Trickle-down economy at the heart of the baseball labor dispute

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NEW YORK – Francisco Lindor’s $ 341 million contract with the New York Mets should be a boon to other shortstops. The same goes for pitchers when the aces Gerrit Cole and Max Scherzer signed mega deals.

Baseball players have long benefited from the trickle-down economy, in which stars create a market that leads to higher paydays for those below. While a bevy of record-breaking deals over the past few seasons has pushed the salary spectrum to the top, they haven’t done much for players on the lower end and may have contributed to a thinning of the middle class.

Players ‘belief in a top-down market and their desire to increase teams’ payrolls is at the center of the financial differences that led to Major League Baseball’s first work stoppage in 26 years.

Lindor, Cole and Scherzer are on the union’s eight-member executive committee. The group also includes infielder Marcus Semien, catcher Jason Castro and pitchers Zack Britton, Andrew Miller and James Paxton. Of these, only Castro – at $ 3.5 million – made less than $ 12 million last season.

Of the 1,670 players who appeared in the Major League that year, 1,145 made less than $ 1 million, including 771 under $ 500,000 and 241 under $ 100,000.

“Ultimately, we are struggling in many places to make things better for the next CBA,” Miller wrote in an email to The Associated Press. “We want every player to be treated fairly and compensated, that every team tries to win and ultimately every fan of our game sees the best possible version of baseball.”

Concerned salaries have been weighed down by the luxury tax and a drop in major league payrolls since 2017, with the union proposing raising the tax ceiling from $ 210 million to $ 245 million. Players would cut free agent eligibility from six seasons in the big league to five for players 29.5 and younger by 2025-26, and lower pay arbitration eligibility to two years. The overwhelming percentage of the profits would go to the top earners.

MLB claims union proposals will result in more stars leaving smaller markets, an attitude gamers believe is a ruse to hide an aversion to spending spikes.

“The closer you get to a free market, the closer you get to an accurate valuation of players, and the more restrictions there are, the more artificial the salaries,” said Gabe Feldman, director of Tulane’s sports rights program. “But then there is also the concern that all leagues have that if there is a free market, the big-market teams will attract the best players because they are willing to pay more.”

Negotiations broke off on December 1, hours before the collective agreement expired, and the MLB initiated a lockout the following day. The sites have remained publicly silent since then, and talks on key economic drivers are not expected to resume until next month, as the scheduled start of spring training on Feb.16 draws nearer.

The MLB’s 100 highest paid players accounted for 50.6% of revenue in 2021 on the opening days.

Since many teams gave the stars a higher percentage of salaries, some journeymen threw seven-figure salaries in favor of younger players with shared contracts: far lower salaries in the smaller leagues than in the majors. Because of this, and the increasing role of auxiliaries, the end of rosters has become a constant change between majors and minors.

“We have been at war with our middle-class players by and large for the past two decades, in sports with the salary cap and in baseball with the luxury tax and free agency,” said Bob Boland, a former agent with Penn. teaches State School of Labor and Employment Relations. “When you’re a players union, you know that the top end of the free agency will always have some value. What you worry about is whether there is a living next level piece, and baseball has already cut that down vigorously. “

MLB has proposed raising the major league minimum salary from $ 570,500 to a number of tiers: $ 600,000 for players with less than a year of service in the big league, $ 650,000 for at least one but less than two and $ 700,000 for at least two. Each would rise by $ 10,000 annually, to $ 640,000, $ 690,000, and $ 740,000 in 2026.

Players have asked for the highest minimum percentage increase in decades: $ 775,000, rising to $ 875,000 by last season. Both sides would raise minimum amounts while they are being allocated to the minors.

Players have also suggested that those not yet eligible for arbitration split a $ 105 million bonus pool from central revenue based on WAR, appearances on an MLB-only team, and recognitions such as best positional, best Pitcher and best rookie.

Expanding the designated hitter into the National League would likely create several higher paying jobs for seasoned hitters.

Baseball’s luxury tax cap started at $ 117 million in 2003, rose to $ 148 million by 2007, and hit $ 206 million in 2019, the last season before the pandemic. The threshold rose 18% from 2013 to 2019, a period during which the MLB posted sales numbers up 49%.

Commissioner Rob Manfred put MLB’s operating losses from the pandemic at $ 3 billion in 2020 and said it was too early to reveal a number for 2021.

No more than six teams have paid luxury taxes each season, and the norm is closer to three. Many clubs have treated the threshold as an upper limit, making tax the most important factor in limiting club spending. If tax levels were the only factor, the proposed changes to freedom of representation and arbitration would likely shift an extra percentage of the money to the stars, but the union insists that the economic system is not zero sum and many actors take advantage of their proposals .

The teams have offered a tax cap of $ 214 million for each of the next three seasons, which will rise to $ 216 million in 2025 and to $ 220 million in 2026.

And while the teams have proposed a minimum wage of $ 100 million, it would be funded by a 25 percent tax on payroll over $ 180 million. The union says the penalty at the top would more than make up for any gain at the bottom.

Additionally, players want to stop what they call refueling, what the clubs call prudent decisions, short-term demolishing big league squads aiming to rebuild for longer-term success.

Both sides have proposed expanding the playoffs, owners from 10 teams to 14 and players to 12, which would encourage more competition. Players also want safeguards against service time manipulation, such as: B. the ability to accumulate service time based on accomplishments.

The negotiators have also discussed an NBA-style draft lottery, but the owners would limit it to the top three teams and the players would expand it to the top eight. The union would reward small teams with additional draft picks for success, such as:

Possible changes to speed up the game have been set aside for the time being.

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