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Do not mistake Lorenzo Cain’s five-year, $80 million free-agent deal with the Milwaukee Brewers for some great thaw in this most frozen of baseball winters. As February fast approaches, as spring training dawns, as multiple full teams’ worth of players remain jobless, frustration on the players’ side is growing, entrenchment on the teams’ side is intensifying and a neither party seems particularly inclined to blink.
The game buzzed Thursday night about the Brewers’ daring set of plays, which included their signing of Cain, acquisition of outfielder Christian Yelich from Miami for four prospects and pursuit of a trade for a starting pitcher using their outfield surplus. Temporarily it distracted from a reality that grows more stark by the day: The players, as engaged as they’ve been in economic matters in more than a decade – maybe more than any time since 1994 – are encouraging one another to stand firm amid teams’ efforts to remake the free agent market, sources familiar with the situation told Yahoo Sports.
Players believe the value dispute between the sides will last long enough that a number have discussed the possibility of staging a free agent training camp to mimic their typical spring work, according to sources. Others already are making workout plans independent of a possible camp. The players have coalesced around not just a depressed free agent market but anger over Major League Baseball’s proposed implementation of new pace-of-play rules about which a significant number of players have voiced their concern.
MLB Players Association executive director Tony Clark met with commissioner Rob Manfred and deputy commissioner Dan Halem earlier this week to discuss pace of play, according to sources. Negotiating against the backdrop of the free agent market has complicated the possibility of a deal, sources said. Players continue to swap stories of their free agent experiences, which circulate among their peers in phone calls and on text chains that capture their dissatisfaction.
Some cry collusion, though no clear evidence to support that has manifested itself yet. Others fear clubs’ tactics are going to wipe out baseball’s so-called middle class. And others still hold themselves and the union culpable for not recognizing the owners’ willingness to weaponize the luxury-tax threshold and use it as a soft salary cap.
All of it is manifesting itself in ways executives, players and agents admit they’ve never seen. The dialogue between teams and the top players available has slowed to a crawl, according to sources. Over the past week, sources said, teams have re-engaged a significant number of middle-tier free agents – in some cases with a most unusual approach.
“They keep asking me, ‘What’s it going to take?’ ” one agent said. “And you can’t play into that strategy. But when they have five choices, they have the luxury of being able to do that.”
It’s a tack typically taken by agents with teams, and the reversal has discomfited players. Another agent said a team that earlier in the winter expressed interest in one of his free agents called recently and asked if the player was willing to propose a deal. When the agent pressed for parameters, he said, the team official demurred, saying he wasn’t planning on making an offer and that he simply wanted to know whether the financial demands of players were evolving.
Among top players, at least, it isn’t. Teams don’t believe a deal is close for Yu Darvish, Eric Hosmer, J.D. Martinez, Jake Arrieta and other top free agents, according to sources, even as the 31-year-old Cain’s deal bucked the trend of short-term contracts that do not lock players up past their mid-30s.
“It proves the point,” one source on the players’ side said. “[If] a good 32-year-old gets paid through age 36, why shouldn’t someone younger get seven or eight years to go through age 36?”
The reason most teams are offering: The luxury tax – known throughout the game as the CBT, or competitive-balance tax – is squeezing the willingness of the highest-revenue clubs to exceed the threshold this winter. Despite record revenues of more than $10 billion and franchise values that have rocketed by more than 150 percent in the last five years, teams are treating the CBT in a way they never did during its previous incarnations. Any team that exceeds it pays a small tax on the dollar overage and can be docked draft picks or money to spend on international amateurs – a deterrent, yes, but not to this level.
During the negotiations leading up to the collective-bargaining agreement struck in December 2016, teams were preparing for a significant increase in the CBT threshold, according to sources. The league had indicated to teams its willingness to push the low end of the threshold to perhaps the $215 million mark during the agreement’s first year, sources said. Instead, MLB celebrated when it jumped to only $195 million last season and $197 million for the upcoming season.
The consequences are obvious. Officials with the Los Angeles Dodgers and New York Yankees, two teams looking to dip beneath the threshold and reset their base tax burden to 20 percent after paying a 50 percent overage for constantly exceeding it, have acknowledged they certainly would have spent more this winter were the threshold higher, according to sources.
A memo sent by the union to players upon the completion of the CBA in 2016 highlights not just the missed opportunity but a view of CBT penalties that multiple executives said simply doesn’t compute. The memo, obtained by Yahoo Sports, emphasizes the victories the union gained in the new agreement and, under the heading “CORE ECONOMICS,” says: “Increased the tax burden for the highest and most habitual CBT offenders.”
Though theoretically good for competitive balance, the tax has offered high-revenue teams this offseason an excuse from spending. Compound that with upward of a dozen teams either spending insignificant sums or straight-up tanking, and what long has been a robust free agent experience suddenly is fraught with pressure to accept undervalued deals.
The upshot, multiple people from both sides agreed this week, is the middle-class squeeze. Next year it could be particularly severe. The Yankees and Dodgers are almost certain to sign at least one of the stars of the boffo 2018-19 free agent class and blow past the CBT threshold next season, which nullifies the notion that it’s a ceiling. Once they do, though, the argument against signing others will be that tax implications make those players more expensive than they should be. The offers to the lesser players will suffer accordingly – and considering the number of one-year deals that will be signed between now and when the 2018 season starts, the glut of free agents next winter will be even worse.
In the meantime, the players are preparing best they can. Stars are stepping into behind-the-scenes leadership roles. Free agents are heeding the calls for patience. And the union, in addition to gathering information to best react to the market, is considering addressing a pair of situations contributing to the cause: Not only is it exploring whether the Miami Marlins are complying with revenue-sharing rules, it is likewise looking into whether the Pittsburgh Pirates, who have traded stars Andrew McCutchen and Gerrit Cole this offseason, are reinvesting the money given to them into baseball operations, sources told Yahoo Sports.
All of it is part of a bigger battle to come, one that is going to define the short remainder of this offseason, hang over the 2018 season and come to a head next November. The animus is strong, the players fixing for a fight, ownership inviting one. It’s real enough that one executive this week wondered if the sides might consider opening up the collective-bargaining agreement in the near term and giving the union financial concessions in exchange for labor peace beyond the pact’s current Dec. 1, 2021 expiration date.
It’s an idea certainly, and even if it’s unlikely, it shows the danger of where the sides are today. Just because Lorenzo Cain cashed in doesn’t change baseball’s fundamental problems. The staring contest endures, for the foreseeable future and beyond, and nobody’s eyes seem to be getting tired.
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