San Francisco Giants: Wednesday Wakeup, Are Labor Talks Stalling the Giants Negotiations?

The San Francisco Giants hot-stove is virtually turned completely off right now. There is nothing. No concrete rumors. Just a whole lot of speculation.

The biggest news of the San Francisco Giants offseason might have been that Yoenis Cespedes was signing with the Mets. The “dream” left field acquisition didn’t come to fruition and now Giants fans are getting anxious. What’s slowing it all down? Labor Negotiations.

The Owners and MLB Players association are currently locked in a significant battle over the new Collective Bargaining agreement. At the start of the week, the two sides seemed pretty far apart, and worries about a lockout were beginning to surface.

Over the last two days, things have started to turn favorable to get a deal done. The deadline is tonight at midnight ET to have a deal in place. So what about the CBA is stalling the free agency process? There are two significant things that the would directly effect the Giants negotiating plan.

Qualifying Offers

Working on the qualifying offers might have been one of the biggest things. The players want the “loss of draft pick” to be removed from the equation when it comes to the qualifying offers. No restricted free agent has been signed away from the team that issued the qualifying offer yet. According to Jon Heyman, the league has offered to scrap that system. That could be beneficial to the San Francisco Giants in negotiating for somebody like Kenley Jansen and a few others. On top of that, comes the luxury tax.

Luxury Tax

The biggest thing is the luxury tax threshold. The San Francisco Giants need to know this not for next year, but the year after. In 2018, Brandon Crawford and Brandon Belt’s contracts jump up to $15.2 and $17.2 million respectively. Add in a potential Madison Bumgarner extension, plus trying to keep Johnny Cueto from leaving on his contract option, the Giants could be getting close to the salary tax threshold. They don’t really want to pay that tax, and I don’t blame them. That will affect how much they negotiate for right now.

Yes, Matt Cain’s terrible contract ($20million) is coming off the books next season, but that’s virtually negated by the escalators built into some of the contracts they’ve made in the last couple seasons. So, they probably won’t finalize figures and contracts until this agreement has been solidified. That allows them to figure out where they’re at: For this season, they’ll be fine. They are currently sitting at $142,561,111 for 2016. In 2017, that will move to $166,877,777. That’s if Johnny Cueto declines his player opt-out option, and continues with the contract he has. That doesn’t take into account who they sign this offseason.

So if they sign Mark Melancon at around $13-$15 million, that could bump them up to $181 million. Heyman also reported that the league was willing to bump it up to $200 million. The current level is at $189 million. There was also a proposed “loss of draft pick” for teams who exceed the threshold instead of paying money. However, the players declined that idea.

Final Thoughts

The Negotiations are clearly putting a stall on it. With how much the Giants have committed in the future, and will potentially need to commit in the future, they have to wait and see how much room they’ll have in the future. 2018 and 2019 will be large for them, especially with the contract of Jonny Cueto potentially needing to be re-upped. The Giants need to be sure they have the right amount of money. So it makes sense they’d wait on the labor negotiations to make a deal. I actually applaud them for it. They’re taking a careful approach to things, and trying to have a high-payroll, while not getting themselves into situations like the Dodgers. Gee! The Giants made a smart business move! That’s what happens in successful organizations. They make smart decisions. Be thankful Giants fans, we could be run by the Yorks.

All contract and payroll figures provided by Spotrac.com.