Marching Towards A Lockout

A few weeks ago, Rob Manfred was in the Phillies clubhouse meeting with the players when he was cursed out and told to leave by Bryce Harper.  What was it that got Harper so heated?  A salary cap.  The owners want one.  For the players, it's a non-starter.  As soon as Manfred brought it up, Harper immediately shut the conversation down.  Which tells you all you need to know about how the players feel about even discussing a salary cap.

Manfred's visit to the Phillies was just one stop on his tour of all 30 teams.  The goal was to gauge the players' concerns/priorities heading towards negotiations for the new Collective Bargaining Agreement.  The current CBA, which was signed in 2022 after a three-month lockout, runs through the end of next season.  And everyone is already bracing themselves for another lockout after the 2026 season.  Noting I'm not saying the possibility of a lockout.  Because it would be absolutely shocking if there isn't one!  And it's expected that this one will last longer than the last.

Tony Clark, the Executive Director of the MLBPA, indicated that the owners have already made it clear they intend to lock out the players when the CBA expires in December 2026.  At the All*Star Game, Pete Alonso admitted that, while no one is talking about it, the players have resigned themselves to the high likelihood it'll happen.  They're preparing themselves for it to be a long one, too.  Because the players will fight tooth & nail against a salary cap.  Manfred, meanwhile, is being coy and has never used the term "salary cap" in public.  The players all know the owners want one, though.  And it'll be at the heart of the CBA negotiations.

Major League Baseball, of course, has never had a salary cap.  Among the four major sports, i's the only one without one.  Instead, they have the luxury tax system, where teams can spend whatever they want, but if they pass certain thresholds, they're charged different amounts depending on how much they go over.  While some teams use the luxury tax as a sort of soft cap, others like the Dodgers and Mets have no issue paying the luxury tax.  Player salaries have skyrocketed as a result.

It's fairly obvious why the players like the current system.  Juan Soto has 51 million reasons a year to like it.  As long as they're willing to pay the luxury tax penalties, there's nothing stopping owners from signing multiple players to massive contracts.  Large market teams like the Dodgers, Yankees, Mets and Phillies have taken full advantage of that.  They have World Series aspirations every year and spend like it. 

Other teams have taken a different approach.  They spend the bare minimum on salaries while still collecting their portion of the revenue sharing pie.  That's beyond frustrating for the players.  Although, during the last CBA negotiations, they were also opposed to the seemingly obvious solution of a salary floor.  Why?  Because they think once a salary floor is in place, a salary cap won't be too far away.

The owners are frustrated on both ends.  There are plenty of teams that aren't happy about those who choose not to spend, but have no issue taking in their share of revenue sharing money.  There are also those teams that don't like the large market clubs' ability to freely spend, which they think give those teams an unfair advantage.  And those competitive balance concerns are the owners' biggest issue heading into CBA negotiations.

Making that payroll disparity an even bigger concern moving forward are the continued worries about regional sports networks.  We've already seen a few teams have their local TV rights taken over by MLB, and the thinking is that there'll likely be more in the future as the RSN model continues to be threatened.  The large market teams with solid RSNs don't have that problem.  And it further gives them an advantage since they bring in TV revenue that teams in smaller markets can't match.  The owners of those mid-level teams (the ones who can't be big spenders, but aren't actively not spending money) would like to see those scales balanced, at least somewhat.

So, they're at an impasse.  And it's not something that'll easily be solved in the next year and a half before the current CBA expires.  The owners will push for a salary cap that I'm not even sure they all want.  They also want assurances that teams can't just pocket their revenue sharing dollars while not making any effort to be competitive on the field.  And, if the owners can't even agree, how are they gonna present something to the players, who'll have their own list of things that they want addressed?

That's why there's absolutely no confidence that anything can get done without a lockout.  The sides are so far apart on the most basic issues and neither seems very willing to budge.  There's also some unresolved tension from the last CBA negotiations and the resulting lockout.  As a result, both sides expect the negotiations to be contentious.  Especially since they aren't even close to agreeing on basically any point.

Ultimately, though, this comes down to the owners.  Only ownership can initiate a lockout, and all it takes is eight unhappy owners to make it happen.  That's pretty much a certainty.  Because you'll have teams like the Dodgers that have no issues with the current system and, like the players, don't want a salary cap.  You'll also have teams like the Marlins who don't spend any money and don't want a salary floor.  Even if those two groups band together, there are still plenty of teams in the middle that aren't fans of the current system.  And they'll be the ones with all the power regarding whether there's a lockout or not.

What makes the looming threat of a lockout even more frustrating is how, overall, Baseball is in a very healthy position financially.  In 2024, the sport brought in $12.1 million.  So, you would think there's motivation on the owners' part to maintain that place of strength.  It's actually just the opposite, though.  Because the system is broken and the teams in the middle know it.  And they feel a lockout is the only way to fix the problem. 

Getting 30 different owners with competing priorities all on the same page is easier said than done.  And, frankly, that's the biggest issue at play here.  The players actually agree with the general sentiment that there's a competitive balance problem.  They don't like the Dodgers deferring 90 percent of everybody's contract or the Mets spending more money on Juan Soto than the Marlins are spending on their entire roster, either.  The only thing they're adamantly against is a salary cap.

If the owners push for a salary cap, they'll have quite a fight on their hands.  The Commissioner, for all his faults, does seem to somewhat understand that.  The problem is he needs to get the owners to see it and make them come to some sort of compromise among themselves.  Until that happens, the chances of there not being a lockout are slim to none.  That's why, even though the CBA doesn't expire for another 16 months, the writing is on the wall.  Brace yourselves.  A lockout is coming.