Posted by: Mike Cornelius | December 1, 2016

Everyone Wins With The Great Game’s New Deal

With a little more than three hours to spare Wednesday night, baseball’s players and owners reached a tentative deal on a new Collective Bargaining Agreement, assuring another five years of labor peace in the Great Game. In this decade alone the NFL, NBA and NHL have all experienced work stoppages in the form of lockouts initiated by owners, but baseball has now gone more than two decades since the strike that truncated the 1994 season, wiped out the World Series for the first time since 1904 and eventually delayed the start of play in 1995. When this new agreement is ratified the period of mostly harmonious relations between owners and the union will be assured of stretching to a quarter century.

That is in sharp contrast to the period leading up to the 1994 strike. From the first players’ strike in 1972 through the 1994 debacle, baseball fans waited through a total of eight different work stoppages. The last one was the longest of all, running for 232 days. Many fans, who blamed both sides in equal measure, were thoroughly soured on the game as a result. When play finally resumed for the shortened 144-game 1995 season, attendance across the majors dropped by 20% and television ratings plummeted as well. In the end it would take first Cal Ripken Jr’s. successful pursuit of Lou Gehrig’s consecutive game record and then the drive by sluggers Mark McGwire and Sammy Sosa to break Roger Maris’s single-season home run mark to eventually bring fans back to the ballparks. Of course the fact that the latter took place with chemical assistance, while most owners, players, media members and fans chose to look the other way in turn created yet more challenges to baseball’s popularity.

While the temptation of PEDs is and will remain a problem for almost every sport, the Great Game has grown enormously since the dark days of 1994. The lack of more strikes or lockouts has certainly helped, and it sometimes seems that both sides, unable to forget the searing memory of that mutual disaster, are loath to tempt fate with the possibility of another job action. Even as the clock wound down toward the Wednesday midnight expiration of the old CBA, the widespread assumption was that failure to strike a deal would result in a short-term extension of the existing agreement rather than a decision by owners to lockout the players. No such stopgap arrangement proved necessary, as after an all-night session on Tuesday and another marathon negotiation through most of Wednesday, the two sides emerged smiling shortly before 9:00 p.m.

Owners and players alike have learned the value of keeping the game going. Much is made of the massive revenue streams produced by the NFL, but over the life of the most recent CBA major league baseball quietly grew into a $9 billion business. In that same five-year period twenty-one of the thirty franchises played in the postseason, and the ten available spots in the World Series were filled by eight different clubs. The just concluded Series was the most watched in decades and featured the feel-good story of the Great Game’s longest championship drought finally ending.

In short there were many more reasons to agree than disagree, and the two sides have now settled on a CBA that seems to have a little something for everyone. That too is in sharp contrast to our other major sports, where recent labor standoffs have generally yielded results more favorable to the owners.

Baseball’s soft salary cap, which teams can exceed at the cost of paying a luxury tax, will rise significantly over the life of the new agreement, from the current $189 million to an eventual level of $210 million. That’s a win for the players who obviously want a bigger piece of the revenue pie. On the other hand the penalties for teams that exceed the luxury tax threshold will also increase significantly. New tax rates of as much as 90% for every salary dollar over the limit may discourage some free-spending owners, even with the rich regional television deals that clubs are now signing. At the very least all but the most deep-pocketed ownership groups will think long and hard before exceeding the cap.

Starting next offseason, the qualifying offer rules for free agents will also undergo major change. Currently teams that sign a free agent who turned down a qualifying offer forfeit a first round draft pick. That has depressed the market for numerous free agents. Now the cost of such a signing will be a lower level pick, and will depend on the value of the free agent’s new contract and whether his new team is over or under the luxury tax threshold.

It’s being widely reported that the owners offered to eliminate any free agent compensation, but only if the players agreed to an international draft. That concept was vehemently opposed by a large contingent of Latin American players. Instead the agreement calls for a new hard cap, most likely around $5 million, that teams will be able to spend on signing new international talent annually. That gives the owners some cost certainty in what has been a wide open and often chaotic market.

The longest season will become just a bit longer starting in 2018, with Opening Day moved up by half a week. That will allow for the 162 game schedule to be played over 187 days instead of the current 183, easing travel schedules and the sometimes frantic late season search for an off day to make up an earlier rainout. More series will also end with afternoon games if the visiting team is scheduled to play in another city the following day, eliminating overnight flights and middle of the night arrivals.

Finally, in an unexpected change that all fans should applaud, former commissioner Bud Selig’s silliest legacy is now history. Home field advantage in the World Series will no longer go to the representative of the league that wins the All-Star Game. Instead home field will go, as it should, to the team with the best regular season record. The Midsummer Classic can go back to being what it’s always been, a fun but meaningless exhibition.

With labor peace assured fans can now turn their attention to the Winter Meetings, which convene next week and are likely to feature significant movement in this year’s free agent market. It’s only another seventy-five days or so until pitchers and catchers report, and the first games of Spring Training will follow shortly after. After Wednesday night’s good news fans can rest assured that when that day comes the venerable call will ring out. It will once again be time to “play ball!”

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Responses

  1. Nice.


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