Players Take Big Step Toward Compromise With Latest Offer
On Monday, the owners presented their second economic proposal to the Major League Baseball Players Association, offering to pay players 50% of their pro-rated salaries from the March agreement for 76 regular season games, and 75% of their pro-rated salaries over 76 games if they played the postseason. That proposal was similar to the previous one the owners had made, shifting around roughly the same amount of money and ultimately offering the players less in guaranteed salary. While the players waited eight days for that proposal, it took them just a single day to respond with Jeff Passan first reporting the MLBPA’s response last night.
The players’ proposal includes an 89-game season beginning July 10 and lasting through October 11, a 94-day period. Players would receive full pro-rated pay for those games. The proposal includes expanded playoffs in both 2020 and 2021, and a player bonus pool of $50 million for the playoffs if there are no fans. Players who are considered high-risk for complications related to the coronavirus or who live with someone considered high-risk could opt-out of the season and receive service time and salary, though others who opt out would receive neither. In analyzing this deal, we have several different comparisons to make when it comes to other offers or potential proposals.
The Players’ Prior Offer
The previous offer made by the players included a 114-game season ending at the end of October, expanded playoffs in 2020 and 2021, a provision allowing high-risk individuals and those living with high-risk individuals to opt-out and receive service time and salary, and all other players to opt out and receive service time. The new proposal addresses some significant issues raised by the owners. Owners want to pay players less. Moving to 89 games decreases player pay by roughly $630 million. Owners have expressed concern about playing late into the year. Ending the season on October 11 moves up the end of the regular season by three weeks. Owners want expanded playoffs; that bargaining chip was kept in the recent offer. Owners didn’t want all players to be able to opt out and accrue service time (service time was a huge issue when the sides negotiated the March agreement), and the union response acceded to those wishes. That doesn’t mean the offer is palatable to the owners, however.
The Last MLB Proposal
When it made its last proposal, MLB offered just 50% of the pro-rated salaries from the March deal for 76 regular season games, and up to 75% for completing the playoffs. A 76-game regular season would pay the players $957 million in game salaries, with the playoffs pushing the total to $1.435 billion. The 89-game proposal at full pro-rated pay would give the players $2.24 billion, with another $50 million for the playoffs. This is where the gulf between the players and owners lies. The difference in regular season pay between the two plans is $1.283 billion; after the postseason is accounted for, the difference drops to $855 million. And when we consider the league’s failsafe, we can begin to appreciate just how bad MLB’s last offer was.
A Short Season With No Deal
There seems to be something of a consensus that MLB’s last resort will be to play a season of around 50 games and pay the players their full pro-rated pay from the March agreement. Evan Drellich and Ken Rosenthal reported the season would likely be 54 games or so. Under a 54-game proposal using pro-rated pay, players would receive $1.36 billion in game salary. That guaranteed regular season figure is $400 million higher than the owner’s last proposal and just $75 million short of the total amount with playoffs. This backstop is a significantly better option for players than the previous offer made by the owners, and it leaves open the option for the players to file a grievance asserting that the owners did not make a good faith effort to play as many games as possible as required under the March agreement. It also lacks any sharing of risk should the playoffs not happen and includes no provision for expanded playoffs and the potentially hundreds of millions of dollars in television rights that come with them. There’s still an $880 million disparity between the two sides, but expanded playoffs in two seasons might provide anywhere from $300 million to $500 million to the owners, and going from 89 games to 78 games would lop off $277 million in salaries. Then the owners barely have to move at all to reach an agreement, particularly when weighing the risk of an expensive player grievance.
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How much money expanded playoffs might be worth is speculative, but consider that ESPN pays $27 million for a single Wild Card game, MLB Network provides $30 million for two division series games, and TBS pays $310 million for between 11 and 18 games, while FOX pays $370 million for 12-22 games. An extra round of three-game series provides an extra 14-22 games, while five-game sets would add 22-38 games. If MLB is going to field 16 postseason teams the next two years, they are going to have a huge inventory of playoff games worth hundreds of millions of dollars. In order to get access to that money, owners must strike a deal with the players.
As for what MLB might respond with, Andy Martino of SNY has reported that owners were willing to offer 75% pro-rated pay. That would be significantly better than the last offer, but it’s not clear the players will move off of the pro-rated pay they negotiated in March.
One thing to keep in mind when discussing the amount the owners are offering, and what made the last deal a step backward, is tying a significant amount of pay to the playoffs on a contingent basis. If the owners are concerned about not being able to stage the playoffs and take in the attendant television money, it makes every dollar offered that is contingent on completing the playoffs worth less. If there’s a 25% chance the playoffs don’t happen, the owners’ last offer making $480 million contingent on completing the postseason isn’t worth $480 million today, it is worth just $360 million. If the odds are 50/50, that knocks off another $120 million in actual value today. If the owners are going to make an offer with money contingent on the postseason because they are reasonably concerned it won’t happen, those dollars should be offered at a discount.
The players made a significant move towards compromise with their offer yesterday. It’s now up to the owners to make an offer that reflects that compromise rather than just making the same offer with the numbers rearranged that still results in a billion dollar pay cut for the players. There might cause some difficulty within the ownership ranks given the financial disparity between teams, but it is clear owners aren’t going to be able to make a deal that makes all the owners happy. The supposed 54-game backstop for the owners is significantly better than any offer they’ve made thus far, and the next step forward needs to reflect that reality.
Craig Edwards can be found on twitter @craigjedwards.
The players need to take a pay cut. Doesn’t matter if it’s as little as 10%. That’s the compromise gesture the owners are looking for. Any offer that doesn’t include that is a waste of everyone’s time. The MLBPA first offer for full pay in 114 games was comical which means this one is definitely much better, but let’s stop acting like are the ones in the right.
The problem of course being that everyone already agreed to prorated salaries and therefore it legally doesn’t have to be on the table for renegotiation if either side doesn’t want it to be. It’s the owners trying to renege on already negotiated points, not the players.
This is an incorrect point I have seen being kicked around. The original contract stipulated that playing with no fans might affect the prorated salary agreement. For example:
https://www.forbes.com/sites/mikeozanian/2020/05/15/provision-in-mlb-deal-with-players-negates-guaranteed-prorated-salaries/#6b33202a6a84
The language is…ambiguous. Which makes it a disaster. But even then, I don’t blame the owners for interpreting it that way.
Ownership especially really messed up by kicking the can down the road on this one. Now it seems like MLB double dipping into players’ salaries instead of one comprehensive deal. And it’s not like ‘no fans’ was unforeseeable (triple negative!)
I’d encourage you to check out Eugene Freedman’s Twitter, or listen to his interview on Effectively Wild a few episodes back. From people who have experience with this sort of thing and know what they’re talking about, it really sounds like there is no room for MLB to be negotiating off of the prorated salaries. That article you linked to essentially just says “actually there is a clause that lets the owners do what they want”, without offering any further evidence or explanation.
I’d also caution against taking anything on Forbes.com at face value. Despite its name, which ostensibly implies credibility, it really has astonishingly low publishing standards and has been known to publish blatantly false or misleading articles for a few bucks. Not saying this article necessarily falls into that category, but I also wouldn’t be surprised if it did.
Yes, the players should definitely take a pay cut to risk their lives. Sounds reasonable
How are they risking their lives? Most of the people in this country and the world have returned to work. Teenagers are working at McDonalds for $10 an hour but pampered athletes would be “risking their lives” to play a baseball game in a sanitized, empty stadium?
Bingo Atomic! There is a freaking opt out in every offer. If any player doesn’t want to play, they don’t have to.
Then none of the players should play. Why do the owners get to sit at home and count their money and the players have to go out in the middle of a pandemic at less pay?
The players are not being forced at gunpoint. They are free to sit at home and count their money just like the owners.
The people working at McDonalds are also risking their lives. They should be receiving hazard pay.
STFU about “pampered athletes.” No one can be forced to work for less than agree to work for in this country.
Should be but many are not…most health systems are cutting hours.
“Hazard pay” for McDonald’s employees…
How much would you pay for a Big Mac? Probably not enough to cover Hazard Pay to the fry cook.
Yeesh, labor at those types of places is ~14% of total costs. If you double salaries and you’re not going to get a hamburger because the price went from .99 to 1.13 you’re crazy.
They are still risking their lives. They will inevitably come in contact with dozens of people per day, who themselves are in contact with dozens of others… Exponential math still works for people making millions of dollars. Quibble with the macroeconomy for valuing professional athletes at what it does if you wish, but no employer should be forcing their employees to work in abnormally hazardous conditions while simultaneously trying to steal back money they already agreed to pay them. It’s just shitty human behavior, no matter the scale. (yes this also applies to Jeff Bezos and Amazon warehouse workers, and grocery store workers, and fast food workers, but that doesn’t mean it doesn’t apply to MLB owners and professional baseball players as well.)
‘Pampered athletes’ is a dumb phrase. But from all indications, the players are asking for LESS stringent safety protocols, which does not mesh with the idea that they are concerned about the health implications of playing.
As doctors and first responders and service workers are doing already
Yes, MLB should definitely operate their business at a loss just because we say they should. Sounds reasonable.
Then they can not operate their business. This isn’t difficult.
I don’t want to get sucked into this whole thing again but since it’s inevitable…most owners will, at the minimum, lose less money if they operate (at least some will even make money). Others will not.
I don’t love how we wind up conflating the problems of teams losing money with the problems of teams collectively losing money per game. The players have every right to reject the premise that they are responsible for the first one, which is nearly inevitable, and the second one isn’t really the issue it’s been made out to be.
The owners are trying to use this as an opportunity to take money back from players because of longstanding differences in how each team makes money. That’s the issue the owners need to resolve
Risk their lives? Come on. There’s enough data out there that you should be embarrassed to pretend to believe that. Or is data only relevant to baseball?
Maybe they do, but they shouldn’t. The players under contract should be completely immune to the business risks.
No employee in America is immune to business risk
Simply not true, at least not within the constraints I gave. When their contracts expire, they’re certainly affected, but while they remain under contract, they’re immune. If you’re a UAW member working working under contract and GM has a bad year, they can’t change the terms of your employment. If my business has a lawyer on a retainer contract, I can’t tell him I’m paying him less for services because sales are down. Players are under contract. If they keep up their end of it, the team needs to keep up theirs whether they make money or not. (To be clear, I’m not making a legal argument. I think their agreement allows for renegotiation if fans can’t attend. But, I don’t think the players should have agreed to that.).
The players already have agreed to take a pay cut. They have legally binding contracts that the owners have to pay full price. Only way out of those contracts is if the owners file bankruptcy, or the players agree to take a pay cut. In this case, they are saying i’ll take pro rate/game of what you owe me because i want to play and i’m a nice guy.
Any other industry the person with the contract would tell the owners….tough luck and you have 2 options, you pay me my full contract or ill take you to court for much more.
The MLBPA’s first offer reflected the tenor that the owners established.
Isn’t agreeing to prorated salaries taking a giant pay cut? Isn’t agreeing to expanded playoffs a major revenue gain for the owners? Why can’t the owners simply accept what players are saying at face value and let’s make a deal? Given players want full prorated, it should be blindingly easy to determine season length. Set the number, owners. Let’s play ball.
In nearly a century and a half, there has never been a baseball game played without players, but I bet there are hundreds of them going on right this minute without owners.
They already agreed to a pay cut though amount to half their total salary. That’s a pretty big deal. If your boss gave you half pay for the rest of the year before covid and then came back and said you need bump that up to 67% cut, you’d balk too
Again, this all ends up the same way it looked like it would end up weeks ago: roughly half a season, fully prorated pay, expanded playoffs for two years (which will then make it into the next CBA), players can opt out as discussed in the article, and if they play they sign a waiver. Should get finalized by this weekend.
In a sane world this would probably be true. But if it were that easy, they would have just quietly agreed to it a few weeks ago and announced a July 4 start date. Instead they’re making DOA proposals and sniping at each other in the media.
I think the owners, while they may collectively make money (or lose less money) for each game played, are more interested in a short season that minimizes the downside risk of losing the playoffs (which would also be supported by the teams that lose money on a per-game basis, obviously). I’m guessing a season closer to 50 games than 80.
Incidentally, does anybody know how or why we’ve gone from 50 games to 48 games to 54 games as the “backstop” option?
This is the key. The goal is to get to the playoffs, where their profit margins are huge.
The owners have been talking about 48-54 games for a while.
agreed donald. I think its a no brainer…..pretty fair…owners should take this deal and play half a season.
Only if the owners are done trying to wring every possible dime out of the players.
If I‘m the players I throw a tiny 5-10% salary cut and play the patriotic card. 82-90 games and start of July 4th! Can’t believe they missed the chance to do that when no other sports will be on. Screw the expanded playoffs.
Thats a 60% cut in pay…why would they agree to that? Because the billionaire owners are pouting they aren’t going to make much money off of them? Welcome to the rest of america’s business owners. These players have legally binding contracts.
I get it. The owners suck. Like it or not, the owners are going to put emphasis on gate receipts this year AND next year…so when they gut the schedule this season and lose fans, have delayed fans coming back due to virus concerns, or have no season at all, it’s only going to be used against the union, 2021 free agents, and brought up during the CBA. The players need to look like they are the ones who care about their sport, get on tv and possibly in some parks, and take the high road. The union should push for more games, buy up tickets to give to people when possible, spread the sport to minority communities, and stop waiting for the crony capitalist owners to do the right thing.
As an aside many baseball fans are hard working salt of the earth people, and it would look good for the MLBPA in the court of public opinion. My salary has been cut in half during the pandemic. We have 20% unemployment. Football/basketball get the best minority athletes (7.7% AA in baseball) and yet they have salary caps.
Players salaries are about to be cut in half too when they play half the games. MLB has a salary cap as well. Its a soft cap but its still a form of cap.
Owners have a cap but the players have no salary floor and these teams are running wild with it trying to field cheapest team possible to pocket more money.
Its destroying the brand and attendance.
What you’re missing is that the players have been doing that for a long, long time, and their share of revenues keeps declining, and fans keep taking the side of owners. At a certain point the players need to stop trying to win a media battle they are losing and just stop giving up stuff out of good will. They already agreed to a 50% cut in pay and expanded playoffs to offset that, and now the owners are trying to find a way to screw them more. Forget the court of public opinion. Players standing up for themselves is absolutely the right move.
yep. MLB Revenues have skyrocketed the last several years but the players pay has not increased at all. stayed flat. Owners pocketing all of it.
100% with you Scott. If they don’t want to look like villains that is the easiest thing to do
“playing the patriotic card” by subsidizing billionaires.
I’m on the players’ side….Ok so what is the end game? Hold the line. Play a 48-54 game season that know one will care about. Get paid prorated salary…then what? Betts and Bauer get hosed in FA. 2021 rolls around and fans don’t come back, or can’t come back in full capacity. Revenues go down. Owners won’t open books, but players don’t want a salary cap anyway…They strike? Get locked out? MLB gets further tarnished which is not going to help salaries long term. NFL and NBA are eating MLBs lunch…
Those leagues have commissioners that drive the ship with a vision to grow their brands….MLB’s commissioner is weak and is a puppet of the owners. Every decision that he’s made is short sighted and detriment to the long term vision of mlb.
Playing patriotic card is why players agreed to a massive pay cut, which is what prorated games means. Players have gotten less than zero appreciation for that concession. Owners took that as a sign of weakness and are asking for even more. There is no good faith on owners part. We are to point owners need to take responsibility for length of season at full prorated salaries and let’s play ball
I mean, the game will go on. There will always be players willing to play, and baseball teams are profitable enough that eventually this won’t work out in the teams’ favor. Most of the reason the fans take the side of owners is because at the end of the day all they care about is baseball getting played. And if the owners keep doing everything they can to destroy the sport, eventually that will translate to fans.
Because that’s the joke here–there isn’t an ad campaign in history that can convince the fans that teams are literally too poor to sign free agents just because one bad season. All these salt of the earth fans are coming off down years in business but they’re going to keep doing their best to take it on the chin…but owners are going to try to shut down the game because they took a loss ONE year? Yeah right. That won’t fly.
Great offer. Owners should just settle at half a season with expanded playoffs and lets go play ball!
I think if the players agree to defer some salaries (maybe at the owners’ original sliding scale) that would be a fair compromise.
MLB does not really have uniform ability to do the microseason. What realistically happens when the players don’t show up?
Well, as both of us have pointed out elsewhere, the problem is the playoffs. Going to 50 games without a major, major change to compensation for the playoffs is a recipe for disaster. Players are not going to play 50 games and then do the playoffs for fee.
What’s interesting is that I don’t really see much from the players’ side on this proposal for the playoffs. Did they accept that part of the owners’ offer?
I don’t really see this much of a compromise. A little, maybe. But I also don’t think they *should* compromise at this point after the owners basically proposed the same deal in two consecutive offers, nor is this proposal DOA. That, in itself, is progress.
The reason I don’t see this as a compromise is that there is a fairly intractable problem that this proposal doesn’t solve (and, I don’t think should be on the players side to solve). The problem is this:
1. What the owners really want is the shortest possible regular season to fulfill their in-season TV contracts, and then get to the playoffs where they make way, way more money. They don’t pay players per game in the playoffs (they don’t pay them at all at the moment!), so the profit margins are way higher.
2. Since the players literally are not compensated for the playoffs at the moment, the players core goal is to max out the number of regular season games.
What I think the union has decided is that they don’t feel a need to offer any concessions on pay except the number of games, period. And I would agree with them. It’s not their job to give the owners an idea of how low they’re willing to go in negotiations, especially since ownership more or less repackaged their previous proposal. But if the owners did propose to defer pro-rated salaries–that could then be paid early out of playoff money–that is essentially the same end point of the previous players’ offer to defer money if the playoffs couldn’t be held. There’s an obvious point of agreement, but it looks like it may take a little longer to get there because the owners are bent on cutting salary and the players do not want to look like they’re giving an inch on that.
It seems like the players are being short sited. At a time when. Many Americans are out of work, they could ask for full salary, but will settle for prorated. Now If they want full prorated salaries, to do so they will have to have expanded playoffs. They should offer slight cut for more reg season games and playoffs as they are now. Do they really want expanded playoffs? Do we as fans want a more convoluted system? Does baseball need more playoff games? Why not save that bargaining chip for the upcoming CBA? I am pro player but they should be trying to put maneuver the owners. That may mean giving in a little…I mean this is a pandemic so they have an excuse.
It’s on the owners to accept deferrals, but the players need to offer it at some point, hopefully by the end of the week. I could see a good offer from the players:
82 games
Full pro-rata
75% paid this year
We’ll give you however long you want (3, 10, hell, even 20 years) to pay off the remaining 25%. You could turn the difference ($850M / 30 teams) into as low as $1m per year if you want to.
This is close to the framework that has to happen, plus some compensation for the postseason (so, basically, the owners’ last offer except the money is deferred instead of cut). That said, I don’t see why they have to be the ones to offer it. Why would you ask for something that is in the other sides’ interest?
If the owners had actually made a good faith offer the last round instead of basically offering more or less the same total compensation during the regular season I think that changes things a bit.
Sweet Jesus! Owners…..listen carefully. The players are NEVER going to play for less than prorated salaries. Qui wasting the time of baseball fans asking for something that will NEVER happen. Your next offer should be length of season with full prorated salaries. If that’s only 48 games, then freaking man up and put it on the table. If you will do a higher figure, then name that figure. Let’s quit the game playing.
Is there an article somewhere or could there be on how the MLBPA got to where it is in terms of arb years and minimum salary, and how it was agreed on 6 years to FA? Also call up manipulation? I thought I heard that players want fewer players hitting FA at same time, but that means more arb years.
Not a fan of the expanded playoffs when the season is shorter. Shorter season with less time to get it in should equal either less playoff teams or shorter series.
From a competitive standpoint this is a no brainer. Unfortunately, from an economic standpoint, it is the opposite.
Disagree, shorter season equals more variable outcomes. You want more playoff teams from a competitive angle to compensate for fluky 50 game results. With only 50 games your degree of confidence in who is the best is highly limited. This is how both the NFL and MLB handle shortened seasons in the 1980s.
There is a greater risk of fluky outcomes in a playoff series than a 50-game season. Unless the season is shorter than the playoff series, which would be ridiculous, it is a better arbiter of who the best teams are.
I’m a person who loves the regular season and thinks most sports’ playoffs are too long (basketball is the worst offender here), but given that this season is already ridiculous, I’d rather they just do a bizarre 100-game playoff, complete with round-robin/quadruple elimination stuff to keep giving teams a chance to get back in it.
Can someone please send the MLBPA a calendar? July 10th is 30 days away. Players, many of who are currently outside the US, need to travel to training sites and then quarantine for 14 days. After that, they need 2-3 weeks to complete spring training and then travel to game sites. If they pull that off and start July 10th, they plan on playing 89 games in 93 days. That leaves no room for cancellations or interruptions, both of which are likely. The playoffs, which are being extended will start mid-October and will need to go into late November which will increase the likelihood they are postponed or not completed.
Unless everyone agrees to play a lot of double-headers, an 89 game is not realistic. Every day we go without a deal compresses the schedule and takes away games and soon the owner’s 76 schedule will be unrealistic.
There will not be a 14-day quarantine before spring training starts.
Hat tip to the comments on this article. Much more balanced takes than in previous ones on this issue, and no smug comments about who is and isn’t educated based on their allegiance.
What about 60 games, full prorated salaries, normal playoffs, and no more complaining from either side?
Alternative – fans have no collective bargaining rights in the process, but 100% of the money comes from us… What about a “cancel” movement to cancel MLB completely? Not only boycott watching games… we could boycott every website that even covers baseball!