Report: MLB’s Alternative Financial Proposal May Still Be Percentage-Based

According to a report from Ken Rosenthal and Evan Drellich of The Athletic, the revised financial proposal ($) from Major League Baseball to its players may still be based on a percentage split of revenue. We had already learned that both sides were willing to compromise, with the players discussing the possibility of deferring salaries to ease the burden on owners’ liquidity, but maintaining a fixed split might be a non-starter.

The union’s aversion to the 50-50 revenue-sharing being floated initially was that it amounted to a salary cap, which wouldn’t change if this report is accurate. Even if the percentages shift dramatically, all it does is move the cap higher. And since the owners still haven’t been completely transparent when it comes to their books, the players would have to simply trust that the numbers they’re given are accurate.

There’s also the matter of this winter and beyond, with some fearing free agency and arbitration will become even less lucrative than in the past two seasons. While players are still being paid quite well relative to regular folks, average salaries dipped in 2019 as MLB’s total revenue set a new record. Player compensation continues to make up less of the overall pie, at least in small part due to more teams taking harder lines with file-and-trial negotiating tactics.

That could be what the league is essentially doing here, presenting a take-it-or-leave-it deal for the players and then holding firm to a percentage-based model. The salary deferrals might not fly with owners because any relief they’d experience this season would be mitigated by having to pay more over the next season or longer. That could in turn hurt those players who will enter free agency this winter and next, though it’s incredibly difficult to predict any of this with a high degree of confidence.

At the same time, it could lead to more club-friendly extensions as players seek to avoid the uncertainty created by the current situation. One way or the other, Tuesday should be very interesting.

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