November 4, 2021

HARD BALL OFF SEASON

When the Braves won the World Series, baseball has less than a month left on its existing Collective Bargaining Agreement (CBA). The existing CBA expires on December 1st. There have been no reported movement between the players union and the league.

But there are still deadlines to meet.

Before December 1st, teams need to submit their qualifying offers to free agents to accept a one-year ($18.5 million contract) or hit full free agency (with a possible penalty to the new club in lost draft choice). 

Before the contract expires, teams need to finalize their 40 man rosters and submit them to the league to hold players out of the December winter meetings Rule 5 draft.

Also, teams have to submit arbitration notices to eligible players or lose them to free agency.

Some teams may also be looking to their financials to get under the luxury cap as it affects their future draft and international money pools. 

But all of those items are under the backdrop of uncertainty. No one knows what the next CBA will look like. The owners floated the idea of lowering the luxury tax (which is a default salary cap) which will be rejected by the players. The owners floated the idea of revenue sharing percentage with players, but players reject that notion because it does not include "all" income sources from affiliated enterprises such as parking, etc. The players will want to raise the minimum player salaries and stop GMs from manipulating service time so players free agency is held off an extra year. The union may want to reduce the years to get to free agency,which some owners will reject since that would adversely effect their bottom line. 

Teams are using younger players which means those stars hit free agency faster. Teams have started to "buy out" arbitration years in sweetened rookie contracts, but those rising star players may hit free agency TWICE during their career which could be problematic down the road as MLB must see that overall revenues are at a plateau.

As the NFL gets greedier by making deals with streaming services for games, it is yet to be seen if fans will actually follow those kinds of broadcasts. Likewise, MLB has hinted that it wants to get out of its own broadcasting venture (MLB.com). Many teams, including the Cubs, have found running their own team channel/network not the huge profit center that cable provided with super-stations two decades ago. 

It is probable that most teams will not make any big moves until there is a new CBA. Why commit to large payrolls or long term contracts if free agency is going to change or the unlimited payroll budgets could be significantly reduced to a hard cap?

The hard financial outlook will be the center of the tug of war. It is clear baseball is not growing revenues like it used to. MLB owners still want total control of their product (and profits) as it did in taking over the minor leagues. But there is only so much blood you can squeeze out of a turnip.