Is a hard cap in MLB worth the risk of a strike or lockout?
In a harmonic convergence of sorts, three of the four major North American sports leagues will see their labor agreements expire in 2011 (the NHL has extended its agreement through the 2011-12 season). Up until 2002, that marked either a lockout or a strike for Major League Baseball as owners and players fought furiously over whether the game was in need of a salary cap while facing difficult economic times. And yet, with the expiration of the current collective bargaining agreement, there will have been 16 years of labor peace in Major League Baseball, all without a hard cap in place during a very difficult national economy.

While the national economy has spun downward to its worst level since the Great Depression, Major League Baseball has seen its business steadily grow, something that overshadows pressure to implement a hard cap. Last year, the league saw record revenues of $6.6 billion, the highest of any of the major four sports leagues. Major League Baseball was followed by the NFL ($6.5 billion), NBA ($3.2 billion), and NHL ($2.4 billion). The economics of the game, and the associated financial information that is collected by the clubs, is also a large part of baseball’s labor peace.

“Determining when the economy will completely right itself is still unknown, but one of the things both the league and union has been good at going back to the ‘80s has been an excellent flow of information and discussion about the finances of MLB as an industry,” said Michael Weiner, Executive Director of the MLB Players Association. “The league now provides us with essentially all the economic data that they receive from clubs, and they’re continued willingness to do so is a function of ours always honoring the confidentiality of that information.”

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Instead of MLB having labor issues, it is the NBA and NFL that sees saber rattling, with sports analysts predicting one or both seeing work stoppages. The capped systems for the leagues, both tied to revenues, are finding that in good times the systems work well. In a down economy, owners call for restrictions on player pay, something that of course the players are opposed to. The NBA is claiming that it lost $400 million last season, something that Billy Hunter, the head of the union for the players called “baloney.” Meanwhile the NFL is looking to reduce the players’ cut in league revenues from 58 percent to 47.56 percent. The NHL, still licking its wounds from the 2004-05 lockout that saw the cancelation of an entire season, seems to have learned the lessons from MLB and are just now seeing the game starting to regain its former prominence. How bad has it become for the NFL? Both the league and NFL Players Association have created special websites to make their arguments to the public as to who is right in their labor fight, with the NFLPA running an ominous “lockout clock” counting down to the day football is replaced by picket signs.

For those in MLB that negotiate labor agreements for the league and the players, there has been more “Kum ba yah” than “bring it on” for more than a decade, in large part because discussions of a hard cap have gone to the wayside in favor of increased revenue sharing and changes to the Luxury Tax. Even the vocabulary seems absent cap talk with “salary compression” often the buzz phrase used in its place. The threat of a labor stoppage for MLB is nearly nonexistent at this stage, and those that will sit across the table from each other to negotiate a new labor deal have settled into a steady rhythm after so many years going to war. While the business interests of the players and the league have been at the center of negotiations, according to Michael Weiner, the relationship has gotten better due to having many of the same people involved in negotiations for a considerable period of time.

“For a long time I think there was a substantial component on the management side that didn’t accept that the union was part of the landscape,“ said Weiner. “I think since the ’94-’95 strike, and on an increasing basis with ownership turnover, not only is there a recognition on management’s side that not only is the union a part of the landscape but that we can a positive part of improving the game and the business of the league.”