This afternoon, Craig reported that there is “going to be a war” if MLB owners seek further pay cuts in advance of the league attempting to start the 2020 season, likely some time in early July. Understandably, the players and the union that represents them are not happy about that.
In the time since Craig’s report, more details have trickled out about the issue. Per Jon Heyman, the owners are indeed going to seek to further curb player salaries this year, attempting to scrap prorated pay. Heyman adds that owners may suggest a 50/50 split based on revenues. That would, obviously, involve renegotiating the deal the owners and the union agreed to in March. Jim Bowden also reports that the league is expected to propose the use of a universal DH for the 2020 season.
As Newsday’s David Lennon notes, gate-related revenue makes up 51 percent of total revenues. That percentage is 40 percent for MLB at large. MLB set a new year-over-year revenue record for the 17th consecutive year, reaching $10.7 billion for the 2019 season. Let’s say in an alternate universe with no pandemic, the league would have set another revenue record at $11 billion for 2020. (2018 saw $10.3 billion in revenues, so the increase is reasonable.) 40 percent of $11 billion is $4.4 billion, so the league stands to lose $4.4 billion in revenues this year if no games are played. It also still stands go gain $6.6 billion in other revenues. The league and its individual team owners will still be making money — especially if it still has half a season, even if they don’t admit fans — just not as much as it otherwise would have in a non-pandemic year. The billionaires, who will still be billionaires during and after all of this, will be crying poor.
This all comes against the backdrop of the collective bargaining agreement expiring on December 1, 2021. The relationship between the union and ownership was already tense due to issues that existed well before the pandemic such as stagnant free agency and service time manipulation. The anxiety and uncertainty caused by the pandemic will only exacerbate the existing strain between the two sides.
If the union holds its ground and refuses to agree to further reduce player salaries for the 2020 season — or half-season if you will — there is a chance there will be no season at all. And just as in 1994, MLB owners and many in the media will characterize it as greedy players refusing to come to work. When the league comes into a windfall as it did with the MLB Advanced Media (BAMTech) sale in 2017 which netted each owner at least $50 million, did player salaries increase commensurate with the windfall? Of course not. As Craig put it earlier, the owners love to privatize the profits and socialize the losses. If the owners indeed propose curbing 2020 salaries, it’s going to be a tough sell to the union. And it will serve as the toughest test MLBPA executive director Tony Clark has had to face in his tenure.