Photo by Craig Nedrow for TalkNats
Were you part of the group who thought that MLB commissioner Rob Manfred was done negotiating for 2020 with the MLBPA? Yes, they came to an agreement last month on pro-rated salaries and other concessions. Now word is spreading that MLB wants to change it up to a a revenue-sharing arrangement between the players and teams if baseball resumes this year. Maybe this is just a negotiating tactic that MLB would open up their books. They have never done that before so why start now?
With no fans in the stands, MLB knows that that some teams that rely on ticket sales, food and beverage, plus parking, will be worse off financially if they pay out full salaries even if they are on a prorated basis. The new rumor is that there would be an 82-game schedule only between regional teams rotating in a 10-team division where you basically play each team 9 times during this shortened season. That is great for the Nats who could play the Yankees and Red Sox nine times each as well as their normal NL East foes.
Revenue sharing is far easier to quantify than profit sharing where creative accounting can change the numbers significantly. An owner like Peter Angelos who controls the Orioles could pay his wife, and two sons huge salaries as executives and turn a profit into a loss. If a player is worth $30 million a year, why couldn’t an owner pay his executives as richly? This is why profit sharing is a bad idea but revenue sharing would be hard to argue over more finite numbers from TV revenue and advertising with no ticket sales to quibble over.
Last month though it seemed like Tony Clark of the player’s union and Manfred came to a fair agreement. Didn’t Manfred know then that fans probably would not factor into the situation this year? The Players Association likely would see any attempt to adjust the economics further now as an attempt to get one over on them.
“That negotiation is over,” MLBPA executive director Clark said in an April statement.
As MLB puts down their new proposal today for a return to play in 2020, you know owners want to throw a changeup in a fastball count. This is not the Green Bay Packers. No baseball ownership group makes their books open for public scrutiny. A one-year revenue sharing package is just a glimpse at a depressed year not what a normal year would look like.
“The league gives us certain revenue numbers from various sources but requires us to keep them confidential,” the Players Association said. “In addition, the league does not give us access to the actual (media) contracts.”
It is quite possible that some owners feel like they are better off not playing if it means their losses for 2020 would increase if they play games. The Nationals are probably in that group as they have one of the largest payrolls for players without the benefit of a top local TV contract due to their ongoing dispute and lawsuit with MASN. Why play ball and lose millions more? It makes no sense for the Nats while low attendance teams like the Orioles would probably be able to turn this into a larger profit. It sure doesn’t seem fair.
One player who has been very vocal over dozens of social media posts is Sean Doolittle who is stressing the safety issue. I posed back the question that I have been saying for weeks that players should be able to opt-out if they don’t feel safe. In the end, is this a big mistake to try to play? So far in Korea, it is working with no safety issues inside of empty stadiums.
Hopefully these concerns will be addressed in MLB's proposal, first and foremost: 1) what's the plan to ethically acquire enough tests? 2) what's the protocol if a player, staff member, or worker contracts the virus? We want to play. And we want everyone to stay safe.
— Sean Doolittle (@whatwouldDOOdo) May 11, 2020
Words among the players is a high level of skepticism in whatever Manfred is trying to sell now. The players’ belief is that overall the teams can make a profit by playing these games with no fans. And there is the divide.
“Even if it were true, the league would come out well ahead if one includes postseason TV and other revenues,” was the union’s response.
What other revenue are they talking about? With a longer postseason envisioned, MLB could add new revenue streams in the national television contracts with the big networks like FOX, ESPN, TBS and TNT as well as the MLB Network.
According to reports in the Sports Business Journal, MLB was working on new TV deals with ESPN, Turner and others. The league already reached an extension with FOX from 2022-2028 in a deal that does not start for two more years as they did not touch the current deal that expires after the 2021 season.
Just like tickets already paid for by fans, there could be credits due to the networks according to The Athletic:
“For example, a $50 million rights fee already paid for 2020 could be spun into a credit for next year, which means the league doesn’t have to pay the money back. But it also means $50 million less coming in a year from now.”
“Yeah, you can get your refund, I suppose, but at the same time, you want to maintain a solid long-term relationship,” said Lee Berke, president of LHB Sports, Entertainment & Media. “And so there’s a lot of ways that these can go going forward. I think baseball’s in a good position in this. It could be additional digital rights that are provided to the respective outlets. It could be additional sponsorship sales opportunities. It could be additional access to players or to the field or a lot of different things. It could be additional programming.”
Speaking of refunds, the Nationals still have not responded to ticket holders with a refund and rollover policy. Every MLB team posted a policy over a week ago. The reigning World Series champs are still on the clock.
