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Everything Dodgers fans need to know about MLB labor negotiations

Setting the stage for a potentially long winter

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Major League Baseball’s collective bargaining agreement, the document agreed upon by players and owners, which governs the sport, expires on December 1 at 8:59 p.m. PT. We’ve known this for quite some time, but it seemed so abstract and far away in the future. But now the time is nearly here. December 1 is Wednesday.

This week could be relatively busy for a few days, before things get awfully quiet.

Most signs point to a lockout beginning Wednesday night, which would be the first labor stoppage in the sport since the 1994-95 strike. The main difference between a lockout and strike is who initiates it. Strikes happen when players — the labor — withhold their services; a lockout is when the owners shut things down.

Commissioner Rob Manfred at the owners meetings in Chicago on November 18 talked about the negotiations between players and owners, which seemed to be laying the foundation of a pending lockout.

“I can’t believe there’s a single fan in the world who doesn’t understand that an offseason lockout that moves the process forward is different than a labor dispute that costs games,” Manfred said, per Evan Drellich at The Athletic.

Also from that press conference, per Jeff Passan at ESPN, Manfred said, “I think we need to look at other sports. The pattern has become to control the timing of the labor dispute and try to minimize the prospect of actual disruption of the season. That’s what it’s about. It’s avoiding doing damage to the season.”

In other words, barring a last-minute pact, MLB will be in a lockout beginning Thursday. Let’s take a look at what that means for the offseason.

(Non-)tender deadline

The usual date by which teams need to tender contracts to players on the 40-man roster is December 2 at 5 p.m. PT. Players who already have contracts — from Tommy Kahnle to Mookie Betts — aren’t affected here. This deadline is for renewing players who are either eligible for salary arbitration or those with between zero and three years of major league service time.

The vast majority of players who make news on this date are players in arbitration, with teams not wanting to pay what they might earn through the salary arbitration process. Justin Turner was non-tendered by the Mets on December 2, 2013, for instance, making him a free agent. The Dodgers non-tendered Yimi Garcia on December 2, 2019. The Brewers were likely to non-tender Corey Knebel last December 2, but instead traded him to the Dodgers, who were more than happy to pay his eventual $5.25 million salary.

Just last week, players and owners agreed to move the tender deadline up from December 2 to November 30, before the CBA expires. Another sign that a labor stoppage is imminent.

Sometimes a flurry of small deals get done around the tender deadline, usually on the lower end of salaries for arbitration-eligible players. Scott Alexander signed a $1 million deal for 2021 last December, for instance. This offseason, only four Dodgers are eligible for salary arbitration. Caleb Ferguson, at three years, 93 days of service time, and having missed all of 2021 after Tommy John surgery, seems like a prime candidate for one of these early pacts for 2022.

What a lockout means

If MLB owners lock out the players on Wednesday night (or Thursday morning, depending on where you are in the country), it means everything gets shut down for players on the 40-man roster. No more Justin Turner and other players working out at Dodger Stadium.

The MLB Players Association sent players a 36-page guide to ready for the lockout. J.P. Hoornstra at the Orange County Register mentioned this detail:

The guide stipulates that players can play in independent and foreign leagues during a lockout, but aren’t allowed to work out at team facilities or team-organized workouts unless they are rehabilitating a baseball injury.

Dustin May, rehabbing from Tommy John surgery in May, began a throwing program in November at Camelback Ranch in Arizona. Whether he’s allowed to continue doing so is in question. Atlanta pitcher Charlie Morton, who broke his leg during the World Series, in an interview with David O’Brien at The Athletic, wasn’t sure if he’d be able to rehab at team facilities during a lockout, but mentioned any team staff wouldn’t be allowed to interact with the players.

The lockout will also affect foreign players. Another item from the MLBPA lockout guide, per Drellich at The Athletic:

Players who are already in the U.S. when a lockout begins would not be violating the terms of two common types of visas, the union advised. But if a player hasn’t entered the U.S. prior to the start of the stoppage, his visa could be revoked.

Dodgers examples include Eddys Leonard, who is playing — with free agent Albert Pujols — for Escogido in the Dominican Winter League, and Jorbit Vivas, who is with Zulia in the Venezuelan Winter League. Both Leonard and Vivas were among the Dodgers’ additions to the 40-man roster on November 19.

Transaction freeze

A lockout would mean no more major league roster moves, and a whole lot of waiting. It could make these next few days eventful, with free agents opting for the relative certainty of knowing where they’ll play in 2022, even if only to avoid a potential scramble during spring.

We saw the beginnings of that flurry over the weekend. The Rangers and Mets each agreed to terms with three players, including big deals for Marcus Semien (seven years, $175 million from Texas) and Starling Marte (four years, $78 million from New York). Kevin Gausman got $110 million from Toronto. Even the Marlins agreed to a pair of pacts over $50 million, for outfielder Avisail Garcia and to lock up pitcher Sandy Alcantara.

Max Scherzer reportedly agreed to a three-year, $130 million contract with the Mets on Monday, setting a new high bar for average annual value.

No major league transactions can be made during a lockout, so 40-man rosters will essentially be frozen. No signings, no trades. The major league portion of the Rule 5 Draft, set for next week, would have to be rescheduled.

Seiya Suzuki, a 27-year-old Japanese outfielder who was posted by Hiroshima, has a 30-day window to sign with an MLB team that ends on December 22. The Dodgers are reportedly one of a number of teams interested in his services. A lockout would stop Suzuki’s 30-day clock, which would resume once MLB reopens for business.

What’s at stake?

Going back to the MLBPA lockout guide sent to players and agents, per Hoornstra: “A broad assessment of our industry shows that player value and player compensation are not moving in the right direction ... We have fundamental concerns about the integrity of the system as it is currently operating.”

Put simply, players salaries aren’t growing at the same pace as MLB revenues. That’s not just a function of the pandemic, the effects of which were seen when this year’s qualifying offer — the average of the top 125 salaries in the sport — declined from $18.9 million to $18.4 million. In December 2019, Maury Brown at Forbes outlined how players received a smaller percentage of the pie in the last few years of the 2010s.

That’s before considering the ancillary revenue that isn’t necessarily counted by owners as baseball-related, like real estate surrounding ballparks and funds generated by MLB Advanced Media and its various arms.

MLB has new national television contracts with Fox Sports, Turner Sports, and ESPN beginning in 2022 that average $1.76 billion per year — just under $59 million per team — through 2028. That’s up from $1.55 billion annually, a tad under $52 million per team under the previous deals. And it could be even higher.

One of the best bargaining chips the players have is how badly the owners want an expanded postseason, for the extra television revenue an extra round of the playoffs would generate. We already saw a 16-team postseason in 2020, and it would be surprising if the next CBA doesn’t include adding playoff teams into the fold. Whether the new system would still require a 106-win team to play a one-game playoff remains to be seen.

How players can be paid more is multi-faceted:

  • Remove spending restraints on the upper end, either by raising the limits of the competitive balance tax or decreasing the penalties, or by untying draft pick compensation from signing upper-tier free agents.
  • Disincentivize tanking
  • Pay players more during their most productive years, when they are younger. Significantly raising the minimum salary, which was $570,500 in 2021, and potentially revamping the salary arbitration system are options here. Travis Sawchik at The Score in mid-November made a compelling case for why MLB’s minimum salary is due for an overhaul.

The competitive balance tax is back in play for the Dodgers this year after three seasons of avoiding the tax, though they would have been over the 2020 threshold of $208 million had David Price not opted out of the season. This year the Dodgers final CBT payroll, which counts average annual value of contracts, will come in somewhere north of $260 million. Though by avoiding the tax the previous three years the Dodgers reset their lowest base rate to 20 percent, they also blew past two more thresholds and will end up paying something close to 35 percent on their total overage amount, likely around $18 million in tax.

Dodgers competitive balance tax history

Year CBT threshold LA payroll Tax Rate
Year CBT threshold LA payroll Tax Rate
2013 $178,000,000 $243,234,050 $11,415,959 17.5%
2014 $189,000,000 $277,737,083 $26,621,125 30.0%
2015 $189,000,000 $298,320,297 $43,728,119 40.0%
2016 $189,000,000 $252,551,634 $31,775,817 50.0%
2017 $195,000,000 $253,633,893 $36,209,572 61.8%
2018 $197,000,000 $195,039,730 $0 0.0%
2019 $206,000,000 $204,918,530 $0 0.0%
2020* $208,000,000 $204,653,651 $0 0.0%
2021 $210,000,000 $285,599,944 $32,649,965 43.2%
*full-season payroll (not 60-game season)

With the caveat that the next CBA hasn’t yet been agreed to, and things could change, as it stands now the Dodgers have 11 players signed for 2022. Counting estimates for the four players eligible for salary arbitration, plus a rough guess of minor league salaries and MLB-wide player benefits that get counted against the CBT, the Dodgers 2022 payroll for tax purposes is already around $205 million. That’s with an incomplete roster, and does include Trevor Bauer, who missed the final 81 games of 2021 and remains under investigation per MLB’s joint domestic violence, sexual assault and child abuse policy.

Despite the expectedly large payroll in 2022, the Dodgers still have roster flexibility. As of now, Betts, AJ Pollock, and Bauer are the only players with guaranteed contracts for 2023, with Pollock and Bauer both having player options. There will be several players eligible for salary arbitration, but the Dodgers, especially with their financial might, should be able to adapt to whatever economic system MLB players and owners agree upon.

Having a designated hitter in both leagues, which was used during the truncated 2020 season, seems like something both the players and owners want. If the DH is added to the National League beginning in 2022, that would affect how the Dodgers approach building the position-player side of their roster.

How long?

A December lockout doesn’t have the immediacy of a strike in the middle of a season. Reporting dates for spring training haven’t been revealed yet but will likely be around Valentine’s Day, and spring games don’t even start until February 26. So it will be a while before a labor stoppage affects games.

Owners locked out the players on February 15, 1990, right around the start of spring training. That lasted 32 days, with the two sides agreeing to terms on March 18. Opening day was originally slated for April 2, but was pushed back to April 9. It left just under three weeks for spring training.

Those circumstances gave us this wonderful quote from Dodgers third baseman (and one-time pitcher) Jeff Hamilton.

“It’s been really hard to keep in shape and I know there won’t be a lot of guys ready to go,” Hamilton told the Associated Press. “I’ve been to a batting cage a couple of times, so I’m just glad I’ve got some calluses.”

The pandemic-truncated 2020 season also included a lengthy, and public, negotiation between players and owners, followed by a shortened “spring training” (or “summer camp” if you prefer) to lead into the regular season. In that regard, this winter might not necessarily be new.

But to back into that for 2022, with opening day set for March 31, that means spring training would need to start by roughly March 10. Accounting for the fact that scores of players will still need to find homes, the last week or two of February is a tangible deadline for players and owners to reach an agreement without conceivably missing games.

Whether the potential lockout takes three months, we at least know it will be a fairly frustrating process.