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The nerdiest article you’ll read about the baseball lockout

Why the fight that could cancel the baseball season is worth following, even if you don’t care about baseball.

A baseball player throwing a ball.
Max Scherzer #31 of the Los Angeles Dodgers pitches against the Atlanta Braves in the first inning of Game Two of the National League Championship Series at Truist Park on October 17, 2021. Scherzer is one of the chief negotiators for players trying to forge a new bargaining agreement.
Kevin C. Cox/Getty Images

There might not be a 2022 baseball season in America.

In early December, Major League Baseball’s collective bargaining agreement with the players’ union expired before any serious negotiations began about a new one.

Instead of extending the old agreement until a new contract could be ratified, MLB — which is to say, the owners of the 30 major league teams — decided to institute a lockout, essentially ceasing all baseball operations until there is a new bargaining agreement

Since then, negotiations have continued on and off, without major breakthroughs. By mid-February, players would normally have started spring training. When there wasn’t a contract at the end of February, the deadline the league had set in order to allow the season to start on time at the beginning of April, Major League Baseball Commissioner Rob Manfred announced he was canceling the first week or so of the 2022 season.

In the week since that announcement, the two sides appear to have moved even further apart on key issues, raising serious questions about when, or whether, the season will start at all.

It’s the highest-profile work stoppage in professional US sports in the nearly 20 years since the National Hockey League locked out players in the mid-2000s. And it’s happening at a moment when a range of industries are seeing increasingly empowered workers (and unions).

But the MLB lockout should be of special interest, even to people who aren’t into sports, because of baseball’s unique legal status. For over a century, Major League Baseball has been formally exempt from federal antitrust law, making it an explicitly legal monopoly. And baseball’s labor relations have long been entwined with that monopoly status — and with the federal courts.

The time Sonia Sotomayor saved baseball

Major League Baseball won its antitrust exemption after getting sued by a startup league in the 1910s. The judge hearing the case tried to sit on it for a year because he worried it would hurt baseball if he had to rule. (That judge, Kenesaw Mountain Landis, became the first commissioner of baseball a few years later.) The case ultimately made it to the pre-New Deal, reactionary Supreme Court, which ruled that baseball wasn’t subject to congressionally enacted laws because it didn’t engage in interstate commerce.

Over the next decades, the court’s view of interstate commerce expanded immensely, but the baseball exemption stood.

Twice, the Court heard challenges to the antitrust exemption, and twice it let the exemption stand. Both times, a key part of its argument was that if Congress had wanted to pass a bill subjecting baseball to antitrust law, it would have done so — and because it didn’t do this, Congress had essentially endorsed the exemption. (This argument is, frankly, a bit weird, since in the late 1950s, MLB pushed Congress to pass a law codifying the antitrust exemption, and Congress didn’t.)

The second and final time the court heard a challenge to the antitrust exemption, in 1972, it was in a labor relations case. Curt Flood, an outfielder, sued the league over the “reserve clause” — which gave contract rights to a player’s current team indefinitely, preventing him from seeking more money elsewhere or from vetoing a trade to a different team. After Flood lost the suit, the players’ union switched tactics and successfully got rid of the reserve clause, ushering in the era of free agency, when a player could run out his current contract, then force teams to bid against each other to maximize earnings from his new one.

The rise of free agency has changed public perceptions of sports unions. Often, labor fights in sports are perceived as millionaires versus billionaires because the top players are making so much money. But even though baseball has never had an official salary cap, there’s never been the arms race on player salaries that Econ 101 would predict.

If you want to know why there’s labor strife in baseball right now, this is as good an answer as any: While revenues for major league teams (i.e. owners) are at record highs, the amount of money paid to players in the last few years has gone down.

In the past, major league owners engaged in explicit collusion to keep offers to players low. The league ultimately paid out a settlement to the union after losing three straight arbitration cases regarding collusion in 1985, 1986, and 1987. The losses were so embarrassing that Atlanta Braves owner Ted Turner famously told his peers, “We have the only legal monopoly in America, and we’re fucking it up.”

Then, in early 1995, owners tried to force the union to accept a salary cap. When the National Labor Relations Board (NLRB) ruled against MLB in the dispute and the union lifted its ban on players negotiating with teams, MLB immediately banned all teams from signing players. The about-face prompted the NLRB to kick the labor dispute to federal courts in an attempt to save the 1995 season.

The judge who got the case, Sonia Sotomayor, was initially characterized in the press as not being a baseball fan — a description at which she took umbrage (Sotomayor was and remains a Yankees fan).

She issued a very quick and elegant injunction forcing the league and players to restart play under the old collective bargaining agreement, an act that White Sox fan President Barack Obama, when nominating her to the Supreme Court, would later characterize as “saving baseball.”

What’s at stake in the negotiations and why it matters

In the years since then, owners have quietly implemented a “soft” salary cap by forcing teams with a payroll over a certain amount to pay a fraction of that payroll as a “tax” to the league.

This “competitive balance tax” is the key issue in the current negotiations: The owners want to make it even more expensive for teams to go over the threshold, thus making it a “harder” salary cap.

Even though the league and players are still far apart on where they want the threshold to be, some owners feel that the league is already giving in too much by offering too high a threshold.

The problem, as the players (and a player-sympathetic baseball media) see it, is that the status quo incentivizes anti-competitive behavior from owners. The balance tax encourages richer teams as well as poorer ones to keep their costs down. Meanwhile, revenue-sharing subsidizes teams that bring in less money, either because they’re in a smaller market or just because the team isn’t worth paying to watch.

Put them together and it’s awfully easy to make money owning a baseball team without bothering to improve the product — which is to say, paying for better players.

This is the explanation usually given in sports media for the current rift between management and players: that professional baseball players are inherently competitive guys who’ve gotten angry as they see owners making money without trying to compete (and have a convenient foil in Manfred, a commissioner who often seems kind of indifferent about baseball).

But that understates just how impressive it is that players are so united.

When Manfred canceled Opening Day, players around the league spoke out and blamed him by name — including Mike Trout, a future Hall of Famer who is best known for not saying anything controversial (or really even interesting). Hall of Fame inductee David Ortiz reportedly convened a meeting of Dominican players and urged them to hold the line.

One of the union’s chief negotiators is pitcher Max Scherzer, who shortly before the lockout signed a $130 million three-year deal with the New York Mets. The superstars are forgoing their own salaries for as long as the lockout continues to fight for a deal that’s going to help people who aren’t millionaires. That’s an impressive feat of union organizing, but there are also other factors in play.

The other key issue is the future of free agency. In recent years, teams have learned to maximize the amount of time before a player can become a free agent by waiting until a couple of months into the season to bring stars up from the minors. By doing this, teams don’t just buy themselves an extra year of a rookie-contract bargain on a young star. They shorten the amount of time the player will have on a more lucrative contract before his skills decline. In theory, for more physically punishing positions, a player could already be on the downslope of his career when he first becomes a free agent — so he’ll never capture the value he generated at the top of his game.

Given the professionalization of youth sports over the last few decades, the fact that college athletes still can’t get paid for playing, and the fact that even the most promising baseball players spend a few years in the minor leagues (where un-unionized players are underpaid and even underfed by their teams), a baseball player could have put decades of uncompensated labor into a major league career in the hope of winning one big contract to make it all worth it.

That might be what the millionaires see when they look across the negotiating table at the billionaires: the people who benefit from years of free and cheap labor from people promised a big payday later, and are now balking at the prospect of paying out.

This article is adapted from Vox’s The Weeds newsletter, a weekly briefing to understand policy and its impact, from housing to health care to, yes, baseball! If you’re not a subscriber yet, you can sign up at vox.com/weedsletter.