MLB owners could still save baseball in 2020

Baseball commissioner Rob Manfred is set to unilaterally impose a schedule of about 50 games on the players in which they will receive prorated salaries for the number of games played, which comes to about 30.9 percent of their full salaries.

There will be no expanded playoffs. Players will receive only a percentage of gate receipts for the post season- which looks like nil as we speak. Fans will be upset, players will be upset, and owners will be upset as the two sides file grievances against each other with accusations of bad faith negotiating. And there looms a toxic atmosphere heading into the next round of CBA talks.

There is a better solution

It doesn’t have to be like that. The owners could still propose a schedule that is more respectable. They could make an offer that makes more money for both sides, and that eliminates the acrimonious grievance procedure. They could keep their finances secret, and that could be worth hundreds of millions of dollars alone.

The owners could propose two deals to the players. One which includes more games, expanded playoffs and the $50 million playoff pool that both sides have proposed. The other would unilaterally mandate fewer games, no expanded playoffs, and no playoff pool unless fans are in attendance at playoff games. It should be an easy choice for the players.

Each of the three previous offers made by MLB to the players would have paid them about 35 percent of their full salaries. None of them satisfied the one absolute requirement that the players had to make a deal- prorated salaries based on the number of games played. If the owners were to propose the same number of games at full prorated salaries that pays the players the same 35 percent of full salaries, that number comes to 58 games. That should be the minimum. But they can do better than that.

According to USA Today, playing an extra round of the playoffs by expanding to 16 teams would bring in up to $113 million or more in extra revenue per season, even without fans in attendance. The players proposed two seasons of expanded playoffs, but no deal was agreed to, so the baby goes out with the bath water.

The season was expected to begin around July 15th and end no later than September 27th if an agreement had been reached. That’s 74 dates to play baseball.

By not making a counter offer, the MLBPA ditched the bargaining process and heads toward arbitration. They will file a grievance claiming that the owners negotiated in bad faith by not scheduling “as many games as possible” and by refusing to extend the season. They will demand the owners to open their books to support their claims that more games are not economically feasible. By giving the players an agreement they can- and should sign, the grievance is precluded.

Follow the Money

Each game costs about $24 million in player salaries for 30 teams, so a 72 game season would cost $336 million more than a 58 game season at full prorated salaries. But there is also revenue that comes in for every game played. MLB receives $700 million per season from ESPN, and $525 million from Fox, and $325 million from Turner broadcasting. They get $2.2 billion from regional sports networks, two thirds of which are partly owned by the MLB clubs. They get $1 billion from the central fund which includes MLB.tv and the MLB network. $5.3 billion total TV revenue, $787 million of which is tied to the post season, rather than regular season games.

That’s $4.513 billion revenue just from media rights for the regular season, or $27.9 million per game. Player salaries and benefits total $4.22 billion. Most club’s other operating expenses are fixed, not per game. Many costs such as player development are wiped out or sharply reduced this season.

All this is not to mention $1.1 billion in sponsorships that MLB will get whether games are played or not. And there’s the problem. They don’t have to play games to make much of their money.

Is MLB really losing money each game?

How much of that TV money is tied to playing games, and how much is guaranteed regardless? And what are their expenses for each game played? They won’t tell us. Worse yet, they won’t tell the players who are expected to take their word for it that MLB would lose money for each game they played. That, in a nutshell, is why we are where we are, and why the players will file a grievance.

What this shows is that MLB has the revenue to pay the players. Whether it comes in the form of prorated per game revenue, or whether some of it is guaranteed regardless of whether games are played, they have the revenue. There may be clubs that are highly dependent on games for TV revenue and others not so much. If this matter does go to arbitration, MLB must show that they scheduled as many games as possible.

Ken Rosenthal of The Athletic proposed that MLB offer the players a 72 game schedule at full prorated salaries, with expanded playoffs. He outlined the benefits to the owners and players. It’s a win- win proposition. They have time to play 72 games by September 27.

Enough blame to go around

The players are far from blameless in this dispute. At the outset, they threw hundreds of amateur players under the bus, agreeing to cut the draft from 40 to just five rounds, and limit the signing bonuses for hundreds more. For most, this is the only decent money they will ever get playing baseball. “Not our members, not our problem” is not good for baseball. And they could have made one more offer instead of heading straight to arbitration.

Baseball owners are the stewards of a sacred American institution, but they’re treating it like it’s just another hedge fund. They’ve cut the amateur draft and plan on a hostile takeover of Minor league baseball, shutting it down in 42 small towns across the country. Some teams have furloughed employees, scouts, and personnel. Now, they propose to run a half-assed season for the cause of penny pinching players’ salaries as much as they can, at the expense of the game. They could show us that they care a little bit about the game and the fans who support it. Make the players an offer they won’t refuse. The cost of not doing so is much greater.