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Volume 22 No. 7

Labor and Agents

MLBPA head Tony Clark (left) and MLB Commissioner Rob Manfred both received contract extensions this fall that will keep them in their respective roles beyond the expiration of the current CBA in December of 2021.
Photo: Getty Images (2)

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.

 

MLB added a clock between innings in 2015, and could impose one for pitches as soon as next season.
Photo: Getty Images

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.

 

Outfielder Bryce Harper could be headed for the richest contract in baseball history this offseason, but that doesn’t mean he’s pointing the way forward for all of his fellow free agents.
Photo: Getty Images

“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.

Pitch clock
MLB’s average game time did improve by nearly five minutes to just over three hours in 2018. But a 20-second pitch clock is being seen by many within management as a tool to further improve the game’s pace of action and make it more appealing to younger consumers. The pitch clock is already in use at the Class AA and AAA levels in the affiliated minor leagues. The union, however, has expressed concerns about pitcher comfort and the unknown ramifications from large-scale rule changes such as this. The league holds the right to impose a pitch clock unilaterally, but MLB Commissioner Rob Manfred still prefers a negotiated solution.

Player marketing
Baseball is blessed with a historic level of prominent young talent, including Boston Red Sox outfielder Mookie Betts, New York Yankees outfielder Aaron Judge and Los Angeles Angels outfielder Mike Trout, among many others. But the star power of baseball’s top figures consistently lags well behind those in many other sports. Joint efforts such as the MLB Little League Classic have been helpful in trying to turn that tide. Much more, however, is still needed. And Manfred last summer caused a bit of an industry stir when he said Trout had made “certain decisions” that have inhibited his marketability, and that improving player prominence will require a more active role from those players.

Roster sizes
No other major sport operates in this regard like baseball, which uses a 25-man active roster for five months of the regular season and then balloons up to 40 for the last month with minor league call-ups. At issue is how to create a more consistent situation throughout the season while also giving teams sufficient roster flexibility and ample ability for players to begin earning service time. The roster size issue was discussed extensively during the last major round of collective bargaining in 2016, and there was nearly a deal then for teams to play with 26 players during April-August and 28 in September. But an agreed-upon solution has remained elusive. Potential changes to disabled list rules are also linked to this topic.

On-field action
Baseball has quickly veered to a game dominated by the three true outcomes: home runs, strikeouts and walks. And the 2018 season was the first in MLB history with more strikeouts than hits. Manfred has consistently expressed a desire to have more balls in play, and MLBPA Executive Director Tony Clark similarly has allowed that “those coming to the ballpark … aren’t 100 percent certain that what they’re seeing is the game they want to see.” Discussion here will center on other potential rules modifications to promote a more action-filled style of play that is one step toward addressing the sport’s attendance drop of 4.1% from 2017 to 2018 .

Both MLB Commissioner Rob Manfred and MLBPA chief Tony Clark are familiar faces from the most recent CBA negotiation which ensured that baseball’s run of labor peace that began in 1995 would continue. But each side has other people who will play important roles in the ongoing dialogue as labor talks heat up.

MLB

Halem
Photo: AP Images

Dan Halem: Deputy commissioner
With MLB since 2007, Halem was promoted last year to his current role, and he oversees all of the league’s labor relations and legal affairs. Halem was a key architect of labor deals in 2011 and 2016.

Dick Monfort: Colorado Rockies owner, chairman and chief executive
The longtime cattle executive doesn’t have anywhere near the public profile of other well-known MLB team owners such as the White Sox’s Jerry Reinsdorf. But after 21 years with the Rockies, Monfort has quietly become one of the league’s longest-tenured owners. Monfort last year took over leadership of MLB’s labor policy committee, succeeding San Diego Padres Executive Chairman Ron Fowler.

MLBPA

Meyer

Bruce Meyer: Senior director of collective bargaining and legal
The MLBPA last summer hired Meyer, a former senior leader with the NHL Players’ Association and before that an outside counsel to several players unions, to lead its bargaining efforts in a newly created role. Meyer’s arrival in part addresses a desire by the union to tackle the ever-increasing complexity of its relationship with MLB.

Rick Shapiro: Senior adviser
The longtime sports lawyer isn’t a public figure. But after first serving as an outside consultant to the union (he had performed the same role with the National Hockey League Players’ Association) and then coming in-house at MLBPA in 2009, Shapiro has now been a key adviser to three different MLBPA executive directors, from Donald Fehr to Michael Weiner to Tony Clark. Shapiro over the years has also served on various joint MLBPA-MLB committees, including one regarding international talent acquisition.

As a veteran NFL agent, Mike McCartney knew he shouldn’t sign a 5-foot-8, 185-pound running back. But in the end, he couldn’t help himself.

 

McCartney, director of football at Priority Sports & Entertainment, agreed to represent Colorado’s Phillip Lindsay earlier this year, but he couldn’t get him an invite to the NFL Combine. He did get him into the East-West Shrine Game, though, where Lindsay led all running backs with 51 yards.

 

McCartney pleaded Lindsay’s case to player personnel executives throughout the NFL. “All I ever heard was, ‘Oh, Mike, he’s a really good football player, but he’s too small. He’s too small,’” he said.

 

By the end of the NFL draft in April, not one team had called Lindsay’s name.

 

Now Lindsay is the biggest underdog story in the league, if not all sports. Through 12 games, the Denver Broncos’ undrafted free agent was fourth in the NFL in rushing and had over 1,100 yards from scrimmage and nine touchdowns.

 

He’s broken numerous records and is the first undrafted free agent in league history with 100-plus scrimmage yards in each of his first two games. He’s also the first rookie to average at least seven yards a carry in three consecutive games since Jerome Bettis in 1993.

 

Lindsay is a hometown hero for Broncos fans, having attended Denver South High School prior to going to Colorado. Brian Mattoni, Priority’s director of athlete marketing, is in conversations for local and national endorsement deals for Lindsay, who is signed to Nike for shoes and apparel, but Mattoni said he’s turned down deals because Lindsay wants to focus on football.

 

Broncos rookie sensation Phillip Lindsay (left) and his agent, Mike McCartney of Priority Sports & Entertainment
Photo: Courtesy of Mike McCartney

“This is his first year and I think going out there and doing a bunch of deals — whether they are local or national — just doesn’t necessarily set the right example,” Mattoni said.

 

Sponsors love the long-shot angle of Lindsay’s story, Mattoni said, as well as his wild hair, personality and the story of a local kid making it to the NFL in his hometown.

 

McCartney had his eye on Lindsay since he was at Colorado. The agent’s father, Bill, is the school’s winningest football coach, leading the Buffaloes from 1982 to 1994. The younger McCartney became a fan of Lindsay’s during his sophomore year but kept telling himself that as an agent he couldn’t sign him because 5-8 running backs don’t make it in the NFL.

 

Finally, after watching a fearless play by Lindsay result in one of his 39 touchdowns in college, McCartney said he relented. “I said, ‘I love this kid. I am done.’”

 

When he became his agent, McCartney warned Lindsay that he might not get drafted but to be ready for an opportunity. “I kept encouraging Phillip — ‘Keep getting better, your day is coming. All we need is a shot, and when you get your shot we are going to run with it.’”

 

This has been a banner year for McCartney. In March, he negotiated a three-year, $84 million fully guaranteed contract for quarterback Kirk Cousins with the Minnesota Vikings. It was a record for guaranteed money and made Cousins the highest-paid player in the NFL. It was especially sweet for McCartney as it culminated a career plan that the two worked on together for two-and-a-half years.

 

After this year’s draft, McCartney negotiated a three-year, free-agent deal for Lindsay with the Broncos, which was pretty standard except it included a $15,000 signing bonus, which is big for an undrafted running back.

 

The financial magnitude of representing Cousins versus Lindsay is, obviously, vastly different. But representing the running back has given McCartney something more.

 

“I have a lot of pride in representing Phillip just because I feel like I saw he had something different inside of him,” McCartney said. “I have a lot of joy watching him doing, really, what he did in college [and] now at the highest level and helping his team win.”


Liz Mullen can be reached at lmullen@sportsbusinessjournal.com. Follow her on Twitter @SBJLizMullen.