Major League Baseball’s owners and players clearly do not view the path back to the 2020 season the same way. It’s almost as if they’re seeing things through different eyes, as Max Scherzer made clear in a strongly-worded tweet Wednesday evening. Some initially read it as though the heterochromic righty was saying the MLBPA wouldn’t negotiate at all, but he simply meant they’d make no further concessions on salary given the information on hand.
— Max Scherzer (@Max_Scherzer) May 28, 2020
“After discussing the latest developments with the rest of the players there’s no reason to engage with MLB in any further compensation reductions,” Scherzer’s statement read. “We have previously negotiated a pay cut in the version of prorated salaries, and there’s no justification to accept a 2nd pay cut based upon the current information the union has received.
“I’m glad to hear other players voicing the same viewpoint and believe MLB’s economic strategy would completely change if all documentation were to become public information.”
Boom, shots fired. And very justifiable ones, at that.
The latest round of acrimony was brought about by the sliding-scale pay proposal put forth by the owners on Tuesday, an alternative to the aborted 50/50 revenue-share with players. Not only does the latest scheme appear to be meant to sow discord among union members, keeping lower-paid players nearly whole while drastically reducing the highest salaries, it actually represents a significant decrease in aggregate pay over what the rev-share would have provided.
Based on some very extensive cocktail-napkin math conducted by CI’s Jon Ferlise using figures from Cot’s Contracts, the new proposal would pay players almost $400 million less on the whole than an even split would have. That’s based on the financial modeling the league provided to the union in which revenue was expected to come in around $2.87 billion for the season. MLB argued that paying players their full prorated salaries, an amount they say comes to around $2.36 billion after various benefits, would eat up too much of the pie.
But therein lies the crux of the problem Scherzer is talking about, which is that the players don’t have faith in the veracity of the numbers they’re being given. Nor should they, especially since the latest offer represents a dramatic departure from what the players believed was an agreement signed in late March to play for prorated salaries.
It might be different had the owners presented all the requested financial documentation or had the pay scale been even a close to the prorated amounts. As it is, however, the top tier of players would be earning only about 20% of their original annual pay. And though the guys making lower salaries would see a higher percentage of what they’d expected, the total take by the players would come out to around 24% under the owners’ plan.
Even with the $200 million bonus pool added in, the amounts fall laughably short. That’s why, as multiple outlets reported Wednesday evening, the union will counter with a proposal to receive full prorated pay (that’s important, since some people are still sorely mistaken about exactly what players are really asking for) over a longer season than has been discussed. The Athletic reported that the proposal would be for more than 82 games with ESPN further clarifying it’s more than 100 games.
Basically, the players are just acting as though the owners’ proposal doesn’t even exist, which makes sense. In addition to the requests above, players are also seeking additional documentation to show proof of the claims that revenues are truly as low as the league claimed in that earlier memo.
More than pay structure alone, the number of games and length of the season are going to factor heavily in these negotiations. Players get paid by the game, so more games equals more money. Owners earn much higher relative revenues from postseason broadcast rights, so they desperately want to ensure they can facilitate an expanded version of the playoffs to max out their profits. Do you see where this is going?
Not only would the players’ proposal cost owners a great deal more money during the regular season, but it could potentially jeopardize the viability of the postseason should a second coronavirus wave crest in the fall. Both sides are trying to maximize their earning power, or to simply mitigate their respective losses, but those seemingly mutual goals can only be achieved through disparate means.
Unless, that is, there’s a path to compromise in which both sides get most of what they want. The players aren’t going to agree to a drastic decrease in pay and the owners aren’t going to pay prorated salaries over 100+ games, if at all. So the best solution as I see it is to go with the shorter season of 82 games and get the expanded playoffs in there while deferring some of the players’ salaries — something the union has reportedly discussed — over the next two or three years.
We’re talking about something in the neighborhood of $1.1 billion between prorated salaries and MLB’s sliding scale (another $250 million or so in benefits are not impacted), the latter of which we can use as a figure owners would be comfortable paying. Not that I’m necessarily worried about their comfort, mind you. If you break that down per team over three seasons, it comes to an average of $12.33 million. Make it two seasons and you’re still looking at just $18.5 million per team per season. You think that’s doable?
Players get paid, owners don’t have to shell out as much this season and don’t feel much of a pinch in subsequent seasons, and they can play ball in 2020 with a postseason. Now it just comes down to whether owners will be able to look past their nose rather than cutting it off to spite their face, which is to say they’d do well to consider the long-term health of their massively appreciated assets rather than trying to maximize short-term profits. Or minimize short-term losses, as the case may be.
It’s also possible that owners open their books to an extent that the players feel comfortable with the information and agree to soften their stance on pay. That would require a significantly greater degree of transparency and isn’t likely, but it’s not impossible.
I still have confidence that both sides will find a way to make this work, simply because there’s far too much at stake for them to punt a season that could otherwise be played. That confidence, however, is probably based more on my desire to see baseball again than on any evidence we’ve seen to this point.