For MLB, winter is coming
It was a rather busy late November day for MLB Commissioner Rob Manfred, even by the normally frantic standards of his office.
Manfred was still trying to extinguish the public firestorm created by the league’s now-returned campaign donation to controversial U.S. Sen. Cindy Hyde-Smith (R-Miss.). He had just finished announcing a landmark $80 million partnership with gambling operator MGM Resorts International, one that fully moves baseball into the emerging realm of legalized sports gambling. And he had just been a featured honoree at the March of Dimes’ annual sports luncheon in New York.
But looming behind all of that, like always, was the league’s oft-changing and all-important relationship with the MLB Players Association. On this particular day, Manfred was still waiting to hear back from the union on a series of pressing issues, including measures to improve baseball’s pace of play in 2019, as the players held an executive board meeting in Irving, Texas. And in a matter of hours, MLBPA members would give Executive Director Tony Clark a four-year contract extension, just two weeks after Manfred received his own five-year extension from team owners.
“My understanding is that the players have a lot of ideas in mind. We also have interests we’d like to pursue,” Manfred said. “And we are looking forward to sitting down in the very near future and discussing all of this.”
Clark, for his part, said, “The question becomes whether common ground can be found against the interests they have and the interests we have. So different values may be placed on different pieces of that puzzle.”
Those words, of course, are extremely measured, the clear signal that the two executives are not looking to negotiate in public. But after last year’s deeply fractious offseason opened wounds in baseball’s labor landscape not seen in at least 15 years, every element of what Manfred and Clark and their respective camps say and do over the next several months will be rigorously scrutinized.
The 2017-18 MLB offseason certainly had more than its share of drama: The MLBPA filed a formal grievance against four clubs — Miami, Oakland, Pittsburgh and Tampa Bay — claiming improper use of revenue-sharing funds, with that grievance still ongoing; a slower free-agent market prompted Clark to claim “a significant number of teams are engaged in a race to the bottom,” in turn amplifying industry talk around teams allegedly tanking; and Brodie Van Wagenen, then a player agent at CAA and now the New York Mets’ general manager, said the owners’ activity “felt coordinated,” suggesting possible management collusion. The union even went so far as to briefly operate a spring training camp of its own for unsigned players.
First Look podcast, with MLB discussion at the 11:45 mark:
It is against this troubled backdrop that the league and the union are now trying to not only agree on improvements for the 2019 season, but create more systemic and lasting change in the sport. And after a 2018 season that saw MLB attendance fall to its lowest level since 2003 and with all of baseball still searching for deeper relevance among younger consumers, Manfred acknowledges the critical stakes at hand.
“We operate in a really competitive entertainment market, and it’s incumbent upon us to make every effort to make our product as good as we can,” he said.
Changing Labor Market
The current labor pact, signed two years ago, runs through the 2021 season, continuing a historic run of labor peace that has existed since 1995. And the two sides have been in regular contact during the current agreement on key issues such as revenue sharing, the joint drug agreement, and more recently, collective efforts such as the World Baseball Classic and their shared charitable foundation to grow youth baseball and softball.
Those generally would be more operational matters, and broader policy changes would often wait until the next round of formal bargaining. But the accelerating pace of change in baseball, both on and off the field, in many ways has created the need for the two sides to revisit their basic agreements more frequently and treat them much more as living, breathing documents.
As a result, the last several offseasons have produced numerous policy modifications and on-field rule shifts, such as an early 2017 deal that created the no-pitch intentional walk and time limits for managers to invoke challenges, and another the year before to trim in-game commercial breaks.
That series of mid-agreement deals between the owners and players, however, hit a speed bump last winter. Another set of pace-of-play modifications — this time producing new limits on mound visits per team per game — was developed with the input but notably not the formal consent of the MLBPA. Instead, it was termed an “understanding” in which the union merely agreed to not oppose the latest changes.
Some even bigger pace-of-play changes management wants to see, including a pitch clock, remain on the table, as does player marketing (see sidebar, below), and they will be among the key subjects of this winter’s planned talks. Manfred now holds the unilateral ability to impose a new playing rule with one-year notice. And that notice on some matters such as the pitch clock has been provided.
But the commissioner, who often refers to himself as a “deal guy,” has consistently said he still much prefers to reach an agreement with the MLBPA. And since midseason, Manfred and Clark have been in regular, informal contact in preparation for this offseason’s talks.
“We would like to reach a negotiated agreement,” Manfred said. “That’s always been my clear preference and still is.”
Executive Extensions, Executive Changes
The start to this baseball offseason was marked by management and labor each committing long term to their respective leaders. Manfred, who was first elected in 2014 following a bruising two-day process, this time easily sailed to a unanimous extension through 2024 with no rancor or controversy.
St. Louis Cardinals owner Bill DeWitt Jr., who previously led the search for a successor to former MLB Commissioner Bud Selig, said the clubs “are excited to have [Manfred] continue his excellent work in this new five-year term.” Texas Rangers Chief Operating Officer and co-owner Neil Leibman similarly pointed to “a uniformity of thought” among team owners regarding Manfred.
Some of the same dynamic could be described for Clark. The labor deal signed in 2016 focused heavily on non-economic and quality-of-life concerns for the players, prompting lots of industry chatter that the union was soundly defeated on fiscal matters. That in turn generated some whispers that Clark, the first former player to lead the MLBPA, could find his job in jeopardy.
Instead, the players unanimously extended Clark through 2022, and Clark himself referenced a marked spike in overall player engagement following last offseason’s issues. Both leaders, as a result, are now fully in place for the next round of labor talks.
Below that, though, there have been some key leadership changes. Most notably, the union last summer hired veteran litigator and labor attorney Bruce Meyer to a newly created role of senior director for collective bargaining and legal. Meyer, who previously worked at the NHL Players’ Association with former MLBPA executive director Don Fehr and before that was outside counsel for many players’ unions, will now lead the baseball players’ bargaining efforts.
Manfred, however, said he hasn’t met him yet, and thus a relationship has yet to be formed. In the meantime, Clark has said the union plans to further bulk up its staffing in other areas such as analytics.
On MLB’s side, the executive front has been more stable, with longtime labor executive Dan Halem promoted last year to deputy commissioner for baseball administration. But there have been some shifts within key ownership committees. Among them, owners last year elected San Diego Padres Executive Chairman Ron Fowler, who led the league’s labor policy committee during the 2016 CBA negotiations, to MLB’s executive council.
Fowler still sits on the labor committee, but that group is now led by Colorado Rockies owner Dick Monfort, who quietly has become one of the league’s longest-tenured and more respected owners.
A Hotter Hot Stove?
Much of last winter’s iciness in the labor relationship stemmed from a perceived slowness in the free-agent market, even as there were still four player deals in excess of $100 million, up from just one the prior winter. But this offseason’s market promises to be rather different, especially at the top end. Superstars Bryce Harper and Manny Machado, both 26 years old, are available in the primes of their careers and are expected to sign contracts worth well into nine figures.
To that end, Clark said he was “optimistic by nature” in this offseason’s early going. But he also warned he is again “seeing conduct eerily similar to what we saw last offseason,” and pointed to teams such as the Mariners recently dumping much of their veteran talent through a series of trades.
Despite that, there have been some early signs of a robust free-agent market. The Atlanta Braves recently signed third baseman Josh Donaldson to a one-year, $23 million contract, the richest one-year deal ever in free agency for a position player. Similarly, pitcher Patrick Corbin was said to be finalizing a six-year, $140 million contract with Washington. Other bold-faced names available include pitchers Dallas Keuchel and Craig Kimbrel and second baseman Daniel Murphy. This week’s Winter Meetings in Las Vegas are expected to bring more news of signing activity.
But the industry remains on a marked collision of teams increasingly seeing the folly of signing older players to lucrative deals, while players still don’t earn free-agency rights until they accrue six years of service time.
“I think the trend we saw last year of the older guys not getting paid will continue,” a player agent said, speaking on the condition of anonymity. “I think the game is trending younger, and I think over time that is going to continue to get worse. I think teams have realized that these contracts that are paying guys into their late 30s aren’t smart.”
Another baseball player agent similarly said, “If you are an agent and you expect your 30-year-old free agent to get a 10-year deal, you are smoking the wrong stuff.”
Regardless of any possible rebound in the market, there remains a marked effort by teams to stay under the luxury tax, which is $206 million for the 2019 season, despite still-growing revenue throughout baseball. Only Boston and Washington went over the 2018 level of $197 million. And the New York Yankees and Los Angeles Dodgers, traditionally two of the game’s top spenders, this past season were able to stay under the luxury tax threshold and in turn reset their tax rates notably lower.
Hal Steinbrenner, the Yankees’ managing general partner, said at last month’s owners meetings in Atlanta that even after going under the tax threshold, the team’s operating mentality hasn’t changed.
“My psyche is kind of the same every year, which is we need a team that’s going to win a championship,” Steinbrenner said. “We’re going to get to that threshold, and if we’re not where we need to be, we’re going to keep making moves.”
If other teams bring a similar no-quit mindset to the negotiating table, it could go a long way toward ensuring that the sport’s run of labor peace may not strike out after all.
Staff writer Liz Mullen contributed to this report.