There’s an ongoing battle, so to speak, between Major League Baseball and the Major League Baseball Players Association. While there’s a large focus on the monetary issues – the two sides seem to be about a billion dollars apart in their proposals – the players also want some of the health and safety issues addressed in the plan put forth by Major League Baseball earlier this week.
Tucker Barnhart is the Cincinnati Reds player rep for the union. He was on 107.5 The Fan in the Indianapolis area where he’s from and talked about some of what’s going on. This is from The Indy Star, who quoted Barnhart from the interview:
The union has sent a document request on, I believe, May 13, asking, Hey, we would really like to see these documents, basically asking (the owners) to open their books. Not all the way, but in a way that proves that it is not economically feasibly for them to play without fans in the stands because that’s what they’re talking about. And it took them 10 days to respond.
Not to give documents or anything like that, it took them 10 days to just acknowledge the document request was sent. And then when they did acknowledge, they sent like, three documents — and I’m ballparking here — on roughly a 100-document request. … I don’t understand why, if it is cut and dried for them, if it’s so damaging to play without fans in the stands, why not show your cards?
There was some more to it, and you can click on the link to read more of that particular area if you would like. But Barnhart noted that he thinks baseball will gt it figured out this year and get on the field at some point.
This is much bigger. And that’s why I think that we will. I think everybody involved understands what’s at stake. The long term effects would be terrible if everybody went off and we didn’t, just because of monetary decisions.
But let’s talk a little bit about what Barnhart and the players association is asking about. They want to see more financial documents from the owners to prove what they are saying is accurate. And as of now, the owners have not done that.
Kurt Badenhausen of Forbes.com wrote an article today showing just how much their estimates are for team profits, and let’s note that those numbers don’t include profits from team-owned regional sports networks (19 of the 30 teams are at least partial owners and 18 of the teams got that partial ownership in exchange for lower cash paid for broadcasting rights of baseball games) or any mixed-use developments owned by teams that surround their ballparks. In the last decade Major League Baseball owners have made $8,000,000,000 in profit according to their numbers.
MLB owners say they barely made money the past 10 years in their attempts to reduce 2020 player salaries. @Forbes estimates show profits have tripled.https://t.co/7a8iJ2bPKy pic.twitter.com/YI9R66hz2D
— Kurt Badenhausen (@kbadenhausen) May 29, 2020
Within the article, Badenhausen notes that teams aren’t sitting on piles of cash from those profits.
With the above spending, owners are not sitting on a pile of cash. They are actually facing a liquidity crisis, as my colleague Mike Ozanian has written. It’s 2008 all over again and each MLB owner owns a dozen condos in the financial crisis but is struggling to meet their monthly mortgage payments.
Here is the big sticking point. The owners may not have cash reserves sitting around to tap into. Of course, they could always get loans, sell some stuff if needed, in order to get them carried over until things get better. This goes back to what Scott Boras said the other day:
The owners’ current problem is a result of the money they borrowed when they purchased their franchises, renovated their stadiums or developed land around their ballparks. This type of financing is allowed and encouraged by MLB because it has resulted in significant franchise valuations.
Owners now want players to take additional pay cuts to help them pay these loans. They want a bailout. They are not offering players a share of the stadiums, ballpark villages or the club itself, even though salary reductions would help owners pay for these valuable franchise assets. These billionaires want the money for free. No bank would do that. Banks demand loans be repaid with interest. Players should be entitled to the same respect.
We’re going to see how this plays out. While Tucker Barnhart isn’t at the very top of the players association, as a team representative, he’s nowhere near the bottom, either. That he’s confident that the season will be played is probably good if you want to see baseball this year.
Still, there’s a very large gap between what the players and the owners are proposing to each other right now. It’s basically $33,000,000 per team if we break it down evenly. But that’s not how it works. Some teams are claiming that they would lose a lot more money than others would. It’s going to be real interesting to see how things progress in the next few days. Hold on tight, it may be a bumpy ride.