We talked recently about the slow nature of free agency this offseason, and questioned whether it was another one-off fluke thanks to reasons X, Y, and Z, or if it was an extension of last offseason, and something of a new normal.
Against that backdrop, and in the current spending environment, it probably shouldn’t strike any of us as a surprise to see this, even if it absolutely *should* strike all of us as very troubling (have I said the word “strike” enough?):
The decline in spending on player payroll is first-time since 2010 ($2,911,575,488) to 2009 ($2,913,904,332) in MLB. The drop of $115,390,452 between 2018 and last year is the second-largest drop year-over-year since 2004 (-$204,784,305) via @forbes https://t.co/djv1BsLGpl
— Maury Brown (@BizballMaury) December 17, 2018
We don’t have firm revenue numbers for MLB in 2018, but I think it’s a safe bet that it went in a positive direction: the record set in 2017 was the 15th consecutive year of record revenue for MLB. Having just inked new monster national TV deals, too, it doesn’t figure that revenue for the league and its teams will be going down any time soon, and certainly not to an extent that you’d expect to see such a dramatic decline in player payroll.
Another bad signal: Luxury tax payments for 2018 – which came only from the Red Sox and Nationals – totaled about $14.3 million, the lowest mark since the very first year of the current luxury tax system back in 2003. Yikes.
So what’s going on? Well, as the graph in the Forbes report shows, you can see a flattening of payroll spending riiiiiight around the time the new Collective Bargaining Agreement arrived. That’s probably not a coincidence. Which is not to say a flattening/decline in player payroll spending is entirely due to the overwhelmingly owner-friendly CBA, but I can say with confidence – as most outside observers did the very day the thing was signed – the current CBA did almost nothing to help push spending in the players’ direction. So, as revenues for the league climb, there was little reason to expect that player spending would climb in lock step.
This CBA runs through the 2021 season, but we were seeing sabers rattled already last year. With another slow offseason underway, and with reports like this about aggregate spending, I think you’re going to see another round of verbal sparring between the league and the players union. And if things aren’t looking different by next year? Yes, you will start to see serious talk about a potential strike in 2021. It’s unnerving.