The MLB Lockout: How a Fight Between Billionaires and Millionaires Could Affect Your Wallet

February 22, 2022

Sure, they’re finally talking but the mentality most baseball fans seem to feel is– “shut up and play ball!”  Major League Baseball owners locked out its players way back on Dec. 2 of last year. Spring training is already cut short and while the owners and the Major League Baseball Players Association (MLBPA) are sitting at the table this week in the hopes of hammering out a deal before an MLB-proposed Feb. 28 deadline, fans are anxiously awaiting for some kind of movement while not becoming disillusioned with a sport they love.

Fans are exhausted. It’s a generalization but there’s been no transactions off the field, a delay to the start of spring training, and concerns over the season starting on time. It’s bad enough this is happening in the midst of a pandemic backdrop.  So watching billionaires and millionaires fight it out in the media and social media isn’t going to gain anyone sympathy points in the stands or at home. And, pretty soon it’s going to hit fans – or hit the fan – where it hurts the most.  Inflation is everywhere. It impacts us, and we impact it.  The impact on a family’s budget can be immense and can create reactive changes.  It’s even more reason to have a proactive dynamic plan and pretty soon, exhaustion and frustration over baseball battles could lead to some key economic decisions among fans that may not include baseball.   The lockout has already had a financial impact on the common fan.

The longer the lockout goes on, more will come. Consumers already have had to cancel spring training trips to Florida and Arizona and question why they committed to season packages of their favorite team.  Let’s face it, the fans create the demand for the game and the revenue.  They watch the team, buy the merch, pay for whatever packages are available to stream games, go to games, and spend a ton on hot dogs and beer when they’re there.  The longer this standstill goes, the more baseball risks finding itself in the conversation of movie theater chains.  Is it worth going to the game and paying for parking and more or is it better to invest or enjoy in your big-screen television and enjoy the game at home in the comfort of your own home with your own concessions.  Cue the economic pressure music…

What It’s Really About and Why You Might Stay Home…

This is a negotiation between management versus labor or employer versus employee.  As they battle this out, there is another battle brewing concerning wage growth and the impact of higher wages on further pressuring inflation.  Many things cause inflation. As Webster’s states, inflation is “a continuing rise in the general price level attributed to an increase in the volume of money and credit relative to available goods and services.”

Prices have risen for so many things- milk, bottled water, meat, gas…. If you, the fan, doesn’t budget and think proactively for yourself.  Can you afford that season plan?  How many games can you go to with your family?  Will it be worth it?  Can you afford it?  Is a hot dog really $12?

The good news is wages are growing again amid a tight labor market, but this adds to the existing pressures from supply shortages that led to higher prices on many goods. Apologies for the geek talk, but what we’re saying is this has  implications on your budget. Inflation means higher prices. And ongoing inflation worries are prompting the Federal Reserve to raise interest rates.  This has implications across asset classes. As we all know, gas prices are sky high so it can be expected that items at the ballpark very well may prices will skyrocket. Will this impact the demand for and how consumers or fans spend? With the lockout fall out, you can expect to pay a lot more for a modest beer.  Fans often come last unfortunately so you’ll need to budget.  But, how did we get here?  Why is there so much crying in baseball?  Tom Hanks said there wouldn’t be.

Owners locked out players in December after the collective bargaining agreement (CBA), which was signed in 2017, expired. The action was done to apply some pressure on the union to move CBA negotiations along faster.  Well, that’s worked splendidly, right?  Since that time, the owners and players association have gone to the table, left the table, tweeted about it…rinse, repeat.  They still seem like a long way apart despite meeting this week – though signs point a bit more positively then, say, that joke of a press conference MLB Commissioner Rob Manfred held two weeks ago. The previous CBA seemed to primarily benefit the owners, and the industry, press, players, and everyone in-between, have reported that it’s been harder to get the owners to budge than getting a dolphin to ride a bicycle. 

The owners want the status quo pretty much and haven’t budged much.  They want expanded playoffs, which translate to more TV revenue.  The players want, among other things, a bigger piece of the pie, better protection for prospects and players in their prime.  They also want to prevent some owners from intentionally tanking a season to land higher draft picks a better revenue sharing.  The offerings both sides have given so far has been one mammoth “big whoop.”

Understanding the Game Outside of the Game If we look at it from a simple risk/reward standpoint, the players want to maximize the most money they can make while they’re at the height of their careers or while their ceiling is at the highest.  Think of how many top players in the game held out for better deals only to falter, get injured, or run into trouble that completely derailed their careers and left countless money on the table, right?  Competitive sports can be unpredictable. Players need to bank on themselves now versus risk getting hurt or worse.  They are the product and their value in their labor market is everything.  That said, obviously players do bank on themselves a bit too much, roll with the dice, and sometimes they cash in on the pay day they could never have dreamed of, or kick themselves forever. 

On the flipside, owners’ risk, especially in larger markets, is arguably lower.  They can shell out money on players and know they’ll get endless revenue streams for the product that baseball essentially has become  The owners have a wide range of revenue streams, but just like in “real life” there are, as mentioned, major differences and constraints between say New York City owners and smaller markets like Kansas City or Milwaukee.  Actually, check that.  Someone Google “Oakland A’s” before finishing this article. We can’t predict what will happen, but eventually we’ll have some resolution to this disruption to the baseball labor market.  The fans will probably end up paying the price for baseball arguments and inflating prices in the game and outside of the game.  Baseball may pay the price for toying with fans emotion and cause them to take a look at themselves and what they can and cannot afford.

Following the shortened 1994 MLB season, it took quite a while for baseball to bounce back. One could argue it truly didn’t find its footing until Mark McGwire and Sammy Sosa battled to break then-Roger Maris’s home run record in 1998. This lockout is going to cost baseball a lot more than dollars. But, it’s actually going to cost us dollars and sense.