Economics Struggles in the MLB Causes Lockout


MLBPA president, Tony Clark who is negotiating on behalf of the players union to settle the collective bargaining agreement.

By Emily Chin, Managing Editor

The Major League Baseball went into lockout after failing to reach a new collective bargaining agreement (CBA). On Dec. 2, the MLB’s 2016 CBA expired, which hasn’t occurred since the 1994-1995 strike. Since it is currently the offseason, fans are hoping that the MLB can reach an agreement with the Major League Baseball Players Association (MLBPA) before the regular season begins.  

Both the MLB and MLBPA pitched their demands, but between the two, a solution wasn’t met. 

Prior to the lockout, the MLB demanded that the postseason be expanded to 14 teams instead of the current 10. They also proposed a universal pinch hitter, which was implemented for the 2020 season due to COVID, a reduction in the luxury tax ceiling from $210 million to $180 million, and a NBA/NHL inspired draft system.

But one of the main reasons the MLBPA did not reach an agreement was because of a demand regarding salary arbitration and free agency. Instead of a player being eligible for free agency after six years in the league, MLB pitched that a player would instead hit free agency at the age of 29.5 instead of it being service based. 

Salary arbitration is when a salary arbitration-eligible player, typically 3-5 years of experience in the league, and team cannot determine a salary. During the arbitration period, both the player and the team will present two different salaries; which are based on the players’ performance, to an arbitration panel, who will then determine the final salary. But instead of using the salary arbitration system, the league pitched a new system, Wins Above Replacement (WAR), which calculates the players’ total value. 

Contrary to the MLB, the MLBPA demanded different changes. This included a reduction in free agency and salary arbitration restrictions. The MLBPA also proposed a solution to end tanking, a strategy used to gain a higher draft pick in the future drafts, which they claimed caused the league to be less competitive. A concern that was voiced was the need for a higher minimum wage and better benefits for younger players. Looking at the past years, there has been an increase in revenue for the teams, but a decrease in players’ salaries; the MLBPA proposed that there be a higher minimum wage. Other demands included reduced revenue sharing, luxury taxes, draft orders and service time.

Knowingly going into the lockdown, many teams signed active free agents. In total about $1.9 billion dollars were spent in the days prior to the lockdown. With the lockdown applied, no trades or free agency contracts can be signed during this period and teams cannot have contact with players, which includes players using the teams facilities. MLB has removed images from all MLB player profiles on their websites immediately after going into lockout. 

If no agreement is reached, the lockout may go into the 2022 regular season resulting in a stoppage of play.