Rob Manfred No Longer Confident 2020 Season Will Occur

@Patrick – do a quick Google of 2020 federal payroll taxes. It goes beyond FICA and Medicare. Start there.

Next, the premise of income/payroll taxes is wages are deemed earned anywhere services are provided. A ballclub plays games in 10 cities, taxes are owned for each game in each city/state a game was played in per day, plus at the federal level. Additionally, there is that liability to the home city/state of the team/player residence, which usually there is a credit for taxes paid to other jurisdictions. People who work out of state are familiar with this.

Now, you have a pattern in your posts of saying you don’t know something, but, dismiss it out of hand as if it’s insignificant.

Let’s say we had 81 games at prorated salary. That’s still 2.1B. You know how much even 1% on 2.1B is? $21m, or almost 1/3 of a number of mlb ballclubs total player payroll. You get to 2%, 4%, you’re talking real money here.

Then let’s move on to your assertion of 787m in postseason revenue. Turner pays 325m for one LDS and one LCS. But you have us believe the other LD, LCS, crown jewel WS, and postseason gate revenue are only worth a combined 462m?

Please identify what contracts and reports you personally read and reviewed the math on to get to that number.

Also, please identify what tv rights deals for the regular season you parsed to know they aren’t reduced for games not played or made up beyond a preset excusable number as is common industry practice?

Have you talked to executives at MLB to know that MLB.TV is getting full 100% revenues compared to 2019, subscribers haven’t cancelled or gotten refunds, and that any subscribers they DO manage to pull as households tightened expenses due to lost income won’t have to be offered at reduced rates as the number of remaining games decline as has been practice every season I can remember?

You also seem unable to comprehend, or at least give credit to, what stadium costs are for clubs, and hint, it ISN’T day of game operations that cost the most.

Are sponsors paying for ads seen by nobody? Is a game not played a game sponsored?

Teams either pay municipalities guaranteed revenue, own and owe debt service, or have a public/private partnership that usually requires teams to cover the interest and debt payments in whole or part. Likewise, teams even on a lease are usually required to pay 10s of millions per year in maintenance and periodic upgrades even on leased stadiums – tens to hundreds of miles of electric wire alone in these concrete behemoth aren’t free of service for example. The braves had to buy new seats for a stadium they were planning to leave because it was part of scheduled maintenance obligations. Most of this gets covered in detail when teams go for new stadiums and move… like recently in atlanta. But, these huge expenses that would add up in the BILLIONS per year are dismissed out of hand as if they don’t matter. That dont get prorated either.

Everyone is operating from a handfuls of leaks. But one thing that is scoffed at by too many is somehow discounting that MLB is at a 4.1B loss compared to expected income… we know, from publicly available and undisputed info that over 4B is what wouldn’t be earned by ticket and gameday revenue. We also know revenue sharing was suspended for 2020 by prior press release meaning clubs are on their own.

4.1b not coming in is 4.1b lost. That wouldve paid player salaries but is now gone.

We also know that even states that have reopened haven’t relaxed the large gathering restrictions to stuff 40,000 fans in a stadium. Any reduced social distance crowd still takes up the same real estate for parking, for seating sections, cleaning, services, utilities, sanitation, security, etc. 10% attendance could easily cost MORE than it generates in profit.

Keep parsing further, there’s TONS more to this all.

One preposterous position you promote is that ALL tv ad revenue could cover 2020 player salaries. BUT you discount all the other team costs. The braves public books are a good basic approximation say give/take 20% either way for an average club on that front.

But you also ignore costs of the parent MLB organization that pays umpires, it’s own employees, marketing, etc.

Then go further. That postseason revenue you point to? The excess from the tv rights deals? Who pays November-March salaries and benefits to scouts, club employees? Who pays for health insurance in the offseason? Who pays for SPRING TRAINING? All these things happen without 2021 tv payments or gameday receipts coming in.

If you borrow for 2020 player demands, Borrow for post 2020 and pre 2021 costs, who pays back that principal and interest?

Will the players be ok with 3-5 yrs of salary regression while those bonds are paid off? Of no facilities upgrades and wearing out equipment?

Make no mistake. The players have given NOTHING up so far… there was a national emergency declared in the US. The existing CBA provides player salary will be reduced pro rata to actual games played in such an instance.

What we’ve learned is that in the next CBA owners will DEMAND contracts are not fully-guaranteed. Other pro sports have the same ability of othet businesses to reduce employee salary, albeit usually paying a small portion of the contract and taking the rest as a cap hit to reduce arbitrarily doing so unless necessary for better needs of the franchise.

If the MLBPA has shown itself either unable, or worse unwilling, to make any good faith concession in the face of the business losing 40% of its gross revenue just from fans not attending on gameday in a single crisis season while seeing new costs (covid related protocol WILL add cost) then MLB will require this to be corrected in the next CBA. And that 40% DOESN’T address losses in tv revenue, a potential shortened or lost postseason, sponsorship losses, lower mechanised sales, etc. It will be higher, the question is how high?

Strike/lockout is guaranteed at that rate, and MLBPA is the source.

You are false in the assumption that FICA is the biggest portion of payroll taxes when dealing with massive scale obligations. You would be correct if dealing with a company of mainly sub-150k salary employees.

FICA is 6.2% of 137.7k… but medicare is 1.45% no-limit. So on a 1m salary, $14,500 goes to medicare while only $8,537 goes to FICA.

Then there’s piddling add-ons… FUTA claims $540 max per employee, basically all count as maxed since it’s based on a $7000 taxable cap. But over the organization and all its minor leaguers, it adds up.

Again, there’s state taxes as well.

While you interpret “JOCK” taxes and your knowledge as applying to withholding in the employee sense, I certainly hope you understand employers also need to pay for everywhere their employee earned wages… or that your “employees” of your “company” never work outside california. When Mike Trout plays a game in the bronx, the LAA have to pay NYC’s employer payroll taxes, NY state’s payroll taxes, and NY state’s unemployment taxes on Trout’s 1/162nd season wages for that one game.

So while state payroll taxes vary, their unemployment taxes often mirror FUTA. Each time you call someone up, another full tax share since they likely make $7000. Over a season, those numbers really add up.

You parrot some incomplete sets of data on tv rights, but again even here try to compare apples to oranges. You’ve made posts in the past saying MLB clubs earn enough from TV rights to pay players pro rated salaries with money left over.

At least here you admit to not knowing what the regular/postseason splits are, how non-played games are handled, how payments are due, and how credits/refunds are handled.

HOWEVER, you should also be aware that any credit in a future year is a debit against future revenue AND the networks would expect interest so as not to be interest free loans.

You also claim networks derive most of their revenue from subscriber fees rather than advertising… I assume you have numbers on how many paid subscribers pay for TBS and FOX for mlb programming and how much advertising revenue TBS and FOX make from MLB game ads? What about for ESPN? More off the cuff assertions I presume? Advertising is important to the networks in paying the cost of the contracts, it’s why Manfred hacks up tradition to save 3 minutes a game instead of removing some of the ridiculous number of commercials.

The basic idea here is that it’s easy to say “I presume” or “that’s probably” without having the hard data on a million sources. Easier still to then dismiss it as not mattering.

And yet, nobody extends the owners that same ability to just say, look, take a handful of the big numbers everyone knows. 40% of GROSS revenue is gone. If we accept the Athletic/Forbes number of 787m (sounds low if TBS pays 325 mainly for one LDS/LCS) another 47.75% of GROSS revenue is tied up in that TV revenue with only 7.87% postseason. That means 29.98% of GROSS revenue is in TV rights that are severely impacted regular season games.

So if we just prorate and list what’s lost to be simple minded, 40% gross revenue is lost at gates/gameday. 15% of gross revenue would be half of regular season tv revenue which is either lost outright or, less likely, charged against future payment streams.

MLB is now operating at less than 45% of regular revenue. We know sponsorship money goes down, but not how much. We also know spending in general is down (recession) and will hit merchandise streams. We don’t even know if the roughly 8% that the postseason makes up at the low end will happen.

So, 2020 needs to happen with a baseline of below 37% guaranteed revenue (no playoffs are certain) before sponsorship losses, no playoff ticket sales at HUGE prices per fan, and speculative losses, then pay operating costs, pay covid costs, cover all full season non prorated costs, cover all offseason costs, all spring 2021 costs, all debt costs…

But MLBPA wont accept in good faith, and some people try to give cover for them, that owners claim to lose 4.1B in revenue in a 2020 season with 81 games at full proration salary under those conditions.

And *some* people claim, without knowing what’s there or how it’s divvied up, that tv revenue, even prorated, is sufficient to cover prorated player salaries. I haven’t read the tv contracts… but I’m not advocating all over online that there’s enough revenue in them to cover prorated salaries either.