The MLB season is approaching its midway point. Teams are starting to take stock of what they need to do at the trade deadline and how they stack up in the standings. The Yankees and Phillies are setting the pace in each league, the Astros are recovering from a sluggish start, and the Braves are doing their best to overcome a slew of injuries.
These storylines have guided the baseball community in 2024 in the aftermath of the Shohei Ohtani gambling saga, but events happening off the field have ramifications beyond this year. The dissemination of baseball games and other MLB content is undergoing radical upheaval; the market for free agents is becoming increasingly untenable, and the media’s focus is starting to show its influence on baseball.
MLB’s Pay Problem
Based on how things are progressing, how parties are reacting to them, and the new landscape that appears to be taking shape, baseball fans will suffer in a few years. 2027 will be a critical year for the future of MLB. With a confluence of interests and changing environments, it is more likely than not that the 2027 MLB season will be a spectacle, not because of any play on the field, but because of who will be willing to sacrifice it. We are heading for one of the uglier stoppages in MLB history.
Building on the success and popularity of some of the recent rule changes implemented by Theo Epstein, baseball is in a good place. Many problems still plague the sport, but those are negligible compared to what is coming down the track. There have been warning signs about a major shift in the MLB business landscape, notably, teams being reluctant to spend money in free agency and the disaster of their TV deals.
The Los Angeles Dodgers dominated the 2023 offseason, signing Shohei Ohtani and Yoshinobu Yamamoto to record-setting deals, acquiring Tyler Glasnow from the Tampa Bay Rays and landing Teoscar Hernandez. However, the Dodgers are the exception to the rule this offseason as more teams went in the opposite direction. They tightened their budgets and withheld their free agent or trade market funds.
Notable among teams that fit this description is the San Diego Padres. In previous offseasons, the Padres went all in with free agency and trades, signing Manny Machado, extending Fernando Tatis Jr., and acquiring Xander Bogaerts and Juan Soto, among other moves. The onslaught of transactions came after the Chargers left San Diego, making the Padres the city’s chief professional team.
Their quest to take San Diego and the league by storm fell flat, with the team underperforming relative to expectations and payroll. That led to the 2023 offseason, during which the Padres traded away Juan Soto to the New York Yankees. The decision to sell off one of the best hitters in the league was due in no small part to the media rights and TV aspect of the Padres operation.
Bankruptcy at Bally
The Padres suffered a fate felt by other teams throughout the league. The teams were broadcast and disseminated by Diamond Sports Group, a subdivision of the Bally Sports Group. The company’s financial trouble and ultimate collapse left MLB in a precarious spot. Commenting on the bankrupt entity, MLB issued a statement.
“It is highly likely that the loss of carriage of the debtors’ broadcasts by Comcast, and the resulting loss of licensing fees from Comcast, will render the [reorganization] plan unconformable, thereby wasting time and estate resources to the detriment of MLB, the signatory clubs, and other interested parties. The debtors should not be permitted to stumble through the restructuring process, the debtors once again face a very high risk that they will not emerge from these Chapter 11 [bankruptcy] cases as a going concern.”
Other major sporting leagues, such as the NBA and NHL, have maligned Bally Sports Group for its handling of the situation, echoing many of the sentiments felt by MLB. The impact of this dispute has long-lasting effects that tighten the pockets of the league and its teams.
Free Agency Mayhem
The first indication of this impact was the 2023 free agency sweepstakes. Last offseason’s iteration of free agency continued some trends but escalated others. Players continued to delay their signings until late winter, spring training, and even the regular season. Teams continued to opt for younger, cheaper alternatives to veterans looking for deals. These tenants of free agency aren’t new and can be expected from the MLB offseason.
Something new this offseason was the team’s reluctance to consider the top-tier free agents on the market. The St. Louis Cardinals, San Francisco Giants, and New York Mets took advantage to bring in some mid- to upper-tier players off the market, but they were the notable exceptions.
Players represented by Scott Boras found difficulty in reaching deals throughout the winter, with Blake Snell, Cody Bellinger, Matt Chapman, Jordan Montgomery, and JD Martinez taking late contracts that were exceedingly less lucrative than what they were looking for at the beginning of the offseason.
Montgomery and Martinez ended up signing one-year deals, with Snell, Bellinger, and Chapman signing multi-year contracts with opt-outs after each season. Boras had some words for how the offseason and his clients’ free agency unfolded.
“I don’t think their[media’s] predictions included what we were fully aware of, and that is, clubs were going to come to us and say, ‘We’re not going to look at length with premium AAVs because of what preceded their performance prior to 2023. You’re either going to get the appropriate AAV, but you’re not going to get the length, or you’re going to get the length at a much lower AAV, so what do you choose?”
How the League and Players Reacted to Rough a Rough Offseason
Jordan Montgomery fired Boras shortly after reaching an agreement with the Arizona Diamondbacks. The negotiations between the players and the clubs spell disaster for future off-seasons.
The aforementioned Juan Soto will be looking to cash in during the 2024 offseason when he hits the market with Scott Boras as his representative. Soto’s impending free agency has led to his being traded twice: from his original team in Washington to San Diego and then recently from the Padres to the Yankees.
Even the vaunted New York Yankees have expressed concerns over the negotiations with Hal Steinbrenner, noting, “Look, I’m going to be honest, payrolls at levels we’re at right now are not financially sustainable. They wouldn’t be sustainable for most owners, given the luxury tax we have to pay. We have a considerable amount of money coming off.”
Whether you believe the veracity of Steinbrenner’s comments or not, it will be interesting to see how Juan Soto’s free agency pans out because not only is he one of the best hitters in baseball and primed for a huge deal. It could be the last in the recent slew of mega-contracts, like that of Shohei Ohtani, Aaron Judge, Bryce Harper, Yoshinobu Yamamoto, Gerrit Cole, and countless others.
CBA Negotiations
With the media disaster impacting revenue and the pre-existing hesitation to shell out big money in free agency, Juan Soto’s contract might be the last of its kind, especially with some other considerations coming into play in future off-seasons. MLB’s CBA is set to expire following the 2026 season, opening the door for some hard conversations between the owners and the players’ union, further complicated by recent events.
The owners will be reticent to green-light these contracts in the current financial environment of MLB if the revenue streams do not open back up before the CBA expires. The clash between top free-agent players and owners, combined with the continuation of the trends that have cumulated in the polarization between the haves and the have-nots, will make it very hard for the league to not take a serious look at altering the structure of the business of baseball.
If the pressures of the baseball landscape continue to intensify, MLB’s pay structure will come into play in the negotiations. Capping the astounding heights of these huge contracts will have to be a major component of the negotiations. Bridging the gap between the top-paying teams and the frugal clubs in the league could be a chip on the table to try to reorient MLB’s hierarchy.
Seismic Shift for MLB
This will have to take place within some semblance of a salary cap. There are many iterations of a salary cap that the league could integrate into its current structure, but MLB once considered implementing that kind of structure unthinkable. The atmosphere, as of now, is such that the owners may be willing to push hard for a salary cap.
The CBT was an initial effort to try to put the guardrails on the pay structure of MLB, but this seemingly inevitable proposal for a salary cap will not go over well with the MLBPA (as if anything ever does). The strongest of all the player unions, the MLBPA has been tested before and has shown the resolve necessary to resist the owners’ will. The owners, however, have sparsely had the reasons to fight so hard in negotiations as they will have in 2026.
What will likely result is, unfortunately, a play stoppage that will rob the fans and baseball community of some, most, or all of the 2027 season. Tony Clark and the Players’ Union have had the owners over a barrel for a long time, but this may be their biggest test.
They have fought for minor league players’ conditions and retirement benefits and resisted recent rule changes to the sport, but nothing as consequential to the fan experience as what is looming ahead. The battle between the union and the owners is uncertain, but fans should be prepared for a summer without baseball if nothing changes before the CBA expires.
