Quiet Ballparks: A Look at the Lockout That Almost Destroyed the 2022 Baseball Season
As the MLB playoffs near its conclusion and a champion is crowned, we are once again reminded of why this sport is America’s pastime. However, in a season that saw records broken and legends retire, we forget just how lucky we are that a season took place to begin with. Prior to the beginning of spring training, both Major League Baseball and the MLB Players’ Association were unable to reach a collective bargaining agreement, resulting in a ninety-nine day lockout and the second largest work stoppage in baseball history.[1] In an attempt to speed up the three month long negotiation, MLB commission Rob Manfred requested the aid of a Federal Mediator and Conciliation Service in hopes of bringing the two sides together.[2]
What is a Lockout?
In sports, a lockout is a labor stoppage where owners/management prohibit their players from practicing at team facilities and halt the free agent process.[3] Owners have previously utilized lockouts as a strategy to preempt strikes by players and curtail the possibility of delays that last into the regular season.[4]
In the past, Major League Baseball has entered lockouts instead of continuing to operate under the terms of an old Collective Bargaining agreement.[5] This prevents the players from holding strikes during the regular season (an issue that derailed baseball in 1994).[6]
The Disagreement
The key issue between the players and owners is the competitive balance tax (“CBT”).[7] First introduced as a luxury tax, the CBT has been transformed into the league’s “unofficial salary cap.”[8] In essence, teams are penalized if the combined average annual value of their player contracts exceeds the tax line.[9] The owners were interested in maintaining the status quo, with some believing that the number is already too high.[10] The players, however, believed that maintaining the status quo would incentive anti-competitive behavior.[11] A higher tax would encourage both richer and poorer teams to keep their costs low.[12] At the same time, MLB’s revenue sharing system would subsidize the teams that bring in less money.[13] However, this would result in small market teams becoming more interested in losing and making money instead of focusing on improving the team.[14]
The Agreement
The agreement reached between the two sides features many important provisions. This included a CBT threshold of $230 million starting in 2023 with a penalty of $60 million for surpassing the threshold.[15] In addition, the agreement addressed issues of minimum salaries and a new postseason format that features two new teams.[16] Many view the agreement as a win for the owners, as much of the “status quo” was maintained.[17]
Anti-Trust Exemption
Normally, labor negotiations fall under the jurisdiction of Section One of the Sherman Act.[18] The relevant provision provides that “every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is declared to be illegal.”[19] However, Major League Baseball has a special exemption that the Supreme Court granted in Federal Baseball Club of Baltimore, Inc. v. National League of Professional Baseball Clubs.[20] This exemption, which was further narrowed through the Curt Flood Act,[21] does not allow teams to suppress players’ wages, but does allow them to conspire on agreements concerning issues like ownership sales, franchise relocation, and Minor League Baseball.[22]
The Future
Recently, Major League Baseball’s exemption has drawn the ire of the Senate.[23] Both Jeff Duncan and Bernie Sanders have proposed bills aimed directly at eliminating MLB’s exemption.[24] When the current CBA expires in 2026, one hopes that the next negotiations will not result in a delay to the season.
Footnotes
