You may have heard that MLB owners and players are at odds over how baseball will (hopefully) work in 2020. Back in March, both sides agreed that players would get a full year of service time but would be paid prorated salaries in the event of a shortened season. In other words, half a season would mean players getting half their salaries. Seems reasonable.
But when COVID-19 got worse, MLB realized that most if not all of the season would be played in empty stadiums. Owners then claimed they could not afford to pay players their full prorated salaries without fan revenue. As such, ownership offered players a choice between a short 50-game season at full prorated pay or a longer season at a reduced percentage of prorated pay.
Owners claim that without ticket sales and concessions they will lose about $640,000 each game. In a strictly technical sense, they are correct. On a deeper financial level, they are (as usual) full of #$%@. For instance, this “lost” money includes interest payments on the huge debt owners took on to buy their teams and/or finance their stadiums, money that actually creates equity (i.e. money) for owners. Owners can also write off 2020 losses against future taxes and playing a season increases the value of each team long term, etc. You get the idea.
But let’s pretend for a moment that MLB owners opt to pay players their full prorated salaries over a longer season than they’ve been willing to approve and they end up losing money. So what?
Have MLB owners considered that they might subsidize baseball for a country racked by disease as a public service? Seriously, how is this not a part of the conversation? Why is sacrifice for the common good only being asked of nurses and meatpackers?
It is undisputed that MLB revenues have increased to record highs for 17 straight years. Meanwhile, average salaries have fallen the past two seasons. Translation: owners made record profits the past two years. They can afford to take a loss for one season.
Owners also just negotiated a new playoff TV deal with Turner Sports that will reportedly increase MLB’s annual take from $350 million to $500 million. That is $5 million more per team over every season of the new deal. Increasing the season from 50 to 72 games at full pay would only cost around $19 million per team, which the Turner deal alone pays for in four years.
Also consider that by playing hardball with the players today, owners are almost guaranteeing a strike in 2022 when the new collective bargaining agreement must be negotiated. Baseball is already catering to an aging fanbase that gets older each year, so owners are foolish if they think young fans will return after losing almost two seasons over three years. Are they really willing to bet their billion-dollar investments just to avoid losing a few million?
The greed and hubris are staggering.
Yes, I am aware some of these same points could be made about the players. But the owners are not being asked to risk their health to play and the players did not just negotiate a new television contract or take on mountains of debt in order to start their respective careers.
If owners are really concerned about losses, they could agree to a 50% revenue split that extends for the next five years beyond this one. Players would make less in 2020, but I’m willing to bet they would end up making way more than owners are otherwise willing to pay them in the future. Convenient how losses need to be shared, but the profits never do.
Saturday’s statement from MLB said the league will “determine the best course to bring baseball back to our fans.” Staying true to that means they should be willing to swallow their pride and eat some short-term losses. We’ll see.