MLB Rumors: Agents Expect Some Teams to Downsize Budgets Because of Lockout Losses

A number of agents believe that MLB teams will shrink their budgets after the owners' lockout ends and a new collective bargaining agreement is reached, which could squeeze the earning potential for veteran free agents, according to ESPN's Buster Olney:

One of those veterans, Josh Reddick, responded to Olney's tweet by noting that "plenty of veterans can get the job done better than plenty of younger players. Make zero sense why we are getting 'forced' out of the game."

It likely won't be the top available players who suffer. Before the owners locked out the players, teams committed over $1.7 billion in contracts to top stars like Corey Seager (10 years, $325 million), Marcus Semien (seven years, $175 million), Max Scherzer (three years, $130 million), Robbie Ray (five years, $115 million), Kevin Gausman (five years, $110 million with the Blue Jays) and Javier Baez (six years, $140 million), among others.

So MLB owners clearly don't mind spending for star power. And players like Carlos Correa, Kris Bryant, Freddie Freeman, Trevor Story, Nick Castellanos and Clayton Kershaw are still available.

The issue is where teams don't seem willing to spend, however, which in this case is for the solid veteran players who round out the roster.

Many of the players' key issues in this labor dispute—"getting players paid more earlier in their careers, fixing service-time manipulation, preventing teams from tanking and removing restraints on free agency," as ESPN's Jeff Passan wrote—have been about protecting those non-stars, on either end of their MLB careers.

Passan added that while some owners around the league are trying to negotiate toward a salary cap, "baseball's uncapped system does not have a salary floor, allowing teams to spend as little as they want. The Pittsburgh Pirates' final payroll in 2021 was $50.3 million, their lowest since 2010 and less than one-fifth of the Los Angeles Dodgers."

That cap has allowed non-contending teams the option to slash payroll, field teams with mostly young, farm-grown players whose rights they control through arbitration for years and avoid pursuing veterans in free agency. In turn, those players have seen their market shrink, leaving the supply to exceed the demand.

The competitive-balance tax, meanwhile, has operated as something of a soft salary cap, with teams attempting to avoid going into the tax. In 2021, only the Dodgers and San Diego Padres went into the tax.

So veterans get squeezed on both ends. The contending teams aren't willing to pay them quite as much as they would in an un-taxed system, prioritizing their spending on stars, while non-contending franchises in small markets aren't incentivized to sign veterans to market-value deals since they don't have a required salary floor they must hit. Those owners would seemingly rather trot out less established players to maximize profits.

The result? A labor dispute with two sides that are very, very far apart, a cancellation of the first two series of the 2022 season and the prospect of many more games being lost.