Major League Baseball Enters Lockout

December 9, 2021

Written on behalf of Feigenbaum Consulting

Outside of critical institutions such as education and healthcare, there is likely no public outrage equal to that which comes as a result of a labour stoppage than when they occur for major league sports. Much like other unionized workplaces, Major League Baseball, the National Football League, the National Basketball Association, and the National Hockey League, all operate with collective bargaining agreements (“CBAs”) between players and owners. Much like CBAs in other workplaces, those for major league sports outline how players can be paid, how often they have to play and practice, and cover other obligations and rights between the two groups involved. 

On December 2, 2021, the five-year CBA between the ownership groups of Major League Baseball (“MLB”) and its players’ association (“the Association”) expired. Just a few moments later, commissioner Rob Manfred told news outlets that the league would be locking out its players, meaning all league-related activity would have to come to an immediate stop, including trades between teams and communication between players and teams. In this article, we look at what led to the lockout and what it means for the sport. 

What do team owners want?

The sports news website SB Nation provided a summary of the issues behind the lockout, breaking down the major issues into two categories, including what players want and what owners want. The major ownership desires include expanded playoffs, with SB Nation adding that under the previous CBA, teams collect 100% of playoff revenue as well as a portion of the gate. Ownership was reported to have offered the players a shortened season to make up for the longer playoffs (down to 154 games from 182). That was the only reported major ask by team owners, who as a group are hopeful to maintain status quo on many of the changes requested by players. 

What are the players looking for?

As described by SB Nation, the players’ demands are more far-ranging than that of the owners. Paramount is what has been described as “creative accounting” that has led to a reduction in revenue received by players. Other issues include complaints that teams keep players in the minor league system for too long in order to take advantage of being able to pay them lower salaries, thereby delaying some major league debuts by players. 

Free agency is another sticking point, with players reportedly asking to be able to declare themselves as free agents If they are at least 29.5 years old and have played for five years (or any player who has played for six years). Team owners say they are satisfied with the status quo, which allows players to seek free agency after six years, including a three-year arbitration. Other player concerns include perceptions that teams intentionally perform poorly during the regular season, keeping low salaries while collecting draft picks and keeping those promising players in the minor leagues. 

Ultimately, player concerns largely revolve around making sure that second and third-tier players have an opportunity to make meaningful money earlier in their careers and allowing players to reach the majors without waiting too long in a team’s farm system. 

As conversations between the two groups begin to pick back up, it will be interesting to see what requests the ownership group is more likely to acquiesce to, and which ones will be put aside. It’s not likely that the players will get everything they want, but some movement on at least some of their issues can likely be expected. 

Could the season be in jeopardy?

Labour stoppages are not terribly uncommon for the MLB, though there haven’t been any in close to 20 years. The most recent stoppage was a strike that took place from 1994 to 1995, causing an abrupt end to the 1994 season. The strike lasted for seven months and required intervention from the National Labor Relations Board before it ended. The 1980s were a turbulent time for labour relations in MLB, with strikes in 1980, 1981, and 1985. There was also a lockout in 1990. 

We are currently in the off-season for baseball, but training camps will open up early in the new year. While there is no guarantee that the lockout will be resolved by then, players and owners have about three months to work through their issues. ESPN has reported it would be “shocking” if the lockout continued past the start of the season or resulted in a shortened season. Another good point made by ESPN is that both players and owners lost a significant chunk of revenue during the COVID-19 pandemic, and likely aren’t keen to risk losing more as a result of the lockout. 

Another factor that contributes to hope for a quick resolution is the bitterness that fans felt after the strike in 1994/95. The strike ended what some thought might have been a championship season for the Montreal Expos, who packed their bags and moved to Washington D.C. in the season following the strike. As reported by a UK sports website, it took years for fans to get over the strike and MLB experienced over a decade of smooth operations (with the exception of the steroid scandal) in the years that followed.

Feigenbaum Law offers trusted advice to agents, coaches, and business managers

The entertainment and sports worlds went through significant upheaval over the last few years. The team at Feigenbaum Law is proud to offer a full range of services to clients in both sports and entertainment. We offer a wide-ranging list of services to high-profile clients, including those related to residency, immigration, and visas. We also offer reviews of contracts, sponsorship agreements, employment contracts and publication deals. Additionally, our own Mark Feigenbaum has extensive history assisting clients in both the United States and Canada with sound tax advice. Agents and coaches can feel confident in referring their clients to us with confidence. We can be reached by phone at 877-275-4792 or by email in order to schedule an initial consultation.

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