NEWSLETTER
Today, Major League Baseball’s 30 teams will convene via conference call to finalize their proposal for a return to baseball, per multiple reports.
That proposal is expected to include, among other things, an 80ish game schedule, which would begin in early July. Teams would play in their normal divisions, but a geographically limited schedule. There would be a universal DH, expanded playoffs, and a Spring Training Part Two kicking off next month at home parks or spring facilities.
All of that stuff is certainly interesting, and is an important part of the planning process. But we all know the two much, much more important items that will be addressed in the proposal: how do you keep players and personnel as safe and healthy as possible, and how do you fairly compensate players?
The answer to the first question remains beyond the scope of my ability to predict the future (how do you keep them safe? well, for one thing, none of those considerations matter at all until testing is so rapid and widely available that you can do it for everyone virtually every day, so … ). The answer to the second question, however, is going to be the one I suspect we’ll see a ton written about this week.
For the players, they’ve already agreed to take prorated salaries based on the games that are actually played. For the owners, they want players to take even less if the games do not have gate-related revenues. So, we’ll see how the proposal handles this dispute, but
Amid coronavirus pandemic, #MLB owners will vote on historic revenue-sharing plan that guarantees at least 48% to players on 82-game season with universal DH and extra playoff round. https://t.co/xs3g6LbJP6
— Bob Nightengale (@BNightengale) May 11, 2020
Without knowing the deep, deep financial realities of the teams, and without knowing what “at least” means, it’s impossible to fully evaluate a revenue-sharing plan. All I can say is that it is plausible that with playoff revenues folded into the mix, especially if they are up substantially thanks to expanded playoffs and pent-up TV demand, the players might wind up with close to their prorated salaries on a revenue-share model.
But: (1) there’s a lot of risk there for the players, and (2) why should the players be the ones to bear the added risk of revenue losses? They’re the ones actually taking the field and bearing the added health risks, right?
We’ll evaluate the proposal more when it comes out fully. Again, I’m not saying it’s impossible – I’m on the outside, I don’t have the books, etc., etc. I’m just saying it’s hard to imagine this being a good deal for the players.
As I wrote before about the idea of revenue sharing in this season:
At an extremely superficial level, you can see why the league could make this argument: revenues are going to be way down, you players typically wind up with about 50% of revenues in a normal year, so let’s just say you get 50% of our revenues this year, too.
There are big issues with that logic, however. For one thing, business owners necessarily retain much of the risk of operating a business (which is how they also get access to the upside), so there is a bit of a pure logic problem in saying the workers should absorb as much of the loss from a bad year as the owners absorb. It’s not like the owners have been tripping all over themselves to share more of the *increasing* revenue of the sport with the players the last five years (indeed, based on how the last CBA has played out, it looks like the opposite was true).
For another thing, the owners – especially as a collective MLB unit – are in a far better position to absorb one-year financial losses than individual players, whose careers are short, and whose earnings capacity vary so wildly player to player, year to year. (As a hypothetical example to illustrate the point: Tell an up-and-down fringe roster guy that it’s the “same thing” for him to see his expected annual take-home drop from like $100,000 to $25,000, as it is for an owner to see his expected annual profit drop from $40 million to $10 million. The simple division might say those are the “same,” but I’d hope your brain and your conscience tell you otherwise.)
For another thing, the players are taking more of a risk by getting back out there this year than the owners. Just as we expect front-line workers through this pandemic to be taken care of, physically and financially, why wouldn’t you make the same argument about the players?
For still another thing, per Drellich’s article, the Players Association does not actually believe the owners’ claims that they will lose money on a per-game basis if they pay players their full, pro-rated salaries. When you account for postseason revenues, related businesses, etc., the players are not at all convinced owners would actually lose money per-game at “full” player salaries.
For still another thing, I’d make the argument that even if it were true that some owners are losing money on a per-game basis this year, it would still be worth it to do so for the long-term value of the sport and your own franchise. Think about how much long-term value you’d piss away by sacrificing a season – at a time like this! – on the altar of short-term cash.
That is all to say, upon initial reflection, I do not think a revenue-sharing model for this year is a particularly compelling idea. Should the players perhaps have to take an additional haircut of some kind – maybe tied to guarantees from the teams that they will not lay off other employees? – yeah, I could see that. But a full-on revenue share (at 50/50, anyway) probably goes too far.
