Why the Owners Might Not Crumble This Time

At first, I thought of it as a kind of “Hail Mary” attempt.

Faced with rivers of red ink for the proposed 2020 half season, it would almost be expected that the baseball owners would at least float some kind of profit sharing plan.  It would be likewise expected that the union would have none of it.  And so, it would be at about this point of the negotiations that the ownership group would concede the fight, realizing that some money was better than no money.

Taking a deeper dive into the numbers, though, there seems significant reason to believe that the owners won’t cave this time around, and – with the players ever unwilling to move off their position – it seems that the 2020 season is exceedingly unlikely to happen.

For an example of the owners’ situation, let’s use my beloved Cardinals.

Like all major league teams, the Cardinals get TV revenue from two main sources.  They have a local TV deal, which provides them (on a 162-game season) with about $33 million dollars.  They also reap about $50 million dollars annually from the network contracts.  This $83 million of TV money is augmented by gate receipts.  How much do the Cards pocket off attendance?  Let’s make a generous estimate.

From the ballgames I’ve gone to, it doesn’t quite seem – all things added together – that a night at the ballpark should run $50 a person, but it does come fairly close.  So, $50 multiplied by the usual season attendance figure of roughly 3.5 million – they have fallen slightly short of that mark for the last four years, but – as I said – we’re making generous estimates.

That would add about $175 million to the coffers. For total revenues of (roughly) $258 million dollars.  There are some other minor income sources, but the TV money and the attendance money are the primaries.  Of course, they don’t get to keep all of the gate receipts – as the visiting team gets a slice of that.  But then, they also get a slice when they play on the road – even though this arrangement ends with the Cards giving more than they get.  Last year their home attendance of 3,480,393 (42,967.8 per game) was answered with only 2,385,586 attendees on the road (an average of 29,451.7).  Still, all things considered, were are probably looking at a little north of a quarter of a million dollars coming in – during a normal season.

From that sizable total, the Cards are on the hook for $165,375,366 in salaries to their major-league players (roughly 64% of revenues).  The team is also on the hook for all benefits, including insurance both on and off the field, as well as all airplanes, busses and hotels (major leaguers, by the way, don’t stay at Motel Six).  In addition to stadium upkeep and incidentals (like electricity and hot water – which are probably substantial bills), they also pay salaries for all coaches, trainers and scouts while supporting a fairly extensive minor league system.  This is not to cry poverty.  Just to point out that the fat-cat owners don’t get to pocket all that coin.

In general, the system works out better than either of the parties are likely to admit – enough money for both the players and the owners.

2020, of course, is a very different story.  The past winter and spring has noted the perishing of more than 100,000 Americans, with millions more losing their sources of income and thousands of businesses closing their doors for the last time.  There has been plenty of suffering to go around.

The specific damages to baseball will include the loss of half the season – and half the TV money that that would have brought in – and the loss of all revenue associated with the fans coming to the games as it is mostly inconceivable that baseball will have its fans in attendance this year.  Now let’s re-calculate.

For the Cardinals the $175 million or so from attendance has evaporated.  The $83 million normally expected from TV will now be more like $41.5 million.  The players have agreed to prorate the salaries, so instead of being on the hook for $165 million, the Cardinals’ salary obligations would be pared to $82,687,683.  But even so, weighed against just $41.5 million of expected income it’s easy to see the club operating at a significant shortfall.  Toss in the travel expenses and any additional expenses associated with all the COVID-19 protections – plus any increase in insurance that arises from the increased threat of the virus – and an expected shortfall in the neighborhood of $45 million dollars is not unreasonable.

The Cardinals, by the way, are not the only team in this position.  A quick glance at salaries and TV money show that 25 of the 30 teams can expect to lose money if there is a 2020 season, with total losses industry wide approaching a half billion dollars.

So now, I ask you, if this is your franchise and the deadline for rubber stamping the season is rapidly approaching, wouldn’t you at least have to think about this?  As much as you would like to play the season (and the Cards, having fallen just short of the World Series last year, would very much like to play the season), would you be all that willing to give the thumbs up when you know it will cost you more than $40 million dollars?

While not claiming that they are poor, the Cardinals are not one of those franchises that are making money hand over fist.  A $45 million dollar set-back will be significantly damaging for the franchise.  This is made all the more difficult to swallow, when you realize that none of the players will lose a cent.

And let’s be very clear about this.  Mookie Betts, for example, was scheduled to earn $27 million this year.  Under the latest proposal from the owners, that would be reduced to about $6 million.  So, in some sense you could say that Mookie would lose $21 million dollars.  But that is only against expected income.  At the end of the day, Mr. Betts’ bank account would be increased by $6 million dollars.  That is very much different from having Mookie open his checkbook and write a $21 million dollar check for the privilege of playing a year of major league baseball for no salary.

This time in the salary negotiations, it is actually the players who are in the position to decide that something is better than nothing.  I would be stunned, though, if they relent.  The Players Association is nothing if not consistent.  Even when their decisions are far more damaging to the rank-and-file of their members, they will seemingly support any position that plays out in the best interest of their wealthiest members.  One of the great ironies of this situation is that if the season never happens, all of the tier-2 and tier-3 players will owe the owners a debt of gratitude (not that they will ever admit it).

How this all plays out isn’t too hard to predict.  For argument’s sake, let’s say the owners relent and agree to pay the full pro-rated salaries.  So Mookie gets around $13.5 million (instead of about $6).  Players in the $6 million dollar range will end up with $3 instead of the $1.75 the owners would have liked to pay them.

This is all fine and well until the offseason preceding the 2021 season.  What will the climate be like?  Terrific – for Mookie Betts and the other top tier stars.  Teams will lay money in front of their feet as though the financial difficulties of 2020 had never happened.

All situations, you understand, are not alike.  Given the amount of money the Dodgers’ local contract calls for, it seems virtually impossible for them to lose money on a season of any length at all.  (The Dodgers, by the way, will get more from their local TV package alone than St Louis will from all sources of income.)  There are some other teams with significant resources (the Angels, Yankees and Red Sox), who will be in position to quickly recover from any losses they might sustain this year.  There are even teams like Cincinnati – likely to lose over $30 million – who might still make a big money play for a guy like Betts, who is the best combination of baseball talent anywhere not named Mike Trout.

Think of it as a gold-plated hog trough, with all the prime slop spread out for the moneyed teams to get first crack at.  These would be the “evil empire” teams – the Dodgers, Yankees, Angels and Red Sox.  They will feed until they are sated.

Behind the tier-1 free agents, though, are a whole host of secondary players.  These are very good performers – the kind of players that can make a significant impact in a pennant race.  Players who – under normal circumstances – might walk away with five-year contracts that call for $60-$70 million dollars.  But expecting a team that has just taken a $40 million dollar bath the previous season to line up to pay these guys $12-$15 million a year is a hard sell.  Eventually, all of these players will find a team, but only after their salaries descend to about the $2-$3 million dollar level that they would be playing the 2020 season for.  This is a situation that could take two-to-three years for the less moneyed teams to recover from, so the result of a union “win” in this negotiation could lead to the tier-2 players playing for far below their true value for several seasons.

All worth it, I suppose, so long as Mookie doesn’t have do without about $7.5 million this year.  Hopefully, he’s grateful.

There are a couple of under-the-radar aspects of this increasingly contentious negotiation that are more significant then are generally realized – if, for no other reason, than for what they reveal about the players and their relationship with the owners and the fans.

A Profound Lack of Trust

In most reports regarding the negotiations, you will frequently find at least one sentence that expresses the players concerns over any potential precedents these agreements might set.  They fear that the owners will take any concessions made here and try to make them permanent.  There is absolutely no reason for them to make this assumption.  The issues underpinning this entire proposal by the owners are the special circumstances that apply only to the 2020 season.  In no sense is there any material reason for the union to fear any lasting effects from these negotiations.

And yet, they do fear them.  This is because almost all of their past negotiations with the owners have been labyrinths of deception and ill-will.  From past experience, the players have learned that the owners will attempt to twist anything to their advantage – even a situation like a COVID-impacted season.

I don’t mean to absolve the players totally.  Their negotiations haven’t always been in the best of faith, either.  But clearly the owners have created this current circumstance.  Even their hesitance to open their books under circumstances like these is evidence of the abiding mistrust that exists between these two groups.

If this were a healthy relationship, would the players make more concessions?  Hard to say.  The talks, though, would be very much different.  This relationship is marked by drawing lines in the sand rather than a common search for solutions.

The Players Aren’t On the Fans’ Side Either

The other disappointing story to surface recently was a proposal by the players for a longer regular season.  Again, this was disappointing, but hardly surprising.  The ownership plan calls for 82 games played from early July through early October – with an eye on having everything wrapped up by the first of November.  The union wants to play 114 games through the end of October and then run the playoffs through November.  Through much of the country, the weather in these months is undependable at best.

So far this century, the Cardinals have played 19 World Series games in late October either at home or in Detroit or Boston (they also played 3 in Arlington, Texas).  Eight of the 19 games have been played in temperatures below 50 degrees, with a low of 43 degrees for Game Three of the 2006 World Series against Detroit.  Over the years, St Louis has had several home playoff games rained out – a workable inconvenience in the playoffs that would provide a major headache if a regular season schedule was to be adhered to.

Ironically, the original schedule for 2020 started the season at the end of March in hopes of avoiding playing World Series games in November.

There is little gained by pushing the regular season that deep into early winter.  As temperatures drop and conditions worsen it effects the quality of the game.  A 114-game season is no more legitimate a season than an 82-game season if the last 30 of those games are played fickle weather.

Details of their plan were not released, but it would likely be heavy on having the warm weather and dome teams playing at home for much of October – to their distinct advantage and their divisional opponents’ distinct disadvantage.  In the NL Central only Milwaukee plays in a dome, so they would presumably play nearly the entire last month of the season at home, while divisional foes in St Louis, Chicago and Cincinnati – all of whom have playoff aspirations – will be predominantly road teams (or play in bad weather at home).

It’s a plan that is very likely to tilt the pennant races for no appreciable gain.  Except, of course, that the players haven’t suggested this because they are under any illusions that the fans like watching baseball games in the snow (which could happen in Colorado).  It’s simply a money grab.

Players get paid for the regular season.  More regular season games mean more money.  If they play those games in November or December, then they play them in November or December.  If the conditions force a mockery of the game, oh well.  They still get paid.  If the particular circumstances (like Milwaukee playing the last month of the season at home) alter the playoffs, too bad.

In that situation, the only ones to suffer are the fans who are emotionally invested in their teams.  Sadly, this is a group that accounts for very little any more.  Generations ago, it was the game that was absolute, and millions of young boys hoped to gain the privilege of playing in the major leagues.  Now it is the players who are the absolutes, and we mere mortals are privileged to have them play before us.  And if, at any point, the game as presently constructed doesn’t suit them, then it is the game that is folded, spindled and sometimes mutilated to fit their whim.

By the way, adding games without fans only increases the disparity between the clubs’ income and expenses.  Under a 114-game season, the Cardinals’ seasonal deficit would swell to more than $60 million dollars, and the industry as a whole could see losses topping $700 million – a proposition that doesn’t move toward resolution.

Expanding the schedule into the winter is one mild example of the players’ general disregard for the fans.  It leads me nicely, though, to tomorrow’s rant on why the Designated Hitter rule is purely evil.  Stay tuned.

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