Since a strike of record length cost baseball the 1994 World Series and delayed the start of the following season, the sport has endured its share of controversy, led by a steroid epidemic that ate at the integrity of the game during the early part of this century. But even through that, baseball enjoyed two things – enduring labor peace and related prosperity – that allowed it to move forward, unimpeded, even as the country’s other major sports suffered work stoppages.
That record of uninterrupted peace is at stake this week as negotiators from both Major League Baseball and the players’ union meet in Dallas in an effort to negotiate a new collective bargaining agreement before the current pact expires Thursday. If a deal isn’t reached, there is at least the possibility the owners could lock out the players, and — just as the annual winter meetings are set to begin next week at National Harbor in Prince George’s County – the business of baseball could halt.
As the two sides headed into negotiating Monday afternoon, some key issues needed to be resolved. MLB wants an international draft; the union opposes one. The players would like teams that sign free agents to no longer be required to give up a draft pick as compensation. And the current “competitive balance tax” – in which a team spending beyond a certain amount on payroll is penalized financially – remains a point of contention.
The current round of negotiating, on hold over the Thanksgiving weekend, comes as the union gathers representatives for its annual meeting. MLB’s team of negotiators arrived Sunday night, and both sides remained hopeful a deal could be reached before the old one – which covered the 2012-16 seasons – expires.
Both Commissioner Rob Manfred and union chief Tony Clark are in their first set of negotiations in their current roles, though Manfred was the lead negotiator for the owners under former commissioner Bud Selig. Neither side would comment publicly Monday, as the sides prepared to resume talks. Still, a look at some of the issues that are defining the talks:
International draft: The amateur draft, which dates back to 1965, covers only players from the U.S., Canada and Puerto Rico. Manfred has been adamant that expanding that system to include prospects throughout the world – including talent hotbeds such as the Dominican Republic – is in the best interest of the sport.
“It’s about access to talent,” Manfred said at the general managers’ meetings earlier this month, “and divvying up that access in a way that is pro-competitive balance.”
The players, however, see a draft as another way for the owners to lower player salaries. Foreign players are now able to sign for larger bonuses than their American-born counterparts, and lower prices at the point of entry would have a trickle-down effect, producing lower salaries as they moved through the minors and into the major leagues.
Draft-pick compensation: Under the current CBA, a team can offer one of its own free agents a one-year “qualifying offer,” which this year was worth $17.2 million. If the player declines, the team he signs with would have to forfeit its highest draft pick – a system which the union believes suppresses the market for some players. One person with knowledge of the talks said the league would be willing to address a revamped compensation system – perhaps one in which a team that has a free agent depart gains a pick, but the signing team doesn’t lose one. Such a compromise presumably wouldn’t come without a corresponding concession on the part of the players.
Competitive-balance tax: Under the current deal, teams were penalized by a tax of 17.5 percent of their total payroll for exceeding the league limit ($189 million from 2014-16) for the first time, a rate that rose to 50 percent for a fourth violation. The players would obviously be in favor of a higher tax threshold and lower penalty rates.
There are a slew of ancillary issues that also surround the talks, including roster size and scheduling issues. But with the winter meetings now the centerpiece of the sport’s offseason, MLB officials were preparing to answer clubs’ questions about how they should prepare for that event given the possibility a new deal might not yet be in place, and the sport could be at a standstill.
Should the current CBA expire before an agreement is reached, the sport would continue working under the old rules – unless the owners decided to lock the players out. The two sides have three days to avoid a situation in which such a decision would have to be made.