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— Where BTF's Members Investigate the Grand Old Game
Wednesday, August 21, 2002
Why There Won’t Be a Strike
I sure hope Eugene is right.
There has been a lot of hue and cry on SABRmetric websites such as Baseball Primer and Baseball Prospectus about why neither of the owners’ key proposals will increase competitive balance. There has been even more hue and cry in the mainstream media about why the spoiled, greedy players, who average $2.4M per season, should not strike, especially with the first anniversary of the September 11 terrorist attacks only a week and one-half after the scheduled strike date. This column deals with neither of these issues and you should be glad about that because the topics have been discussed ad nauseam over the past few weeks.
Last week we heard a lot of optimism from the players who delayed setting a strike date. Instead of the sides moving closer together, nothing happened. That’s why one sets a strike date if one is the Union. But, it also showed that the owners wanted a strike date to be set. They wanted the upper hand in the media campaign that was shortly wrested from them by the players deciding to defer any action. Now that the owners are again winning the media war, something that the players care little about, they have begun negotiating again at the table.
First, there is a procedural issue that has not yet been addressed. The players have not yet voted to strike. I do not have a copy of the MLBPA Constitution and By Laws, but I can assure you that the players must individually vote to strike. Instead, all that has happened thus far is a sense of the Union has been taken by the Player Representatives on each team, and from that sense, the Executive Board of the Union has authorized a strike date. Eventually the vote will have to be taken, and it is likely the vote will be pro forma, but it is necessary for a strike to occur. Even so, I do believe that should it come down to a vote, the membership will authorize a strike.
The real reason that there won’t be a strike has to do with the owners. The owners have already won. This may come as a shock to you, but it is true. Go back to the beginnings of this collective bargaining process. The owners were calling for increased revenue sharing, a much stronger salary tax system than was in the previous CBA, a worldwide draft, and steroid testing. Which of those issues have they not achieved? The Union began by arguing that owners were not losing money as they said they were. They argued that a salary tax was a de facto salary cap and they weren’t going to buy into any salary cap. They argued that steroid testing would violate players’ privacy.
Since then they have agreed to a worldwide draft. I actually think this is good for the Union as a whole. Remember, the Union is made up of its current members. It only has to negotiate on behalf of its current members. Foreign players who are currently free agents take away potential money that could be spent on Major League free agents, who are current members of the Union. If those foreign players become part of the much lower paid class of draftees, then more money will be spent on the current membership of the Union.
The Union then bought into steroid testing. Although the system is not yet fully fleshed, or in this case muscled, out, it will be in effect beginning in 2003. The Union’s proposal maintains the anonymity of the players and protects them from discipline. These are the two major issues that the Union was arguing on positionally. So they were able to meet their interests without being locked into a position.
Now the Union is wrestling with a salary tax. The Owners have proposed taxing the portions of payrolls over $102 million (using 40-man rosters and including $9 million per team in benefits), and using a tax rate of 37.5 to 50 percent. The Union has proposed thresholds of $130 million to $150 million, with a tax rate of 15 to 30 percent. Where is this compared to where we were months ago? It’s a long way. The players have already bought into the principle of taxing salaries based in the manner that the owners want- based upon a fixed cap. Once the cap is exceeded, each marginal dollar is taxed. This is a complete departure from the Union’s original position. First, they were philosophically opposed to a tax. Second, if they were to accept a tax it should be like the tax under the last CBA. That tax was levied against the five highest payrolls only. This allowed each team to move upward without penalty as long as they stayed outside of the top five. Conceding to the owners fixed ceiling, whether it’s at $102M, $130M, or somewhere in between is already a capitulation to the owners.
Many of the owners are looking to break the Union. That is not a realistic goal. Their goal should be to achieve their proposals at the table, and if they cannot achieve them totally, they should look to achieve them longer term. Once the majority of owners realize that they’ve achieved their goals this will settle quickly. Part of that realization has to do with the messenger. Selig always talks in terms of gloom and doom. He may paint the picture of the current bargaining as still positional based. But, it’s not. The owners have won on principle. If that’s presented to them in any coherent manner this will settle without a strike.
Next there is the issue of revenue sharing. We haven’t heard too much about this issue in recent days, or even weeks. I can’t even find exactly what the current proposals are. To me this means that the owners aren’t as united on this issue as they are on the salary tax. They want to punish George Steinbrenner for having a salary expenditure that’s far and away the most, but they’re not so sure they want to punish him for having the biggest draw. Sure the Yankees are the biggest draw, but there are others who are close. Can Cleveland really support more revenue sharing? Can the Phillies justify receiving more money? Also, I wouldn’t doubt it if some owners don’t trust each other to report revenue accurately. Even though this issue keeps being reported as open there are no facts or proposals attributed to either side anymore. They are either so close that it’s no longer significant or one side- the owner’s side, is so divided on this issue that they don’t even have proposals anymore. Eventually this one will be settled quickly.
Finally, we have contraction. We also have an arbitrator who appears unable or unwilling to decide the case. Many times I will contact an arbitrator and ask that a decision or hearing be held in abeyance pending settlement discussions. This allows the parties to negotiate the issue without the pressure of a third party ruling one way or the other and mooting discussions. I would suspect that the owners have already given in on contraction for the Union’s concessions on a salary tax system. It is far better to reduce pay slightly overall then lose 80 jobs. And, don’t doubt that the Union considered this to be 80 jobs, because each team in question has a 25 man active roster, but 40 players considered Major Leaguers, receiving benefits, and paying Union dues.
The important thing to note in all of this is that both parties are on the same page for each of the issues now. They are dealing with numbers only and not principles, theories, and positions. The owners have achieved all of their overarching goals. The Union has prevented those goals from being achieved to the fullest extent possible while saving 80 jobs. I don’t know whether or not a critical mass of owners will realize that they’ve won on principle prior to August 30. In the final few days leading up to August 30 there will be a lot of conference calls and perhaps a few face-to-face meetings. At some point one of the owners will figure it out and explain it to his colleagues. Perhaps they already know. That is what will prevent a strike. The owners have won, they only have to figure out that they have.
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