Player’s Union Counters MLB Proposal With More Baseball
Last week, MLB proposed that major league players take a $1 billion pay cut beyond the pro-rated salaries they’d already agreed to under their March deal. Last Tuesday’s proposal was not met positively by most players, and they had pretty good reasons to be upset. Now the MLBPA has responded to MLB’s proposal, with Jeff Passan first reporting the details followed quickly by Evan Drellich and Jared Diamond. The focus of the union’s response centers around more games, which would take regular season play into October, but it also includes potential salaries deferrals and expanded playoffs for this season and next.
On it’s face, this proposal might not look much of a step forward to getting baseball back in 2020. After all, the MLB proposal asked for a billion dollars in cuts to player pay; adding 32 games to the schedule and increasing player pay by nearly 40% means an extra billion dollars for the players. A source told Jon Heyman the deal was a “non-starter” for owners. But while the deal might not be looked upon favorably by ownership, there are several aspects of it that invite negotiation.
At least publicly, there seems to be a fundamental disagreement between the players and owners regarding whether regular season games make money for baseball’s owners without the presence of fans. In MLB’s presentation to players from last month, their claims of a $640,000 loss per game missed huge chunks of revenue that need to be included to arrive at a more realistic revenue figure. When I ran the calculations based on MLB’s own numbers, I found that MLB generally would make, after accounting for pro-rated salaries, about $170,000 per game. Those numbers actually edge slightly higher the more games are played due to MLB’s inclusion of some fixed costs, like buyouts. Even by these conservative numbers, which come directly from MLB and leave out considerable baseball-related revenue as well as marketing opportunities (or losses), that means that in 32 more games, owners make another $974 million while paying the players another $840 million or so, netting MLB another $134 million overall. While MLB’s public posture is that regular season games cost money, former MLBPA lawyer Gene Orza theorized in an Evan Drellich and Ken Rosenthal piece that Rob Manfred and the owners want more games just like the players do, but it is a better negotiating tactic to have the players ask for those games. So while more games might be something that the players have a strong desire for in order to make more money, it appears to be mutually beneficial, though certainly some teams will end up better off than others.
The players offer to stage an extra round of playoff games this year and next, as well as an All-Star Game and Home Run Derby, might put another half billion dollars or more in the pockets of the owners in terms of additional broadcast rights, though the idea for additional round of playoffs in 2020 was included in the owner proposal. Where there was a billion dollar gap in salary alone in MLB’s latest proposal, there’s an argument that the players have bridged about two-thirds of that gap in their latest offer.
Players also offered to defer to $100 million in salary if there are no playoff games. Given that the playoffs might be worth $1 billion in television rights this year, the $100 million in deferments isn’t likely to be met with much enthusiasm by the owners, but it does represent a basis from which to negotiate and indicates some willingness to compromise without opening up the March agreement regarding pro-rated salaries, per Eugene Freedman, a union lawyer and occasional Baseball Prospectus contributor. (His conversation with Ben Lindbergh and Meg Rowley on Effectively Wild is worth a listen for those wanting to learn more about the legal intricacies of MLB and the MLBPA’s negotiations.)
Most of the other aspects of the deal don’t cost anything or provide owners significant amounts of money. Players who are at high-risk, or who have family members at high-risk, of suffering negative health consequences due to COVID-19 would still receive salaries under the player proposal, but, in addition to it being the compassionate thing to do, those players would be replaced by minimum-salaried players. Players not deemed as high-risk would not receive salaries this season if they choose to opt out. Providing another $100 million as an advance in June doesn’t cost the owners extra given that it would come with a deal to play regular season games by the end of the month. Providing greater access to players in terms of having them mic-ed up during games will help MLB with its broadcast partners and helps to promote the game, but doesn’t create or relieve any direct financial burden.
As for the owner response, hopefully it will come soon. Over the weekend Buster Olney indicated that some owners were intent on skipping the season without cuts to the player salaries from the March agreement:
Sources say there is a group of owners perfectly willing to shut down the season, to slash payroll costs and reduce losses, and the disparate views among the 30 teams have been reflected in the decisions to fire and furlough.
This comes after months of owners repeating over and over again that they will lose money on every regular season game played. MLB’s first proposal catered to the big-market teams with high payrolls. What the profits and losses for this season will be isn’t clear, and how a season played under the March agreement versus there being no season at all affects revenues varies greatly by franchise. Those comments to Olney aren’t a negotiating tactic or even really a warning sign to players. They’re posturing to Rob Manfred and fellow owners on the part of those who made them that if a deal that benefits them can’t be worked out, they might torpedo the entire season for everyone. While the owners might not be pleased with the players’ offer, it is a step toward a season. Baseball’s owners have become used to sharing billions in profits over the last half-decade. This season, they need to come together and share in the losses — or at least help ensure that all teams come pretty close to breaking even — so that the sport can move forward and avoid a colossally short-sighted mistake.
Craig Edwards can be found on twitter @craigjedwards.
If the furloughs represent which teams are willing to sit out, that would mean the Marlins, A’s, Angels, D-Backs, Mets, Rays, and Reds (and maybe the Nationals, depending on how you look at it). That’s interesting because I would have guessed for sure that the Cubs were part of it based on their overall cost-consciousness. and the Marlins, A’s, D-Backs, and Rays get very little benefit from the ownership proposal, and I’d expect they’d benefit substantially from the owners’ revenue sharing agreement this year (in the Marlins’ and Rays’ case, they may even make more money since they barely have any gate revenue anyway).
I’d guess the core of the cancel-season-owners includes the Angels, Nationals, and Mets, since all of them would save huge amounts of money in the latest proposal.
It also may be just that those owners are the ones with the least available cash and the most current debts that they are not able to pay.
Well, what Olney’s report said was that the owners willing to cancel the season mapped on well to the layoffs and furloughs. But it’s hard to see how that squares with the offer the league put out last week.
It’s an interesting list because there are separate biz ops and baseball ops considerations. From a business standpoint some of these teams’ owners may prefer to just minimize their losses and their risk by shuttering things up instead of entering uncharted territory here.
From a baseball ops standpoint the list is more interesting. I would have a hard time believing the Reds, Nationals, Rays, and A’s would be inclined to forfeit a season rather than try and compete for some kind of championship given team control and competitive windows. Then again baseball is very different than it was 20-30 years ago and I’m not sure how much winning really matters to some of the current crop of owners.
Could make the same competitive window argument for the Angels except Moreno is the one owner that is consistently, explicitly referenced by sources as being a hardliner during proposal discussions.
It totally matches. Whether we accept, that’s a different issue. Each team has a different balance sheet, but the basics of financing baseball are such that from a short term perspective they will lose money. Long term a different story, not playing baseball in 2020 is bad for owners, players and fans. And fans are the paying customers in case we forget… and the fans won’t forget if there is no 2020 baseball.
Regarding revenue sharing (both between teams and potentially between MLB and the MLBPA), small market teams should actually be substantially negatively impacted under covid conditions.
With a covid season in play local revenues (generally making up more than 50% of shared revenue – $118M/team in 2018) will be drastically reduced for all teams (no gate and ballpark related revenue for any team, less local advertising revenue, etc.). So the only revenue to really be shared is the national revenue (tv deals and merchandizing – $91M/team in 2018). This is still a significant chunk of change, but for the small market teams who rely on both local and national revenue sharing to fund operations this is an enormous loss.
The teams that will benefit the most from the proposed revenue sharing agreements are those that own significant percentages of their cable networks (Red Sox, Cubs, Blue Jays, etc.) since that revenue is not subject to revenue sharing.
1. http://www.captainsblog.info/2020/03/07/looking-under-the-hood-of-mlbs-revenue-sharing-plan-yankees-baseball-red-sox-mets-how-does-baseballs-revenue-sharing-work/25425/
2. https://www.baseball-reference.com/bullpen/Revenue_sharing
Hm. Interesting. My understanding was that the owners announced that they would share 50% of all revenue this year. That definitely favors teams who owns % of other cable networks since the money isn’t quite in that pool, but teams like the Angels I think don’t own a significant portion of it.
Don’t forget the teams with little or no playoff hopes.
If the only real money (big if) is the playoffs, then half the teams will be happy enough to skip the season.
But as we’ve noted here before, salary deferral is clearly the only way out of this mess. If an agreement is reached, that will be the core of it–at least some and perhaps most of the players are going to get paid their 2020 pro-rated salary over multiple years.
I fully agree here, I will just hate hearing “well we can’t sign player x, because we’re still paying player y $3M in deferred money from the covid crisis.”
If I owe mike trout 30 million today and I am presented with a deal where I have to pay mike trout 30 million tomorrow instead, that’s not really solving a revenue problem. It may help solve a cash flow problem but the issue here is substantially less revenue which implies lower salaries.
It sounds sexy but doesn’t address the core issue
Salary deferral only takes money from future player payrolls and not the owners’ wallets. To me it is sickening that MLBPA constantly tries to protect the high paid veterans at the expense of young players/cheap veterans. Salary deferral may not affect guys like Betts or Springer, but a lot of guys like Tony Kemp may be cut instead of being offered arbitration.
Option 1: Salary Deferral: Owners take on future liability in order to pay current cash commitments. Owners likely reduce (or don’t expand) payroll in the future to make up for those liabilities.
Option 2: Debt-funding: Owners take on more debt (a future liability) in order to pay current cash commitments. Owners reduce payroll in the future to make up for those liabilities.
Option 3: Owners pay from own pockets: Owners take money out of their own pockets to pay current cash commitments. Owners reduce payroll in the future to refund those personal losses.
Either way, the sport is harmed long-term. The economics aren’t going to be great for players the next couple years regardless. They’d be worse if there isn’t a season. If salary deferral is the least objectionable option and the one most likely to get a deal done, I’m all for it.
Option 4, Players accept a deal that they make a portion of revenue commiserate to what they are worth this year such that owners don’t have to take it out of future payrolls. Salary deferral, debt funding, owners sucking it up this year (your three options) basically lead to rich players today taking money from lower paid players tomorrow.
Players next year are already going to feel some of the effects of a worse economy. Taking 100 million from them is just piling on.
Option 4, even if the players agreed to it, would do nothing to prevent owners from reducing payroll in the future anyway, pleading economic downturn, uncertainty of fan attendance in 2021, or whatever.
And as I commented below, the owners have lots of revenue that is conveniently excluded from the pool they would share with players.
So really, option 4 is “players sacrifice in order to enable another profitable year for owners in the midst of a global crisis, with no guaranteed benefits to show for it.”
Why is it on the players to solve the owners’ terrible (they claim) financial straits?
They don’t. They’ve signed an agreement in March that basically says how much they make if no season gets played. They can stick to that if they prefer
Confusing “commensurate” with “commiserate” is somewhat ironic here.
18 downvotes! Of course you are right. I suspect the owners are quite happy to sit this year out without their cost structure adjusted to the new revenue reality
I don’t think there’s anything that will take money out of owners’ wallets instead of away from future players. Even if the players get their full salary this year, that might just lead to multiple teams going into full-on Marlins mode and refusing to spend any money for several years. Even if the players accepted the owners’ offer, that still wouldn’t guarantee future spending. Whether that would be unavoidable belt-tightening because of Covid or just the owners being greedy doesn’t really matter.
One way or another, I expect the players (and the fans) to take the hit on this one. Over the next few years, the owners will set their payrolls wherever they want. All the players can really do in this particular negotiation is get theirs in the short term.
I don’t see how the players can protect against owners deciding to cut payroll except through revenue sharing, but I also agree they’re right to not want that. As long as the owners can run the actual team at a loss while their RSN and/or ownership of every sports bar and parking garage within two blocks of the stadium makes all the money, the players are right not to trust them. I don’t envy Tony Clark his job in negotiating the next CBA.
Of course spending is going to less in future until economy rebounds. Though, salary deferrals and all these other options only take more money out of future cheaper players to make rich veterans this year more money.
How much do you guess “lots of revenue that is conveniently excluded from MLBPA” is? Again, why does MLBPA accept MLB’s numbers from Ben Lindbergh’s famous article “Baseball’s Economics Aren’t As Skewed As You Think”? Can we admit now that this “hidden revenues” canard is conspiracy theory bullshit?
The sad thing is that Craig pretends rigor with public numbers when they serve his narrative and then falls back to this idiotic conspiracy theory when they don’t.
MLB games will not be played if Owners lose money. And from Craig’s last article those teams are the NYY, LAD, BOS. These teams’ revenues fund the whole league. Their payrolls have to be right-sized to fit their revenues.
NBA, NHL, and NFL all tie their salary caps to league revenue. We don’t hear these kinds of tropes about Owners in those sports. Bradford Doolittle explains this well in his article on ESPN and explains why MLBPA hates this idea, though I haven’t read that one yet.
Wouldn’t the proceeds of the MLB.tv sale be an example of revenue hidden from MLBPA? And franchise valuation increases? IIRC, the former was north of $500M, and the latter seems to be significant, even if you don’t agree 100% with Forbes. Those may be the only examples, and while you may not change your personal stance, they pretty solidly refute your unnecessarily vitriolic final question in paragraph 1.
BAMTech powers HBOMax, ESPN (for its WatchESPN service), the National Hockey League, PlayStation Vue, and TheBlaze. MLB was BAMTech’s first customer so gave them credibility and those annual broadcast revenues are shared with the players.
This isn’t difficult to Google.
No revenue % are shared with the players currently. The other professional leagues are years behind the sophistication of the front offices of MLB. Only recently has NFL and NBA even started trying to use analytics making decisions and even then its laughable.
I know for certain you’re dead wrong about analytics in the NBA. I assume also true for the NFL but I can assure you the NBA – aside from maybe a couple of dolt teams – is long since fully nerded up for years now.
BAMTech was developed by a branch of the MLB called MLB Advanced Media, which MLBAM then spun off. The company was initally fully funded by MLB owners (using private funds not team dollars).
Characterizing MLB as BAMTech’s first customer is incredibly misleading, MLB was fully responsible for the
initial funding as well as the development of the product.
This isn’t difficult to Google.
It is a fact that teams have cable revenue that is not subject to revenue sharing even though it is directly tied to the game being played on the field. There is an argument development revenue from the areas around the parks is also directly tied to the games on the field an none of that is shared either.
It’s not conspiracy theory BS, it’s creative accounting and unintended loopholes in policy due to poor bargaining by MLBPA leadership.
Why would revenues from a Condo complex attached to a stadium be shared with MLBPA? Man, take some Business 101 courses.
It’s almost as if a condo complex attached to a stadium can charge more rent because they are attached to a baseball stadium….These development projects near stadiums are only so lucrative because the games played on the field draw so many people to the area.
If owners are going to leverage debt against the team to fund these projects and then state they can’t raise payroll because of it, well maybe the players should be getting a cut.
But go ahead, continue to sling insults at people as they disagree with you because you don’t have anything more interesting to say.
Shalesh…Please study this more. Here is an rough 101 example….. Team X in MLB has 100$MM in EBITDA every year. Well the owner decides damn….I’ll take that revenue and go get a loan to develop all the things around the park and buy into the RSN and others etc …..taking a loan out. He purchases all the other things in different LLCs. Now that 100$MM EBITDA for the MLB team now pays down the 30 yr loan which is now an expense. So your once 100$MM EBITDA for the MLB team is now only 20$MM as he has 80$MM dollars in opex the team has to pay. Those revenues from the garages and rsn’s that were purchased are no where to be found on the MLB team books as those are different companies but the same owner owns all of them.
Typically, cash flow either stays in the company for future investments and expenses or is distributed as dividends. If they use this cash flow to buy garages and RSN’s, those are not off-book. If owners individually use their dividends to do this, I guess it’s a judgment whether that should be on-book or off-book. I saw Trevor Bauer says it should be on-book and thus shared with the players.
This example and others people cite are entirely notional. If you have a specific team that has done this, then describe it here with real numbers. No team has $100M in perennial EBITDA, a team here or there hits it occasionally.
The point is shalesh is it’s not black and white. It’s not that simple and these teams have extremely complicated and creative accounting procedures used to hide revenue. No one is going to take there revenue values at face value. Real world examples Have been posted a ton on here. They are all set up this way, it’s not just one teams. Go study the cubs owner if you have time…that’s a good one.
“To me it is sickening that MLBPA constantly tries to protect the high paid veterans at the expense of young players/cheap veterans”
You’ve just described practically every union on Earth.
It is sickening that police unions constantly try to protect the high paid veterans (including those with ~20 unaddressed complaints) at the expense of younger cops
It’s kind of amazing to me that there is anyone out there who can take anything the owners say at face value.
Year after year, the owners somehow getting *any* potion of public/fan opinion on their side is the single most impressive thing they do.
it not that amazing when you consider how shitty the MLBPA has been at PR for the past 30 years or so.
Really, when the MLBPA has Blake Snell doing their PR?
Last week, MLB proposed that major league players take a $1 billion pay cut beyond the pro-rated salaries they’d already agreed to under their March deal.
Sigh. No.
A fair and accurate rendering of that statement would be “MLB proposed that major league players take a $1 billion pay cut beyond the pro-rated salaries included in their March deal, based on language in that March deal that calls for salaries to be renegotiated in the event that games are played without fans in the stands.”
The latter may be no more acceptable to some people, but is far more accurate.
Everyone’s seen the Joel Sherman article, right?
https://nypost.com/2020/05/19/mlb-thinks-email-is-smoking-gun-in-salary-fight-with-players/
The email isn’t the “smoking gun” that MLB claims that it is… but is yet again clear and convincing evidence that the Owners believed they had an agreement with the Union to revisit the salary discussion if games were played without fans. That is what the text of the March agreement says, and the owners have been clear publicly since April that this is what they negotiated and the Union agreed to. And now we have Joel Sherman with an email contemperaneous with the March negotiations alleging that this was clear to the MLBPA and that the MLBA acknowledged their understanding. And yet the Union now claims that “no additional salary concessions are due” despite the fact that they signed an Agreement to the contrary.
There’s plenty of room for opinion on who has done what, and how it should be remedied, and who is at fault, etc. But a true telling of the FACTS simply has to include the reality of what the March agreement says, in writing, with respect to games played without fans, and what the intent behind that language clearly indicates.
And my first opinion, above all else, is that the Union is either negligent in not understanding the deal they agreed to in March, or guilty now of welching on that agreement after seeing that their constituents – the players – didn’t like the deal that the Union brass agreed to. If the former is true, it’s still negligence to sign a deal on behalf of your constituents with any terms that you don’t understand or that you believe are not defined or written clearly enough.
It’s really frustrating to see repeated claims that the owners are “negotiating in bad faith” when the true bad-faith negotiations are on the part of the MLBPA, aka the Union. I’m not faulting the players for this, but rather the Union itself. The owners are pissed because the party acting without regard to the March agreement is the Union, and yet public sentiment seems to be on the side of the players despite the Agreement that their Union signed on their behalf.
Said differently – if someone is frustrated that such language is in the March agreement, I get it. Maybe the Union signed a bad deal, or one they regret. But they signed it. And now they’re acting like the specific terms on salary renegotiation in light of no-fans-in-the-stands isn’t there, when it is, and MLB has been saying that all along, consistently, since March.
Here’s Randy Levine’s quote.
“As I have said, our players are patriots and they are all wise enough and careful enough to make decisions that are in the best interests of them and their families and we all respect those decisions,” [Randy] Levine said. “However, they need to make their decisions based on what the March agreement actually states and has been signed off on by both sides. I personally reviewed all of the documents and the bargaining notes from the dispute over the provision about renegotiating salaries and they are just clear that it does not state what Scott Boras and Tony Clark have said.
“It clearly states in bold language that if there are any bans on mass gatherings — which there are to this day — that prevent fans in the stadium, and/or any travel restrictions exist — as they do today — for example, people have to quarantine for 14 days going in and out of Canada and/or the commissioner has to certify that it is safe to go to a ballpark, which has not happened because he is bargaining with the union about the health and safety protocols; since those three conditions have not been met, the agreement says that based on those facts and the economic feasibility of the moment there has to be a renegotiation on salaries. That is not my opinion, that is what the text of the agreement says.”
Excellent analysis Tomerafan!
It is helpful to understand the terms of the March agreement in order to assess the current proposals. Thanks for the clarifications.
You must be new to this……Have you not been following all the finagling the owners are doing? Playing gotcha games with a word here and there is ridiculous….they should be focused on starting baseball and growing the game. Players have agreed to more than one deal and even proposed there own….even though they don’t have to do anything because they have legally binding contracts. This is on the owners by far.
The owners are crooks and have really showed there true colors in all of this……trying to subsidize their losses by making the players change legally binding contracts. Any other business, the owners would’ve been told tough luck….contracts a contract. The owners think this is the twilight zone.
Not new to this at all. It’s not “gotcha games,” it’s the language of a legally binding agreement. I think some people are so biased against the owners that they can’t see literal facts starting them in the face. There’s plenty at fault with the owners’ past behavior, some of their current positions, etc. but this simply isn’t one of them. The Union agreed to a deal that it doesn’t want to honor.
trying to subsidize their losses by making the players change legally binding contracts.
Then the Union shouldn’t have agreed to the March agreement!! That’s my whole point. The Union agreed to this. They may not like it now, but they agreed o it and now are unwilling to live by it. The Union absolutely failed the players and is failing the sport far more than the owners are. I don’t “blame” (not even a good word) the players at all in this. But their Union royally screwed up.
So, wait – the “legally binding contracts” matter to you but not the legally binding March agreement, negotiated between the owners and the Union? You want to respect one contractual document but not another?
Owners are the the ones that started to change the terms. Players agreed to a deal the owners wanted more and more and more.
Then you didn’t read my original comment. The deal the players agreed to included a clause to renegotiate salaries if games were played without fans in the stands. Full stop. That’s the point. It’s fair to argue that the owners are asking too much. But it’s unfair to criticize them for wanting the Union to do what the Union agreed to do in March – renegotiate salaries if games were played without fans.
Shocking At this point that people don’t understand the Plain language. I understand people not liking owners but the agreement is as clear as it can be that if the conditions aren’t met, the owners can re-open the salary discussion
“The agreement says that based on those facts and the economic feasibility of the moment there has to be a renegotiation on salaries. That is not my opinion, that is what the text of the agreement says.” – Randy Levine
After the stunt the owners pulled a few days ago…..that deal set the negotiations back months. I was 70/30 that we would have a season, but after that stunt i’m thinking its more like 30/70.
Trying to turn the players against each other is disgusting.
I agree, trying to turn the players against each other is gross, it was in bad form, and is a bad tactic in these circumstances. But that doesn’t change the facts that I am speaking to and which you are no longer even trying to dispute.
If they believed they had a written contractual agreement to revisit it if there were no fans in the stands, then that language would be spelled out exactly in the final agreement, not in an exchange of emails. During negotiations, there are many exchanges and items that don’t make it into the final agreement. Ones that don’t make it means there wasn’t agreement. What matters is the final signed deal. If it’s in there, all well and fine from the owners side. If it’s not, then the owners should honor the deal they negotiated, especially if these numbers are correct and they’re going to make money regardless if there are fans in the seats or not.
It *is* in the agreement. The interesting part about the email int he Joel Sherman article is the allegation from MLB lawyers that the Union specifically acknowledged the point and agreed that it says what MLB intended.
The Union has argued – at best – inconsistently – that the wording is ambiguous. Which, again, is incumbent upon the Union to clarify. You can’t sign a legally binding agreement and then later claim that the language was ambiguous. Someone wrote a piece that quoted the actual language… I am searching for it right now…
Then the owners should acknowledge the players contracts they signed, are they arguing those words are ambiguous?
Its well known that Joel Sherman is the owners puppet….not a good source for info unless you want to hear only 1 side of the story.
Its been sickening how many leaks the owners have had…including the one you are referring too.
You keep getting hung up on gotcha word games….i think you are forgetting they can have any word they want in a document but it doesn’t matter if the players dont show up. We were close to a strike last year after the owners collusion during Free agency….but after this stunt last week we are closer than ever. Could easily end in a strike.
You must not understand how collective bargaining works. The Union renegotiated the overall blanket terms of its labor agreement with baseball in light of the pandemic. All player contracts are in effect supplemented by terms of the March 27 agreement. That’s why there was an agreement in March in the first place…
I understand the CBA more than you can imagine….what you are forgetting is this is a union and the worker could decide any minute not to show up until terms of a deal are different.
Right now my imagination of your capacity to process logic, reason or consistency is incredibly, incredibly low, so no doubt you understand it more than I can imagine. Whether you understand it enough to try to tell people what it says is a different matter entirely.
You need to find a consistent position and stick to it. On one hand you’re arguing that the terms of a contract matter. On the other hand you’re arguing that the words don’t matters since the players can just choose to not show up. So the terms matter only for the owners, but not for players?
You also keep using phrases like “gotcha word games.” There’s no “gotcha word games” when your lawyers call the other layers and say “Just to be clear – here’s what we wrote and here’s what it means – do you agree?” That’s the point of my post – it’s the OPPOSITE of “gotcha word games.”
You’re incorrect, and don’t grasp the basic facts, and in the most American tradition possible you are doubling down on how wrong you are. But you’re not arguing from a position of facts, logic, or even consistency; you’re responding from a position of pure emotion and bias.
You are incorrect. You don’t understand the fundamentals of a union. You shouldn’t write about things you have no idea about.
I’m arguing both, that its ambiguous, and even if it wasn’t it doesn’t matter.
The players contracts are set in stone. They are “individual employment contracts”. Those bind only those 2 parties the individual and the employer. Those can’t be changed and the only way out of those by the employer is through bankruptcy.
“Collective agreements” are totally different and in an entirely different category as those are between the union and the employer. Any minute the collective agreement/contract can become worthless until changed….called a strike in a union amigo. Its only as good as the paper its written on.
You keep pointing to this collective agreement….doesn’t mean anything if the union wants a new one in any given moment. Hence the word “ambiguous”….which i agree with the MLBPA attorneys on. Doesn’t mean anything.
Owners have no leg to stand on if they want to hang their hat on a gotcha word in some collective union agreement.
My goodness, you are so wrong. Pay is indeed generally specific between the player and the Club. But the CBA specifies all of the terms and conditions of employment. Yes, you’re correct – the players can indeed strike if they don’t like the terms of the CBA. But that again points out your logical inconsistencies in expecting the owners to honor contracts while not expecting the players to honor the CBA that they ratified, or the March 27 agreement that they ratified, etc.
There you go again with “gotcha words.” They’re not gotcha words when they are written in an agreement, and your lawyers call the other lawyers to make sure everyone agrees to what the phrase means.
You are incapable of logic or consistency, and you’re arguing from emotion. Have fun arguing with someone else. I should have realized five posts ago that trying to help you form a cogent point or develop consistency was beyond your command.
Tomerafan, I maybe the only one, but I agree with you wholeheartedly. Without a doubt I believe that the owners are being greedy in these negotiations. Businesses have risk and the owners aren’t willing to face those risks now that they’ve come to pass after 20 years of prosperity.
This does not change the fact that union negotiators either did not understand the terms of their March agreement or are now pissed at having to abide by that agreement. Per said agreement, the owners are legally entitled to new negotiations since fans will not be in stadiums; it’s pretty cut and dry.
Bingo. Thanks.
You know what else is funny? I’ve been accused at times of being pro-owner and at other times pro-labor, and I am generally pro-labor in life and at work, but that doesn’t change the fact that the Union bungled this big time and that while the owners, and their history, and their negotiation positions have many flaws, they are completely justified in this one point that some people want to ignore and sweep away because it’s inconvenient to their argument.
Anyway, the fact that I’ve been accused on both sides tells me that i’m doing a good job of actually finding and reading the facts, because the truth lies somewhere inbetween.
Mostly in agreement. Assuming they lose more by having a season vs. cancellation, they really shouldn’t be thinking so short term. But yeah the language posted by tomerafan seems pretty clear cut that a fanless season would imply concessions by the players.
Wasn’t there a phrase about negotiating in good faith? I don’t consider the owner’s approach — players share in losses this year but not profits in any other year — as good faith.
I’d recommend listening to Episode 1548 of Effectively Wild, specifically their interview with Eugene Freedman, where he explains why it’s literally impossible/illegal for the owners to renegotiate down from pro-rated salaries unless the MLBPA agrees to open it up for negotiation (which they haven’t) – the March Agreement only reaffirms what has already been collectively bargained. Or just follow Freedman on Twitter where he has explained this as well. Please do some research before ranting like this – it will save you from sounding like an ass.
LMFAO. I love the EW podcast, and subscribe, but a Labor lawyer like Freedman is not an unbiased source. If you think I sound “like an ass,” then that says more about your ability to process facts from source material than anything I’ve said. I’ve negotiated plenty of contracts, worked in professional sports (though not MLB), and can think critically from source material on my own.
And if you take the presentation of facts as a “rant” then God help us all. Don’t be so afraid of people who disagree with you, or process actual facts from source material rather than parroting the take of a labor lawyer. That’s almost as bad as citing Scott Boras or some other agent and their obviously biased takes based on their own self-interest.
I’m a lawyer. Judge, actually. I stopped commenting here on anything labor or legally related because it didn’t matter what the facts or the law was to many people here, any belief that does not fully support the players is believed to be wrong.
Perhaps I do come down on side of management more often than not, although I’d like to say they usually do have the law on their side. That said, I also believe that owning one of the 150 pro sports teams in America team should come with an implied obligation to deliver a quality product. In this case, the owners should probably just accept a loss for the season. If they aren’t liquid enough to eat that loss, they shouldn’t be an owner. That’s not at all the law, but I do think it’s “right.”
Unfortunately, rarely does doing the right thing put a person in the position to afford a team.
By the way, this is really simple:
Absent consent by the Office of the Commissioner, the 2020 championship season shall not be commenced unless and until each of the following conditions is satisfied: (i) There are no federal, state, city, or local restrictions on mass gatherings or other restrictions that would materially limit the Clubs’ ability to play games in front of spectators.
So, no spectators, no season. No deal.
It goes on to state that MLB and the union “will discuss in good faith the economic feasibility of playing games in the absence of spectators” and that “the parties will meet regularly to bargain over application of, and any appropriate modification” to the agreement.
Reads pretty clearly to me. No spectators, then the season doesn’t commence. If we want the season to commence without spectators, we’ll come back to the table to discuss the economic feasibility, and bargain any appropriate modification.
Facts can be found.
Perhaps the economic feasibility discussion is in bad faith, and the owner-proposed modification isn’t appropriate. The language you cite doesn’t explicitly mention player salary reduction. Is it mentioned elsewhere in the agreement?
I wish I had a full copy of the Agreement, and I don’t and can’t find one in the public domain. I also wish I could find the article that quotes more of the language, and fairly points out both the owner’s position, and the player’s position of the one phrase that is a little different at two different terms.
My reading from various sources – which may be incorrect since I haven’t seen the whole Agreement – is that salary “reduction” is not directly mentioned in such explicit terms. However, what the Agreement says in the sections I have read is that the terms of the Agreement as applied to the 2020 season only apply at such time as there are no federal, state, local or city restrictions on gathering, and no restrictions on travel that impact cross-border transit (such as the requirement to wait 14 days after crossing into Canada). In other words, the Agreement covers a very specific set of facts & circumstances – the terms and conditions for labor in the event that there are no restrictions on gatherings or travel. The owners have taken this clause to mean that the Agreement itself is binding only if a “traditional” season is played in front of fans with no restrictions on gatherings or travel. And while some may not like the impact of those words, this to me is a clear and unambiguous statement in and of itself (unless contradicted elsewhere in the Agreement… but no one on the MLBPA side has leaked or shown any documents that refute this point.
In short, if there are restrictions on gatherings or travel, then the season does not commence under the terms of the Agreement unless the Commissioner consents. I may be shortsighted but I don’t believe anyone is contesting this point.
Then there’s the part about how MLB and the Union “will discuss in good faith the economic feasibility of playing games in the absence of spectators.” The Union believes the owners are not at the table in good faith because they haven’t been transparent enough about financial data. The owners believe the Union is not at the table in good faith because they’re ignoring the rest of the agreement about making modifications and negotiating other terms – i.e. the fact that the Union is calling changes to the salary structure a nonstarter. That’s a deep, sticky argument, and one that I’m not trying to minimize.
A better agreement would have better defined “economic feasibility” and included terms and conditions that must be met by both sides. It does not seem that this is the case. But this is where the published MLB email comes into play. It is not the “smoking gun” that the Joel Sherman article suggests it may be. But it is contemperaneous documentation of what “economic feasibility” means in the eyes of MLB:
[MLBPA Deputy General Counsel Matt Nussbaum] asked what ‘economic feasibility’ meant in Section I. I told him it meant that we would only consider playing in neutral sites or without fans if it worked for us economically. I reminded him of Rob’s comments at the outset that playing in empty stadiums did not work for us economically. But I said, for example, that we might be willing to have a conversation about playing some limited number of games in empty stadiums if players agreed to reduce their daily salaries for those games, and if it was part of a larger plan that made economic sense. Matt confirmed that that is what he thought we meant, but appreciated the confirmation.
While this is only MLB’s perspective, neither the MLBPA nor Matt Nussbaum have rejected or refuted this, that I have seen. If MLB was lying about the conversation that took place, you would think MLBPA would refute. Instead, MLBPA has said “we’re not under any obligation to negotiate salary further.”
Finally, there is the clause that the parties “will meet regularly to bargain over application of, and any appropriate modification” in the event that fans are not in the stands. The players are arguing that no modification is required. The owners are replying that since the entire Agreement is based on fans in the stands, then a modification is required.
Honest question, if the players feel confident that MLB Revenue is higher than they are saying, then why are they not interested in a % of revenue split.
Two reasons. First, revenue sharing comes with a salary cap, which has traditionally been anathema to the MLBPA. Now, that’s been based on the assumption that FA salaries would rise indefinitely and mediocre 30-something DH types would get large multi-year contracts, so it might be time to revisit that assumption. Except for the second reason the players want no part of it – they don’t trust the owners to be open about how much revenue there actually is.
It’s not a matter of the owners cooking the books and lying about their finances. That sort of thing tends to come to light eventually. But the owners can and do structure their businesses so that much of their revenue comes from sources that are not subject to revenue sharing, such as RSN ownership. That’s why the players believe revenues are higher than claimed.
There’s nothing stopping the players from negotiating for full disclosure and sharing of all these other revenue streams, of course. Except that the owners probably wouldn’t entertain such an offer. Even if they did, once there’s a definition of “revenue” to be shared, the players don’t (and shouldn’t) trust the owners not to restructure again so the money is somewhere else.
Sounds as if MLB’s counter proposal will not seek to cut salaries beyond prorating based on number of games played, but instead reduce the number of games. If so, they may have a framework for the two sides to now negotiate that’s based strictly on the number of games played. Appears workable.
Latest rumors sat tbe owners will pay full prorated…
…for 50 games.
Either way, they pay out tbe same amount.
Unbelievable. Players propose playing 100+ games in 100 days trying to make the season as normal as possible. Owners don’t want to play at all.
I can’t find the article that I’m looking for that had the dissection of the language in the March 27 agreement but here’s the take from Andrew Zimbalist:
https://www.forbes.com/sites/andrewzimbalist/2020/04/22/everyone-wants-baseball-back-but–mlb-will-face-more-than-a-few-obstacles-if-it-wants-to-restart/#50211fa51522
Boras needs to reread the agreement. There’s nothing in it that indicates players’ per-game salaries will be unaffected by special circumstances. In fact, the agreement states the opposite: “Absent consent by the Office of the Commissioner, the 2020 championship season shall not be commenced unless and until each of the following conditions is satisfied: (i) There are no federal, state, city, or local restrictions on mass gatherings or other restrictions that would materially limit the Clubs’ ability to play games in front of spectators.” It goes on to state that MLB and the union “will discuss in good faith the economic feasibility of playing games in the absence of spectators” and that “the parties will meet regularly to bargain over application of, and any appropriate modification” to the agreement
I’m actually impressed that MLBPA recognized a rhetorical advantage and seized it. Owners want to nickel-and-dime players and tell the public, “sorry, you can’t have baseball at any price. We need to get our money first!” and the players respond with, “Let’s have TONS of baseball…seriously, just say the word and we’re in.” OK, so that’s too simple, but you see what I mean about rhetoric. It’s usually better to be the party that looks generous and willing, not the miser trying to pinch the pennies until they scream. Good on MLBPA, even if it changes nothing in the end.
Josh, I’m Switzerland in this fight, and I tend to look for factual inaccuracies in dominant logic/narratives. Owners are not aligned on revenue- its not the NFL. Each has their own business model, with large market teams having more revenue and greater cost structures. Smaller markets having lower revenue and lower cost structures. AND no revenue sharing model- the players don’t want a cap and large market owners (and fans) don’t want to share their stadium and regional TV revenues.
MLB tried to present their interest (need as opposed to demand) as being needing relief on cost structure since top line revenue had decreased at least 40%. I get MLBPA is skeptical on regional revenue, and accounting/tax treatments. However the top line revenue story is clear and should be indisputable. I get the rhetorical (verbal narrative) advantage but I push back on any negotiating movement. If the owners say they’re losing money (40% of revenue base) on each game, and the players respond let’s play more games. That’s essentially is an eff you response, similar to owners saying to Buster “I’d rather pull the plug and cut out losses”. Both positions result in long term damage to baseball.
You want more proof MLBPA negotiators are incompetent? The fact that these new agreement terms aren’t going over what happens when certain teams are allowed fans in their stadium is beyond me.
There will undoubtedly be teams that make revenue off fans (some % capacity in Texas is already allowed I think and maybe other states as well) this season. I’m not hearing anything about how this revenue will get split up. If owners are smart, they’ll lock in the players pro rated salaries with deferrals and then the teams who are fortunate to earn gate revenue (it will happen in some states, I promise you) will share that revenue amongst all the owners.
You raise a good point that hasn’t been discussed. As you say, these revenues are hard to predict and will be variable. It’s fair to include that incremental revenue in an agreement but could only be done on the back end- almost like a rebate. As bad as the relationship is… doing this would be a negotiating nightmare.
The social (physical) distancing policy suspension over the past week might impact many cities with a COVID spike? Which might impact potential ballpark openings.
However regarding your statement “gate revenue (it will happen in some states, I promise you) will share that revenue amongst all the owners.” If that happens it would be voluntary on the part of owners- I doubt owners share that revenue under current rules.
FWIW, the players asked for more than 84 games and MLB countered with 50, even less.
Oh yeah, that’s a sign of progress…
Not.
It’s more like “the rate is negotiable but the payout is fixed”.
All the owners want is just enough games to seed the playoffs.
Which they can get with as little as 24 games.
Lower if need be.
I just saw this. That seems like a bizarre move for the owners unless it allows them to retain players for another year through some service-time mechanics (and I’m not sure that’s possible with the prior agreement). Do they really think they’re going to lose money on every single game? As I understood it the problem was that they had a lot of fixed costs, and that doesn’t solve it at all.
No, it’s a negotiating tactic. A season that short will be arguably a farce and will lag in fan interest. Also, players will insist on better postseason bonuses. As of now, veterans actually play the postseason for pennies on the dollar. That won’t fly, I’m guessing, with a super short season and extended postseason.
Also, at 50 games some players will be “playing for free” given the advances. Lowering the games makes that the case more often.
It may be that they’re taking how much they get from the expanded playoffs and are offering a fixed amount in pay based on that. The players’ rate then determines the number of games they play in the qualifier tournament.
(Because let’s face it, anything less than half a season is not a season.)
In that scenario, the more the union demands, the stronger the no-season camp gets.
The thing is there’s no telling the kinds of “force majeure” clauses the teams have in their facility contracts, loan contracts, and insurance policies that might only trigger if there is no season. And to add to the “fun” different teams almost certainly bave very different contracts. An agreement that might be adequate for Miami might be murder for Oakland; a deal the Yankees can live with might not work for the Dodgers. And by all reports no deal is the only way the Angels don’t get clobbered. (The pujols deal?)
Ultimately the underlying issue is lack of owner financial consistency.
Much like during the last lockout/strike. Some owners *will* be better off without a season that with a partial one.
It seems crazy to have 50 games and expanded playoffs, as in MLB’s counter proposal. I hope they can keep the 82 game structure and figure out the finances.
That said, proposing a reduction in the number of games is consistent with the owners’ position that they’ll lose money per regular season game. Craig claims “the owners want more games just like the players do, but it is a better negotiating tactic to have the players ask for those games”. That doesn’t appear to be the case, otherwise they would have accepted the 114 game schedule from the MLBPA.
This matters a lot because Craig claims that the owners are actually making money for every incremental game, based on his calculations. The owners’ desire to reduce regular season games indicates otherwise. Owners are looking to to mitigate losses rather than increase profits via more games. This isn’t to say the owners’ claims of losses are accurate (-$640k/gm), just probably exaggerated.
The owners gave an offer they knew would go nowhere for fewer games. That doesn’t necessarily mean they want fewer games. The only thing we know is they want to pay less (duh).
Yeah I don’t think the owners are actually expecting a 50 game season. It’s just that their desire to reduce rather than increase the number of games is consistent with “we lose money for every incremental game”. This contradicts Craig’s claims that owners actually want more than 82 games because they’re secretly earning money for every extra game. Otherwise they’d either accept 114 or propose something >82.
Well, your point is valid if you are talking about what they ultimately offer. The owners have not actually expressed what they want other than an offer that cuts salaries in a major way from pro rata share.
Also, the owners could very well make money from extra games but also know that losing the postseason would be worse. All this to say that an unproposal doesn’t prove anything at all.
They’ve also proposed fewer regular season games at prorata.
You’re suggesting that the owners are making money on every incremental game, but a 114 game season significantly increases the odds of a cancelled postseason. So it’s better from a risk mitigation standpoint that the owners get a 50 game season, which will net less regular season profits, but with a higher probability of playoffs? If so, that’s plausible.
Obviously nobody knows the real numbers, but forbes suggests teams make about 1.5B on 10.4B in revenue (including playoffs). I don’t think a business that is making ~15% in good times can lose 35% of revenue relative to expenses without losing money. Maybe it’s the best course in the long-term for the owners to eat the costs to guarantee a season and keep fans engaged. But I’m not skeptical that they’re losing money in the process.
They have not proposed that. They floated it in media
Also. Forbes is basically trash.
It’s really hard to know about the owners pocketing billions of dollars over the years. Just because team values increase, does not mean they are making money in terms of cash… Their assets just become more valuable. Owning an MLB franchise is likely not owning a money printer. The only way we’d be able to find out how much money would really be made or lost is if FIQs were leaked, and only if they have been reported honestly.
If I were to make a guess, the owners are much more incentivized to not play at all than most of us think, due to the profit margins likely being thin in a normal season. Now the margins for this season are likely very poor (read: losing huge amounts) as it stands. Owners likely gain their greatest reward of ownership in the form of appreciation of club value. Owners should want to play, as they would be devaluing their asset due to a lost season, but if you put your own club in a permanent financial bind where your debt is gigantic, causing you to pay enormous yearly interest, that might be assessed as worse. Both sides need to come together, with the understanding that professional sport is an entertainment business. In this time, many people are missing sports… but many are also finding new ways to entertain themselves, as is the human nature. The longer it goes on, the more people might realize they didn’t need a specific form of entertainment as much as they once thought.
The last lockout/strike had the same cause: lack of unity among owners,rich teams vs “poor”. High budget teams actually benefit from high player compensation since it cripples the competiveness of the low budget teams but the players need most teams bidding up FA salaries because an extreme two tier team split also means an extreme split in player salary distribution.
As long as the union pins its strategy on high FA payouts rather than maximizing total player take the divide among owners will keep on leading to these kinds of deadlocks.
This might be a silly question, but how much does it cost the owners to turn the lights on at these ballparks? With no crowds, a much smaller game day staff is needed, including reduced security/law enforcement presence. So while I understand that hey won’t be making money from parking and concessions, I don’t understand how they will be losing $600,000+ a game without fans. If there are baseball owners that would rather not have a season, then pay reduced salaries, they need to get out of, and stay far away from the game.
exactly…and as its been broken down on fg they are not going to lose any money with no fans in stands
I’m trying to follow the facts here… In Craig’s earlier piece from March 18 he references the following “MLB’s estimate of central revenues, which amount to $1.35 billion” as not being included in the MLB per game profitability number. Can someone explain what “central revenues” consist of? Thanks.
MLB really has two revenue sharing components. The first is the Central Fund, which collects revenue derived from national sources (e.g., network TV rights and merchandizing) and then distributes an equal share to each team. According to Forbes’ estimates, in 2018, about $2.76 billion was allocated in this manner. The second component involves local revenue, which Forbes estimates to be about $7.29 billion, a portion of which funds MLB’s “Revenue Sharing Plan.”
Thanks. I’ll do some research- Forbes is as good a public resource as I’ve found.
This seems like a great opportunity for players in terms of public perception. “We want more games, owners want to cancel the season.”