Players Ask Owners How Much Baseball They Want by Craig Edwards June 15, 2020 Last Tuesday, the Major League Baseball Players Association offered a quick response to an owner proposal to resume the 2020 season that was fundamentally no better than MLB’s first offer. The players reduced the number of games they proposed to play from 114 to 89, offered expanded playoffs for the next two seasons, and made concessions on service time for players who opt out of the season. The offer looked like a step toward compromise. On Friday, MLB responded with an offer similar to its previous two offers. In response, the players have opted to stop negotiating against themselves, and have asked Rob Manfred to set the schedule and decide how many games the owners want to have this season. The new offer was staged differently than owners’ the previous attempt, but the foundation of it presented the same reductions the owners have been attempting to pass on to the players since it became clear the season can’t be played with fans in attendance. MLB proposed a 72-game season with 70% pro-rated pay, amounting to $1.268 billion in game salaries. If the postseason, which was to be expanded, were completed, the players would receive another 10% of their pro-rated pay — around $181 million plus a $50 million bonus pool — essentially maxing out at $1.5 billion. Let’s compare the three offers made by MLB to the likely a 54-game season with full pro-rated pay as stipulated by the March agreement: Salaries Under MLB Plans vs. 54-Game Pro-Rated Pay Playoff Scenario Sliding-Scale Salary Cut (82 G) 50%/75% Pro-rated (76 G) 70%/80% Pro-Rated (72 G) 54-G Pro-Rated No Playoffs $1.03 B $0.99 B $1.27 B $1.36 B With Playoffs $1.23 B $1.44 B $1.50 B $1.36 B The first offer didn’t pay as much as 54 games even with a potential playoff bonus. The second offer’s guarantee was less than the first’s, and the total possible payout was just $80 million more and heavily contingent on completing the postseason. The latest offer by MLB still guarantees players less than a 54-game season would (it’s about $60 million higher than a 48-game season with pro-rated salaries), with the potential to go a total of $140 million higher if the postseason is played. Let’s be optimistic, and say there’s a 85% chance that the 2020 playoffs are completed. That means that the $230 million in potential playoff pay in the owners’ last offer is worth more like $196 million, while the total value of the 72-game season is about $100 million more than what the players would receive in a 54-game season. In exchange for that $100 million above the owners’ threatened plan, MLB wants: Expanded playoffs, which come with television rights that might far exceed $100 million 18 regular season games, which would have paid $453 million to players under the March agreement for pro-rated pay The elimination of a potential-billion dollar grievance from the players over violating the March agreement’s provisions about attempting to play as many games as possible. The owners asked the players to lop off half a billion dollars in pay and only offered a portion of the television revenues MLB won’t even receive in the first place without the players giving them expanded playoffs. While some might complain that the players took a hard-line stance and refused to budge, the owners have not made a remotely compelling offer in the course of these negotiations. Let’s turn bullet points above around, and assess a hypothetical 82-game season with pro-rated pay that would pay the players $2.06 billion, or $700 million more than a pro-rated 54-game season. In exchange for $700 million more in pay than the owners’ threatened 54-game season, the players could have potentially offered: Expanded playoffs for 2020 and 2021 worth hundreds of million of dollars in TV rights. Per the AP’s report on MLB’s presentation to the players, postseason games currently average $30 million per guaranteed game; even getting half that would mean $420 million over two seasons. Twenty-eight games of local revenue amounting to $412 million in television money plus another $23 million in revenue above the cost of putting on a game. (Again, these numbers come directly from MLB’s presentation to the players, without accounting for national television revenue or shares of local RSNs). Increased regular season content to satisfy national television contracts with ESPN, FOX, and TBS, and the revenue that accompanies those games (if pro-rated, that amounts to around $200 million for 28 games). Eliminating the potential for a billion-dollar grievance for delayed negotiations and failure to try to play as many games as possible. We can move around the numbers a little to account for a 48-game schedule, but the owners offered only player concessions while the players offered value in exchange for their services. If we want to have a discussion about bargaining in good faith or economic feasibility (this is certainly not the space for the entirety of that discussion), MLB offered far less in value than they wish to receive, while the players offered considerably more in the way of economic benefits to the owners than they were asking for. There’s more to an economic offer than just pay cuts. The players offered value while the owners fiddled around with the same numbers over and over again. After publicly indicating it was necessary to renegotiate the March deal, it took MLB 41 days to make its first economic offer to the MLBPA. The players responded in five days; the owners then took eight more to mull things over. After that second MLB offer, the players responded in a day; they waited three days for a response. The owners seem to be worried about a potential second wave of COVID-19 preventing the playoffs and the money that comes with it, but they aren’t offering compelling financial incentives for the players to finish the season if there are safety concerns come October. An 82-game season starting at the beginning of July seemed like it could meet the owners’ goals of ending the season more or less when it would have under normal conditions. They offered such a timeline just three weeks ago; they offered a 76-game season a week ago! By not meeting the players’ demand to honor the pro-rated pay agreed to in March, they might have lost hundreds of millions of dollars worth of player concessions. Let’s take a look at how much the owners claim they will lose playing games per team in local revenue, without factoring in national TV money or shares in RSNs, by season length: Local Losses Per Team By Season Length (Owners’ Claims) Number of Games Local Loss Per Team Change from 48 Games 48 $15.4 M 0 54 $17.3 M $2.1 M 72 $23.0 M $7.6 M 82 $26.2 M $10.8 M Does not include national television revenue or playoff revenue. For just under $11 million per team (or just under $9 million per team if the season is 54 games), baseball could’ve had an 82-game season with expanded playoffs. Those 30 or so games probably represent somewhere between 2% and 5% of most players’ lifetime earnings. For the owners, it’s an extra hit of about three percent of revenue in just one normal year, and only one half of one percent of a franchise’s value. The owners made a demand. The players offered compromise. What followed were similar demands from ownership despite more attempts at compromise from the players. There were certainly two parties in this negotiation, but only one was willing to make meaningful concessions. Any other view ignores the events of the last four months. The players were left to ask the owners when and where they should report to resume play. MLB might have one shot left to make a reasonable offer, as the potential schedule has been reduced by delays from ownership. Soon, we’ll know just how much baseball team owners want to play this season. Their answer might determine how much the game’s fans want to watch in the future.