The writer takes no delight in imparting this news, but it’s not too soon to start pondering another round of labor strife in Major League Baseball. Opening Day and its blessings loom, of course, which makes the forthcoming discussion even more unpleasant. Money, though, never sleeps, and above all money never shuts up. So proceed we must.
The current collective bargaining agreement (CBA) between MLB and the MLB Players Association runs through the 2026 season, which means we’re still a ways off from a potential shutdown. Already, though, negotiable items are being prioritized, and the struggle for public opinion is underway. Nothing hammers this home quite like some recent comments from commissioner Rob Manfred, which we’ll get to in a moment. To get you up to speed on these matters, let’s make use of the imaginary interlocutor we keep in a storage closet and the time-honored FAQ format.
Onward, like it or not.
What even is the CBA?
The CBA, known in more formal terms as the basic agreement, is the negotiated accord between players and clubs (i.e., the team owners) that governs their working relationship with one another. It covers things as mundane as players’ meal allowances and travel protocols and as vital as minimum salaries, the structure of free agency, revenue-sharing specifics, and roster sizes. The CBA presently in force, for instance, spans more than 400 pages.
In recent times, each CBA has covered a period of five years. The current CBA governs the 2022-26 seasons. It expires at 11:59 p.m. ET on Dec. 1, 2026.
The first Basic Agreement covered the 1968 and 1969 seasons, and it was the first collective bargaining agreement in professional sports history. That was the handiwork of Marvin Miller, the pioneering head of the players association (i.e., the players union) and woefully belated Hall of Famer. It was Miller’s organizing skills, foresight, and training as a union economist that allowed him to make the players association a viable and effective union, and he did so in defiance of the odds and history.
During Miller’s time and beyond, each CBA negotiation has been a pitched battle between two powerful entities. While that power shifts by degrees between players and owners, it’s no longer a case of owners ruling by fiat, which is largely how things were in the pre-Miller days. As such, the skirmishes over the CBA often result in labor stoppages, in the form of either owner lockout or players strike.
What are going to be the major issues up for negotiation this time round?
In broad terms, it’s always about money. More specifically, it’s about how the sport’s revenues will be divided between players – who are not only the labor force but also the product itself – and club owners. The owner side and Manfred may be gearing up for yet another salary-cap push. This has been the white whale of MLB ownership since time immemorial it seems, and the recent spending at the top of the market by teams like the Los Angeles Dodgers and to a lesser extent the New York Mets have dragged the matter howling from the vaults.
From the league standpoint, there are two paths to circumscribe team spending at the top: one, putting limits on how high payroll can go and, two, taking away money from those big-spending teams. On the first point, yes, a cap is the most obvious means to achieve that. MLB already has a luxury tax on high payrolls (formally and misleadingly known as a competitive balance tax, or CBT), which is an effective governor in some cases, but the Dodgers of a recent vintage haven’t proved to be all that sensitive to CBT penalties. Thus, the whispers of a renewed push for a cap. Maybe “whispers” is too light a term, as Orioles owner David Rubenstein recently said this:
“I wish it would be the case that we would have a salary cap in baseball the way other sports do, and maybe eventually we will, but we don’t have that now. I suspect we’ll probably have something closer to what the NFL and the NBA have, but there’s no guarantee of that.”
Calls for a cap in baseball are typically accompanied by specious claims that it will promote competitive balance across the sport. This has not been true in the past, and indeed it’s still not true. What caps do is limit labor costs, and that appeals to owners. The competitive-balance stuff is just agitprop designed to rally fans and opinion-shapers around the idea. More to the point, the perception from the owner side is that being a part of a capped league is better for franchise values than the alternative. This obviously appeals to owners who see their teams as portfolio holdings as opposed to semi-civic trusts, and those kinds of owners are too much with us these days.
Implementing a salary cap is going to be a titan’s lift. The union has never shown any willingness to discuss a cap, and even if the MLBPA isn’t as strong and perhaps as ideologically resolute as it was under Miller and then Don Fehr, agreeing to a cap would constitute a major shift in philosophy. As well, caps typically carry with them some guaranteed share of revenues for players, and agreeing to what counts as team revenue is a complicated thing in this era of stadium-adjacent real-estate developments, equity stakes in regional sports networks, and the like. Owners will argue those aren’t baseball revenues, while players will argue those money sources wouldn’t exist without baseball.
Furthermore, a cap is necessarily going to come with a salary floor. Will chronically neglectful owners like Bob Nutting in Pittsburgh, Stuart Sternberg of the Rays, and Bruce Sherman in Miami – this is of course a very partial listing – sign on to a new economic system that forces them to invest in payroll at levels apparently anathema to them? That’s quite uncertain.
Manfred recently hinted at this longstanding schism when he said of the forthcoming CBA talks, “I have owners with really strongly held views that I need to coalesce into a position that we’ll ultimately take to the MLBPA.”
The tensions between small-market and large-market team owners and the difficulty of building a sturdy consensus on the league side brings us tidily to a discussion of revenue sharing in MLB. Revenue sharing is the above-mentioned “taking away money from those big-spending teams” approach to reducing labor costs.
Presently, teams share national broadcast revenues equally. On the local front, however, each team contributes 48% of local revenues – meaning local broadcast contracts; gameday revenues like ticket sales, concession sales, and parking receipts; sponsorships; and merch sales. Those pooled revenues are then distributed equally among teams. As you can figure, small-market/low-revenue teams do very well through this system, and it’s no great rhetorical flourish to say that teams like the Dodgers, Yankees, Mets, and so forth are paying for the bottom-dwelling payrolls of the Pirates, Rays, Marlins, and A’s (being a revenue-sharing recipient is such a lucrative gig that the A’s under saboteur John Fisher left Oakland for a smaller market at least in partial measure to ensure they’re permanently on the MLB dole). For small-market teams, revenue sharing is in essence guaranteed profitability with effectively zero risk. Needless to say, large-market teams tend not to care for this lack of accountability on the bottom end. Yankees team president Randy Levine gave voice to such angst in October of 2023 when he said:
“A lot more focus has to be on individual teams to do better and not just rely on revenue sharing. You can’t have two Florida teams averaging 15,000 fans. You can’t have it. You don’t go into an NFL stadium or an NBA arena and see that.
“And I think that there’s been a dependency issue that’s got to get better. … The commissioner has done an incredible job, but now it’s on individual teams. Instead of complaining and whining, ‘We need more money,’ You got to take some responsibility.”
Teams, especially small-market ones, get so much guaranteed money for merely existing that there aren’t really strong incentives to do the work of building the best possible roster. When you’re profitable regardless of home attendance and what kind of local-broadcast contract you can command, then you can do, well, not much of anything and not feel it in the bottom line.
Those pointed philosophical differences among owners complicate making changes to the revenue-sharing system, but Manfred is likely to try it anyway. That’s because he wants to do away with local-broadcast autonomy and fold all of it under the MLB umbrella. That would mean those local revenues would be shared equally and would eliminate what remains of the individualized profit motive for those clubs with lucrative local TV contracts. Such a drastic shift would no doubt delight the Pirates, Rays, and Brewers, for instance, but larger-market teams, especially those with large ownership stakes in their respective regional sports networks, will be loath to agree to such changes.
Back to the CBA discussion, changes to MLB’s revenue-sharing system are subject to collective bargaining, and that means the players must consent to those changes. The players, as it turns out, have very sound reasons for opposing additional revenue sharing. As detailed, increased revenue sharing takes money away from the big-spending teams and redirects it to teams who have shown a reliable penchant for pocketing it instead of reinvesting it in their rosters. In related matters, the increase in revenue-sharing rates has coincided with a declining share of league revenues on the player side. And as ever, there’s very little relationship between market size and success in MLB, which undermines the entire supposed premise of revenue sharing.
Whether Manfred and MLB are primed to pursue a cap, expanded revenue sharing, or both, it’s probably going to be a struggle on two fronts – first between team owners and then against the players.
What other matters might be discussed during CBA negotiations?
To repeat, the CBA is a sprawling, many-tentacled document that covers all manner of baseball matters. Besides the headliner issues noted above, owners are likely to press for an international draft once again, and they’re probably going to ask the players to approve another round of playoff expansion – this time from 12 teams to 14.
MLB angled for an international draft, which would replace the international free-agent apparatus, during the last CBA negotiations, and at one point they offered to get rid of the qualifying offer system in exchange for union approval. However, that didn’t suffice. The player side rightly sees the international draft as a major bargaining implement, and they won’t give it up lightly. As well, many Latin players, who make up a sizable portion of the MLBPA’s constituency, are opposed to an international draft, and the union would ignore those wishes at its own peril.
Playoff expansion is another coveted aim by MLB, and it’s something else the players will agree to only in exchange for something they desire on a similar scale. Doing so would of course further minimize the importance of MLB’s signature 162-game regular season, but the league wants to expand the inventory of playoff games they can peddle to broadcasters no matter what it does to the sport’s native and time-honored qualities. Given that the players would benefit from those theoretical revenue gains, there’s a path to get there.
Elsewhere, owners have long coveted team-friendly changes to the salary-arbitration system or even wholesale elimination of it, but players won’t be agreeing to that, at least in the absence of a successful effort to break the union on the part of MLB.
Will there be a labor stoppage?
The short and unfortunate answer is “probably.” First and foremost, CBA negotiations have historically often resulted in a labor stoppage. Here’s a brief history of such things:
- 1972: Players strike over a pension dispute; lasted about two weeks during the season
- 1973: Owner-implemented lockout during spring training over salary arbitration
- 1976: Owner-implemented lockout during spring training over the evolving issue of player free agency
- 1980: Players strike during spring training, largely over the structure of free agency
- 1981: Players strike over free-agent compensation; almost two months’ of games were lost during the season
- 1985: Players strike over pension fund and salary arbitration; lasted for two days in August
- 1990: Owner-implemented lockout over salary arbitration and free agency; began during spring training and pushed back Opening Day.
- 1994: Players strike largely over owners’ desire to implement a salary cap. The entirety of the 1994 postseason was canceled, and the 1995 season was significantly abbreviated. Play resumed only after a federal judge reinstated terms of the previous CBA.
- 2021: Owner-implemented lockout over various economic points of conflict and to pre-empt an anticipated players strike; lockout ends after 99 days with an agreement upon a new CBA.
As you can see, the most recent lockout ended a long run of labor peace in the sport, and the current expectation is that a new, grimmer trend is in place. Indeed, Manfred is already prepping the public for an owner-led labor stoppage. Here’s what he said not long ago about the prospect of a lockout following the 2026 season:
“In a bizarre way, it’s actually a positive. There is leverage associated with an offseason lockout and the process of collective bargaining under the NLRA works based on leverage. The great thing about offseason lockouts is the leverage that exists gets applied between the bargaining parties.”
That seems a bit of a tell, to point out of the obvious. For their part, the union also expects a labor stoppage after the 2026 season.
“Unless I am mistaken the league has come out and said there’s going to be a work stoppage,” Tony Clark, the MLBPA’s executive director, said last month. “So, I don’t think I’m speaking out of school in that regard.”
Throw it all together – the thicket of important issues over which there’s little common ground, the shots across the bow from Manfred, and the fact that territory is being carved out this early in the process – and, yes, a labor stoppage seems likely. It’s too early to worry about this overmuch, but it’s all happening, all coming together, just under the currents of the coming season. As time goes by and as things crystallize, there will be more to discuss. For now, the scene is set for what could be a coming labor war in baseball. Let’s hope there’s time enough for that to change.
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