The current Collective Bargaining Agreement between the owners and the players expires after the 2016 season. One of the issues which some — notably Scott Boras — has thrown out as a possible topic of the upcoming CBA negotiations is the apparent disparity between baseball’s revenues and the share of those revenues taken by the players.
On the surface it appears that, while everyone in baseball is getting rich these days, the owners are getting far, far richer than the men who actually play the game, proportionally speaking. Indeed, those who have studied the matter or who have at least spoken out about it, including agents with skin in the game like Boras and less-agenda driven analysts like Nathaniel Grow of FanGraphs, have been in agreement that the players’ piece of the pie is shrinking.
Last spring Grow reported that since baseball’s last labor stoppage, in 1995, MLB’s revenues have increased nearly 650% (from around $1.4 billion to over $9 billion in 2014). During that same time period, however, MLB payrolls have only increased by around 378%, from roughly $925 million in 1995 to just under $3.5 billion last year. The spilt, Boras says, has gone from 60/40 in favor of the players to 57/43 in favor of the owners.
While revenue splits between owners and workers have, historically, been on the front burner of labor disputes, whether that split is actually a huge issue for the players heading into the next negotiation is unknown. Maybe they don’t care about it too much and are more concerned with other matters. But there is that history and, of course, when you negotiate it’s NEVER in your best interest to give away an issue or to claim it’s unimportant ahead of time, even if it is. Indeed, the key to winning a negotiation is to “give in” on stuff that, secretly, you don’t care as much about as your opponent thinks you do.
As such, it would make perfect sense for MLBPA Executive Director Tony Clark to claim — even if he does so only for tactical purposes — that revenue split is a concern of the union. Clark spoke with Bill Shaikin of the Los Angeles Times today, however, and he said something rather odd on the matter:
I can find no one who studies such matters who has claimed what Clark claims here regarding revenue splits. And, at least from the outside, it would be hard to come up with such wildly divergent numbers. Payroll figures and baseball revenue are more or less publicly reported. We know what each player makes and the league itself likes to crow about how much it brings in (it helps shout down the “baseball is dying, you guys” crowd too). Simple math gives us percentages, of course.
Which isn’t to say that Clark is wrong. He’s the head of the MLBPA, after all, and after Rob Manfred and some accountants one presumes that he has better information than anyone. He also doesn’t have any incentive — as owners certainly do and as owners have frequently claimed throughout history — to disingenuously understate baseball’s revenues, to portray the league as poorer than it really is or, for that matter, the players richer than they really are. Again: he’s the Executive Director of a labor union. If he did that, he’d be committing malpractice.
So what the heck is going on here?
At the moment I can’t for the life of me figure it out. One possibility that fits here is that, in reality, those $9 billion+ revenue numbers that get passed around each year are bogus and that, in reality, baseball makes far less than it claims. If that were the case, Clark wouldn’t be “crying poor” the way the owners have done in the past. He’d just be operating from financial assumptions which he can reasonably defend in a negotiation. If that’s the case, a reasonable takeaway here would be for the media to never again credulously report baseball’s revenues as reported by baseball and, further, to criticize baseball for claiming the crazy-growth it has claimed for the past 20 years.
If that’s not the case — if the $9 billion+ and the payroll figures which get reported are legit — I’m at a total loss. And utterly unable to comprehend why a union boss would downplay the size of the golden goose. A golden goose from which he has a fiduciary duty to carve a larger part for the workers he represents. Or to at least claim he wants to for purposes of negotiation.
Anyone have any ideas?