Why Doesn't Baseball Love Us Back?

I couldn't agree more. Hopefully, this is all just posturing and they cut a reasonable deal soon. It's all about greed and baseball is dancing close to a major PR disaster. I remember 1994 and how many friends and family that were casual fans said forget MLB. If they don't play a 2019 the negative reactions will dwarf what happened in 1994.

Economics is economics.  Apparently what you want is just fine.  You don't care about some other perspective because that is "greed" which apparently means any other interest but your own.  

I am not taking the side of the owners, nor am I taking the side of the players.  But they are both trying to maximize their returns from any agreement about moving forward with the 2020 season.  That isn't greed, that is what every human being in a free market does.  

In the end, just be patient.  The return of baseball could be a magnificent event, but if you drive yourself to anger over the details of trying to recover from such an unprecedented thing you might ruin it for yourself.

Both are positioning themselves & both are to blame. Like what was said, we needed them to bypass all that BS to speed things up not play games. I believe the owners gave a reasonable offer & expressed a concern about not having fans. The players IMO should`ve countered w/ a more realistic offer.

This is 100 percent on the players. One. Hundred. Percent.

I dont often side with ownership, but they are the ones trying to get a season going. It's the players pissing and moaning about money. Trying to use this situation to negotiate the next CBA.

This is the worst possible take. The players already took a paycut the owners agreed to, but then the owners decided they wanted even more money and are demanding another paycut based on...well, they won't even publicly identify the reason. Imagine your job was shut down due to COVID and your boss said you had to take a paycut to start working again. Then you agreed to that, but before coming back, your boss demanded another paycut. I'm sure you'd happily agree to that, right? You wouldn't have a single problem with it?

50 games is a joke. 114 is not realistic. Play an 80 game schedule starting in early July. It's what the calendar and common sense suggests. Stop the bickering. 

I'm with the Owners.  They are taking up the cost of the League... 

Except for the portion borne by Sean Do Much.

It's been reported by a national writer...sorry but I forget who at the moment...that read the agreement made in March. In it is language to continue discussions if there are no fans.

I also am frustrated by both sides. I do, however, think the owners last proposal was mostly fair and I was really intrigued by the profit sharing split of all post season $.

Where the owners made a mistake was the sliding % scale to the highest earning players, who also seem to have the most power in the union.

They also could have put in a provision for additional sharing if fans do indeed come back.

I thought the players proposal way way off. Especially the part about deferring additional pay so they could recoup more later. Most everyone and every business is taking some sort of hit through all of this.

Thanks for this article. So passionate.

I'm no economist, and I don't pretend to understand all the implications, and truth be told, don't really care.

It almost seems that the main reason we are where we are has been forgotten. There 's still a deadly virus out there. So let's say there's agreement on an 80 game schedule. The season starts, and a single player tests positive. Then what? Because realistically, it is almost impossible for that NOT to happen. So if 2020 is ultimately cancelled, it should be for that reason.

Thanks for this article. So passionate.

 

I'm no economist, and I don't pretend to understand all the implications, and truth be told, don't really care.

 

It almost seems that the main reason we are where we are has been forgotten. There 's still a deadly virus out there. So let's say there's agreement on an 80 game schedule. The season starts, and a single player tests positive. Then what? Because realistically, it is almost impossible for that NOT to happen. So if 2020 is ultimately cancelled, it should be for that reason.

All sports leagues will have to have a plan to continue on even if a player test positive. Otherwise there's no point in starting. I believe they all do. It's why there will be expanded rosters etc.

It looks like the owners understand that there is only so much revenue that will be generated in a season, seems they should share that projection and center the payroll negotiations around it.  Game revenue from fans in the stands is not trivial but it seems the players don’t understand or are simply unwilling to factor it in given their latest proposal.  Player’s can’t expect the owners to willingly lose tens of millions of dollars, they have lost sight of the fact that there is real economic risk to operate a league.

Oh and they should all agree that whatever that broadcast revenue is should be shared equally between the teams playing each game.  If the big market teams don’t like this they should just schedule games only among themselves and see how that goes. 

Maybe this goat rope of a season will finally spark the much needed dialogue among all of the stakeholders to come up with a workable plan that is equitable for all stakeholders.  I really like baseball but I’ve grown almost despondent over the lack of equity in the league with big and small market teams.  No other professional league is this stupid about competitive play, It makes no sense.

It looks like the owners understand that there is only so much revenue that will be generated in a season, seems they should share that projection and center the payroll negotiations around it. Game revenue from fans in the stands is not trivial but it seems the players don’t understand or are simply unwilling to factor it in given their latest proposal. Player’s can’t expect the owners to willingly lose tens of millions of dollars, they have lost sight of the fact that there is real economic risk to operate a league.

 

Oh and they should all agree that whatever that broadcast revenue is should be shared equally between the teams playing each game. If the big market teams don’t like this they should just schedule games only among themselves and see how that goes.

 

Maybe this goat rope of a season will finally spark the much needed dialogue among all of the stakeholders to come up with a workable plan that is equitable for all stakeholders. I really like baseball but I’ve grown almost despondent over the lack of equity in the league with big and small market teams. No other professional league is this stupid about competitive play, It makes no sense.

The competitive balance issue is troubling to me as well. It is baffling why they can't have some semblance of sanity on this issue of the haves and have nots financially.

You cant take in 31 percent of revenue, and pay 50 percent of player salaries.
 

You can if you have adequate reserves (which I'm sure the owners do) and if you'll come out ahead long term. The same applies to the players, although I'm sure there are players who have little to nothing in terms of reserves.

I'm not advocating for owners or players here, but this is about more than just this season. For both sides.

That's false, even according to the league itself. Per USA Today: "MLB said 2019 revenue was 39% local gate and other in-park sources, followed by 25% central revenue, 22% local media, 11% sponsorship and 4% other." So, in-game revenue already accounted for solidly under half of the total. It is all but certain that those revenue streams outside of in-game would increase with heightened TV viewership, more streaming subscriptions, etc.

 

When you start by basically arguing "I know this is true regardless of contrary evidence" I'm not sure how to address the rest of your comment. 

Nick, you disproved one of Chief’s data points. However, you did not even consider the possibility he is still right. At least your post does not illustrate any consideration. Many sources have reported that in-stadium revenue are 40%. Let’s actually consider Chief’s point instead of taking one side or the other without any actual assessment of what a 40% drop in revenue means.

If we look at various sources, player salaries (with taxes and benefits) are around 52%. Forbes and Statistica report that net income is around 13%. If these are correct, operating expense is 35% of revenue. If anyone does not want to believe operating expense is 35, that OK, we can still pursue Chief’s position that we don’t need a deep dive to understand full player salaries in the face of a 40% decrease in revenue is not viable.

The one data point that is relatively easy to derive is player salaries. We know exactly how much they are paid and it’s not that tough to estimate payroll taxes paid by employers. It’s public record and it is generally reported to be 11.5%. If we assume full pay for players, based on a 40% decrease in revenue Player Salaries = 86.66% of revenue. This does not include MiLB players, coaches, or meals. In other words, Chief already understood the numbers well enough to know this model was not feasible without needing a financial audit. We really don’t need any additional information to understand full compensation is not viable.

If you accept reported Operating Expense estimates, calculated at 60% of normal revenue, Operating Expense = 58% of Revenue. Therefore, even if you believe Statistica is getting paid to produce numbers that are of by a factor of 1/3 (which obviously is not the case because they are still in business) Operating Expense would still be 40% of revenue when revenue is 60% of normal. Of course, this little exercise is quite telling in terms of the viability of providing normal compensation with a 40% decline in revenue.

If you are still not convinced, look at the proposals. Owners wanted less games. Why would this be the case if they were not losing money? The bottom line estimate based on projected revenue and stated percentages is as follows.
Revenue 3,000,000,000
Operating expense $1,820,000
Players   2,240,000
Net loss = 1,060,000

It would appear the league made an offer where teams came close to breaking even in the 2nd half. In other words, the owners have made an offer where they will not recoup any of the losses from the 1st half. They are not asking for a third of what they normally make and asking the players to take a cut that supports them in getting back the massive first half losses. They are saying they will play for no financial gain, even take a loss. The players are saying sorry, we don’t care if there is a pandemic, we want 100% of normal compensation.

I am with Chief. They have made an offer to play that is very reasonable. The players on the other hand are saying we don’t care how extreme the circumstance, we want every dime we would have got under normal conditions. The owners have taken care of their employees and MiLB players. Which side is demonstrating they don’t care about the game, the fans or the people who will be unemployed if the season is not resumed? Which side is showing no love for the fans. 

Players are saying these things? Does this include all back pay for April and May? Link?

Obviously, the players are not literally saying these things. Their actions/position on the other hand are quite clear. They don't care if there is a pandemic, they are not willing to accept less than normal rate.

Again, the expectation is players get paid as if things are normal. Millions of American's could not work and did not get paid. Players did not work and therefore did not get paid for the 1st half of the season just like the rest of Americans who were not able to work because of Covid-19. Obviously, the teams did not take in their normal earnings either. Both parties came out the same where this is concerned. The owner also shelled out $60M on average according to various reports. In other words, the paid out 1 ½ years of earnings out of their savings. (not literally but you get the point. Who would you rather be? The guy who paid out a year and half worth of earnings or the guy who made nothing.

Buster Olney suggests it was the players who offered back 20% from their highest salaried players back to the owners, but the owners leaked the offer to the media in a way to spin it negatively against the players.

https://www.espn.com/mlb/story/_/id/29241941/future-mlb-not-just-2020-season-stake

If there is no season, players will be taking a 94% pay cut. However I think the owners have the most to lose long term if there is no season. MLB will for sure lose fans, just for starters.

You are correct. The players would lose most of their normal compensation if the season is lost. However, you are only considering one side of the equation. Owners will not only lose 100% of their normal income, they will PAYOUT the equivalent of 3 years income. The equivalent from a players perspective would NOT be to MAKE 6% of normal. The equivalent would be the players contributed 3 years of wages toward covering operating losses.

But thinking long term, with revenues that will not return to their previous levels and a CBA negotiation coming up, I think the worst case scenario for owners is that eventually players will retire or leave for international or independent leagues. The players hurt the most would be guys like Berríos and Buxton (my two faves) who have done well financially but lose the chance for large life-changing paydays, but owners will stand to lose much more if MLB becomes a shell of its former self.

The season is not going to be lost. It has been reported the league has the option to reinstate play at a given number of games at prorated salaries. The number of games is just going to be far less than what we fans would like to see if the players insist on something near 100% of prorated salary. That’s the league’s fallback position. It’s a pretty safe assumption the league is proceeding with a plan that includes rolling to this fallback position. That’s likely part of the reason they asked for a response by Wednesday. If I were them, I would have a drop-dead date set where we roll to plan B.

The premise that players will leave for other leagues has been floated here in other discussions. I can’t find any form of logic that substantiates this scenario. Where are they going to go? The next highest paid league is the Nippon Professional Baseball League. The average compensation for players in NPB is roughly ONE-EIGHT of MLB. I spelled it out so I could capitalize this point. Players would play for half in a heartbeat if that’s what revenue dictated.