![]() Arguably, there should be an enforcement mechanism and an incentive system that ensures that revenue sharing will be used to increase payrolls and diminish tanking. The current system allows lower payroll teams to pocket the shared local revenues, and there is neither a payroll floor nor a requirement to invest in talent, which benefits small-market owners. In MLB the lowest revenue teams now earn the largest revenue-sharing subsidies. The spoils of major league sports are not uniformly distributed across owners. CBA negotiations tend to settle on resolution of the former, but it is often a breakdown regarding the latter that triggers a lockout. One is the obvious split between owners and players, but also fundamental is the allocation of revenues among the owners themselves. ![]() There are two phases of the revenue-sharing debate that drive labor unrest. If the owners have things going their way, why the lockout? First, sports labor negotiations center around the division of revenues that is, how to split their big-money pie. The owners have countered that all players should wait for free agency at 29.5 years of age, instead of after six years of Major League experience. The MLBPA also charges clubs with manipulating players’ service time, through late call-ups to the majors for young minor league stars, which extend the time to reach free agent status. Tanking clubs are avoiding the players labor market, and that puts downward pressure on all salaries. The union is also not happy that small market teams are “tanking,” or willfully not competing, for the purpose of reducing their payrolls. The competitive balance tax on club payrolls has proven effective as a de facto salary cap, especially since the 2016 CBA, when penalties increased. For example, many observers believe players have seen their share of total league revenue decline considerably since the early 2000s. This time it’s the union (MLBPA) putting forth the primary complaints with the current system. The side with the most dissatisfaction with the current system or the most to gain from a revision has the greatest incentive to initiate a stoppage. Typically, when a sports league’s CBA approaches expiration there is some public jockeying, with both sides making a case for what needs to be changed. Since 1995, MLB has resolved issues before the end of each term and renegotiated with little incident four times, including new CBAs in 2002, 2006, 20. The resulting CBAs have reduced the players’ share of revenue across the board and have included the owner-friendly policies of a hard salary cap in the NHL a highly punitive luxury tax and limits on individual player salaries in the NBA and a direct reduction of the players’ share of NFL revenue. And every lockout-three in the National Hockey League three in the National Basketball Association and one in the National Football League-has culminated with significant union concessions. The MLB lockout follows the pattern of labor negations in American professional sports since the 1994-95 baseball strike, where every work stoppage has been an owner-initiated lockout. ![]() Strikes are much more common in industry, yet in professional sports, owner lockouts have entirely supplanted union strikes. Work stoppages-a lockout, if led by the owners, or a strike, led by a players’ union-are commonplace in unionized workforces, and sports are no exception. The trend of rolling back those advances will likely continue with Major League Baseball’s current lockout, as owners will settle their differences on sharing the spoils at the expense of the players. Union gains are hardly erased, but owners have been able to exploit labor laws, and the use of the lockout in particular, to roll back considerable union gains of the last century. Notwithstanding, the 21st century has seen an about-face. The last quarter of the 20th century saw American professional sport unions utilize labor law to make considerable advances in compensation and working conditions. Maxcy, professor and head of sport business at Drexel University’s Lebow College of Business.
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