Posted by: Mike Cornelius | January 27, 2022

All The Hard Work Remains

Shortly before Christmas in 1996, then-Federal Reserve Chair Alan Greenspan addressed the annual dinner of the American Enterprise Institute, the mainstream conservative Washington think tank.  While “The Challenge of Central Banking in a Democratic Society,” as Greenspan titled his remarks, might seem an unlikely source for memorable phraseology, the Fed Chair made a lasting contribution to the English language when he used the term “irrational exuberance” to describe the eager speculation, untethered to any financial metrics, that was fueling the boom in dot-com stocks.  Greenspan’s blunt criticism of investors who were pushing shares of internet companies to outlandish valuations, including enterprises that owned no discernable assets beyond a website, was especially notable because by that time he was at the midpoint of his nearly twenty years in charge of the Federal Reserve and had famously perfected the art of “Fedspeak,” the ability to talk at length about the economy without saying anything dramatic, so as to not upset the markets.  Asian stock exchanges, open when Greenspan gave his after-dinner speech in D.C., promptly fell three percent. 

More than a quarter century later, Greenspan’s elegant turn of phrase came to mind this week when perusing the sports pages and social media in the wake of back-to-back negotiating sessions between MLB and the players union on Monday and Tuesday.  After forty-three days of inactivity on the core economic issues of a new Collective Bargaining Agreement, from the owners’ imposition of a lockout at the start of December until a session at which they presented the MLBPA with an updated proposal on January 13, the most common reaction to the two sides meeting twice in a row ten days later was that the breakthrough fans have been hoping for was at hand.  Progress!  Movement!  Spring Training on schedule!  The season is saved!  Peace in our time!

Well, maybe.  Then again, maybe not.  For as details of the parties’ current positions on various key issues gradually became public, the yawning chasm between what each side is offering became apparent.  With that came a gradual realization that all the optimistic tweets, posts and calls to sports radio programs added up to a classic example of excitement fueled purely by emotion rather than hard facts.

What fans of a certain generation – shall we say, more seasoned followers of the Great Game – have found interesting throughout the work stoppage is the extent to which the hopeful outlook in such abundance this week has been present, in just slightly more restrained form, since even before the lockout began.  Countdowns to the published date for pitchers and catchers to report to Spring Training were everywhere on social media, and projections of which free agents would sign where as soon as the lockout was lifted appeared on various websites.  But the new season’s calendar remains meaningless without a Collective Bargaining Agreement, and the terms of that deal will guide the payroll budgets of many teams. 

The optimism may not be merely a collective case of whistling past the graveyard, but instead a product of baseball’s recent history, which does not include any work stoppages, either by strike or lockout.  Fans, and for that matter players, younger than age 27 weren’t alive during the 1994-95 players strike, and an even larger cohort, say anyone up to age 35 or 40, has at best a vague memory of those days.  And that lack of personal experience isn’t true just for many on the field or in the stands; it applies to those ensconced in the owners’ suites as well.  Less than one-third of MLB’s franchises have the same ownership today as in 1994, and even in some of those cases the ownership family or structure is the same, but the principals have changed.  Hal Steinbrenner was celebrating his new MBA degree in 1994, and probably not deeply concerned about the state of talks between the union led by Marvin Miller protégé Donald Fehr, and MLB owners including his father. 

But even if the current situation is a new personal experience, the economic stakes ensure that owners, no matter how new, and players, no matter how young, are intensely focused on the negotiations and clear-eyed about the personal impact.  Fans and sportswriters have a different perspective.  The Great Game has a major place in our lives, but except for a writer paid to cover a strictly baseball beat, the connection is emotional, not pecuniary.  The nature of the attachment, combined with this being an entirely new experience, may well be why so many younger fans can’t imagine a bad outcome.

But they happen.  Since the last time the Great Game visited this ground, the NHL has had three work stoppages, the NBA four (though that includes a 1996 lockout that lasted less than half a day), and the NFL one.  All have been initiated by the owners, which doesn’t mean they’ve all played out exactly as management expected.  Most significantly for MLB’s current situation, though all eight lockouts started in the offseason of the various leagues – after all, it wouldn’t make much sense for owners to shut things down while fans are coming through the turnstiles – the stoppages still cost 438 NHL games in 1994-95, 494 NBA contests in 1998-99, another 480 basketball games at the start of the 2011-12 season, and 510 hockey faceoffs in 2012-13.  Plus, most memorably, the entire 2004-05 NHL season, 1,230 games that never were.

While this could change in the time it takes to type it, at the moment the next meeting on the core economics has not been announced by either MLB or the union.  When it does take place, will the owners improve upon their last offer to set the minimum major league salary at $615,000?  That was a laughable $15,000 increase over their first proposal, and light years away from the union’s request for $775,000.  It is also less, when adjusted for inflation, than the $535,000 minimum five years ago, at the very beginning of the last CBA.  It is as if the owners wanted to remind players how their average salary declined by 9%, in absolute numbers with no inflation adjustment, over that agreement’s five-year term. 

That yawning gap between the two sides is but one of a plethora of unresolved issues.  The list includes some, like the payroll threshold for the luxury tax, which are intensely divisive.  Perhaps that is why, like a quiet ocean at low tide, the irrational exuberance that was abundant earlier this week has steadily receded, as a harder and less pleasant truth settles in. 

These things can change in a moment.  Dramatic and unexpected breakthroughs have happened before.  But it is not too early to remind fans of the Great Game that the sport is played at many different levels.  Knowing that, one of the few things that can be said with certainty that it is only 68 days until Opening Day, that glorious rite of spring when fifteen stadiums across the land will be filled with happy fans, cheering their local heroes as home teams take the field and another baseball season gets underway.  Just 68 days until the Great Game returns, at least for Minor League Baseball.

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