Major League Baseball is facing a potentially "self-destructive" lockout as its collective bargaining agreement with the MLB Players Association is set to expire in December, according to legendary sports agent Leigh Steinberg.
Steinberg described the current environment as the "murkiest" the sport has experienced since before the turn of the century, evoking comparisons to the 1994 strike that led to a 40% drop in gross receipts the following year. He indicated that owners are determined to implement a salary cap, a move vehemently opposed by the players.
"This is the murkiest environment that baseball's had since they had the strike back in 1994," Steinberg told OutKick in a recent interview. "Owners seem determined to put in place a salary cap."
Steinberg pointed to recent large contracts signed by the Los Angeles Dodgers, including those for Kyle Tucker and Edwin Díaz, as catalysts for owner frustration and the push for a salary cap. Despite both players struggling in their initial seasons with the Dodgers, the perception of significant spending by some teams has fueled the owners' desire for financial controls.
Tucker signed a four-year, $260 million contract but is hitting .221 with 12 home runs and 59 RBI in 136 games this season, a performance below his career averages. Díaz was signed to a three-year, $69 million deal to serve as the team's closer but has been hampered by injuries, posting an 11.85 ERA in 13 2/3 innings pitched with seven saves, far from his career ERA of 3.06.
"When you get powerful billionaires owning teams locked in with wealthy players, you know, millionaires against billionaires, if you don't have someone able to see the larger picture, you can get deadlocked," Steinberg said.
He warned that a lockout would be "remarkably self-destructive" for baseball, noting that the sport experienced a resurgence after the 1994 strike, aided by the steroid era home run race. Steinberg highlighted that current revenue streams, including TV deals, attendance, merchandising, fantasy sports, and gambling, are robust, indicating that owners are not facing economic hardship. He emphasized that despite these favorable conditions, the conflict between owners and players could lead to a stalemate.
Both sides have engaged in preliminary talks, but significant progress has not been reported. In March 2022, a 99-day lockout concluded when a new collective bargaining agreement was ratified by MLB and the MLBPA. Steinberg expressed concern that owners might be more entrenched in their stance for a salary cap than they were in 2022, potentially leading to a willingness to sacrifice games to achieve their objectives.
"What happens is you need to be able to put yourself in the heart and mind of the other side to negotiate a contract. So, are owners claiming economic turmoil and difficulty?" Steinberg asked. "And the answer is no, because the TV money and attendance and merchandising and fantasy and gambling now. The revenue streams are huge and baseball's had a resurgence."
Steinberg, a highly regarded agent who was inducted into the California Sports Hall of Fame in 2017, has represented numerous prominent athletes across football and baseball throughout his career.