MLB’s Financial Dispute Appears to Come Down to $326 Million, Perhaps Far Less Over Time

Rather than drawing this explanation out any further than necessary, I’m going to direct you to Jeff Passan’s column at ESPN for the full math on the gap between owners and players in MLB’s financial negotiations. Using a combination of available numbers and solid assumptions, Passan arrives at a difference of $326 million between the 48-game season owners are threatening and the 82-game season players would settle for. That comes down to a skosh less than $11 million per team for the season.

To put that in relative terms, it’d be like every team having to sign José Quintana as their No. 4 starter for one season. Seriously, that’s it.

Passan’s figure is based on the league’s claim that it will lose $640,000 per game played without fans, though we have to take that with a hefty grain of salt. First, it’s difficult to accept the owners’ projected losses at face value because they have not been completely transparent when it comes to their books. Second, MLB is reportedly inclined to allow local governments to decide if fans are allowed at potential games, with Texas ruling that teams can hold games with up to 50% capacity.

Kinda changes the calculus a bit, no? Owners obviously would prefer to strengthen their case by overstating potential losses, but all indications are that they won’t be in nearly as dire a situation as initially stated. After all, they’re still going to pull down about $980,000 per game in local television revenue, so playing more games means more revenue, right?

Yes, except that it also means paying more salary. Based on CI’s math, the difference in player compensation from 48 to 82 games comes to about $860 million. The additional television revenue comes to just shy of $500 million, so we’re almost right there at the figure Passan came up with. He also noted a gap of about $55,000 per game between some of the figures he used, so extrapolating those out gets us another $28 million for owners and brings their losses to $332 million.

Even without full clarity when it comes to the numbers involved, I think it’s pretty fair to say that arriving at a figure that differs by only $6 million from what Passan got with an even deeper calculation indicates that we’re all in pretty much the same boat. With that in mind, let’s think about those fans and the expanded playoffs that could take place next season as well.

Having fans in ballparks, even at a significantly reduced capacity, will mitigate some of MLB’s losses. Even if it’s only 2,000 fans per game at an average ticket price of $50 and another $50 in expenditures, you’re talking $200,000 fewer losses per game and $102 million over the gap between 48 and 82 games. Owners are still losing money, mind you, but we’re now down to about $224-230 million. That’s roughly $7.6 million per team.

According to the data MLB sent to the union, playoff broadcast rights account for $787 million ($370 million by Fox, $310 million by Turner, $27 million by ESPN, $30 million by MLB Network, and $50 million from international and other). It’s difficult to place an exact figure on how much more revenue would be generated from an additional round of play, but let’s just make a really conservative estimate of $100 million. And remember, the same would be true for next season.

If that’s a fair assumption, we’ve now reduced owners’ losses to the paltry sum of around $30 million. I’ve been using a calculator to this point, but I’m gonna freehand this one and peg that at $1 million in losses per team by the time the 2021 season has concluded. Even Pittsburgh’s Bob Nutting might be able to come up with that kind of scratch if he continues to withhold contributions to employees’ retirement plans for a little while longer.

My figures are admittedly biased here because I’m staunchly and unapologetically pro-player when it comes to the topic of restarting the season. But even if you choose to carry water for the owners, it’s pretty easy to see where and how they’ll be able to make up those losses via other means once the season resumes. And let’s keep in mind that I was actually using some pretty conservative figures above.

Maybe fans won’t be allowed at all and the playoff rights won’t increase by as much as I figured, but the fact remains that the gap between the league and players appears to be around $11 million per team at most. That’s using the owners’ math, which we should all be able to agree is going to favor their cause. Passan notes that there’s a scenario in which players taking another small haircut in order to get more games might actually earn them more money in the end, though that also means the owners make more as well.

Wait a minute, shouldn’t that lead to agreement? Sure, but players aren’t taking less than prorated salaries and shouldn’t have to. Whatever ends up happening, I hope it happens soon and that we get something as close to half a season or so as possible.

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