The lockout ended Monday’s 96th day. Both sides were divided on three key items: pre-arbitration bonus pool, luxury tax and minimum salary.
Openers, which took place on March 31, were among the 91 games that had been canceled. Commissioner Rob Manfred seemed to be poised to call off more.
“This is an awful, terrible situation. Everybody on the Yankees and in Major League Baseball is responsible for our current situation. Players, owners, executives, and everyone else. It’s a very bad look, especially with (what’s happening in) the world,” Yankees president Randy Levine stated Monday on the team’s YES Network. “We all look pretty awful. It’s embarrassing to be here.
The percentage differences in some items in an industry where salaries project to reach $4 billion is not insurmountable.
On the minimum salary for this season, $15 million for 2023, $25 million for 2024 and $25 million respectively for 2024, it appears that these sides are about $15 million apart. Each side is less than 1%. The minimum affects approximately half of the major league players at any one time.
The differences are more in the last two seasons when the union asks for cost-of living increases.
The new pre-arbitration pool has a gap of $50 million. It will rise to $70 millions by 2026. This item affects a small percentage of total payroll, at a mere 2%.
Then there’s the most contentious issue: luxury tax thresholds. These two sides are $18million apart this year. The difference will rise to $33million by 2026.
What is the potential impact of each $1 million additional threshold on player spending? There is no one exact formula.
There have been 18 seasons of luxury tax. Three seasons saw one team pay tax.
Non-monetary penalties were added for the 2020 pandemic-shortened season, when the tax was suspended. There were 15 instances of each exceeding the first threshold in both the 2017-21 and 2012-16 agreements. This is up from the nine and eight cases in 2007-11 and 2003-06.
The maximum luxury tax impact estimate would be five times multiplier. However, history has shown that the actual impact will be lower.
Carlos Correa and Freddie Freeman are the only stars who can drive a team to the top, with a large portion of this year’s free agent class signed.
MLB is concerned that a higher 2022 figure could lead to larger threshold numbers in the future, leading to greater payroll disparity and making retention more expensive for small and mid-market clubs.
Negotiating is about more than just the most prominent items. Your mindset is as important and as important as your current position.
The union believes it has retreated from its proposals for more liberalized agency and the restoration to salary arbitration eligibility for all players who have at least two years of service in major league baseball. The players also indicated that they would accept uniform and helmet advertising, faster pitch clock and shift limits, and expanding the playoffs. However, the union prefers 12 teams, while MLB would prefer 14.
MLB believes it has increased the money going to players through the expansion of the designated hitter to National League, the dropping of direct free agent compensation and increasing slot values to amateur draft picks. It also hopes to improve the pension plan.
The clubs claim they have addressed the concerns of players that young stars are not being paid the right salaries. However, the union believes the clubs have not done enough. The proposals to increase penalties for teams exceeding the tax threshold have been rescinded by the clubs.
Both sides are close together on a draft lottery for amateurs, which is intended to encourage competition. The top five choices were offered by management, and the top six were requested by players. There are some limitations on teams’ participation in consecutive years.
Even though they are moving towards each other, both sides will continue to be at the end of their rope unless they reach a compromise.
Levine stated, “That’s an mind-bogglingly horrid, horrid, horrible thought.” “Shame on us all if it ever gets that far.”
