There have been eight strikes in the history of major league baseball, and a ninth might be on its way.  Whether a strike ultimately occurs will depend in large part on whether the players and ownership can close an ever-increasing gap between them on a number of critical issues. The current collective bargaining agreement governing the relationship between the players’ union and the club owners doesn’t expire until 2021, so there’s still time to mend the rapidly fraying relationship between the two sides. Unfortunately, there’s reason to be bearish on that outcome: almost immediately after the current CBA was signed, baseball insiders predicted that the negotiations for a successor agreement were set to be contentious, if not destined to lead to a strike. Since then two sides have grown further apart.

In the category of short-term player grievances, it is the slowest off-season ever in terms of free agent signings. The unsigned players are understandably unhappy while those still under contract but approaching free agency must be considering the prospect with some dread. Rumors of collusion by the owners (a not unprecedented occurrence) abound. (If it turned out that the owners were in fact colluding, this wouldn’t violate the Sherman Anti-Trust Act because baseball–alone among the major sports–is exempt from the Act due to some curious Supreme Court precedent.) There are murmurs of strikes or spring training boycotts, although these have been officially denied by the players union. With spring training beginning, a spring training camp for unsigned players is being set up, another development with historical precedence. Even if the bulk of the free agents on the market are signed (signs indicate that they will be), the ill will engendered by this off-season will almost certainly carryover into the next round of collective bargaining in 2021 unless the free agent market picks up in the next few off-seasons.

The medium and long-term issues may prove more difficult to overcome. In the medium-term, the league’s current collective bargaining agreement is proving to be more owner friendly than many players thought. For example, a hard cap on international spending didn’t yield significant benefits for players. Instead, it has contributed to the disparity between league-wide revenue and player payrolls. Expect this to be a major sticking point in 2021.

In the bucket of long-term sources of tension, one popular explanation is as interesting as it is troubling: the economic model of the game itself might be “broken.” It’s not that baseball is no longer viable from a business perspective. On the contrary, league-wide revenue is at an all-time high, but the share of revenue going to players as a percentage of payroll has been steadily declining since the early 2000s.

The free agency system itself might be part of the problem. With players under team control for six years per the CBA, a player’s most productive years might be spent under team control. For most players, their bargaining power during this period is limited to submitting their annual salary to binding arbitration after 3 years of service time. Only after 6 years under team control can a player enter free agency.

From the players’ perspective, free agency is the time to finally cash in, but this off-season is casting serious doubt on the continued viability of that assumption. Teams are more tech-savvy than ever, and the league’s front offices seem reluctant to offer long-term contracts to players based on past performance. By the time a typical player enters free agency in his early or mid-30s, his most productive years and therefore his most valuable years may have been spent under team control.

Needless to say, what each side will seek in the next CBA is a subject of much speculation, but it will more than likely center around these structural issues. In any case, whether the two sides can overcome a situation that’s well on its way to an impasse may depend in large part on whether the two sides can mend fences between now and 2021.

For more on the topic, please read the finely written articles embedded throughout this post.

–Alexander Peyton


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