Weekly Column: Can Baseball Make Deals With a Lockout Looming?

In this week’s column, California Sports Lawyer® CEO and Managing Attorney Jeremy M. Evans discusses how the prospect of a Major League Baseball lockout is affecting contract decisions and what is at stake for players, teams, and fans.

To say the current dispute is over money would be too simplistic. Money is a concern, but the real concern is how money is made, distributed, used, and the consequences surrounding the same.

You can read the full column below. (Past columns can be found, here).

Major League Baseball’s (MLB) current collective bargaining agreement expires December 1, 2026, and a management lockout is expected if the parties do not reach a deal. The collective bargaining agreement (CBA) between the MLB Players Association (MLBPA) and MLB’s clubs is a five-year agreement that lays out the terms and conditions of employment in professional baseball. The NFL, NBA, NHL, and MLS also use CBAs to establish rules for their players and leagues, although the terms and lengths of those agreements differ.

To say the current dispute is over money would be too simplistic. Money is a concern, but the real concern is how money is made, distributed, used, and the consequences surrounding the same. A lockout could have devastating consequences for the league and teams, but also cause a loss in popularity. Fans have less sympathy for professional sports leagues and athletes negotiating over dollars and cents in the million to billion range.

First, what happens during a lockout?

A lockout is initiated by the owners and prevents players from working for their clubs while negotiations continue. In MLB’s 2021–22 lockout, clubs could not sign free agents, extend or renegotiate player contracts, make trades, or conduct other player transactions. Players could not use team facilities or work with club personnel. A lockout in December would interrupt the offseason business of baseball immediately, but it would not necessarily mean that regular-season games are lost. The previous MLB lockout ended before the 2022 season began. MLB’s explanation of the previous lockout provides a useful comparison, although the rules and circumstances of any new stoppage would need to be assessed at that time.

Second, what happens to existing contracts?

A lockout does not simply erase a player’s signed contract. It does, however, prevent clubs and players from carrying on ordinary contract business during the stoppage. Under MLB’s explanation of the prior lockout, players generally received their salaries during the regular season rather than the offseason, while certain compensation already earned or vested before the stoppage could still be paid. The harder questions arise if a lockout reaches scheduled games: how missed games affect salary, service time, benefits, and the length of the season could become part of the negotiations themselves. In the meantime, players and teams must decide whether to make deals under the current rules or wait to see what the next agreement provides.

That decision is already relevant to contract options, qualifying offers, and free agency. A player might prefer the certainty of a deal today, while another might believe that waiting will bring a better market. A club faces the same question from the other side of the table. It may want to secure a player before transactions stop, but it does not yet know whether the next CBA will change the economic rules under which that contract operates. Front Office Sports reports that the possibility of a lockout is already compressing the offseason player market.

Third, what lockouts and labor stoppages have occurred in sports?

Baseball has experienced both player strikes and owner lockouts. The 1994–95 strike, which was initiated by players, ended the 1994 season and canceled the postseason. The 2021–22 lockout, which was initiated by owners, lasted 99 days but ended in time for the parties to agree on a new CBA before regular-season games were played. These are different kinds of stoppages, and their different outcomes show why a December lockout should be taken seriously without assuming that another World Series will be lost. The MLBPA’s labor history lists the sport’s strikes and lockouts.

Other leagues offer reminders of what is at stake. The NFL resolved its 2011 lockout before losing regular-season games. The NBA’s 2011 lockout shortened its season to 66 games, while the NHL lost its entire 2004–05 season to a lockout. The point is that a work stoppage can range from an offseason disruption to a lasting injury to the schedule and the relationships built around it.

Fourth, what are the disputed issues?

The most visible divide is the owners’ proposal for a salary cap and floor. MLB argues that a system limiting spending at the top while requiring spending at the bottom would improve competitive balance. The MLBPA opposes a salary cap and argues that it would restrict player compensation and the market for their services. Those positions reflect different views of how clubs should compete and how much of baseball’s revenue should flow to players. MLB’s account of its proposal and the MLBPA’s response show the distance between them.

The disagreement reaches beyond the cap. The parties have proposed changes affecting minimum salaries, arbitration, free agency, revenue sharing, rosters, and the transaction calendar. Even the number and timing of games matter because they affect players’ work, ticket sales, broadcast inventory, and postseason revenue. The MLBPA has proposed increased revenue sharing tied to incentives for lower-revenue clubs to compete, while MLB has proposed other structural changes as part of its cap-and-floor approach. The question is whether the parties can agree on what competitive balance means before they decide how to pay for it.

At its heart, the dispute is over how baseball’s financial pie should be divided and how its teams should compete. The players want stronger compensation and more opportunity to negotiate their value. The owners argue that a salary cap and floor would give more teams a chance to compete and make spending more predictable. Both sides say they want a competitive league, but they disagree on whether limiting what a team may spend will help baseball or restrict its players. Sports matter, as shown by the fans who watch, the broadcasters who pay for media rights, the players who play, and the owners who buy franchises. Advertisers similarly want access to those fans. Whether professional baseball looks similar or changes, the goal should be a game that grows in popularity and creates opportunity and revenue for all parties.

Fifth, what can be done to solve the disputed issues and broker a deal?

The parties should negotiate the means of improving competition as carefully as the goal itself. Revenue sharing, payroll incentives, minimum compensation, and the existing competitive balance tax each affect clubs and players differently. A proposal that helps a lower-revenue club spend more is different from one that limits what another club may pay its players. A deal must account for both.

Waiting also has a price. Broadcasters and sponsors plan around games; stadium employees and nearby businesses plan around the season; and fans decide how much time and money to invest in their teams. The looming deadline may prompt deals, but it may also cause players and clubs to make decisions out of fear of what comes next. Baseball’s owners and players have every right to negotiate hard. They should consider whether the cost of waiting will be measured only in contract dollars, or in the confidence of the people who make the game valuable.

About Jeremy M. Evans:

Jeremy M. Evans is the CEO and Managing Attorney at California Sports Lawyer®, representing companies, creators, and talent in dealmaking matters across entertainment, media, sports, and intellectual property. An award-winning attorney and industry leader, Evans is based in Los Angeles and Newport Beach, California. He can be reached at Jeremy@CSLlegal.com. www.CSLlegal.com.