No Fans, No Deal Between Players and Owners?

The end of March featured a bit of relatively good news on the baseball front, as MLB and the MLBPA agreed on a deal that appeared to address issues like service time and player compensation during this unusual season, allowing for a smooth path forward once and if it is safe to begin play. (Amateur players, who saw the rounds of the June draft dramatically reduced, got a far less good bargain.) The deal looked to be a good compromise from both sides, seemingly ensuring that labor questions would not get in the way of an abbreviated season. However, recent reports, which keyed off comments from Mets owner Fred Wilpon to New York governor Andrew Cuomo, indicate that the peace is not quite as secure as was once thought.

As initially reported, the deal seemed fairly straightforward. The players would receive a salary advance of $170 million that would not need to be paid back in the event of a cancelled season. In addition, the players were to receive service time consistent with what they had accrued in 2019 if no season was played. The players and owners agreed that player salaries would be pro-rated to the number of games played, with service time calculated in the same fashion. The owners received a guarantee that players would not sue for their 2020 salaries. The owners were also given the ability to defer more than a quarter of a billion dollars of draft and international bonuses to future years while the reduction in rounds would eliminate between $50 million and $100 million from the draft pool entirely.

But now there is division between the two sides over whether the deal assumed that games would be played in empty or full stadiums, which could result in further player salary concessions. Wilpon’s comments to the governor, which were then relayed to the governor’s brother on CNN, indicated a belief the players would need to agree to take less money. In a piece by Ken Rosenthal for The Athletic, agent Scott Boras indicated those details had already been hashed out and that the contract language already considered the possibility of games played in empty stadiums. From Rosenthal’s piece:

A separate section of the deal, listing the conditions for games to resume, says the commissioner’s office and the union “will discuss in good faith the economic feasibility of playing games in the absence of spectators or at appropriate substitute neutral sites.” Similar phrasing exists in other parts of the agreement as well.

Jeff Passan, who read the agreement, previously reported some of the details of the conditions necessary to start the season, noting:

  • There are no bans on mass gatherings that would limit the ability to play in front of fans. However, the commissioner could still consider the “use of appropriate substitute neutral sites where economically feasible”;
  • There are no travel restrictions throughout the United States and Canada;
  • Medical experts determine that there would be no health risks for players, staff or fans, with the commissioners and union still able to revisit the idea of playing in empty stadiums.

The AP summary of the deal at the time echoed the language in the ESPN report:

There must be no government restrictions on mass gatherings or travel restrictions throughout the U.S. and Canada, provided the commissioner will consider ‘appropriate substitute neutral sites where economically feasible.’

Reading the plain language of the latter two quotes, in particular the word “where,” there’s no apparent consideration of re-opening discussions, as the condition of economic feasibility would already have been met. That the language is in the section on conditions to start the season, and includes mostly safety considerations, doesn’t leave much room to argue that the phrase means that other provisions of the contract would somehow be superseded or require additional negotiations other than whether the parties would be willing to start the season with bans of mass gatherings still in effect.

The language in the Rosenthal piece is slightly different. It requires the parties to do something, namely to have a good faith discussion about the economic feasibility of playing games without fans. It is this language that deputy Commissioner Dan Halem argues would require a re-negotiation should it be determined that empty stadium games are necessary. From the AP:

“In the agreement reached earlier this spring, the commissioner’s office and the MLBPA agreed that the season would not commence until normal operations — including fans in our home stadiums — were possible,” deputy commissioner Dan Halem said in a statement, going on to cite the provision for future talks. “If circumstances require, we will, consistent with our agreement with the union, negotiate in good faith over a framework to resume play without fans that is economically feasible for the sport.”

Generally, any good faith duties will not overrule other specific provisions in an agreement. In this instance, the union can argue that the specific, separate provisions regarding compensation would take precedence over any generic duty to negotiate in good faith. As Tony Clark responded:

“Players recently reached an agreement with Major League Baseball that outlines economic terms for resumption of play, which included significant salary adjustments and a number of other compromises. That negotiation is over,” union head Tony Clark said in a statement Monday.

So on one side, we have the league saying more negotiations are needed, while on the other, we have the union arguing that compensation has already been decided. Clark has previously indicated that players are willing to consider playing in empty stadiums and to discuss such a possibility with the owners. The players could argue that playing in empty stadiums is a concession given that other parts of the contract within the same section discuss concerns for player safety. The players could ask for greater allowances to help keep families together and safe. It likely doesn’t take a whole lot for the players and owners to satisfy the requirement of good faith discussions about playing in empty stadiums. Ultimately, it doesn’t really matter who has the better legal argument regarding the contract. The players are likely going to be able to reasonably refuse any request by owners to reduce pay beyond what was previously agreed to, take their $170 million, and head to the next offseason. If either side wants to make more money, they will have to play the games.

As a practical matter, the players and owners could end up with difficult decisions. When or if it becomes apparent that the only feasible way to start the season is to play crowdless games, the owners will have to do some difficult math. Rob Manfred has indicated 40% of revenues are home stadium-related, in line with Forbes’ figure of around $4 billion. As to how that $4 billion figure might be made up, we already have the players discounting their salaries. If, for example, 100 games are played, players are giving up more than $1.6 billion in salaries. As mentioned above, players made amateur spending concessions that come close to $400 million this year. Expenses will likely go down if games are played in empty ballparks or at neutral sites (one estimate was by as much as 40%), and if teams can save even 25% of their expenses, that might mean another $1 billion dollars. Factoring in 2019 team profits of $1.5 billion per Forbes, and the league as a whole might end up turning a profit if they can keep all of their television revenue.

We don’t know what circumstances might be required to ensure that teams and the league get their television revenue, but they aren’t in trouble, yet. They will likely need to play a lot of games, though. Unless the league and teams can keep some or all of their television revenue without actually playing, the owners will have a very strong incentive to get the players on the field and get as much television money as they can. With $2 billion in local revenue, plus additional money from network ownership stakes, another $2 billion in national deals, and additional revenue from MLB.TV, there are considerable sums that would potentially be left on the table if games aren’t played. The owners could play hardball with the players and request additional financial concessions and hope the players blink, but there are a huge financial disincentives to risking an entire season. Hopefully, it doesn’t come to that.

Craig Edwards can be found on twitter @craigjedwards.

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4 years ago

Might be a dumb question, but can the owners employ players who are outside of the current 40 man rosters, meaning, if the players can’t agree to terms, can the owners grab random AAA / AA lifers and field a team and start the season?

4 years ago
Reply to  BeefLoaf

I’m guessing but I would guess that would not be allowed under the CBA or league rules. The players would probably have a serious grievance because I can’t imagine the CBA allows the owners to take their ball and play with it with whoever they want. Besides that, in order to play in a regular season major league game, players would have to be promoted to the 40 man roster, and all the players unwilling to play have to be removed from it, which I think makes them exposed to waivers. I’m not sure if that is in the CBA, but player movement rules would have to be suspended – that might happen anyway with rumors of 50 man rosters, but those changes would be made with MLBPA.

It’s different than playing with “scabs” during a strike or lockout because those occur after a CBA expires and before a new one is agreed to.

4 years ago
Reply to  MikeS

Wouldn’t the owners be able to place any player who refused to play on a suspended list and off the 40-man? Assuming MLB decided it was safe for them to play and they determined the player to be refusing to honor their contract?

4 years ago
Reply to  dl80

Maybe? That’s a good point, although baseball’s player movement rules are hard to keep track of.

But there would still be problems. The new players would have to be elevated to the 40-man and eventually those players would have to be removed from it when the better players came back, so that’s just kicking the can down the road unless the owners are willing to exile those guys from baseball permanently. MLBPA would kick and scream if they tried that.

Also, if the teams try to put 300 guys on such a list, MLBPA is sure to scream even louder. There would be a grievance, hearings, lots of bad press. At that point you could pretty much guarantee a work stoppage in 2022, after the next CBA expires. The union would have to assume that anything ownership said was said in bad faith and would be looking to get even anyway.

I don’t see the owners being brave enough to want to go through all of that to put on scab games unless they are truly trying to break the union and roll payrolls back to 1980’s levels.

Travis Lmember
4 years ago
Reply to  dl80

This action would be akin to firing shots to start a war that both sides want to avoid. MLBPA would be quite upset if this were to happen.

The Duke
3 years ago
Reply to  MikeS

I’d be plenty happy to see a AA/AAA season of that’s all I can get. I think it would be fun as an alternative and what minor leaguer is going to say no to that ?

From the owners point of view a full season lockout of the major league talent helps them in the long run – it will essentially cap salaries if not outright lower them for years to come IN A WORLD WHERE NO ONE ACTUALLY CARES ABOUT THE FANS ( ie the Astros world ).

CC AFCmember
4 years ago
Reply to  BeefLoaf

I would say they could not do that. Here’s my 10 minutes of research best guess:

The CBA provides for an active roster limit:

E. Active Player Limit

(1) Except as set forth in Major League Rule 2(c), the active
Player limit for the period beginning with Opening Day of the
championship season and ending at Midnight, August 31, shall be
25, provided that the minimum number of active Players maintained
by each Club throughout the championship season shall be 24.
However, if a reduction below 24 occurs as a result of unforeseen
circumstances, the Club shall, within 48 hours (plus time necessary
for the Player to report), bring its active roster back to a minimum
of 24 Players. The utilization or non-utilization of rights under this
paragraph (1) is an individual matter to be determined solely by
each Club for its own benefit. Clubs shall not act in concert with
other Clubs.

So first, if the clubs did that, they’d have call up 24-25 minor leaguers, which would require them to simultaneously free up the necessary 40 man spots, which obviously would require more options and cuts than any team would do.

Second, and probably more importantly, the plan would require multiple clubs to do this at the same time to field multiple teams that could play each other. That would clearly be in violation of the last two sentences that prevent clubs from acting in concert when setting their 24-25 man rosters.

Also, the MLBPA is the exclusive bargaining agent for all MLB players, so it’s not like doing that just does a free end run around the MLBPA.

There’s probably some other contract provisions that I could find that would be violated, but frankly, that’s all I’ve got the energy for right now.

4 years ago
Reply to  BeefLoaf

you mean scabs? NFL tried this and it didn’t go great. I’m not making a moral judgment or anything, though I’d prefer they not do it- the quality of play was apparently really low and fans hated it.

4 years ago
Reply to  dukewinslow

I remember that, in 1987, which is why I brought it up. I totally agree, the quality of play was horrible and I’d assume the same for MLB. I was legit just curious if it was a possible tactic by ownership.

4 years ago
Reply to  BeefLoaf

And if a team “suspended” 10 players for refusing to play, the 10 AAA/AA players promoted to Major League jobs immediately become MLBPA Union members.