MLB: Is A Lockout Inevitable?

For those who are unaware, the MLB's current CBA (Collective Bargaining Agreement) is set to expire on December 1st of this year. As it stands right now, the final pitch of the World Series will crown its next champion before the baseball world plunges into darkness. Experts are predicting a cataclysmic event that will shut down free agency, Spring Training, and potentially some of the regular season in 2027. This would be similar to the player's strike in 1994-95. The difference this time is that it won't be a strike. Instead, players, owners, and the public may each stand at different corners of the ring waiting for their chance to enter into the bench-clearing brawl. At the heart of this predicted lockout that we'll all be fighting over stand two major issues: a true Salary Cap and Market Disparity.

First, let's take a step back and examine the most important question for any historian. "How?" How did we get here? How did the events of the past lead us here? How do they affect us now? Unlike many professional sports, the MLB does not have a true "hard cap". A hard cap prevents teams from spending more than the limit, and there are severe penalties including forfeiting games if you do not bring your spending down. That doesn't exist in baseball. Instead, we have a "soft cap", also known as a Luxury Tax, that taxes you for each dollar spent over the cap. The tax increases each year you are over this designated amount. Let's say the designated soft cap is set at $1 million. If your team payroll is $1,000,001, then your first year of penalty will be 20%. Do the math, and you pay an extra 20 cents in tax. If you do it again next year, it will be 30 cents (so 30%). A third year or more is 50 cents (50%). If you do it for even longer, you start getting penalized in the Draft by having your picks punted to later spots in the rounds on top of this tax. Insert any hypothetical amount into this formula, and now you understand how the MLB's economy works.

Where does all this money go? Everyone wants a piece of the pie, but most of the luxury tax dollars go to player's funds for benefits, assistance programs, and retirement. The rest is handled by the Commissioner and divvied up through his "designated revenue system." Sounds fishy, but he's not lining his pockets with tax money. Instead, this revenue system equitably distributes the tax dollars to other teams, owners, and markets looking to increase the competitiveness of their club. Textbook Socialism. That's not derogatory, that's just what it is. If a rich team like the Dodgers spends well over the cap, then that money is taken and given to a poorer team like the Pirates. The MLB reallocates this money in an attempt to ensure equity (or equality) without smaller market teams having to spend more than they can afford.

Which leads me to my next point... what is a small market? A common misconception is that market size is determined by its population. That point may have worked in the 1910, but it's obsolete now. With the invention of the television, markets expanded rapidly. For example, the Red Sox have all of New England at their disposal. The Braves have a majority of the Southeastern US. The Blue Jays have all of Canada. What's the excuse? Nothing. The only valid reasons would be a lack of investors or just cheap, frugal owners. That's exactly what the problem with the MLB is. San Francisco is one of the most populus cities in the United States, so why are they considered a middle market? Why hasn't the team competed in over a decade? Cheap ownership and an inferiority complex are to blame. The idea of a "small market" is perpetuated to either guilt fans into spending more to go to games or to help them cope with losing. Either way, the cheap owners can claim they had nothing to do with it and that their hands are tied because they don't have enough money. Yeah, I'm not buying it.

Where were these excuses when the Yankees won 27 championships? What about the Cardinals and Philadelphia Athletics of old? People have always clamored about other teams spending too much money. In 1902, the Philly A's, were once gifted a white elephant statue from a fan in protest of the team spending too much money on the club. Owner John McGraw loved the insult so much that he made a white elephant their team logo and mascot (which it still is today). After they won the AL Pennant, the team gifted thousands of replicas to fans. Is this not the same thing that's happening with the Dodgers today, 124 years later? It's ignorant to think that this is something new.

But what does all of this mean for 2027 and the future of baseball? Are the Dodgers ruining the game we love? Did the Yankees ruin it already in the 90s? Did the A's ruin it in the 1900s? Should Abner Doubleday just never have invented baseball at all? Let's all take a deep breath before we get too carried away. Currently, the only people upset about the state of the MLB are the fans. The players are making more money than ever, the owners are getting kickbacks from the Luxury Tax, and investors and media corporations are overflowing with profit. Sounds very American to me! I highly doubt any player would support a salary cap because doing so would limit the money they could make. I doubt any paying owners would support one either. If you have the money, then use it. Investors and the media certainly won't to cap their spending either. You have to spend money to make money. That's Hayek's free market economy.

If there is a lockout, it will be a petty war of cheap owners. Fans may boycott the sport or their teams, but that's more of a virtue signal than anything. Fans should instead encourage these cheap owners to sell the team to someone who will actually invest in it and build the team up. Someone who actually wants to compete and win a championship instead of waiting for his Luxury Tax handout at the end of the season. The problem with baseball isn't overspending: it's a lack thereof. If the Pirates, A's, and Marlins had owners that would spend half as much as the Dodgers, then we'd have a very competitive league. But they don't. Instead, these frugal owners would rather plunge the league into a lockout than to spend a few extra bucks. That, in principle, is selfishness and greed, which often cause many problems in the world anyways.

So as for me, I'm on the Dodgers' side. I want them to stick it to all the other owners that refuse to spend and hide behind excuses. It's cowardice. Championships are won by warriors. As my friend Payton says, "Hungry dogs run faster." This team was cheated out of multiple championships in the 2010s. They had to spend even more because their seemingly unstoppable team couldn't get over the hump. If you want to blame someone, blame the cheating Astros and Red Sox for creating this monster. If we have a lockout, it will be fought by players who want more money and owners who want to spend less. Isn't that how it always goes?