How Much Do the Players Actually Stand to Lose Under the Various Financial Proposals?

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How Much Do the Players Actually Stand to Lose Under the Various Financial Proposals?

Chicago Cubs

Let’s see if I can pull off the post that I have envisioned in my mind, and if I can do a “just the facts” version. I’m not going to make any arguments in this post one way or another.

Basically, it’s this: how much do various players actually earn this year under the various possible financial plans with a return to baseball? I kinda want to have this laid out by group for my OWN thinking, so that I know that we’re all on the same page when discussing the negotiations and comments like the ones Blake Snell made about a return to play.

No Season At All

If there is no season at all, the players get what they got in the interim agreement, and that’s it. It’s a total of $170 million being distributed to players for April and May, and it roughly looks like this:

About $300,000 total to each player on a full big league contract (i.e., players on long-term deals, players who signed free agent deals, or players who have reached arbitration).

About $60,000 total to the more experienced big leaguers who are pre-arbitration (i.e., guys with around a couple years service time – think someone like Ian Happ).

About $30,000 total to big leaguers who are pre-arbitration and have barely any big league service time.

About $16,500 total to guys on the 40-man roster who have no big league experience.

Relative to what they would expect to make in a normal season, you can see, it’s not a lot of money. Kris Bryant was set to make $18.6 million this year. That $300,000 is about 1.6% of his salary. Ian Happ was set to make something like $624,000 this year. That $60,000 is about 9.6% of his salary. Rowan Wick was set to make something like $571,000 this year. That $30,000 is about 5.3% of his salary.

The players will keep this money no matter what. No season? It’s their money. Season? Then these payments are treated as an advance on salary.

Prorated Salary Over 82 Games

The current proposal indicates the league will try to play 82 regular season games. In the interim agreement, players agreed to receive their normal salary, but only for the games actually played. So, then, at 82/162 games – 50.6% of the games – players would receive 50.6% of their scheduled salary. 

Kris Bryant, for example, would receive about $9.41 million. Ian Happ would receive about $316,000. Rowan Wick would receive about $289,000.

Prorated *and* Reduced Salary Over 82 Games

This has yet to be explicitly proposed, but imagine the owners say they cannot afford to stage a season at prorated salaries, so the players have to further reduce their pay by X% to make it work. This is mostly an exercise in pulling a hypothetical number out of my butt, but let’s say gate-related revenue is half what the owners expected to make this year, and they want the players’ payroll to reflect about half of that loss, or 25%. So we’ll say, under this possible proposal, the owners ask the players to take a 25% haircut from their expected prorated salary.

That would mean players ultimately receive only about 38% of their expected full-season salary (75% of 50.6%). 

Kris Bryant, for example, would receive about $7.07 million. Ian Happ would receive about $237,000. Rowan Wick would receive about $217,000.

Note, under this version, for a guy like Happ, the difference between staying at home all year ($60,000) and playing a half season (taking the risks) is just $177,000. To be sure, a large amount of money for the average joe, but not an amount so enormous that you’d say he’s crazy for thinking it isn’t worth the risk.

Proportionate Revenue Share

The plan reportedly to be shopped by the owners.

This gets really complicated for a lot of reasons. For one thing, you’d have to pool all the expected player dollars and then divvy that pool up by the player’s proportionate share in that pool, creating a percentage. Then the player would receive that percentage of the actual final revenue share the players get from the league. Even if I had the realistic ability to put those numbers together here, I’d have to be able to reasonably project how much revenue MLB will gross this year … which … that’s just guessing at this point. The best I can do is some ballparking.

If there is a total loss of gate-related revenue, but the league more or less grosses its expected national dollars (most of that is postseason) and half of its local TV dollars, you’re talking about something like $4 billion in revenue? And the players get about $2 billion of that in a revenue share at 50/50? 

On paper, it sounds about right, because get this: total player payroll expenditures this year were expected to be about $4.1 billion. Cut that in half for only half the games, and that means the total prorated payroll would be just over $2 billion … or roughly what you’d expect the players to get in a revenue share system.

So why even propose this? Why not just pay the players their prorated salaries if it’s going to wind up roughly the same number? 

Well, as discussed yesterday, that doesn’t contemplate the biggest risk of all for the owners: a regular season that starts and then a postseason that gets cancelled because of a second wave of the virus. In that setup, the players get their full payroll, but a huge chunk of the revenue – maybe half what the owners expected this year – goes poof.

It’s pretty clear to me that this is the scenario guiding the owners’ propose of a revenue share more than anything else. They want protection, specifically, in case the postseason disappears. Because I already axed ALL of the gate-related revenue from my numbers there – I’m already assuming that revenue is gone. Even then, just paying prorated payrolls works out for the owners (back-of-the-napkin style) unless the postseason disappears.

If the players were to accept a revenue share and then the postseason didn’t happen, it’s conceivable that 40 to 50% of this year’s possible revenue disappears. And then suddenly, instead of getting about half of their salaries, the players are getting only about a quarter.

In Sum

So, then, here’s where things land when you look at the numbers …

No season at all: extremely little paid to anyone. On paper, this does look like a bad outcome for the players.

Prorated salaries over 82 games: everyone gets about half their salary. On paper, this looks like the best outcome for the players.

Prorated salaries plus a haircut over 82 games: if the haircut were, for example, 25%, then the players are ultimately getting just 38% of what they expected this year. This might be the worst outcome, depending on what happens.

Revenue share: could be approximately the same as prorated salaries over 82 games (and, in theory, even more if there are some gate revenues and/or the postseason rates go up), but there is a RISK that it could wind up substantially lower.

There you have it. Those are just the numbers. From there, I think it’s fair for different folks to have different opinions on what risk justifies what option, what health protocols justify which salaries, etc. 

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Author: Brett Taylor

Brett Taylor is the Editor and Lead Cubs Writer at Bleacher Nation, and you can find him on Twitter at @BleacherNation and @Brett_A_Taylor.