Players’ Proposal Should Get Everyone Closer to Major League Baseball

On Tuesday, Rob Manfred and Tony Clark met in Arizona. On Wednesday, MLB made an offer to the MLBPA that would give players pro-rated salaries for 60 games and a $25 million postseason pool. It also included $33 million in salary relief from the $170 million in advances players received, and a universal designated hitter. In exchange, the owners would get expanded playoffs for the next two years, and the players would agree to waive any grievance the MLBPA might otherwise have brought against MLB for failing to make its best effort to schedule as many games as possible, as is required by the March agreement. The players have countered that proposal; the two sides, it would seem, are very close.

As first reported by Jeff Passan and Jesse Rogers, the player proposal is for 70 games at pro-rated pay, with the same or similar salary advance forgiveness as the owners proposed, $50 million in playoff money, and a 50/50 split of new postseason TV revenues in 2021. The deal would include grievance waivers from both parties over the March 26 agreement, as well as the universal designated hitter.

The major differences the players propose are as follows:

• The regular season would end on September 30 instead of September 27.
• Ten extra regular season games, which would provide players with $252 million in additional pay, and, even using only local revenue, provide around $155 million in revenue to the owners.
• $25 million more in postseason pool money.
• Fifty percent of 2021 expanded playoff money, which could amount to $100 million or more for the players, though it would also mean corresponding increases for owners in 2020 and 2021, given that they stand to receive roughly 75% of those rights.

So how far apart are the two sides? The math above puts the gap at $222 million, though if you pro-rate the regular season national television money for 10 extra games, the difference dips under $150 million. Bob Nightengale indicated that the player proposal also allowed for $50 million to be transferred from a joint fund to the Commissioner’s discretionary fund, and allowed advertising on uniforms. That $50 million would seemingly put the difference at under $100 million. The NBA makes between $5 million and $20 million per team (or about $150 million total per year) for the jersey advertisements, which would appear to make up the entire difference between the two sides. Some of that jersey money might come from existing sponsors to make up for lost games, and it’s possible that some of the expanded playoff money might be given to networks in the form of “make goods” from content lost earlier this season. It’s still money that wouldn’t leak into future seasons and would provide more than the expected pro-rated revenue in 2020, greatly lessening any potential losses. Ken Rosenthal reported the deal included a “neutral site/quarantine framework” that would help ease scheduling in the event of a worsened pandemic.

Though an agreement would appear to be inevitable, rhetoric from the owners’ side indicates otherwise. In his piece on the subject, Nightengale notes that three owners were “incensed.” Bill Shaikin reported an owners’ source indicating the players’ offer “went backwards.” An owner told Jon Heyman the proposal was “DOA.” Heyman also indicated owners believed they thought they had a deal at 60 games. Yankees president Randy Levine told Ken Rosenthal that Manfred should tell the players, “We’re finished talking about the number of games.”

To take a step back, here’s what Rob Manfred had to say about the meeting:

At my request, Tony Clark and I met for several hours yesterday in Phoenix. We left that meeting with a jointly developed framework that we agreed could form a basis of an agreement and subject to conversations with our respective constituents. I summarized that framework numerous times in the meeting and sent Tony a written summary today. Consistent with our conversations yesterday, I am encouraging the Clubs to move forward and I trust Tony is doing the same.

From Manfred’s statement, it certainly sounds like the pair had a productive conversation that could lead to an agreement, but that the conversation was conditional (note the “could form” and “subject to conversations”). For his part, Tony Clark had this to say after providing the owners with the players’ proposal:

In my discussion with Rob in Arizona we explored a potential pro rata framework, but I made clear repeatedly in that meeting and after it that there were a number of significant issues with what he proposed, in particular the number of games. It is unequivocally false to suggest that any tentative agreement or other agreement was reached in that meeting. In fact, in conversations within the last 24 hours, Rob invited a counterproposal that he would take back to the owners. We submitted that counterproposal today.

The statements from the two parties who had the conversation in Arizona don’t actually conflict with each other. If some owners believed a deal was made, there was either a miscommunication with Manfred, or Manfred’s statement wasn’t anywhere near strong enough compared to the events in the meeting. In response to Clark’s statement, Manfred has since said:

I don’t know what Tony and I were doing there for several hours going back and forth and making trades if we weren’t reaching an agreement.

Let’s proceed as if this were going well, and compare both proposals to the potential 48-game schedule that could be mandated by the Commissioner. The owners are offering 12 more games and $302 million in salary, along with $33 million in salary advance forgiveness and $25 million for the postseason. In exchange for $358 million, they will receive:

• Expanded playoffs for 2020 and 2021 with television rights ranging from $200 million to $500 million.
• Local revenues, using MLB’s own numbers, amounting to $259 million.
• If pro-rated, regular season national television money amounting to $81 million.
• The elimination of the potential for a grievance worth hundreds of millions, if not a billion dollars.

Just how good of a case the players might have in the form of a grievance isn’t quite clear. A busy Randy Levine told Bob Nightengale, after sounding off on Scott Boras, said, “If I was a lawyer in this case, I would say there’s a 90% chance the clubs would defeat a grievance.” Now, 10% of a billion is still a pretty valuable sum, but owner actions, including a Dan Halem letter threatening to cancel the season, Manfred’s trip to Arizona and subsequent offer, and Rosenthal/Drellich reports of owner fears seem to indicate the risks of a grievance to owners aren’t quite what Levine is representing.

Now, a 60-game schedule proposed by the owners is a pretty clear win over a potential 48-game season mandated by the Commissioner. What about the players’ offer? The players are asking for 22 more games compared to a 48-game schedule, which would pay them $554 million, with the $33 million in advances forgiven, another $50 million in postseason pool money, and 50% of 2021 expanded playoffs rights worth somewhere between $50 million and $125 million. In exchange for that roughly $700 million, they provide the owners:

• Expanded playoffs for 2020 and 2021 with television rights worth $150 million to $375 million (75% of the figure above).
• Local revenues, using MLB’s own numbers amounting to $342 million.
• If pro-rated, national television money amounting to $149 million.
• Joint account money in the amount of $50 million transferred to the Commissioner’s discretionary fund.
• Advertisements on jerseys likely worth between $200 million and $400 million.
• The elimination of the potential for a grievance worth hundreds of millions of dollars, if not a billion dollars.

This deal isn’t a loser for owners, either, who would get far more than they are giving up compared to a mandated 48-game season. Even when you compare the players’ offer to the owner’s 60-game proposal, the players have asked for about $350 million more in pay and offered between $400 million and $600 million in value. The proposal gets to that value in creative ways, seeking to expand the pie in terms of baseball revenue, but it clearly provides more than the players are asking for. In addition, it provides more help in finishing the postseason by outlining a neutral site plan should the pandemic worsen.

While the players’ latest proposal might not be exactly what the owners are asking for, it is a reasonable one and compromise should be an option. If there are owners who still think otherwise, Rob Manfred and owners who want to see baseball in 2020 need to get together and make sure it happens. There’s also the possibility that Manfred and the owners are engaged in further delay in an attempt to avoid a grievance, and force the shorter schedule they desire. The proposals put forth by the owners and players are significantly better than a 48-game season. And no season at all? That would be an abject disaster brought on by the owners refusing to see the short- and long-term benefits of getting their product on the field.