ajor League Baseball is still looking for ways to get its season underway, nearly two months after the campaign should have started. South Korea and Taiwan have already resumed baseball without fans during the Covid-19 pandemic, and MLB reportedly envisions an 82-game season beginning in early July. But for that to happen, the owners and the MLB Players Association (MLBPA) need to reach a labor agreement encompassing everything from salary distribution to testing guidelines to suitable playing facilities.
This week, MLB owners approved a plan that would pay players a percentage of their 2020 salaries based on a 50-50 split between players and owners of MLB’s revenue from the regular season and postseason. That is a non-starter for the players union, which refuses to agree to any deal that they feel represents a salary cap.
So what exactly are the disagreements between the owners and players? And will those differences imperil any chance at the 2020 season?
Why are the players upset?
The players feel like they are being asked to inherit all the risk while making most of the financial sacrifices. While baseball players can socially distance in a way that their counterparts in basketball and football cannot while competing, they will inevitably be close enough to one another to risk spreading the coronavirus. Washington Nationals relief pitcher Sean Doolittle voiced some of those concerns on Twitter last week while Tampa Bay Rays pitcher Blake Snell claimed he didn’t want to accept a reduced salary with so many unknowns regarding the virus.
MLB, unlike the NBA, NHL and NFL, doesn’t have a salary cap and doesn’t split revenue between players and organizations. Teams earn individual revenues through local incomes (team television contracts, in-game earnings like tickets and concessions) and shared national revenues (league licensing, merchandising, national television contracts). Without these revenue streams, teams are hemorrhaging money.
The league and players union agreed to pro-rated salary reductions in late March if games resumed (ie a player’s contract assumes a 162-game season, so he would receive 50% of his salary if there is an 81-game season). This week, however, the owners proposed a 50-50 revenue split – which would mean even less money for the players – because of the major losses they’re taking without attendance. Consult ESPN’s Jeff Passan for a more detailed explanation of the math, but understand this much: the owners don’t pay the players an increased share in boom times (MLB reportedly grossed around $10.7bn last year), but now expect them to share the losses during the bust.
Are the players seriously complaining about money during a time of record unemployment?
That public sentiment might explain why the league leaked their proposal to the press. Some immediately clamored for the players to accept the deal. Illinois governor JB Pritzker said that if safety clearances were met that “we need that normalcy back … I must say I’m disappointed in many ways that players are holding out for these very, very high salaries and payments during a time when I think everybody is sacrificing.” (Pritzker apologized for his comments two days later “for leaving the impression that players shouldn’t be allowed to bargain to protect their health and safety.”)
The most confounding suggestion came from former player Mark Teixeira, who advocated the players accept the deal and that he’d take “pennies on the dollar” to play right now in order to give people hope. Over his 14-year career, Teixeira earned more than $200m. Teixeira is one of the best examples of how players benefit from the absence of a salary cap, yet he took to ESPN to side with the owners and pressure the players into the league’s proposal.
So are the players unwilling to accept any cut?
They would argue that they already accepted one in March once they agreed to pro-rated salaries. While the players are saying that the league is reneging on the March agreement, the league is arguing that owners are losing too much money to pay player salaries at the pro-rated value, which is why they proposed a 50/50 split of revenues from the 2020 season.
Aren’t these players millionaires anyway though?
If a player signs a second contract, then they have achieved the kind of financial security that most Americans lack. Without a second contract, however, there’s a decent chance that a player is living paycheck-to-paycheck. While the minimum salary for a major-league player is $563,500, that number sinks all the way to a $46,000 minimum if a player is on the 40-man roster with the option of being sent to the minor leagues. In short, there’s a wide variance of salaries even at the big-league level. And, of course, baseball careers are relatively short – and can end suddenly through injury.
All indications are that the players want to play so long as their safety is guaranteed. Being told that they need to accept a pay cut in addition to risking their health is perceived as insult to injury.
Don’t the owners need a season just as much as the players do?
That is where the finances get more opaque. Before becoming MLB commissioner, Rob Manfred was a labor lawyer for the league and is known as a tenacious negotiator. Manfred told CNN last week that the owners could lose around $4bn without a season, but that he has great confidence that the league and MLBPA will reach an agreement to start a season.
The owners are independently wealthy, but are losing a lot of money right now. Some organizations like the Detroit Tigers and Philadelphia Phillies are committed to paying their employees through the season. Others, like the Pittsburgh Pirates, Miami Marlins, Seattle Mariners, Cincinnati Reds and Tampa Bay Rays are already either furloughing employees or committing to salary reductions. As the shutdown continues, that list of teams will grow.
The owners may be wealthy even without a baseball team, but they are still businesspeople. They will negotiate until they get the best deal possible, and the most onerous part of payroll is player salaries. Without fans in the stands and concessions being sold, teams will cut as much out of their payroll as they possibly can.
What do the fans think?
This is probably where the league has the most leverage. The owners know that enough fans still see players as entertainers, not employees. By portraying players as a group of coddled, millionaires demanding more money during a pandemic, the league knows that it can probably extract concessions from the players union. As long as enough fans accuse the players of being the greedy ones instead of the owners, then it will be extremely difficult for the players to win any public sympathy.
So what happens now?
Nobody knows. Everybody loses without a season, but the risks are high for the players to even take the field. The owners insist that it is the players, not them, who are the greedy ones. Negotiations will continue even if they get ugly.