As some of you may have heard today, Kris Bryant lost his grievance with the Cubs. You can read more about what led up to the grievance in my service time article here. Effectively, Bryant was arguing that based on the events surrounding his call-up, he should be allowed to reach free agency after the 2020 season with 5.171 years of service time (instead of the 5.172 needed). He lost. Now Bryant will have to wait until after the 2021 season to be granted free agency, at which point, he will be just shy of his 30th birthday. So, why do we care about Kris Bryant not becoming a free agent early? His case is emblematic of the anger within the ranks of MLB players that continues to build as we barrel towards the expiration of the current Collective Bargaining Agreement (CBA) after the 2021 season. I’d like to take the time to have a discussion on the background of why the players are so angry, including the impact of the Kris Bryant decision, the state of labor negotiations moving forward, and some proposals I have for what could help ease tensions.
Player Grievances and Growing Anger
The current CBA took effect in 2017. The CBA is effectively the operating agreement between Major League Baseball and the MLB Player’s Association (MLBPA), and it governs what rights the players have with respect to their employers, as well as what rights the teams have with respect to their employees. As you may know, one of the foundations of the CBA is the framework for team control; a team controls a player until they have six years of service time (actually 5.172 years), after which they can enter free agency. For the first three years, a player is paid the MLB equivalent of dirt. The league minimum, which rises each year, was $535,000 in 2017 and will be $563,500 in 2020. When we compare that against Nick Castellanos, who just signed for $16M a year with the Cincinnati Reds, this truly is minuscule pay. After that, the players enter the arbitration system, which is based on antiquated ideas of player success. This broken system often leads to teams trashing a player’s name and reputation, destroying their relationship with the player in the process (see Trevor Bauer, Dellin Betances, and Marcus Stroman, among others). This all has the effect of suppressing player salaries during a player’s first six to seven seasons, which, to no surprise for a mid 20-year-old athlete, are often among their most productive. This structure exists in order to give small-market teams like the Kansas City Royals and the Pittsburgh Pirates of the world a chance. Neither is able (read: willing, because all of these teams are owned by billionaires who can likely afford it but choose not to) to pay $35M a year for Gerrit Cole once he reaches free agency, so they need some protection in their ability to retain their homegrown players whom they have spent years cultivating in the minors.
A key aspect of this system is known as service time manipulation, and is the crux of the Kris Bryant case. The Chicago Cubs deliberately and intentionally manipulated the service time rules in order to control Kris Bryant’s fate for an entire additional year. They did so with the explicit intention of ensuring he would be a Cub for at least seven years. Some will point out that, in exchange for his additional season in Chicago, Kris Bryant gets a fourth year of arbitration. However, arbitration does not fairly compensate a player, not even in their 4th trip through. Mookie Betts is getting $27M in what would’ve been his third trip through the arbitration system, but even that is not enough for a player who will likely be making more than $30M next season. There’s really no denying that if Betts were able to negotiate with every team, he’d be able to play teams against each other to inflate his price. It’s the effect that competition has on the market. Bryant will get $18.6M in his age 28 season with one more arbitration year ahead of him; another year that he will be unable to achieve his true market value. It’s easy to picture why the players would be upset. Kris Bryant is emblematic of a bigger problem. His issues are shared by Vlad Guerrero Jr, as well as many others, possibly including Los Angeles Angels outfielder Jo Adell this season. It’s not just the manipulation of turning six years into seven, but it’s also manipulation of the Super Two rules to keep players from getting that extra year of arbitration. As these players near 30 years old, when their career starts to turn down, they want to look back on their prime and think they’ve been compensated fairly while looking ahead at the next 5-10 years and know they’ll be compensated fairly for those years as well.
The entire system is built upon an unspoken promise. The promise that when the player reaches free agency, he’ll be rewarded for his years of being underpaid with a large contract in free agency. If the players don’t get that, they’ve worked for six to seven years being underpaid for essentially nothing. Unfortunately, that is exactly what has happened for many recent free agents. The current CBA happened to coincide with one of the most drastic shifts in approach we’ve seen from MLB teams in most of our lifetimes. Gone are the days when teams will spend tens of millions on a 30 year old who produced well in their 20s unless they can prove they’ll return value on that contract. Prior to the 2020 off-season, we’ve seen back-to-back off-seasons slower than the eruption of a molasses volcano, as the players realized they had been swindled. Sure, major free agent contracts were signed; Eric Hosmer got eight years and $144M (which, looking back, was a horrible deal for the Padres); Bryce Harper got 13 years and $330M; Manny Machado got 10 years and $300M. However, these deals did not occur until February, months into free agency. While these top free agents sat and waited, the ones beneath them had to wait for the dominoes to fall before they got a phone call. Hell, Craig Kimbrel had to wait until after the June draft to get a contract (and maybe the Cubs regret it). The teams present a logical approach: why pay Scooter Gennett $15M a year when they can probably get similar production from a minor leaguer for a fraction of the cost? And when you look at it exclusively through that lens, why should they? The answer is that MLB teams shouldn’t be able to have their cake and eat it too. You can’t underpay players from the get-go and then refuse to pay them when they’ve earned the right to market rates for their pay. All that does is disadvantage your employees, and the employees have noticed.
Labor Talks Leading to 2021
The last time we had a major work stoppage in Major League baseball was 1994. In January of 1994, the league proposed a salary cap in order to protect small-market clubs, which the players vehemently opposed. Their salary cap proposal would’ve eliminated arbitration and granted players free agency after four years instead of six, but would’ve effectively replaced free agency with Restricted Free Agency like we see in basketball and hockey where the player’s prior team has the chance to match the highest offer the player receives on the market. Players refused to implement a salary cap and decided to strike, which resulted in the loss of 332 days, the second half of the 1994 season, and the 1994 World Series. Montreal Expos fans will probably never get over it, thinking that was among their best chances at a World Series. The fact that ownership could no longer afford their stars, resulting in the sale of Marquis Grissom, Larry Walker, and John Wetteland in the span of a week probably contributed to the end of the franchise as a whole as well. The strike didn’t end until now Supreme Court Justice Sonia Sotomayor issued an injunction against the owners citing unfair labor practices, binding both parties to the old CBA until they were able to agree to a new one. It took fans a long time to forgive both players and owners alike, and one can argue the league wasn’t forgiven until the home run race of 1998 re-sparked interest in baseball. Overall, we can all agree that this was a disastrous incident.
As recently as November 2019, Tony Clark, the Executive Director of the MLBPA spoke out, reminding owners how unhappy the players are. Atlanta Braves GM Alex Anthopolous sparked this particular outburst wen he mentioned that he had spoken to 27 clubs to “get a sense what they are going to do in free agency, who might be available in trades.” While one can argue this is innocent talk where teams try to get an understanding of the market, the players who already had a fire lit under them may just see teams conspiring with one another to make sure nobody upsets what the league as a whole has been doing the past few years.
What do the players propose to fix things? One suggestion from MLBPA Executive Director Tony Clark was to end the annual MLB draft because it inherently limits opportunities for entry into the game. You might initially balk at that statement – the MLB draft has 40 rounds with 30 picks each, as well as compensation rounds at the beginning. How could that limit opportunities? Well, as the importance of low-cost prospects has grown, so has the need to be picking near the top of the draft, which leads to tanking. You can argue that eight of the 15 AL teams were tanking in 2019, which is far too many. I don’t intend to get into the teeth of MLB team spending as a percentage of revenue to evidence tanking, as I think it’s beyond the scope of this article, but it is definitely an issue. Back to the point, I’m not sure that abolishing the draft is the best way to address tanking. There are many alternatives to banning the draft, which I’ll discuss further below.
Clark also stated that “we are interested in restoring meaningful free agency.” There’s not much context, so I’m not entirely sure what Clark means by “restore”, but I suppose he’s referring to days in the earlier 2000s and before where free agents were fought over, much the way they are in other leagues. I’m not necessarily sure that’s right either because teams do have a legitimate reason not to pay these 30+ year-olds.
Now this is not all on the owners. The MLBPA deserves criticism for letting things get to this point. In 2013, Clark took charge of the MLBPA, and it’s easy to see why players liked him. He’s described as a charming guy, and he’s a former player who understands the working conditions players operated in. If we flash back to 2013, things had been very good for players for a long time, seeing as money was coming in and everyone was getting along. So when it came time for labor negotiations in advance of what is now the 2017 CBA, the players didn’t really want for much. He fought largely for bigger team buses and team chefs, and he got them. Part of the problem is that the players were fighting for themselves; most of the players who have pull within the PA are veterans who don’t deal with the first six to seven years under team control anymore. Without minor leaguers at the table, it is the responsibility of major leaguers to fight for the next generation while they’re at the table because failing to do so helped create this mess. The other factor is that while Clark is very likable and understands the day to day life of a player, he’s no labor negotiator. He’s no Don Fehr or Marvin Miller. Those two fought tooth and nail to make the MLBPA one of the nation’s strongest unions, regularly going to war with the league when necessary. They’re a large reason why 1994 was the fourth work stoppage in baseball in a 22-year period. Clark fought for player comfort and the owners nodded and smiled, happy to make those concessions, because they knew what they were getting. The owners knew they were going to be able to continue taking advantage of the players in all the ways listed above. Make no mistake, while the owners are at fault for perpetuating a system to take advantage of players, the MLBPA is at fault for not seeing this coming. It doesn’t matter if Clark is likable; he’s not the bulldog they need for this upcoming fight.
How to Fix This?
While the CBA doesn’t expire until after the 2021 season, and a lot of the specifics of either side’s desires is murky, what is clear is that the MLBPA is looking into major overhauls. Players will need to see drastic changes to the concept of team control and team spending. I’d like to opine on some proposals that could address players’ concerns, as well as league concerns about spending. In a cruel ironic twist, many of my views are similar to what MLB ownership proposed in 1994: 1) a Salary Cap and Floor, 2) Earlier Arbitration, and 3) Earlier Free Agency/Restricted Free Agency, 4) Greater Compensation in the Minors, and 5) Common Sense Service Time Reform. Ultimately, I don’t think the fix is is in free agency; teams shouldn’t be forced to pay these 30-year-olds tens of millions of dollars if it doesn’t make business sense, but rather the fix is on the front end- players need to be treated better prior to free agency.
To the first point, I understand why players don’t want a salary cap. The New York Yankees are projected at roughly a $250M payroll in 2020, and there’s no way the team would be able to spend THAT much on players under a salary cap, but when done in conjunction with a salary floor, it ensures a balance in spending around the league. While the Yankees wouldn’t be able to spend $250M, the Pirates wouldn’t be able to spend under $50M. It would take some time to adjust, but major league free agents would receive higher contracts to help teams reach these salary floors. Teams would get more control over league-wide spending while players can have some security in the form of more predictable contracts. Some might be quick to point out that in many ways, the luxury tax is a salary cap, and it actually has operated as such in recent years. In 2016, six teams paid the luxury tax. Fast forward to 2019 and only the Boston Red Sox, the Chicago Cubs, and the Yankees paid the tax. The financial penalties for exceeding it are harsh, and teams are still treating it like a hard cap in order to avoid paying. But treating it like a cap and it being one are completely different; the Yankees have blown past the $208M threshold in order to field the best team they can muster. At the end of the day, a luxury tax is probably sufficient on the high-end. The salary floor is really the more important beast here. Teams need to be pressured to spend a certain amount in order to field a competitive team. If teams want to tank, let them do so, but ensure that they can’t do it by not paying major league salaries.
To the second point, if a player received arbitration after one or two years of service time instead of three, it would ensure higher pay earlier in a player’s career. The downside is they’d have fewer statistics to base the arbitration proceedings off of, so some players could end up at a disadvantage. This shouldn’t fundamentally hamstring teams financially, but would certainly reward players with productive years early in their career. As a whole, I’m in favor of repealing the arbitration system though because it is fundamentally broken. Until it is changed to reflect market inflation and the emergence of modern statistics, it is not a reliable system to determine salaries.
To the third point, restricted free agency is a beautiful mix of team control to benefit the players and market rate salaries. After a predetermined number of seasons (my push would be three years), the player becomes a free agent to sign with whomever they want. However, if the original team wants to retain the player after the player signs a deal with another team, they need only match the contract with the other team to retain control of the player. This ensures that players are able to take advantage of their play early in their career to earn as much as possible while letting teams maintain control for a significant period of time as long as they’re willing to compensate their best players – and why shouldn’t they? As an alternative, you could allow players to enter free agency after four years of service time, but I’m not sure if that’s entirely fair for a team who spent likely four plus years developing this player.
To the fourth point, minor leaguers are paid dirt. I don’t want to get into the statistics of this because, as I mentioned, it’s beyond the scope of this piece, but no minor league player should feel they have to take a second job in the offseason in order to put food on the table and make a decent wage. Make players happy early in their baseball career and they’ll be happier when it comes time for them to negotiate with you.
To the fifth point, while I applaud the league for setting their benchmarks for service time, it is far too easy of a system to manipulate. What the league needs is a rule allowing a player who ends a season between five and six years of service time whose facts and circumstances surrounding their service suggest he has, in spirit, met the requirements of free agency to get it. I know that was a very convoluted rule, but I believe the idea is simple. After a set period of time, reflect upon the facts and circumstances of a player’s call-up, and if the facts and circumstances suggest the team has manipulated their service time, the league will amend the player’s service time to reflect it. Yes, this will lead to a lot more debates and some uncertainty, but it would create a fairer process. If you tell a team that a player with 5.172 years of service time gets free agency but one with 5.171 does not, you can’t blame them for doing everything in their power to get that player to 5.171; that’s business. Yes, it is currently against the rules to manipulate service time, but Bryant lost his case because it is hard to definitively prove; I disagree. I suggest creating a rebuttable presumption that when a player is within a reasonable distance of the service time benchmarks, that they actually reached the benchmark unless the team can definitively establish rationale for keeping the player down. I get that it’s still hard to prove, but in my view, these issues should always lean toward the player.
Overall, the MLB system is broken and needs repair. The owners are going to have to make concessions in order to keep their players happy, whether or not it’s painful. The players are going to need tougher leadership at the helm that can not only properly identify the issues, but remain strong in the face of adversity. There could be a strike coming. As a fan, I really hope we do not have to suffer through that, but I will applaud the players for standing tough and fighting for not just themselves, but for the next generation as well.
(Photo by Kevin Abele/Icon Sportswire)