MLB’s Shifting Proposals Obfuscate Relatively Static Payroll Target

Major League Baseball is currently engaged in a confidence game, playing Three-card Monte with billions of dollars in an attempt to get players to bite. Though each new proposal may appear different from the last, it has become evident that there’s a specific payroll target around which owners are simply manipulating details in order to cloud the truth.

Remember that 50-50 revenue-share that elicited such a negative response it was never formally presented? That would have resulted in about $1.43 billion going to the players, based on MLB’s projection of $2.87 billion in total revenue from a shortened season. The next proposal was to pay full prorated salaries for around 50 games with a playoff pool of $250 million, a total of almost $1.5 billion.

Monday’s offer to pay 75% of prorated salaries over 76 games would have amounted to — wait for it — $1.43 billion if MLB was able to hold a postseason. Adding in the removal of draft-pick compensation due to the removal of qualifying offers for the winter, valued at $50-100 million, we get back up to roughly $1.5 billion.

  • 50/50 rev-share: $1.43 billion
  • 48-game pro rata: $1.5 billion (includes playoffs)
  • 76-game proposal: $1.43 billion
    • Lack of draft-pick comp adds $50-100 million

You may have already recognized this, but the numbers above lay out pretty plainly that the owners have placed a ceiling on the total amount of their eventual deal. It’s possible that could be raised a little with the realization that having fans in attendance will naturally impact the numbers, particularly since this whole negotiation is based on taking additional losses due to empty ballparks, but there isn’t much room to maneuver at this point.

Assuming it’ll take a month to gather all the players and conduct spring training, the owners’ demand to end the regular season  on September 27 or thereabouts offers only 79 possible gamedays. Each day we mark off the calendar further limits the potential for the season, so it seems like the only way to reach an amenable solution prior to the commissioner mandating a certain number of games is to settle in the middle.

A 58-game season at full prorated pay would come in just over $1.5 billion, which is right there in the owners’ comfort zone. Or the players could try to come at the deferral idea a different way, maybe by aiming for 65 games at 90% pay for this year and the additional 10% coming out over the next two seasons. That’s a total of $1.69 billion, with $1.52 due in 2020 and $170 million spread over 2021 and ’22 ($2.83M per team per year).

Without going so far as to say the players should cave and agree to what MLB is offering them, it’s important to understand the parameters of the negotiation and leverage them to achieve the best results. Of course, the best results would see players getting what they want now while also winning back some of the things they lost in the current collective bargaining agreement.

Could that mean getting an agreement on the abolition of the QO moving forward? Maybe expanded playoffs would be more permanent, which, along with the universal DH, seems like a given at this point. There are still ways to make this happen, but the owners are going to have to stretch beyond the obvious limits of their payroll target to get there or the players might end up having to accept a final offer from Rob Manfred.

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