With the threat of a lengthy labor dispute looming in the on-deck circle, brands that partner with Major League Baseball would do well to consider a change-up for the coming season, according to experts interviewed by Ad Age.

Baseball owners imposed a lockout on Dec. 2 following the expiration of their previous collective bargaining agreement with the MLB Players Association. The dispute represents baseball’s first official work stoppage since a player strike called in August of 1994, and not resolved until the following April, cost hundreds of games and millions of dollars in losses, for both sides.

A spokesman for the owners provided a statement which read in part: “We explained [to our partners] the lockout is the best way to jump start negotiations during the offseason so we can protect the season, and that we are ready to work around the clock to reach a deal. We have been appreciative of the overwhelming support that we have received from our partners and we will continue to keep them informed of the situation.” An open letter to fans from Commissioner Rob Manfred said the the lockout was “necessary” and "the best mechanism to protect the 2022 season.”

A Players Association spokesman called MLB’s lockout decision “bad for the industry,” but noted that demand for players’ rights is near an all-time high. Its licensing arm, MLB Players, Inc., is “open for business and licensing renewals and other opportunities are progressing.”

The stoppage is only in its early innings. In addition to putting a halt to trades and free-agent signings in the so-called Hot Stove season, the dispute is most evident online, where MLB’s website has taken down all content related to its players, including replacing their headshots with dark silhouettes. MLB’s television property, MLB Network, has suspended original programming like its Baseball Tonight news and highlight show, replacing it with replays of classic games. 

During the lockdown, players can still appear in ads displaying MLB trademarks, like uniforms, as long as they obtained rights in deals that are outside of the collective bargaining agreement, according to a person familiar with the rules.

Brands partnering with the league and its clubs at this point are cheering for players and management to work out their differences and reach a new deal before spring training begins in February. Although most experts contacted by Ad Age anticipate there would be minimal impact to brands if a resolution can be reached in short order, all of them predicted catastrophic consequences should the season be delayed.

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“If [a settlement] doesn’t happen soon, it will be devastating, especially for a league that’s fighting to stay relevant and grow a new audience,” said Adam Holt, senior VP of sales and partnerships of FanAI, a software company that helps brands measure return on their sports marketing ventures.

The average age for nationally televised games in 2019 was 57, according to data shared with Ad Age earlier this year by Omnicom-owned agency Optimum Sports, underscoring the sport’s need to create excitement with younger viewers and not lose continuity with existing fans.

Marketing is also a major component of revenue for the league, right behind its national television agreements, said Jim Andrews, CEO of A-Mark Partnership Strategies, a Chicago-based sports marketing advisor. For baseball’s teams, ad revenue trails only ticket sales. Ballplayers themselves remain in high demand from a licensing standpoint, according to a representative of the Players Association, saying 2021 revenues approached levels not seen since the 1990s trading-card boom.

Marketing is also becoming more ingrained in baseball. Umpires for the first time this year carried advertising on their uniforms in a unique partnership with the crypto trading firm FTX. Promotions like Taco Bell’s popular “Steal A Base, Steal A Taco” have become a highlight of the fan experience.

Several brands on MLB’s list of official partners reached by Ad Age declined comment for this article. A spokesperson for one partnering MLB brand, which requested that the brand not be identified due to the confidential nature of the partnership, said the COVID experience of a year ago, when teams played an abbreviated season before empty seats, got it used to operating amid much uncertainty. “Things like this are par for the course,” the spokesperson said.

Holt believes brands should be acting now to develop contingency plans with the league and its clubs. “If I were on the buy side, I'd have called the league or the teams already to be sure that the value you expected to get out of the relationship can still be delivered, and if not, you need to make adjustments.”

What’s more, he added, “brands are monetizing sponsorships all year round, so the fact that we’re in the offseason doesn’t mean brands won’t suffer. I don’t think they’re going to sit on the sidelines for long before they start looking for make-goods or other adjustments to their business operations, which is the last thing that the MLB needs right now.” 

Manfred has already reached out to partnering businesses to explain the organization’s stance, according to people familiar with the matter. 

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Disputes between management and players are as old as the game itself. Historically, tangles concerned the reserve clause, a contractual detail that tied players to their employers in perpetuity, and withstood nearly 100 years of uprisings before the Players Association won a landmark arbitrator’s decision in 1975, ushering in the era of free agency and soaring player salaries.

Today, revenues and salaries have reached figures beyond the comprehension of the average fan: Shortly before the lockout, pitcher Max Scherzer signed a three-year contract with the New York Mets guaranteeing him $43 million per season. The escalating salaries are one reason ballclubs, players and brands are likely to want to limit public pronouncements and grandstanding typical of labor disputes in other industries, experts said.

“The average person just won’t have sympathy for either side,” said Nick Kelly, a former Anheuser-Busch sports marketing executive who today is president of an expansion Major League Soccer club in Charlotte.

That the dispute will play out before millions of fans on social media will deliver new pressure on the sides to settle, predicted Eric Yaverbaum, president of Ericho Communications, a New York-based publicity firm. Yaverbaum in 1995 was behind the creation of a kind of fan union called Strike Back that was then cited by officials as a contributing factor in the settlement of the strike.

Yaverbaum said brands can assure they’ll win no matter how the dispute is settled if they take a concerted effort to side with fans. “Somebody is bound to do it,” he said.

The issues in the current negotiations concern proposals to institute a salary floor, revisit the so-called “luxury tax” that penalizes clubs for exceeding player salary limits, and service-time thresholds for salary arbitration and free agency. Both sides are framing their positions on these issues as measures that would increase long-term competitive balance between clubs.

The 1994-95 player strike—largely blamed on the owner’s insistence on a salary cap—triggered hundreds of millions in losses for owners, players and broadcast networks, but it wasn’t long before compelling storylines on the field helped baseball to heal itself. Cal Ripken’s consecutive-games record set in 1995 was a key milestone in the sport’s comeback, said Maury Brown, a senior writer for Forbes specializing in the business of baseball and a member of the Baseball Writers of America guild. A few seasons later, a scintillating home run duel between Mark McGwire and Sammy Sosa also helped to put the game back into the spotlight.

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