When negotiations broke down between Major League Baseball’s players and owners over the length of the 2020 season and how much would be paid to the players in salaries, there were a number of other terms cast aside that both sides had agreed upon that were mutually beneficial. These terms can still be agreed upon if the two sides can talk to each other long enough to come to an agreement before the start of the season.
Terms like expanding the playoffs from 10 to 16 teams, guaranteeing the players some playoff pay, and writing off part of the advance that players received as a result of the March agreement are out. Also gone were advertising patches on uniforms and implementation of the designated hitter in the National League for the 2021 season.
Players’ Association president Tony Clark said that he was prepared to negotiate further on expanded playoffs, but comments from commissioner Rob Manfred gave no indication that further talks would be held. Here is what was lost when the baby was tossed out with the bath water.
The proposal that was agreed by both owners and players would have expanded the playoffs in 2020 and 2021 from 10 to 16 teams. This would have meant an additional $100 million to $125 million in potential revenue per season for Major League Baseball. The players asked for half of this extra revenue in year two in a final counter-proposal that was rejected by the owners. Expanded playoffs were included in every proposal made by both sides until talks broke down. This costs the players nothing and helps the owners to recover some of the lost revenue from the shortened season and the absence of fans.
Players’ playoff pool
Under the terms of the current collective bargaining agreement (CBA), players receive a percentage of gate revenues from playoff games, which is given to each team to divide up as the players determine. As it stands, there could be no gate receipts during the postseason, meaning the players would receive no pay for playing in the playoffs.
The players’ playoff pool in 2019 was just over $80 million. The two sides had both included a players’ pool of $50 million in each of their offers to each other, until the owners’ final proposal cut that figure in half, to $25 million. When talks broke down, Manfred unilaterally imposed a schedule of 60 games and no playoff pool was agreed upon. As it stands, players could play the postseason — the most lucrative part of the season for owners — without being paid.
It would make perfect sense if the two sides would agree to just go back to what they had already agreed by expanding the playoffs to 16 teams for at least 2020 and giving the players a playoff pool of $50 million. But wait, there’s more!
Advance salary write-off
When the owners proposed cutting the playoff pool by $25 million in their final offer, which included a 60 game schedule and fully prorated salaries, the offer included forgiveness of $33 million out of $170 million in advance salaries that were paid to players in the spring as part of the March 27 agreement.
While the total advance represents just four percent of the total salaries due to players for the season, it means that there are many players earning at or near minimum major league salaries — or less if they are optioned to the minors — who will receive little or no additional salary for playing the 2020 season. The advance does not have to be paid back if the season is canceled, or even if players opt out for the season. Manfred claims that over 62 percent of the players’ union membership would benefit from this advance write-off.
The proposal first surfaced in the owners’ final proposal to the players and it was given at the expense of half the playoff pool. The players’ final counter offer included a greater write-off as well as the full $50 million in a playoff pool, as well as half of the television revenue from expanded playoffs in 2021.
A proposal included in each of the final offers from both sides would have included advertising patches on uniforms bringing additional revenue to the owners. The cost to the players is nothing, and this would have bridged the gap between the $25 million being shifted from the playoff pool and the $33 million in advance salary write-offs.
The DH rule will be part of the 2020 season in all National League games, including the playoffs. Earlier proposals from both sides included the DH being used universally for the 2021 season as well, but that went away when the grand bargain fell apart. Expect this to come back as something that the owners are obviously willing to give as long as they get something in return. Adding the DH to the National League permanently adds another 15 full-time positions on major league rosters, benefiting the players, particularly veterans whose days in the field are numbered.
Free agent compensation
In their initial proposal to the players, the owners offered to eliminate the payment of free agent compensation for clubs who sign an elite free agent player, only for the 2020-2021 offseason. The players did not bite, and did not include this in any of their three proposals. This is something that is a source of irritation for the players, and will be on the table in the next round of CBA talks. However, the number of players who are subject to payment of compensation is very small.
Some of the owners’ proposals were slanted heavily in favor of players on the lowest end of the salary scale, but this one would benefit only the richest of the rich. The sliding salary scale included in the owners’ initial proposal was heavily slanted to appeal to most of the players, but would have paid as little as 10 cents on the dollar in prorated salaries above $20 million.
What about the grievance?
Oh yeah, the big elephant in the room. The most important demand to the owners when they finally agreed on fully prorated salaries, was that the players waive the right to file a grievance based on the owners’ bad faith bargaining pursuant to the March 27 agreement. The primary reason that the players would not agree on a 60-game schedule was that they refused to waive their grievance. This issue won’t be solved this season.
Some estimates put the value of the grievance at up to $1 billion, but that was while the owners were threatening to implement a 48-game schedule. The difference between prorated salaries for the 60 games that have been implemented and the 82 games that the owners first proposed is just over $570 million in prorated salaries. The players won’t be giving that up for a playoff pool or some advance salary write-offs.
There is money lying on the table to be picked up by both sides, if they can talk to each other long enough to decide how to divvy it up. When MLB releases the schedule and the television contracts are set for the fall, that money might be flushed.