April 16, 2020 at 5:04 pm #126817
I sense you are missing my point. They have pay matters to decide fairly soon even if there are no games in 2020.April 16, 2020 at 5:23 pm #126818
Gov’t leaders are saying things like data driven — not date driven, 6-point plan for opening, follow the science, etc. All businesses worth investing in should already be doing that sort of planning to cover their various plausible scenarios.
And not to be negative, but instead to be realistic, all levels should be considering in advance what will be the necessary triggers to pull back again. Will the dominoes fall again as quickly as they did when a couple NBA players tested positive in March? Trying times, indeed.April 16, 2020 at 6:06 pm #126820
If Manfred is correct that the gate equals 40% of team revenue, and you consider lost concessions and team wear sales on game days, the owners are probably going to submit at least a 50% loss of revenue. Who eats that? Both? Would a 25% reduction of existing contracts be a fair ask by the owners, splitting the loss?
And if/when a % is agreed upon, do you first devalue the contracts by said 25%, and then pro-rate them by games played? A 12mil contract becomes 9mil, and half a season pays 4.5mil? Is that way off base?
I disagree that the players have the leverage. Refuse to play, no pay, past the first agreement (170mil).April 16, 2020 at 6:55 pm #126824
A couple of clarifications. Manfred said 40% of operating revenue is game-day driven. What I have seen used when reporting the players’ balance is percent of gross (total) revenues. It was 54% last year, per Forbes. (Maybe of our resident accountants can calculate the bridge…)
I did not say the players have THE leverage. They have MORE leverage than if there are no games. In the latter case, they have none, as far as I can tell.
Regarding their motivation, the players will have to assess if the incremental difference between the upcoming offer and the $170 MM advance they received for doing nothing will be enough to make it worthwhile for them to play.
I still submit the owners have more to lose than the players if there is no season. (I base this on rumors that TV contracts are scaled by games played and the fact the owners are already down at least $170 MM – not counting the lost opportunity for every veteran on every team due to the year of service time the players get no matter what.)April 17, 2020 at 3:31 pm #126901
I sense you are missing my point. They have pay matters to decide fairly soon even if there are no games in 2020.
Oh I thought the $170M was the guarantee to players if the season was cancelled. I figured that would be the last payroll issue to decide unless the season does begin.April 17, 2020 at 4:19 pm #126903
If I understand correctly, that very lack of clarity is causing concern among both parties right now. It is unclear to us (since we can’t see the details of the agreement) whether the advance was going to be the only advance (as it was payable in April and May only) or if there would be a new agreement covering June and ahead up to when play begins (or the end of the next agreement).April 18, 2020 at 2:14 pm #126997
I went back and found the article from Jeff Passan.
So players got service time. Are they getting paid now, too?
Their salaries for 2020 will be prorated. If teams play an 81-game schedule, players will get 50% of their full, agreed-upon money. If they play 120 games, they will receive 74%. Performance-bonus clauses will be prorated too.
If the season is canceled, the only payment players will receive is the $170 million advance teams guaranteed players to be distributed in April and May. The money is essentially a down payment on salaries for 2020. Should games be played, it will be factored into paychecks. If no games are played, the players get to keep the $170 million without repayment.
The agreement adds that players cannot sue for their salaries — an important distinction even though Paragraph 11 almost certainly would have held up in a grievance setting.April 18, 2020 at 2:30 pm #126998
Thanks for the clarification. While the $170 MM is it if the season is canceled, what happens June 1 if the season still remains in limbo? I predict the players will ask for another advance.
A big issue now is that it was not put in writing if the first agreement on prorated salaries covers games played in empty stadiums. The players say yes, but the owners say no. Hence the owners will push for a lower percent of pay if they can re-start, since it is assumed they won’t have gate revenue, just the TV money.
It is crazy they did not get this clarified from the start.April 18, 2020 at 3:38 pm #127003
I am thinking that MLB will need to make a decision before June 1 as to if there will be any kind of season or not. If there is no season then the players will get the $170M and we will get ready for 2021. If there is going to be a season then they will have to decide how the prorated formula will work in empty stadiums because I don’t think there is any chance fans will be in stadiums in 2020. You are right in that it is strange they didn’t clarify the part about prorated salaries in empty stadiums in the original agreement.April 18, 2020 at 4:44 pm #127005
This article addresses the very issue we were talking about. It is behind a paywall but the general gist is that the two sides are far apart on what the salaries would be in empty ballparks. I would hope there would be some kind of compromise. Squabbling over money when a lot of people are going without paychecks is not a good look.April 18, 2020 at 5:01 pm #127006
I am thinking that MLB will need to make a decision before June 1 as to if there will be any kind of season or not.
Why do you think that? Aren’t they motivated to hold off as long as they possibly can?April 18, 2020 at 5:18 pm #127007
Why do you think that? Aren’t they motivated to hold off as long as they possibly can?
Maybe but then they would run the risk of having to continue to pay the players without any guarantee there would be any baseball played. As of now the players are paid through May 31.
So what if they extend salaries to June 30 with no revenue? Then July 31? Then August 30? Before you know it you have ran out of calendar yet you spent a lot more on salary than you originally obligated yourself to pay.
Of course that is assuming that the owners would extend some kind of salaries past May 31 while trying to salvage the season. I suppose they could say that they aren’t paying any more salary after May 31 but still haven’t given up on the season but that would anger the MLBPA. No easy choices.April 18, 2020 at 6:25 pm #127009
If they delay too long, fans will divide their interests to the other sports, especially NFL and NCAA football, assuming those sports get their acts together. So that brings up the question of TV revenue and contracts. How are those contracts handled in this situation? If the TV broadcasters fear MLB viewership will be significantly reduced due to more direct collisions with the other sports, they might not be so eager facilitate it. They will not want to compete against themselves.
If the only significant revenue for MLB is TV this year, and it is significantly reduced due to delays, then the owners won’t have much incentive to operate at a loss. Again, I have no idea how the TV contracts are/will be impacted the longer things are delayed.
Also, do any of these entities have pandemic insurance? That would certainly change motivation. Wimbledon (tennis) reportedly will receive $141 million in pandemic insurance due to its cancellation.April 18, 2020 at 7:52 pm #127011
I don’t expect another player advance. The owners protected their future salary burden by giving service time in the last agreement. Now the owners only have to pay for games played, if/when played. That first agreement was a huge win for the owners, getting guaranteed contracts off the books for 5+ mil per team.April 19, 2020 at 10:13 am #127027April 20, 2020 at 10:54 am #127089
Maury Brown continuing to worry that owners and players will not work out a salary compromise for 2020. (Also an interesting spelling of “scuttle,” FWIW.)
— Maury Brown (@BizballMaury) April 20, 2020April 20, 2020 at 5:57 pm #127125
Sticking with my 25% reduction of 2020 salary, pro-rated per game, prediction. I still can’t understand why they gave up 96.5% of their pay (based on our 165mil payroll), for service time. Guess they had their reasons.April 20, 2020 at 6:51 pm #127128
The union is digging in…
“Players recently reached an agreement with Major League Baseball that outlines economic terms for resumption of play, which included significant salary adjustments and a number of other compromises. That negotiation is over,” union head Tony Clark said in a statement Monday.April 20, 2020 at 8:20 pm #127132858booyahParticipantFree
The Forbes article was interesting.
I think the owners know if if by some miracle fans are allowed back they perception is that people will hesitate to gather for large events. Thus revenue is lost. So they seem to want to find a way to save a buck.
Players on the other hand will try and squeeze every penny out of this. I think they understand that some sort of prorated salary based on games plays is inevitable but then again a player doesn’t sign based on how many people will show up. They see it as I should get paid no matter if 40,000 or 40 or 0 show up.
Is their any middle ground? IDK but some side is going to have to give a little bit to get it going. Right now the players have no motivation to do so because they’re getting paid no matter what until the end of May but we might see some frantic activity in a 2-3 weeks when both sides really need to figure out if they want to do this.April 21, 2020 at 11:30 am #127201mudvilleParticipantPaid - Annual
“Players recently reached an agreement with Major League Baseball that outlines economic terms for resumption of play, which included significant salary adjustments and a number of other compromises. That negotiation is over,” union head Tony Clark said in a statement Monday.
‘Players on the other hand will try and squeeze every penny out of this.’
The base salary for a 20-25 year old kid to play major league baseball is $563,500. Imagine that!
Obviously, major league baseball players don’t actually need more money to live better than just about anybody. So what’s this really about? I’m guessing that the players believe that there is additional money to be had, and they can’t stand the idea of the owners getting too much of it for themselves. In the end it’s the fan’s money that is supporting all of this insanity.April 21, 2020 at 5:25 pm #127217
The second agreement seems extremely fair. If they play 81 games, you get half your salary (minus the advance they already received I suppose). Since no-one knows the games played total today, it’s a realistic day-at-a-time approach. Hat-tip to both sides.April 21, 2020 at 7:40 pm #127218
The quote mudville included refers to the first agreement.
Work on a second agreement is not expected to get started until they are much closer to knowing when and how play might begin. Right now, we have the two sides posturing through the media.April 21, 2020 at 7:57 pm #127220
In the end it’s the fan’s money that is supporting all of this insanity.
Dang straight, mud! I have always thought the fans should organize. We could call it the MLBFA and demand a seat at the table with the players and owners. Clearly, the billionaires and millionaires won’t remain viable without us, as this unfortunate pandemic is showing. If we hang together, we could negotiate our gratis TV patronage as our contribution. There’s enough money in the TV contracts for all. Our attendance at the games is their privilege. The games wouldn’t be a thing without us. I suppose we should be willing to pay 3 or 4 bucks for a good hot dog and beer. Who’s in?April 22, 2020 at 7:02 am #127227stlcard25ParticipantPaid - Annual
I had a similar thought just yesterday, Euro…fans would certainly throw a wrench in the spokes if they could legitimately organize in large numbers.April 22, 2020 at 7:48 pm #127301858booyahParticipantFree
I guess Boras was on radio today somewhere and said all his clients are on board with a 30 day quarrentine. Is 30 days enough time for an abbreviated ST and start the games in Arizona?
I would think they’d like to get in 1 week of workouts and 3 weeks worth of ST before the actually season starts.
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