MLB lockout: What it means for free agency? How long will it last?

MLB’s current collective bargaining agreement is set to expire at 11:59 p.m. ET on Dec. 1. What happens after that point? Well, it’s not great. It’s also not a reason to panic — yet.

While the two sides at the bargaining table — the owners and the players union — are trying to work toward an agreement before that deadline, it appears likely that Dec. 1 will come and go without a new CBA. That could ultimately lead to a lockout, signifying MLB’s first work stoppage since 1994. That season was halted in August by a player strike which ultimately led to the cancellation of the World Series and a delay to the start of the 1995 season.

What is a lockout?

A lockout is an economic weapon management can use. Employees can go on strike while management can lock employees out. It does not necessarily mean placing a literal lock on the gates, but that is effectively what is happening.

A lockout brings business to a halt. Most notably, that means no more free-agent signings. I think that’s one reason why you are seeing some of the second-tier free agents, such as Eduardo Rodriguez and Steven Matz, getting their deals done now. Once a lockout is in place, no other signings can occur.

A lockout would also mean no Rule 5 draft. There is no arbitration process, and most notably, MLB and the union have agreed to move the tender deadline from December 2 to November 30. This is the date by which teams must offer 2022 contracts to players who are not yet eligible for free agency. By moving it to the day before the end of the CBA, it theoretically gives free agents a day to try and sign a deal before everything might shut down. As if you needed another signal that, yes, we’re going to have a lockout.

How long will the lockout last?

A lockout taking hold on Dec. 2 will lead to a lot of bold headlines in oversized fonts, but it’s not exactly doomsday. Both sides can continue to negotiate during the stoppage. Maybe they will come to an agreement later in December. Or January. That’s what one can hope.

However, it’s fair to say that there won’t be true urgency given to those meetings until there is real money to be lost. In other words, the loss of spring training games followed by the loss of regular-season games. Now, both sides likely understand that having a lockout extend into the regular season would be catastrophic for the sport’s image and bottom line. So, the safest bet is that a new CBA won’t be reached until sometime in February. Beyond then, there is just too much money to be lost for each side. And sure enough, it’s money that lies at the heart of the issues in these current CBA negotiations.

What are the main issues in these CBA negotiations?

A lot of on-field matters are being discussed, such as implementing the designated hitter in both leagues, expanding the playoff field, banning certain defensive shifts, installing a pitch clock, etc. But two topics stand out above those at the negotiating table.

The first is in regards to when players can reach free agency. Currently, players can hit the open market after accruing six years of service time. They are paid the league minimum for the first three years of his career ($570,000 this past season) and then are eligible for arbitration in the next three years.

The union, which would like to see its members paid as much as possible, wants to shorten the time it takes for a player to reach free agency. It would also like to raise the minimum salary.

The owners, who generally would like to save money and get the most value out of their young players for the fewest dollars, are obviously against shortening a player’s free-agency clock. They have proposed granting players free agency at 29 ¹⁄₂ years of age, which has been polarizing to say the least.

The second big financial issue on the docket is in regards to competitive balance. In other words, how can we stop teams from outwardly tanking? Such a tactic has worked previously for teams; look at the Astros, who tanked for much of the first half of the 2010s, got a bunch of high draft picks for their failures, brought along players such as George Springer and Carlos Correa well, and it ultimately culminated in a World Series title in 2017 (no trash can talk here).

But tanking isn’t a foolproof plan. Just look at the Orioles, who are in year 5 of a (insert number here)-year rebuild. And even if a team isn’t shooting for the basement, there are many that simply aren’t competing as hard as they could because some of these owners care more about making as much of a profit as possible. Raising payroll doesn’t jibe with that goal.

To counteract this, there have been discussions about changing how the draft order is decided and changing the league’s revenue-sharing system. Both sides have made proposals that aim to keep consistently poor teams away from the top of the draft year-after-year. The owners have also proposed a salary floor, in which teams must have a payroll of at least $100 million. While that seems like a workable idea for the union, the proposal also includes lowering the current luxury tax threshold from $210 million to $180 million.

The luxury tax threshold has been seen as a soft cap across the league. It’s a number that many teams don’t want to exceed for the fear of paying taxes on every dollar over the threshold. And those taxes are shared among the teams and help fund their payrolls. The union, which wants the owners to spend as much money as possible, will not agree to a lowered luxury tax threshold.

And ultimately, this is kind of just scratching the surface of everything that needs to be hammered out for the next CBA. Ultimately, it comes down to money.

Don’t freak out once a lockout begins on Dec. 2. As Bane said in “The Dark Knight Rises,” now is not the time for fear; that comes later. In this case, later would be somewhere in late February. If the two sides are still far apart by the time pitchers and catchers are usually scheduled to report to spring training, then you can place your hand over the panic button.