Let’s check on the latest notes from around baseball following a week of disappointment as MLB and the MLBPA attempt to agree upon the economics of a potential return to play in 2020.
- Some portion of the league’s owners are “perfectly willing to shut down the season,” hears Buster Olney of ESPN. Doing so would obviously reduce teams’ payroll expenditures and their immediate potential operating losses associated with playing games without fans in attendance, but the optics of such a decision during a nationwide economic crisis could certainly diminish the league’s popularity in the longer-term. With that in mind, Olney hears there’s some division among owners about the proper way to move forward with negotiations. Of course, individuals broadly bucketed on the players’ side haven’t been immune to conflict themselves, most publicly one involving Trevor Bauer and Scott Boras.
- Last week, Ken Rosenthal and Evan Drellich of the Athletic floated June 1 as an informal deadline for the parties to reach an agreement if they were to have the regular season underway by Fourth of July weekend. With no agreement imminent, tomorrow’s target date for a deal will surely go unmet. Nevertheless, Joel Sherman of the New York Post hears that a mid-June spring training 2.0 and July 3 Opening Day could still be in the cards- if the sides can agree upon a deal by “next weekend, maybe a day or two (after).” Given the current state of negotiations, having a deal completed or extremely close to completion a mere week from now seems unlikely, but it’s possible the sides can pick up momentum on talks in the coming days.
- The Indians became the latest team to make an assortment of minor-league cuts. Cleveland released eleven players, reports Paul Hoynes of cleveland.com, including 2014 supplemental first-rounder Mike Papi. Hoynes runs down the complete list of players cut loose, none of whom have MLB experience. Those players will continue to receive health benefits through August, he adds.
No surprise that multiple owners would rather punt the season than have one. From a business standpoint, it doesn’t make financial sense for them to have the season.
Why? They will lose in court if they just don’t have a season.
One of the things in the March Agreement is no lawsuits. Here is the real fear for certain owners a breakup. Years ago Kevin McClatchey when he owned the Pirates, suggested charging wealthy teams money for telecasting road games from say Pittsburgh. The Yankees, Red Sox, Cubs and Dodgers announced they will leave MLB if you try it. He backed down. Just imagine there is no season in 2020, with the prospect of none in either 2021 or 2022, in part because of small market teams? Does anyone think big market teams will tolerate that? That would mean contraction. Would the Players lose jobs? Of course, but it would be on teams like the A’s that have low payrolls to begin with.
Would you please post a source for the McClatchey issue? Would like to read about that.
I dont think the previous agreement will matter if owners cancel because money, not covid.
Lose in court? As in typical of suits filed the last few years and filed in a super blue state where it might be lost and then appealed in a business friendly red state where the appeal would be successful? These types of things would/will go on for years and you are dreaming if think that players will/would get more than the free and for doing nothing 170m they already received.
Go start your own company and take ur own risks if want to learn real economics instead of liberal economics 100 which are based on something for nothing.
From a business standpoint, not having a season is financial suicide.
MLB average fan age is old and getting older. The sport is already facing an uphill battle to stay relevant beyond the next two decades. A lost season destroys it. The NBA and NHL will be playing this summer and the NFL in the fall, baseball will be left behind. And forgotten.
I was going to say “and the owners know that” but then I remember just how many of them are silver spoons like Bob Nutting, who inherited his wealth rather than make it. Maybe they don’t.
Saving some money in the short term only to have nothing in the long term is not good business.
I disagree with you almost always but this one your spot on. Good comment.
Cool. Now, if you just agree with me on everything else, we can both be right all the time.
Win-win.
I could not disagree more. While attendance has declined 4% in the last several years and 1.8% from 2018 to 2019, total attendance is still around 68 million per year. Not to mention the lucrative TV deals that are all but a guarantee in today’s technology drive way world. People have bantered about baseball demise for decades but the growth of the sport over the last century is unparalleled. Baseball has survived 2 world wars, a pandemic, the Great Depression, 2 Great Recessions, multiple strikes and work stoppages, steroids, gambling, cheating, corruption, live balls, dead balls, racism, poor leadership and more. Yet, the sport lives on and will live again whether there is a 2020 season or not. The insinuation that a season off would some how lead to everyone just forgetting or losing interest in the sport is preposterous. If you need proof that the sport has youth on its side, look into how many youth leagues have started play in the middle of a pandemic where arguably every man, woman and child could contract the illness. Yet, they play on. Baseball isn’t going anywhere.
si.com/mlb/2019/08/29/baseball-is-dying-history
This is the problem for the MLBPA, the owners’ propaganda has convinced fans that they’re all poor starving franchises and will lose loads of money if the rich greedy players don’t take a pay cut. But the truth is the owners will simply make ‘less’ money if there is a truncated season. They will still make a good profit from advertising, tv revenue, and other sources, so it makes perfect financial sense for them to have a season.
To the owners who are “perfectly willing to shut down the season”, screw you. The owners know good and well that even if they have to pay the players their pro-rated salaries, they will still at least get SOME money for playing 2020 (through tv contracts). So instead of making the players look bad for trying to get their deserving salaries, maybe take on the risk of owning a team instead of avoiding it.
How can you speak with such certainty? We have no idea what their operating costs are or their revenues. All you can do is speculate and based on your comment we can see which way you are biased.
I think that’s part of the issue, the fact that the owners won’t open up their books on their operating costs.
Not should they. What business allows employees to review the books??
Publicly traded corporations have to have some degree of transparency as required under securities law. I’ve argued for years that any business of a certain size that receives some kind of public subsidy, such as a stadium or arena, including the use of eminent domain for land acquisition or tax-exempt municipal bonds for so-called “privately” constructed venues, should meet the same disclosure requirements of SEC-regulated publicly traded corporations. No one has listened to me.
On that note, I have wondered whether we have more information about the finances of the Braves, which is owned by Liberty Media, or knew more about the Angels when Disney owned them.
Kaeh, Then you can’t cry poverty.
I get what you are saying, but I just don’t see private business opening up books. Financing can happen other ways if restrictions are put on like you mentioned. I own a business, granted nothing even in the same galaxy as this, but no way I open my books up
They won’t open the books, and they would have to if they want to claim that they’d be losing money by paying prorated salaries. Their offer is completely disingenuous.
It’s negotiations. High profile, public negotiations like these start out at the extreme on both sides while each side tries to sway the public to their side. Ultimately a deal will happen as the both know LT they can’t cancel the season. It just sucks that both sides can’t put their big boys pants on, hammer out a deal and get to work. I think 40M plus unemployment would like to go to work right now. BOTH sides need to make it happen!
I am not speaking with as much certainty about the owners books as my comment makes it out to be, though I do know one thing. The owners are running away from risk. Why buy a major sports franchise if you don’t want to assume any of the risk of owning the team? If the money the owners get from tv contracts only keeps them from going major debt, it doesn’t make up for the hate they will get from their fans in the future. All the other sports plan on playing… except baseball. They should expect ratings to fall even more in 21′ when fans can’t watch baseball in 20′.
IF what the owners are saying is true, and they will lose money on every game played if the arrangement is no fans and prorated salary, then I certainly understand the idea behind them not wanting to play. Taking a loss you can avoid is not solid business, and these people didn’t become rich enough to own one of 30 MLB teams by being bad at business.
That said, I do agree that it’s shortsighted and could significantly hurt the game going forward, especially if the next CBA that is already expected to be acrimonious turns moreso. Baseball took a long time to recover from the last labor stoppage. It really doesn’t matter if the owners succeed in getting the players blamed for things as far as the overall health of the sport is concerned.
I do not think they took a long time to recover from the last labor stoppage. After the last labor stoppage the valuation and team attendance has skyrocketed. Yes, 1995 was a down year, but you would have a hard time convincing anyone the sport has struggled…Even through the steroid era.
The owners themselves have already come out and said they will lose 6 billion but will make 4 billion profit as a collective for the season. And you’re a fool if you think that’s the real figure – they’ll have skimmed a considerable amount off the top of that in order to hide their real ‘normal’ season revenues from the MLBPA.
When things are good we hear how they should be paying players more with their profits because there’s no risk in owning a ML team. Now that things are bad they should pay the players because owners take the risk.
So which is it? Business isn’t evil and isn’t going to exist losing money. With businesses you don’t have jobs and without jobs you don’t have an economy
Nobody says that players should be payed more because there’s “no risk”. I’ve never heard anybody say that. Player’s pay is based on 1: the average pay for that position 2: the players performance, not because the owners are making more money.
No one on Earth says that.
And mlb takes one more step closer to gallows
We heard the same dire predictions during the last long strike. Baseball is too deeply woven into the fabric of American life for even the irremediable stupidity of its owners to destroy it. Perhaps there’d be an attendance slump next season but I would guess the game snaps out of it before too much time elapses.
Here is the problem: When there was a strike in 1994, basketball ( especially) and hockey were much smaller, and soccer was invisible in this country.
Exactly. Personally, I will never stop paying attention to baseball, but, over the last two months I already went from deeply hoping for a partial season, to not caring either way. I find myself increasingly excited about the bizarre upcoming NHL tourney, and moreso looking forward to attending more hockey next year. I’d guess I’m not the only one feeling that way.
Also the country overall was a good shape during the strike tin 1994 too, now it is in total chaos and struggling big time, Fans are not going to be so forgiving this time around.
I’ll disagree slightly, changing one word: “Baseball WAS too deeply woven into the fabric of American life for even the irremediable stupidity of its owners to destroy it.”
The beloved sport is a distant third in popularity these days. The boys of summer, I fear, would be more easily forgotten now than at any other time during my life.
“What business allows it’s staff to look at it’s books?!?!”
What business expects it’s staff to finance their losses?
Totally true. But for a business so far in the public eye, their refusal to be transparent may severely impact their future–it also might not. It’s all in the owners hands. They need to figure out how protecting their fortune with a quick fix (cutting the season) will impact future growth. And the need to be correct.
Salary. Business that receive public assistance. Like building them a stadium and giving them the land where it is built. Reducing their business tax rate. Those kind of businesses.
@baseball1010 They open their books to the people and entities they are financially responsible too. They don’t open them up to their staff though. But if the players are going to finance some of the owners losses, wouldn’t it then be a reasonable request for the players to ask the owners to open their books?
It would be logical to think it would be better for owners financially to cancel the entire 2020 season based upon comments in this article and the offer they made to the players union deemed DOA. The optics of cancelling is what seems to be the issue, if I read between the lines. But we’ll see.
From a financial standpoint, it might benefit the owners to just not play a season at all, but for this season. They don’t realize how detrimental it would be to fanbases to just not have an MLB season when NBA, NFL, NASCAR, and even Golf are coming back this year. They are tearing down the sport just because they can keep a few more dollars THIS YEAR… Pathetic.
If the other leagues get going and baseball doesnt get going just cause the owners dont want to pay how would the players lose that lawsuit?
The owners would merely argue they were regulated out of the season. Don’t forget that the league’s special legal status gives it tremendous advantages in court.
The teams are not required to have a season and the players aren’t winning a lawsuit if it’s cancelled.
If MLB would lose all their television revenues by not playing the games, they would lose more money than if they played half of the games. They absolutely do not lose money by playing games. There is more than enough prorated TV revenue to cover the players’ prorated salaries.
National media 3.1 billion
Local media 2.2 billion
Player salaries 4 billion
Cut all this in half (which isn’t exactly how it works) and they still make money by playing games. If they have losses, that’s due to other investments, stadium debt, etc.
Of course it’s due to other expenses, which are huge. Don’t forget taxes on their remaining revenue, on their property, on the payroll itself. They’re looking at all of this right thru to their bottom lines. Some of them have apparently already figured out they’d lose less by not playing.
That’s simply not the case, unless they would still receive their TV revenues for a canceled season. The TV revenue for playing games is more than they pay the players, by a hefty margin.
Their non game related debts are there whether or not they play games.
Player salary is not the only variable expense though. There are travel and maintenance costs, set up costs, stadium costs, etc… salaries for other staff (like broadcasters), plus the opportunity cost of not being able to rent out the stadium for other things like concerts etc…
The nature of the business means it’s very likely true that the owners save more money not having a season.
I’m not saying the owners are handling this correctly, but their claims have validity.
The math really isn’t close on this. Player salaries are by far the greatest cost of playing games. They add up to under $4 billion. Make that under $2billion if prorated for 82 games.
National media revenues are $3.1 billion, and most of that would still come in as long as they have playoffs. (The biggest risk for owners is that they play the regular season and the playoffs are canceled).
Local revenues total $2.2 billion. Let’s say half of that is lost for playing half a season. Set aside the team ownership in two thirds of RSN’s and the fact that they have 10,. 20, and 30 year contracts.
There is easily enough money there to pay the players prorated salaries. Easily, with plenty to spare.
So if that TV revenue is lost if no games are played, then it’s simply not true that clubs lose more money by playing games.
Many of the operational costs are saved by not having fans in attendance. Those can even be subtracted from the net gate receipts that are lost. In any case, it’s not a relatively a large amount.
You make a valid point about opportunity costs, but I don’t see any concerts filling stadiums if there are no games this year.
You don’t have to support the owners or their desire not to have a season–I certainly don’t–but if they’re truly willing to not have one because they say they’ll lose money doing so, I promise they know the numbers on that better than you do.
If it’s all a bluff for negotiating power, we’ll see that in the next week or two.
I have little doubt that teams that would be willing to shut it down are the Orioles, Pirates, Rockies, Tigers and A’s, which are teams that have nasty player obligations ( Tigers), bad financial situations ( A’s) or both (Baltimore). I also suspect that Boras knows ( or at least thinks he knows) who these teams are. We also know he is unhappy with the Draft being cut ( although the Players Association has some guilt there as well), maybe if the season gets cancelled ( and we will know that before Draft Day), he advises his clients not to sign with certain teams ( especially Baltimore and Oakland). Something to watch for.
Tigers payroll is under $ 50 million if they pay prorated salaries for 82 games. They make plenty of money to cover more than that just from local and national TV revenues.
What are the odds that Marrial Law hits the U.S.?
Not high, except perhaps in a few municipalities.
Downtown chicago may be close…..Public transportation has been stopped in that direction and a curfew enabled…
I know that there has been curfews in Seattle and Nashville as well.
Philadelphia to
I was very excited about the season… White Sox back to relevance potentially, exciting for sure, for the first time in many years. But I am close to telling both sides to F* off right now…
I get the impression the owners want to cancel season but want it to look like player’s fault.
The game will be severely harmed irrespective of “fault”. The owners are morons and the players are not much better.
Probably fine since they won’t be able to play due to the riots anyways.
okay then. if the Pirates, A’s, ane whoever else dont want to play than they dont have to. let the rest of the teams play though.
That is the contraction argument. Will the players like it? No, because of a loss of jobs, but if it is that or no baseball in 2021 or 2022, they just might accept it.
Wouldn’t happen. If whole teams of players didn’t want to play then the MLBPA would stick together and lock out the whole league. Players won’t scab on other players, they’d never be taken seriously on another CBA again if they showed themselves to be easily divided.
Isn’t it crazy how much the narrative shifted in such a short time? Two weeks ago it was all about safety, and now it’s all about $$$. What a shame. 2020 baseball is looking deader and deader.
It has always been about money. Look at Blake Snell? Think of Anthony Rendon: He wanted nothing to do with LA, but chose Orange County. Why? The Angels paid him.
It was always 100% about the money, safety was always secondary.
When has safety ever come before profit in America? Why would this be any different?
Idiots all around. The owners need to be honest about their revenue and they need to share revenue. Teams with lots of tv money (Yankees cardinals etc) need to share with the poor teams (pirates rays etc). They need to understand that it is one business, not 30 businesses. The players need to realize that there is more than a 50% cut in income and settle for a little less, but not the insane proposal the owners made. Also it’s time for a salary cap as well as a salary floor.
Maybe it’s time for the fans to come to the ugly realization that it’s NOT one business and really is thirty…
Yankees are paying contracts like Cole and a $75m mortgage on Yankee Stadium, they did revenue sharing with Oakland etc, they are not doing more ( especially if the the A’s etc plan to take that money and put it in their pockets).
I agree there needs to be both a salary cap and a salary floor. But here is reality: MLB is actually 30 different businesses. Teams like the Yankees, Mets and Cubs own their own Networks, while the A’s do not. Rangers have a brand new Stadium while the Rays and A’s have bad ballparks with bad leases. Look at the Orioles and Nationals with the MASN battle. You get the picture.
The offer to the players, both in its structure and in the sheer scale of the cuts, is reflective of the segment of ownership that doesn’t really care about reopening.
Maybe the “no season” rumor was floated by owners as a negotiating tactic.
Highly likely there’s baseball this year…
Could be, but there are actual owners that rather not have a team, do you think Nutting is ok taking a loss? This is the same owner that would not allow a small increase in payroll when the Pirates were contending.
If a business can ask it’s staff to help finance their losses than that staff can ask that business to open up their books and be transparent about the losses that the staff is being asked to comp. Yet so many of us are coming down on the players.
About 30% of revenue comes from attendance.
If MLB can put together an 81 game season, it can recover roughly half its revenue minus 30%. That means that total revenues would equal approximately 35% of those in a normal season with fans in the stands.
Player salaries make up the majority of team costs. To maintain a normal profit margin, those salaries have to approximately match the lowered revenue percentages.
This is all extremely rough, and does not include the post season, in which the owners collect a large amount of revenue that is not matched by increased player salaries. In theory, an expanded playoff schedule would partially make up for the differences to the regular season, but it carries huge financial risk for the owners, and none for the players. Players get paid, whether there is a postseason, or not. Postseason salaries are inconsequential in the grand scheme of things.
The risk to the owners is two fold. Will a watered down playoff season be able to compete with football and the NBA. More importantly, will a second pandemic spike totally wipe out a postseason, which the owners need in order to make up for a financially unsatisfying regular season?
30% is a bs number. Why? Teams like the Rays do not draw flies to The Trop but teams like the Dodgers and Yankees draw 3m plus every year. Meaning? If they play with no fans, the Rays suffer little harm, but the Dodgers and Yankees without fans suffer a lot of harm.
Doesn’t matter what they do this would be a start and stop season. The virus isn’t over, it isn’t close, look at the numbers. They start it up it will shut down. Science isn’t lying like the government official’s manipulating the numbers. I get we need to “ get going “ economically but you can’t force everything and not Mother Nature. I pray for a season I don’t see one that ever gets close to being completed. Same for all leagues. Owners and players need to get a grip on the idea they won’t have revenue like 40 million of us.
Based on the actions of both owners and players concerning the worldwide consequences of Covid-19, the game has diminished already. They got way too caught up with themselves in their greedy me, me, me world. Lot of people out of work who won’t be supporting any pro sports this year. I say call their bluff and see if they really will shut down the game.
These owners who would rather cancel baseball to mitigate damages need to be ousted from the sport. We all know Bob Nutting, John Fischer and the Wilpons are among them. iTs a BusiNeSS is a sorry excuse.
I think the players should realize that punting this season gives a huge long term advantage to the owners. Right or wrong it’s the players who end up being percieved as greedy and most of all it puts the next collective bargaining agreement squarely in the owners favor having just canceled a complete season without any player being paid. Some players would risk no pay for two seasons, but not all.
I think it’s in the players long term interest to get a season in this year as it will put more bargaining power back in the players hands come the next CBA. So in other words less this year equals more in the future.
Fans need to boycott opening day next year if they shut down the season. We all need an escape during these turbulent times and sports gives us that out. All other pro sports can work something out I do not know why baseball can’t figure it out. This just sucks
That’s already the game plan here.
So you are saying that you, as a fan, are important to the game? I think that is what the owners are saying when they indicate how detrimental it is to play the game without fans in the stands. I miss it to but money and health are seriously at play.
In the words of that great philosopher, Napoleon Dynamite, “IDIOTS”.
“Attendance is 30% of a team’s revenue” does NOT mean attendance is 30% of the team’s profits. Not every dollar that comes into the gate is profit, so that claim is a bit specious and misleading. There are costs associated with game revenue that aren’t associated with the Central Fund, or local media contracts.
I’m sure the large market teams want there to be a season; many of them are highly leveraged. The small market teams? Without Revenue Sharing, they may lose less money staying home.
Start the season ASAP. AND day games with fans in those stadiums!