Everyone wants baseball back. The owners want it. The players want it. You and I want it. But it’s not just as easy as saying “Play Ball”, either. There’s a very contagious, deadly virus that we don’t really have a known, good, and easily available treatment for right now that has the entire world slowing down to try and combat it. And of course, there’s also the whole business side of the game, too.
We’ve heard a whole lot of leaked information from the owners over the last few weeks about what they want the public to believe about their finances (but strangely enough won’t actually show their books to even the MLBPA, and as reported by Ken Rosenthal and Evan Drellich of The Athletic late on Sunday night, the owners didn’t fully respond to the unions request for financial documents) in an effort to make the players look like the bad guys here. And it’s largely been working, as we’ve all seen someone talk about how the players need to just compromise on the 50-50 revenue split. Of course the problem here is that MLB has literally not offered that plan to the players to even discuss yet. But Joe Public has already decided the players need to accept a proposal that’s not been given to them.
Still, there’s going to be some negotiation on the money no matter how it is initially proposed – and it’s expected to be proposed on Tuesday by MLB to the MLBPA. Even though the 50-50 split was simply leaked and never presented to the players, the union stated that it was a non-starter in negotiations, especially after they believe that the two sides had already agreed to salary back in March when the players accepted a pro-rated by games played salary. The owners believe there’s a clause in that deal that makes that deal void, which is why they are attempting to now renegotiate that.
Chuck Garfien of NBC Sports Chicago is reporting that both the owners and players may be willing to work with each other a little bit.
According to a source with knowledge of the situation, the league will make a proposal to the players’ union Tuesday that will be a compromise from the 50-50 revenue sharing split that had been floated earlier this month. This could serve as a starting point in negotiations from MLB’s side.
Meanwhile, the union is expected to propose a plan that allows players to receive their prorated salaries based on the number of games played, which was part of an agreement between the two sides finalized March 26. But a certain amount of money would be deferred to future years to help reduce the owners’ expenses for the 2020 season.
These, according to a source, would likely be the general starting points in negotiations, a clear signal that both sides are willing to move closer to one another in the hope they can come to an agreement that allows for a return to play.
The players are taking the approach that Major League Baseball has already applied to the upcoming draft. They are hoping that while the salaries can remain the same, that deferring some of that money to future years when there can be more revenue coming in will be acceptable. We don’t have an exact idea of what the owners proposal will be other than it’s not likely to be exactly a 50-50 revenue split.
But, what this does give us is at least some hope that the two sides are willing to talk about ways to try and make this all work on the money side. Hopefully they can find something that works that is satisfying for both sides, and then we can look at the safety and health sides of the proposals, which after several days and a 67-page plan from Major League Baseball, the players sent back some additional thoughts, questions, concerns, and ideas on Thursday evening.
I’m hearing two big pieces of good news in all this. Nothing on the safety and logistics side of the equation appears to be a deal breaker or even a serious impediment to a 2020 season. And both sides appear to be willing to negotiate on the dollars, with the owners (hopefully) backing off a salary cap type approach and the players offering some room for discussion on the earlier agreement. That suggests that both sides genuinely want to make it work. Let’s hope it does work. With a “spring” training start fast approaching, we’ll know soon.
Still some sticky wickets I think. Some links to deeper looks in this article from MLBTR:
The general gist is that players are probably going to want assurances that whatever agreement they reach for 2020 isn’t financed in part by owners lowballing FA and arbitration offers for 2021.
The problem is the future uncertainty. How can you give assurances along the salaries when the risk is so high. There is a cost associated with risk and the owners have so much in guaranteed contracts that with the exception of teams like the Yankees and Dodgers teams can not afford to take on this risk.
The Reds will be hard pressed to offer Bauer $5 million let alone the $25 million he would have commanded in a normal year. If players are receiving normal raises via arbitration don’t be surprised to see the Reds let Lorenzen and Garrett hit the FA market.
The owners probably feel they have taken on more than their share of future risks with the guaranteed contracts on the books.
Hi Jim Walker I am curious if you are from a small town in Indiana because I grew up with a Jim Walker and I am wondering if you are that person.
Maybe the standard contract for the future will be re-worked to include provisions for situations like this. It is unreasonable, in my opinion, for owners to be on the hook for the full value of a contract when events beyond their control remove the revenue that is paying for the contract and the player is not performing the service for which the contract was agreed. Players already are protected pretty well against loss due to injury. In fact, my understanding is that they can collect the full value of a contract and still get service time for not providing the service for which they are paid. A team could pay the entire value of a contract and not get a day of service for the money.
They aren’t on the hook for the full value of the contract, though. They are currently on the hook for a pro-rated portion of that contract based on the games played. The players do get the service time based on how much service time they got last year if no games at all are played, but the players also don’t really get paid at all if no games are played (the 1200 players on the 40-man rosters around baseball did get $170M to split up among all members, or roughly 4.1% of their 2020 contracts as a whole).
So your understanding seems mostly incorrect of the situation, unless I really misinterpreted your reply.
I think you are 100% correct Doc. For 2020 the contract is the revised contract and not the signed contract. A player will get 100% of his revised contract even if he get hurt on day 1 and misses 80 games.
If Bauer gets hurt pitching to the first batter he faces this second spring training he gets 100% of his revised contract and becomes a FA in October.
Wood pitched very little for the Reds last year but got 100% of his signed contract.
Owners are at risk 100% for Doc’s scenario but are fine with it because they calculate this predictable risk into their contracts.
No one has a clue how many games will be played this year and if there will be a postseason. No one knows if any games will be played next year. No one knows if fans will be allowed into stadiums in 2021 and even if they are how many will show up.
So many questions. So many risks. So many expensive guaranteed contracts (Votto, Suarez, Gray, Iggy, Shogo, Castellanos and Moustakas).
This really confuses me. How does Joe Public blame it on the players if the press blames it on the owners. Doesn’t the public derive it’s opinion based upon what they read in the press?
Sorry BK. I should have started a new line instead of replying. As Sliotar points out 55% of the people probably believe what the media writes. The other 45% will follow their gut, will have an opinion locked in stone or do their own research. Assume 1 out of 3 of this 45% feel the players are getting screwed. That would mean 55% who follow the media + 15% who make their own judgement side with the players. Total is 70%.
Personally I believe:
1. The Reds will lose money from now until the end of Votto’s contract.
2. The Reds will not pursue FA that cost more than $5 million a year for the next 2 or 3 years.
3. Baseball will see a division of haves vs. have nots like we have never seen in other years. If the Dodgers are not the first team to win 120 games it is only because the Yankees beat them to it. The Dodgers could very well clinch the 2021/2022 division titles in August.
The thing that concerns me is the competitive balance of baseball. The Dodgers and Yankees have so much TV revenue that they are profitable all years.
The Dodgers could sign Bauer for 3 years $10 million per year, Realmuto for 3 years and $10 million a year and Betts for 3 years and 45 million and still make money and outbid everyone by $5 million. They go from being heavy favorites to almost impossible to beat.
Do not think any of these players accept that contract.
May be a lot of pillow contracts this fall.
I agree with you 100% BK in that the big market teams will lose more than small market teams due to Covid 19. However, they will still be highly profitable.
2019 Ticket sales: 4 million at a price of 35-700 per ticket. Assume $50 a ticket (but 100 is probably a better estimate). That means $200 million in ticket revenue. In 2013 the Dodgers signed a TV contract for $320 million a year. Assume these are the only two sources of Revenue and the only expense is player contracts ($200 million) and revenue sharing of some kind ($50 million).
No fans the Dodgers lose $200 million in ticket sales and 80 games means the Dodgers lose $160 million in TV revenue. Contract cut in half mean they save $100 million in salary and $25 million in sharing revenue.
Net income lost in 2020: 200+160-125 = $235 million in lost net income.
Net income in 2020: 0+$160-$100 = $60 million in net income.
Reds Net income lost in 2020: $50 (ticket sales) + $30 (TV Contract) – $65 (Player contracts) + $10 (lost revenue sharing) = $25 million in loss of income.
Reds 2020 Net Income = 0 + $30 -$65 + $20 ($10 million post season share +$10 million in revenue sharing) = -$15 million.
Dodgers make $235 million less in 2020 but still make $60 million.
Reds make $25 million less in 2020 and now lose $15 million.
I do not know the true financial state of the Reds (or Rockies) for that matter.
There TV contracts do not live up to the Yanks.
To assume all teams will make a profit this year, is probably not true.
I also, think MLB is lying about losses, etc.
Open the books (include everything), and then we as fans can see.
I think, if MLB does open there books, most will support the players.
I think a 65 -35 split, would be fair (not players they 65%)
But, I do not know anything about this, other then I want to see baseball soon.
On a good point, restaurants are starting to open up in El Paso county (in CO)
NHL Commissioner Gary Bettman has scheduled a big announcement for 4:30 PM eastern today. It is being streamed on NHL.com and NBCSN, the primary US national broadcast partner.
Fair to guess this will either be an announcement of the specific target date and plan to resume play or conversely (but not anticipated) that they will throw in the towel.
The NHLPA last week approved the format of a 24 team tournament playoff. However, later there was blowback from some players that while they had approved the format, some logistical, economic and safety issues remain unsettled.
Yeah this isn’t baseball; but, I think it is noteworthy that a major sport, particularly one with 20% of its teams in Canada is apparently on the cusp of moving forward.
New proposal in from the owners: https://www.si.com/mlb/2020/05/26/mlb-proposal-pay-cuts-highest-paid-players
The cliff notes: Owners are proposing a sliding scale pay structure with salary reductions.
-The sport’s highest-paid players would take significant reductions to what they would be paid during a full season if the plan is approved. The cuts could eventually see highly paid players receive less than 40% of their full-season salaries.
So, basically the owners are asking for a salary haircut as high as 10% for some players. The final math isn’t released, but I’d imagine the overall salary reduction is somewhere between 5-10% for all MLB salaries. That’s the owners first offer and they know there will be negotiations. The owners have to assume they will land somewhere at an overall 3-7% salary reduction for all players.
I’m not on the anti-owner bandwagon, but 3-7%…really? That just seems petty to me. Every MLB owner is fully capable of finding a 3-7% savings in their budget. There are plenty of ways to cut 3-7%. Also, there are just as many ways to make an extra 3-7% in revenue. Why not stagger games so they are on TV all day, host the HR derby/All Star game before the World Series to get revenue instead of canceling it.
Want to make an extra 3-7%. Let’s get weird with baseball promotions from the early 1900s.
-Trevor Bauer throwing a baseball over the CF wall
-Billy Hamilton racing a horse
-Billy Hamilton racing the freeze guy from Atlanta
-Billy Hamilton racing an olympic track athlete from first to third (Olympic athletes have some time now)
-HR derby with metal bats
It’s a global pandemic. There are a lot of people out there who would love just a 3-7% cut right now compared to what COVID-19 gave them.