On Saturday night Cincinnati Reds pitcher Trevor Bauer released his latest “Business Casual” video – a series he posts on his personal youtube channel with some frequency, especially now that there’s not much baseball happening. He and his agent, Rachel Luba, sat down to discuss a plethora of different things in the game, but the first thing they jumped into was whether or not they felt that there was going to be baseball played in 2020.
“I’m very convinced that there will be baseball in 2020. But not for the same reasons that many of you may be convinced of that.” That’s one of the first sentences out of Trevor Bauer’s mouth to begin the video. But he let’s agent Rachel Luba go into why she believes it’s going to happen first, and she brings up a rather interesting point.
“It makes sense to me that there’s a huge incentive for baseball to play enough games to get to the post season. And that’s because in the post season, that’s where the teams are making the most money and revenue from the tv deals,” Luba says. “If you look at the money they’re generating from the gates during the season, it’s not that much compared to the revenue they’re getting when they make it to the post season. So by having a post season they are able to cash in on those tv deals. So playing however many games they need, and there’s a minimum to be able to have a post season.”
That’s when her and Trevor Bauer discuss the number of games needed to have a season officially count. They decide that the number is 60 regular season games.
The breakdown of just how much money is paid for the playoff games isn’t known, but it’s a majority of the contracts from Fox, TBS, and ESPN. And it’s typically worth about $2,700,000,000 according to Fangraphs. A smaller portion of that is for regular season games, as well as the All-Star game. None of that revenue is from the local television contracts, either. Between the 29 teams in the US there’s another $2,079,000,000 in local contracts. Toronto’s contract in Canada is unknown. Those figures also don’t account for what teams get as a “profit” for now owning part of their regional sports network, which 17 teams have at least some ownership of, and the Blue Jays are owned by the same company that owns the entirety of their television network.
Suffice to say, in a normal year, Major League Baseball is making nearly $5,000,000,000 on television contracts. And that doesn’t include another $1,000,000,000 they get from MLB Network, MLB.com, MLB.tv, and MLB Extra-Innings packages.
This, however, isn’t a typical season. Assuredly the billion dollars from the MLB owned entities won’t be the same this year. MLB.com has to be selling far fewer ads and seeing far fewer visits. Likewise, MLB.tv and MLB Extra-Innings packages have to be down in large ways as there’s no baseball being played.
The local contracts are a bit of a mystery, though. We aren’t sure of the exact language in the deals with regards to if they are paid a flat fee for the year with a minimum number of games being required, or if they are paid out on a rate-basis per game. The playoff money, though, is a flat fee. And getting enough games in in order to be able to have playoffs is huge.
It took nearly 24 minutes for Trevor Bauer to get back to his first statement, but much of the information in the middle is necessary for his point.
“I think there’s going to be baseball this year. I think there’s going to be about 60 games of baseball, or whatever the cutoff is. I got to fact check that – if it’s 100 games to make the post season viable, then there will be about 100 games. If it’s 60 games to make the post season viable, then there will be about 60 games. That’s my guess. They’re going to do whatever it takes to get at least that minimum number in so they can get to the post season,” said Trevor Bauer. “In breaking down the incentives in the industry, and at least from my chair the incentives of the owners is to play as few games as possible to be eligible for the post season so they can minimize their losses as much as possible.”
It’s a deep dive into the business of baseball, but it’s very informative to see how things break down between what the players get – particularly in the post season – and what the owners get. The breakdown was honestly a bit shocking to me in terms of how the split was.