In his capacity as a Columnist for California Sports Lawyer®, Founder Jeremy Evans has written a column about Major League Baseball (MLB) nearing a collective bargained agreement (CBA) with the Major League Baseball Players Association (MLBPA).
You can read the full column below.
Albeit with a few deal points to be finalized, it looks that the 2022 baseball season will happen. The Major League Baseball Players Association (MLBPA) representing the players are nearing an agreement with Major League Baseball (MLB) representing the thirty owners/franchises. The end result: likely a five-year collectively bargained agreement (CBA). In what many thought was impossible or at best with a shortened season, has hopefully been avoided—although some spring training games will be lost or the season could see a delayed start.
In professional team sports in America, all of the big five sports leagues (NBA, NFL, NHL, MLB, AND MLS) enter into CBAs between the players unions and the owners of the franchises represented by the league office. The league office has a commissioner, while players union is usually led by an executive director. The various unions vary in power structure and influence, but ultimately the CBA governs all things between the players, agents, and the teams. Everything from salary, arbitration, trades, salary caps, luxury taxes, grievances, and even the minor leagues and/or draft. League bylaws also guide teams in their dealmaking as well additional rules that players must follow.
Major League Baseball and the players are entering into a very important time in sports history. A failure at coming to an agreement was akin to the Cold War between Russia and the United States, mutually assured destruction. Mainly because as the Covid-19 pandemic begins to subside (hopefully for good), fans will be looking for new content and to travel. Without a baseball season, fans would have to replace baseball with something else. Baseball needs wins right with other sports growing in popularity and with younger persons growing uninterested with the game—once the unequivocal national pastime.
Moreover, with the other four major sports leagues in America under CBAs, baseball would have been the odd league out. The American appetite for debate, particularly around finances might have fallen on deaf ears—regardless of who one thought was being more difficult in the negotiation. It is a reality of where the collective conscience and world politics is today.
Nonetheless, a robust debate is important. The players and owners should be applauded for their efforts on zealously advocating their respective sides. A five-year agreement is a long term partnership that has serious consequences on players lives, not to mention all the employees of teams and the league—who without a season would have been out of work. The economic impact of a CBA goes well beyond who plays second base. Therefore, it is important that both sides get it right, sacrifice a little, and as the old saying goes, hurt a little from the negotiated deal points.
What remains to be negotiated beyond player minimum salaries, arbitration, and player control, is the luxury tax. It is fitting the luxury tax is the last item to be negotiated because it is the most important. How much a team can spend before it has to pay a significant fine (tax) is what helps set the budget for large market teams and allows other teams to compare one to the other. Will there be a minimum team spending threshold? The players think so to avoid teams tanking and making sure profits are being spent on the field with talent.
Streamers and broadcasters continue to spend massive amounts of money on licensing rights—Major League Baseball and the players could not miss out on that windfall. Even the talent calling games has entered a new economic stratosphere, (e.g., Troy Aikman and Sean Payton). Meanwhile, Liberty Media, which owns the Atlanta Braves franchise, tripled its profits from 2020-2021. A lost or significantly reduced season was not in the cards—both sides in baseball wanted to see this deal get done. In other words, too much was at stake considering that Covid-19 already took most of the 2020 season.
Player service time continues to be a sticking point as well. With the main concern of the players being team control and/or manipulation of players entering the show. In response, Major League Baseball may approve an entire year of service time for award-winning players. This is significant because a players service time determines when they become arbitration eligible (e.g., get paid more money) or when they reach free agency (e.g., get to choose where to play and paid a lot more money).
With NFL teams looking at a $4 billion dollar purchase price and sports real estate in a booming market, collectively baseball is wise to get this deal done to maintain and possibly grow its place in American sports. The next decade is looking to be an important time in rights negotiations in the battle for American hearts and minds, and dollars. A new CBA will keep baseball at the table as it pursues NFTs, the multiverse, new technology, international development, sports content in Hollywood, and sports betting.
About Jeremy M. Evans:
Jeremy M. Evans is the Chief Entrepreneur Officer, Founder & Managing Attorney at California Sports Lawyer®, representing entertainment, media, and sports clientele in contractual, intellectual property, and dealmaking matters. Evans is an award-winning attorney and industry leader based in Los Angeles. He can be reached at Jeremy@CSLlegal.com. www.CSLlegal.com.
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