By Mark Knudson @MarkKnudson41 Special to WoodyPaige.com
The bargaining rights of Major League Baseball players had reached new heights by the mid 1980’s, and most of the game’s team owners – with the notable exception of New York Yankees boss George Steinbrenner – wanted to put on the brakes. Salaries were skyrocketing and the owners had only themselves (and Steinbrenner) to blame. Collective bargaining talks between the players union and the owners were contentious at best. Impasses in negotiations resulted in four “work stoppages” (three player strikes and one owner’s lockout) between 1980 – 1995 and robbed fans of hundreds of games, creating ill will and staining the sport.
The Baseball Commissioner in the mid 1980’s, Peter Ueberroth, who resided neatly in the hip pocket of the hard line owners, helped devise a scheme to hold down player salaries. They all secretly agreed that no one – including Steinbrenner – could sign another team’s free agent player, and that no free agents got anything longer than a three year contract. In the off season of 1985-86, only four out of 35 free agents chained teams – and those four were not wanted back by their previous club – and no one got a contract longer than three seasons. This collusion went on for a couple of off seasons and resulted in three separate court cases.
The scheme – ultimately ruled to be unlawful collusion all three times – cost the owners a combined $280 million. It was a miserable failure.
Fast forward to 2018 and the off season that is nearing an end. Not since those days of owner collusion to hold down salaries has there been such a shockingly slow market for the services of hundreds of eligible free agent players – including a good number of valuable and productive standouts.
Is this collusion all over again?
Or maybe…is common sense is simply taking up residency in the owner’s box?
Unlike the period between 1985 – 1987, player salaries are not stagnant in 2018. Outfielder Lorenzo Cain just signed with the Milwaukee Brewers for $80 million. First basemen Carlos Santana got $20 mil per season for the next three seasons from Philadelphia. The Colorado Rockies gave veteran relief pitcher Wade Davis more than $17 mil a season for that same time period. They – and several others – have changed teams, proving there’s nothing nefarious going on.
But this market has been historically slow. Why? Because the owners are (justifiably) individually pushing back against the length of many of these new contract requests. Players like 28-year-old first baseman Eric Hosmer are asking for six, seven and even eight year deals. Owners – perhaps finally noticing the effects that year ‘round baseball at the youth level is having on the longevity of adult careers – are just saying no. While Cain, age 31, got five years from the notoriously penny pinching Brewers, three years is the max any other free agent has received so far. And there’s nothing wrong with that this time. Other than Hosmer, you can count the notable free agents still on the market who are under 30-years-old on one hand. Does it make sense to give a guy in his early 30’s a seven or eight year contract?
Player agents like Scott Boras are crying foul, but the actual root of the problem is the unrealistic expectations he and many other agents have put into place. While Boras can throw out numbers that show how the clubs are making a lot more money than they’re spending on players salaries and talking about how financially secure they are at this moment, he can’t predict the future, which is what he’s banking on. Boras – who represents Hosmer – is telling everyone that he knows that his client, at age 35, will still be worth $20 mil a year. Does he own a crystal hardball?
The simple fact is that neither Boras nor anyone else has any clue what 35-year-old Eric Hosmer will be like, or if he will still even be playing Major League Baseball. It’s possible that Hosmer may indeed still be a standout player eight years from now…but it’s more likely he won’t be, which is why teams aren’t buying what Boras is selling at the moment.
The most amazing part is that Boras/Hosmer have reportedly already turned down a seven-year deal from the Royals (his old team) and the San Diego Padres. With Spring Training on the immediate horizon, it’s pretty obvious to everyone (including most MLB players) that doesn’t work for Scott Boras that Team Hosmer should gladly accept that kind of multi-year offer. Like… yesterday.
Several other big named players, like Jonathon Lucroy (age 31), J.D. Martinez (30) and Jake Arrieta (31) have still not signed. Soon they’re going to be forced to sign contracts that are not quite as lengthy as they’d probably like. That’s just common sense.
This is not to suggest in any way shape or form that players aren’t worth what they’re getting paid. Based on the demand and the financial health of the game, they most certainly are. This is just to suggest that assuming a guy who is now age 30 is still going to be just as productive at the major league level when he’s past 35 is foolish speculation, nothing more. Industries don’t remain sound if they make business decisions based on foolish speculation.
Baseball is the only sport smart enough to NOT have a salary cap. The game has a luxury tax system that has worked so well that baseball has actually had much better parity between large and small market teams than those sports that are burdened by having a cap. Small market Kansas City has won the World Series this decade, while the Los Angeles Dodgers haven’t won the title since 1988.
That’s largely because the financial discrepancy between small and large market clubs – due largely to the big gap in local broadcast revenues between team like the Royals and Dodgers – is addressed with the revenue sharing tax, rather than a cap. A salary cap actually serves as a deterrent to weaker teams trying to get stronger (they don’t get any additional revenue in that system) and only helps rich owners save money and stay richer. The luxury tax spreads the wealth, so to speak, creating greater parity within the game.
Baseball is in good shape on and off the field. The game has a system that works, even if it’s not perfect. What needs to happen in the next round of collective bargaining is for the player’s union to find a way to gain some new freedoms – removing the earning shackles so to speak – so that the game’s younger players can start to see some of the financial windfalls every player is seeking while they’re in their prime earning years, rather than when they’re on the downhill side of 30 and easier to say ‘no’ to.