Rob Manfred says he’s optimistic, and it could be ‘disastrous’ for MLB if he’s wrong
TAMPA, Fla. — The most important day in baseball’s attempt to salvage its season arrives Saturday. Major League Baseball plans to make a proposal it hopes will defibrillate negotiations on a new collective bargaining agreement. And anyone yearning to hear the crack of the bat and inhale the aromas of a ballpark on March 31 had better hope MLB makes a significant move. Because Opening Day might depend on it.
The person in charge of the league’s side of negotiations, commissioner Rob Manfred, spoke Thursday for the first time since he locked out players on Dec. 2. Seventy days into the MLB lockout — already the second-longest work stoppage in the game’s history — he attempted to project optimism, offering assurances that he still believes baseball will complete a regular schedule (missing games, he said, would be a “disastrous outcome” for the sport).
Amid that pacifism, Manfred still managed to illustrate why players are so aggrieved. During his 22-minute press conference, he argued that putting money in the stock market is more profitable than owning a baseball team, mangled facts regarding a vital part of negotiations (through a spokesperson Manfred said he misspoke), and said that “I’m the same person today as I was in 1998,” not exactly the sort of thing that speaks well of someone shepherding a sport in 2022.
Let’s start with Manfred dating himself to the era of dial-up Internet. The context is important: After answering a question about public criticisms of him — “I don’t [pay] a lot of attention to social media, to be honest with you,” he said — Manfred cut off the next question to point to his résumé as a negotiator: “In the history of baseball, the only person who has made a labor agreement without a dispute, and I did four of ’em, was me. Somehow during those four negotiations players and union representatives figured out a way to trust me enough to make a deal. I’m the same person today as I was in 1998 when I took that labor job.”
The most charitable read is that Manfred was saying, however inelegantly, that he has done deals before and that any change in the process is less on him than the MLB Players Association’s new leadership, namely Bruce Meyer, the players’ lead negotiator. And yet even then, the fact that baseball is where it is, staring down the postponement of spring training and potential loss of regular-season games, and Manfred is essentially blaming the other side — in response to an earlier question about why negotiations took so long to resume after Dec. 2, he replied “phones work two ways” — doesn’t exactly speak to the conviviality of a dealmaker.
A literal reading of Manfred’s words reveal a commissioner whose mindset resides in the previous century. And MLB’s position on just how valuable its teams really are seems to support that notion. Because when Manfred was asked a simple question — “Would you say that owning a baseball team is a good investment?” — he answered thusly.
“We actually hired an investment banker, a really good one actually, to look at that very issue,” Manfred said. “If you look at the purchase price of franchises, the cash that’s put in during the period of ownership and then what they’ve sold for, historically, the return on those investments is below what you’d get in the stock market, what you’d expect to get in the stock market. With a lot more risk.”
Never mind the fact that 30 men chose to own baseball teams rather than investing that money in the stock market. It’s better to focus on the hard facts that are publicly available and show that owning at least one team, the Atlanta Braves, is quite an excellent investment.
The Braves are owned by Liberty Media, a publicly traded company, and their financials are laid bare in public statements. The most recent statement covers the third quarter of 2021, from July through September, before the Braves won the World Series. In that quarter alone, the team’s operating income before depreciation and amortization (OIBDA) was $55 million, according to Liberty. Hefty returns aren’t anything new. The team’s OIBDA in 2018 was $88 million and in 2019 $49 million before losing $53 million during the COVID-shortened 2020 season. And that’s leaving out entirely the tax benefits organizations reap through depreciation and amortization.
Back in 1998, massive corporations and billionaires weren’t seen nearly as the boogeymen they are today. This sort of rhetoric — that baseball teams aren’t profit centers — was commonplace, a pillar of the league’s bargaining positions. Because teams’ finances are typically a black box, owners long made that argument without significant pushback from media or outside sources. In an interview with 590 The Fan in the summer of 2020, St. Louis’ Bill DeWitt said: “The industry isn’t very profitable, to be quite honest, and I think [players] understand that. But they think, you know, the owners are hiding profits, and you know there’s been a little bit of distrust there.”
Those days are over. And surely it should have occurred to DeWitt even then that such distrust stems from, say, owners of baseball teams calling their industry not very profitable. Certainly Manfred knows that there’s bound to be blowback when he tries to provide cover for his 30 bosses by downplaying just how much wealth there is in the sport in the midst of a labor negotiation that is, at its heart, about money. And yet that line of thinking from the league persists, because it’s far easier to argue that players are being paid enough if owners aren’t making bank themselves.
And still, at least some of the public buys into the league’s perspective. In a YouGov poll in December, 53% of respondents said they believe MLB players are paid “too much.” At the same time, the poll asked who respondents believe is more in the right with regard to the labor dispute: the players or owners. Sixty-seven percent said “not sure.” Of those who were sure: 23% were on the side of the players and 11% owners.
That’s a drastic change from the last labor stoppage, when a CBS/New York Times poll during the player strike that canceled the 1994 World Series had 40.5% of respondents saying owners were more in the right and 19.9% supporting the players. Such a paradigm shift shouldn’t be ignored in these negotiations, as much as the owners wish it could be. Public perception doesn’t make deals, but it certainly helps shape them.
Over the past two decades, MLB, with Manfred leading its negotiations, flipped the power dynamics that had tilted in favor of players. The league’s strategy worked to great effect, and the results played out over the past five years of the basic agreement that expired in December. Industry revenue grew. Salaries decreased. This simple fact underpins the radicalization of players, who see Manfred as the avatar for the ownership class he represents.
The minefield the commissioner must navigate is treacherous. Players want more. Owners don’t want to spend more. At stake is his legacy. Is he indeed a consummate dealmaker or does he just try to play one in public?
When the sides assemble Saturday, it will be just the fifth core-economics meeting since the lockout began. The union has barely budged from its positions in that time. It relented on seeking earlier free agency for players and dropped its ask for a revenue-sharing reduction from $100 million to $30 million — both subjects that the league said were non-starters to begin with. Its positions on minimum salaries, arbitration eligibility for players with two-plus years of service and service-time manipulation have remained the same. Angered by MLB’s last proposal, the union countered with a reduction of its proposed pre-arbitration bonus pool from $105 million to $100 million.
At the same time, the league has also barely moved. It raised its proposed minimum salary from $600,000 to $615,000. It accepted the bonus-pool idea — and offered $10 million, less than a tenth of what the union sought. MLB is still out on changes to revenue sharing and arbitration. Its draft lottery, offered before the lockout, underwent minuscule revisions. Its biggest move was an alternate solution to service-time manipulation: offering draft picks to teams that roster a high-achieving player for a full season. The union wants the plan on top of its proposal to allow players to earn a full year of service through performance.
Not mentioned by either side since the lockout started is the competitive-balance tax, which made an odd appearance Thursday. When asked about it Thursday, Manfred said the league had proposed taxation rates that were “status quo.” This was incorrect. In recent years, the tax rate was 20% for teams over the $210 million threshold, 30% at $230 million and 50% at $250 million. MLB’s proposal calls for a 50% rate at a $214 million threshold, 75% at $234 million and 100% at $254 million. Additionally, teams would lose a third-round draft pick at the first threshold, a second-round pick at the second and a first-round pick at the largest.
The CBT already was a sore subject for players, with the top rates stagnant in recent years as revenue grew. While Manfred characterizing it incorrectly may well have been an innocent mistake, it nonetheless highlighted the sizable gap that exists between the sides and how precarious these negotiations are.
Manfred’s optimistic tack necessitates action to match it. He wasn’t ready to declare the opening of spring training postponed, even though everyone in the sport knows players will not be in camps as scheduled next week. That, presumably, will come after the league makes its offer Saturday — something Manfred characterized as a “good proposal.”
Good is relative. Good is enough to kickstart a negotiation in which the sides make headway toward a deal. Good is no longer incremental, not with the end of February three weeks away and Manfred saying he wants four weeks of spring training before the season begins. Good is acknowledging that things have changed — society as well as the union — and that MLB can and will change with them.
If Saturday brings anything less, the players will only dig in more and regular-season games will be threatened. Owners have operated on the assumption that the union is holding out until a deadline — like the soft one at the end of February or beginning of March — will get things moving. All it takes, as Manfred said Thursday, is one moment to turn negotiations from a standstill to something more productive, and the league has the opportunity to do just that.
Otherwise, it’s obvious what’s next. Manfred said it himself. The disastrous outcome that nobody wants.