This week is a huge week for the negotiations between the MLB and the MLBPA. What’s the proposed economic plan from the MLB owners?
It’s been building for a while now, but this week is the biggest week for the MLB that has happened in quite some time. The fate of the St. Louis Cardinals’ season is hanging in the balance as the marquee issue in the negotiations between the MLB owners and the MLBPA was to be discussed today.
That issue is, of course, the economics surrounding a return to baseball.
On one side the owners are being faced with no fans in the stands or in the concession lines, and on the other side, the players are faced with their short earning horizon being shortened by the owners requesting they help (even more than they have) to share the economic burden of the current pandemic.
I am all for the players in this argument, but the significance of these negotiations isn’t just something I am bringing up on my own.
The initial leak about the owners suggesting a 50-50 revenue split was met with a ton of backlash by players as the only time the owners seem to want to open the books to the players is when they are losing money.
It was clear that the 50-50 split wasn’t going to work, but neither was what the players wanted. While the numbers vary slightly, owners were projected to lose between $1.5B and $2.0B in 2020 if the players were paid the full prorated salary that they requested. Players are requesting it because that was what the owners agreed to (without full knowledge that there wouldn’t be fans in the stands if baseball returned) back in March.
This tweet from Friday was the first sign that suggested compromise was coming as if either side held steady, nothing would get done.
The new economic proposal was due to be delivered to players on Tuesday, and all signs point to the owners agreeing on this new plan.
This was from Tuesday morning, and now (as of writing on Tuesday afternoon), Bob Nightengale has broken down what that new economic proposal looks like in this article. While this plan hasn’t been released to the public, according to Nightengale it was confirmed by three separate sources, which is enough for me to buy in on its validity.
Nightengale writes that what players will be making is based on a sliding scale. That makes sense from a logical standpoint. For a player on a rookie deal, their max pay for a shortened 2020 was right around $275k. That is if they make a full prorated salary.
I get that that is a lot of money, but compared to the Bryce Harper’s of the world ($13M is half his full 2020 salary), that’s a big difference in earning potential.
Because of the disparity between pay for the top end of the league and the bottom, Nightengale says that “players earning the most taking the biggest cuts and those earning the least receiving most of their guaranteed salaries.”
That way, players who can make say 20% of their salary and still make $5.2M on the year (in Bryce Harper’s case) can shoulder the weight for the younger players below them who’s earnings are capped at a much lower amount. Very rough math, but if a player on a rookie deal still makes $250k a year, Bryce Harper (not in the top 10 of moneymakers currently) can shoulder the weight of around 31 rookies.
I’m sure Bryce Harper and other players at the top wouldn’t be in love with this deal, but if you have to concede money to the owners, taking from the biggest piles makes the most sense. The specifics of the sliding scale aren’t known yet, owners would drop their revenue sharing completely.
A slight aside– owners have had their closed books for years with all the players in the dark about exactly how much they make on a yearly basis. Players are capped at the exact number that is written on their contracts. This privatizing of profits doesn’t seem fair, but it’s just how things were.
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Now, the first year that the owners are going to take a loss, they want to socialize the losses with the players burdening a greater percentage in terms of money lost and the opportunity cost of missing out on a half-year’s worth of pay. The owners don’t get to open up the books when it’s convenient to them. If the owners wanted to open up the books, the right way for the MLBPA to agree to that was to have there be a revenue split this year, then 15 years down the line when profits skyrocket again.
Now all of the sudden, I’m sure the owners aren’t going to be so happy about sharing anymore. They don’t get it both ways, and it’s no surprise they are leaning towards the way that means keeping their precious balance sheets out of the MLBPA’s eyes.
A revenue sharing route would possibly lead to a salary cap in the future (something the MLBPA doesn’t want) so it makes sense for both sides to stay on the same system until more time is allowed for negotiations.
While a sliding scale won’t make everyone happy, off the bat it seems to be the best way to do the most good for the players as a whole; especially when considering the little math experiment of Harper vs a rookie contract.
Confidence is growing that a deal is going to get done which is a good thing for the sport. If baseball was the only professional sport held out from games in 2020 and it was because of money, the damage would be huge.
The NHL is announcing their return-to-play proposal Tuesday and if the MLB can begin in tandem, life might just start to feel normal again. Assuming a deal comes in the next 10 days, the league can be on track to start spring training 2.0 on or around June 10th still.
There has been no comment thus far from the MLBPA side of this, but this sliding salary seems much more reasonable than a 50-50 revenue share. It may not be what the final deal looks like, but one side has begun making concessions (arguably the greedier side) which is the first step in getting this figured out and getting baseball back.