly $4.1 million in 2017.
The clock is ticking this year, with Spring Training already underway for many pitchers and catchers and opening day on March 29.
Ratcheting up the bad-will in this $36 billion dollar industry: For nearly a decade the ratio of players’ salaries to league revenue has been declining.
For the 2016 season, MLB teams posted an aggregate revenue of $9.03 billion, almost 7.5 percent more than the year before, according to Forbes’ ranking of MLB team values. Yet players’ salaries accounted for only $4.56 billion in 2016, an increase of 3.5 percent, with nine MLB teams posting a decline in player salaries for the 2016 season.
Well over 100 players remain unsigned free agents this year and could face depressed salaries or even unemployment for the season. While that number might raise some eyebrows, accusations of collusion are hard to substantiate.
Other stats: Players have to put in six years of major league service before getting to the free agent stage where they often can earn a bigger contract. But that’s a long time to wait in a league where the average career is less than six years want to make the most of their high-yield years. It’s a short span given that over-the-hill for a baseball player can hit around 30.
Clubs, meanwhile, don’t want to carry high-priced players who aren’t producing on their payrolls. Clubs also have to pay a hefty “luxury tax” if their total payroll exceeds a certain cap, a double whammy for owners.
These provisions are set under the collective bargaining agreement between players and the league, encompassing all 30 clubs.
The inclusion of a luxury tax—or “competitive balance” tax—is to ensure general competitiveness by discouraging big market, higher revenue teams from spending more to get the best players.The wait time for free-agency is in place to ensure longer club control over players’ and their salary.
The CBA is up in 2021 and the negotiations are likely to encompass both the tax and free agency.
“There is a suspicious pattern today of attractive free agents, especially pitchers, receiving no offers or possibly low-ball offers,” Michael H. Le Roy, a professor in the School of Labor and Employment Relations at the University of Illinois College of Law, told Bloomberg Law. But the pattern alone isn’t enough to warrant a collusion charge, he said. “The reality is proof of salary-rigging by teams is hard to come by,” he said.
Tony Clark, Major League Baseball Players Association executive director, came out swinging in a Feb. 6 statement addressing the free agent signage shortage stating, “This conduct is a fundamental breach of the trust between a team and its fans and threatens the very integrity of our game.”
The league hit back arguing that the off-season’s trend is due to players and agents not agreeing to generously brokered deals. “It is the responsibility of players’ agents to value their clients in a constantly changing free agent market based on factors such as positional demand, advanced analytics, and the impact of the new Basic Agreement,” the MLB said in a Feb. 6 statement.
Attorney Cari Grieb, an adjunct professor at Northwestern University’s master’s in sports administration program, agreed that a smoking gun is hard to get.
“What people don’t realize is that in order for players to have a viable claim of collusion, there needs to be some evidence of an actual agreement among owners or among owners and the league,” Grieb told Bloomberg Law.
Without proof of collusion, the players could embark on a radical measure of decertifying the Major League Baseball Players Association and suing the league under antitrust law.
“The decertification strategy therefore gives the players some leverage: they can challenge free agency, they can challenge draft restrictions and other league-wide player restraints under federal antitrust law,” Grieb said.
While decertification is considered a radical strategy, players unions have decertified in the past in an effort to invoke changes. The National Football League Players Association decertified in 2011 during negotiations with the NFL.
But the measure can backfire. In 2011, NFL teams responded to the Players Association by locking out the players from all team facilities. The players, led by New England Patriots quarterback Tom Brady, sued the NFL and a federal district court granted an injunction to stop the lockout. But the Eight Circuit vacated that decision. After several months of litigation, both sides eventually reached a new collective bargaining agreement anyway.
While the Curt Flood Act of 1998 gives baseball player unions the ability to decertify, the precedent set in Brady v. NFL is a major obstacle, William Gould, former chairman of the National Labor Relations Board and professor at Stanford Law, told Bloomberg Law.
“Brady presents a real barrier to getting an effective remedy against a lockout that is likely to come,” Gould, who was the salary arbitrator in the 1992 and 1993 MLB and MLBPA disputes, said.
“But even though it is only 2018 right now, the players can start forming a collective bargaining strategy for the near future,” Grieb said.
“I think players have perhaps not paid sufficient attention to the tax and to renegotiation of some of the previsions in the CBA, such as free agency,” Gould said.
Going forward, it will likely be a key priority for players to rethink the current free agency terms. By lessening the years of MLB service needed for that status, players could reap the salary benefits at a younger age, when they’re in prime playing years.
“We are entering a new era where agency has become less meaningful for the veteran players, and I think there is a general dissatisfaction,” Gould said. “I think we are now entering into a period of likely instability,” he said.
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