Friday night the calendar will flip from 2021 to 2022, ending what has simultaneously been the fastest and slowest year of my lifetime. Each passing year seems to go by a little quicker as I’ve gotten older, but because of, well, gestures at everything, this year felt like an eternity. I am looking forward to a new year and better days ahead.
Anyway, Major League Baseball is currently on hiatus. The owners locked out the players immediately upon the expiration of the collective bargaining agreement at 11:59 p.m. ET on Dec. 1, and commissioner Rob Manfred’s letter to fans justifying the lockout included a few calculated inaccuracies. Nothing is allowed during the lockout. No major-league free agent signings, trades, etc.
Thanks in part to the upcoming CBA — but not entirely because of the upcoming CBA — the 2022 calendar year with be a significant year for the future of Major League Baseball. Don’t get me wrong, the league isn’t in danger of folding or anything like that, but there are several developments with long-term ramifications about to come to a head.
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Here are four major issues MLB must confront in 2022, starting with a new labor agreement.
1. The upcoming CBA
The new CBA is quite obviously the single biggest reason 2022 will be such an important year for the future of baseball. MLB and the MLBPA are expected to begin discussing core economic issues in January and economics moreso than anything else in the new CBA will impact baseball’s future. Here are the CBA-related matters most relevant to the future of the sport.
Competitive balance tax: More commonly known as the luxury tax. MLB proposed lowering the threshold from $210 million to $180 million a few weeks back, and tying it to a salary floor. Lowering the threshold is a nonstarter for the MLBPA. More recently, MLB proposed gradually raising the threshold to $220 million by 2026. The union is seeking a threshold closer to $240 million.
Revenue sharing: An often overlooked yet vital component of baseball’s economic structure. The very short version of revenue sharing is every team puts 34 percent of its local revenue into a pot each year, then each team takes an equal share. Big-market teams pay more into revenue sharing than they receive, and small-market teams receive more than they pay.
In November, economist J.C. Bradbury noted the players have received a declining share of league revenues since 2003, when the revenue sharing rate was hiked to 34 percent. Bradbury adds “(if) you’re sharing more revenue, winning is less important to your bottom line, so you have less incentive to bid for players.”
Team payrolls are in steady decline and that is at the center of the work stoppage. The players want a bigger piece of the revenue they generate and the owners want to keep chipping away and putting more of that revenue in their pockets. The MLBPA reportedly proposed changes to the revenue sharing system during CBA talks. It is a significant consideration even if it’s not dinner table talk.
Service time: Service time controls everything in baseball. It determines when a player qualifies for arbitration and free agency, and teams openly manipulate service time (by keeping players in the minors longer than their development necessitates) to delay free agency and even arbitration in some cases. It’s bad for the sport. It really is. The best players should be in MLB, full stop.
The MLBPA wants to end (or at least curb) service-time manipulation and has proposed service time bonuses tied to awards, All-Star Game selections, etc. It seems likely the upcoming CBA will include some measures to limit service-time manipulation, though eliminating it entirely may be possible. Teams will always look for (and exploit) loopholes. Still, something is better than nothing.
Pre-arbitration and arbitration: Pre-arbitration-eligible players (0-3 years of service time) make something close to the league minimum and arbitration-eligible players (3-6 years of service time) make more, though their salaries are still quite a bit below what they would make as free agents. These tend to be younger players in what are often the most productive years of their career.
As a result, teams are building their rosters around pre-arbitration and arbitration players more than ever. Simply put, they provide more bang for the buck. From The Score’s Travis Sawchik:
Among all players to step on the field in 2019, 63.2% had less than three years of service time. They accounted for 53.6% of days of service time accumulated, but they combined for only 9.8% of player pay.
At the opening of the 2021-22 NHL season, 23% of players were paid within 10% of the league’s lowest wage. In the NBA, it was just 3%.
It is all but certain the upcoming CBA will raise the league minimum salary ($570,500 in 2021), but how much? That is unclear. The union also wants players to reach arbitration earlier, preferably after two years of service time. MLB proposed eliminating arbitration entirely and replacing it with a pay-for-play system (i.e. you produced this much so you get paid this much). Bottom line, the union wants to put more money in the pockets of young players, who make up an increasingly larger piece of MLB’s player pool.
Free agency: This is tied to everything mentioned above. Luxury tax, revenue sharing, service time, etc. affect free agency. The union wants players to reach free agency earlier in the careers. The owners absolutely do not want that. They proposed tying free agency to age (everyone becomes a free agent at 29 1/2), though that would stifle salary growth of the game’s top players, who tend to hit free agency earlier than age 29 (Carlos Correa is 27, for example).
MLB will cite the pre-lockout frenzy as evidence free agency is alive and well, though that’s not entirely accurate. Ben Clemens at FanGraphs ran the numbers and found teams are still paying the same amount per win in free agency as 2-3 years ago. It’s just that so many signings were bunched together this offseason that is seems like teams spent more. The union wants teams to actually spend more on free agents. To pay a higher premium for their production, not 2018 and 2019 rates.
Expanded postseason: We’re going to get some sort of expanded postseason next year. MLB proposed a 14-team format and the MLBPA countered with a 12-team format. If the union is proposing 12 teams, we’re getting at least 12 teams. A larger postseason field means more postseason games, which means more postseason revenue, so this is very much an economics matter.
This would have been the 2021 postseason bracket under MLB’s proposed 14-team format:
Sub-.500 teams, including the 80-82 Angels and Rays in 2017, would have made the postseason under the 14-team format. And therein lies the rub. Expand the postseason and you’re reducing the importance of the 162-game season, the thing that separates baseball from all other sports, and watering down the postseason competition by letting mediocre teams into the tournament.
Also, if it only takes 84-86 wins to reach the postseason, why sign that extra free agent or call up that top prospect earlier than you planned? Building an 85-win team and calling it a contender isn’t tanking, but the MLBPA has concerns about teams not trying their hardest to win, and an expanded postseason format would only exacerbate those concerns. Point is, expanding the postseason will change the way teams behave and how players are valued, and thus change baseball’s future.
Universal DH: This won’t drastically change much. It is 15 low-value jobs — teams don’t spend much on DHs unless they’re getting one of the absolute better hitters in the game — with no extra roster spots. Still, the universal DH is coming and will change how teams build their rosters to some degree. Obviously National League teams will be impacted more than American League teams.
My guess — and I emphasize this is just a guess — is the upcoming CBA will only tweak the current system, and we’ll wind up with something that looks a lot like what we have now. It won’t overhaul the sport. That said, small changes can have a big impact. Since the 1994-95 strike, the owners have chipped away to get themselves a favorable system, and the players are trying to change that.
2. Rays and A’s ballpark situations
Clearly, the Athletics and Rays need new ballparks. RingCentral Coliseum in Oakland is the fifth-oldest stadium in baseball and it is bordering on dilapidated, even with the NFL‘s Raiders moving out a few years ago. Tropicana Field in St. Petersburg is not exactly a destination ballpark, plus it’s a good 25 miles from downtown Tampa. The commute to the park after work is in rush hour traffic.
Both the A’s and Rays are lobbying for new ballparks and it is a more pressing matter for the Athletics. Their lease at the Coliseum expires after the 2024 season. The team recently made an offer for a plot of land in Las Vegas, according to Mick Akers of the Las Vegas Review-Journal, which could be used as a ballpark site. It could also just be an investment should the team stay in Oakland.
“We’re kind of moving from a phase of research/data gathering to action around a final site,” A’s president Dave Kaval told Akers. “That’s really important because the site selection is a really critical path to keep the process moving forward to where we could have a holistically blessed project.”
By the end of 2022 we should have a pretty good idea where the A’s will play come 2025. If it’s Oakland, great. If it’s Las Vegas, then it’s Las Vegas. It could be somewhere else entirely too. Either way, the A’s will need to leave plenty of lead time to plan and build their new ballpark, especially since pandemic and supply chain issues could slow down construction.
The Rays have more time on their side. Their Tropicana Field lease expires after the 2027 season, so they have three more years to lobby and plan a new ballpark than the A’s. Tampa’s ownership is still pushing the two-city idea with Tampa and Montreal, which is unlikely to happen (good luck getting two cities to give you a ballpark), but again, there’s no rush, so why not keep trying?
In all likelihood clarity on the A’s ballpark situation is coming within the next 12 months. They’ll face a real time crunch getting their new ballpark in order if this isn’t settled by next December. The Rays can slow play things a bit more, but not forever. And, of course, once the Rays and A’s have their new ballparks situated, MLB can begin thinking about expansion.
“I think for us to expand we need to be resolved in Tampa and Oakland in terms of their stadium situations,” Manfred said in 2017. “As much as I hope that both Oakland and Tampa will get stadiums, I think it would be difficult to convince the owners to go forward with an expansion until those situations are resolved. Once they’re done, I think we have some great (expansion) candidates.”
Behind the scenes, MLB and the 30 clubs are terrified of all the cord-cutting going on these days. Cable and satellite packages can get very expensive very quickly, especially when you subscribe to sports packages. Rather than pay for literally hundreds of channels you don’t ever watch, many folks are dropping cable/satellite, and just paying for internet and select streaming services.
In October, The Athletic’s Daniel Kaplan reported Sinclair Broadcasting’s stock price is down 61 percent since Aug. 2019, when the company purchased 21 regional sports networks for $9.6 billion. That is a symptom of a larger problem. Local television money, long a lifeblood of MLB revenue, is beginning to dry up. Here’s more from Kaplan:
“I would just say that locally, regionally, teams need a new economic model,” said Rich Greenfield, a media analyst with LightShed Partners. “Every team, every league has to be thinking about what is happening right now. Cable subscribers are falling off of a cliff, forgetting about RSNs being dropped … audiences viewing sports are declining, obviously, more so than ever before is what we’re seeing so far this year other than the NFL, which is irrelevant to the RSN. So viewership is falling faster than ever before, subscribers are falling faster than ever before. And carriage drops are increasing.”
MLB teams sell their broadcast rights to regional sports networks (RSNs), which then charge cable and satellite providers to air their games. The cable and satellite providers sell subscriptions to customers, and you know what? Many of those subscribers don’t actually watch baseball. They get baseball channels as part of their cable/satellite package but they aren’t active fans.
Cable and satellite providers aren’t just losing customers who are baseball fans. They’re also losing customers who aren’t baseball fans but do pay for baseball channels as part of a larger cable/satellite package, and there’s no way to get those folks back once they cut the cord. The non-baseball fan revenue is going away and those losses will be passed on until they hit MLB itself.
MLB is looking into a streaming service that would give fans access to local games without a cable/satellite subscription (i.e. MLB.tv without blackouts), according to the New York Post‘s Josh Kosman, which would allow the league to recapture some cord-cutters, but not all. More likely, MLB will have to come up with other ways to generate revenue, because the television bubble is beginning to burst. (This is one reason MLB and other sports leagues have dived headfirst into gambling revenue.)
4. The baseball itself
Another year, another ball controversy. This year MLB used two different baseballs — the deadened ball we were supposed to have in 2021, and the livelier pre-2021 ball — without telling anyone, and they’re not hiding it. The league claims supply chain issues created by the pandemic forced Rawlings to fill in production gaps with leftover inventory from previous years.
On the surface, that’s fine. We’re all doing our best these days and if MLB and Rawlings had to use excess inventory to make sure games were played, so be it. But Dr. Meredith Wills, an astrophysicist who has been taking apart and studying MLB balls for years, found some livelier balls were manufactured in 2021. Rawlings produced the livelier ball this year, so the supply chain excuse doesn’t add up. MLB has some questions to answer.
MLB says the “2022 season will be played with only balls manufactured after the production change,” and I wish I could believe that, but I can’t. The baseball has changed too many times in recent years — the ball is the single most important piece of equipment in the game and expecting consistency year-to-year is not unreasonable — and players are unhappy about it. Pete Alonso went so far as to suggest MLB changed the ball to suppress salaries.
Also, MLB cracked down on foreign substances this season — the league did not change the rules, it just started enforcing the existing rule — and is working on prototypes for tacky baseballs, similar to the balls used in Japan and Korea. A tacky ball would, in theory, allow pitchers to have a better grip without using sticky stuff (though they’ll still look for an edge, of course). MLB is not there yet, but it seems like a tacky baseball is coming at some point.
The baseball has come up in CBA talks. Is it a front burner issue? My sense is no, but it’s definitely on the radar. Players (and I would guess most fans) want a baseball that performs consistently year-to-year. A tacky ball that eliminates the need for foreign substances (again, in theory) would be ideal. It feels like the situation with the baseball itself has gone critical. It’s time for MLB to get this settled for the sake of competitive integrity, and 2022 may be the year it happens.