The logistics would be daunting and the safety precautions elaborate. Getting the 2020 Major League Baseball season underway, whether in Arizona, Florida, Texas or in MLB home stadiums, is a complicated challenge that so far is nothing more than speculation. And while the sport waits out the pandemic that has already delayed the season by a month, a new hurdle appears to be looming.
Yes, ending the first extended disruption of a Major League Baseball season that wasn’t about money might be even more difficult than it once appeared — because of money.
The quiet back-and-forth over MLB player salaries isn’t getting much attention yet, because it’s too early to put into motion any of the various proposals designed to salvage the 2020 season, almost all of which envision playing at least part of the season with no fans present. But it took only a secondhand comment, relayed by New York Gov. Andrew Cuomo while describing how much he wants baseball to return, to provoke representatives of players and owners to stake out opposing positions.
Cuomo told CNN last week he had talked to Mets Chief Operating Officer Jeff Wilpon about the possibility of “a baseball season with nobody in the stands. … Look, I think it would be good for the country. I think it would be good for people to have something to watch and do to fight cabin fever.” Then the governor threw in an offhand comment about Wilpon’s response, one that caught the ears of both the players and MLB management.
“Apparently Major League Baseball would have to make a deal with the players. Because if you have no one in the stands, then the numbers are going to change, right?” Cuomo said. “The economics are going to change.”
Wait a minute, the players’ agents and union bosses said. We already settled that. We have a deal: Full salaries, prorated by the game, for whatever number of games MLB manages to play this season.
Not true, MLB responded. That deal is for games if tickets can be sold. We agreed to revisit the issue if fans are barred from attending.
At issue is a clause in the agreement reached last month between MLB and the players union, spelling out the compensation due players during the interruption — the players receive $170 million for April and May (about $4,775 per day for most veterans), nonrefundable if there is no season — and the conditions for resuming play. The sides agree, the document says, “to discuss in good faith the economic feasibility of playing games in the absence of spectators or at appropriate substitute neutral sites.”
Scott Boras, agent to several of MLB’s highest-paid stars, was quick to insist, in interviews with several national media outlets, that the clause was about whether to play at all, not about salaries. “Owners had every opportunity to say, ‘We will also reduce the rate of your salaries if these conditions exist,’ ” Boras told the New York Times. “They didn’t, and the reason they wouldn’t is because players would never accept it.”
Union President Tony Clark reiterated the point Monday, telling the Associated Press that the players association is willing to talk about the sites, medical testing and restrictions necessary for playing games again. But player salaries? “That negotiation is over,” he said.
But it’s clear, from Wilpon’s reported comment and a handful of anonymous reports around the league, that team owners, already facing large losses of revenue, disagree. Deputy Commissioner Dan Halem, in a response to an AP inquiry, cited the language in the original agreement and the necessity to negotiate a plan “that is economically feasible for the sport.”
Gate receipts are the largest single source of MLB revenue, accounting for roughly $3.2 billion last year, according to an estimate by Forbes magazine. Concession sales, parking and other ballpark revenue account for another $925 million.
Forfeiting that income while still paying full per-game prices for players, even if the huge revenue streams from TV contracts are restored, could mean some or several teams lose more money by playing than by canceling the entire season. Would those franchises balk at playing at all?
The Twins’ finances are instructive. Let’s take a look, with the caveat that the figures used are estimates, unconfirmed reports and a few guesses:
With several free-agent signings, including Josh Donaldson and his $94 million contract, the AL Central champions increased their payroll to around $137 million for 2020. That’s normally paid over a 184-day season, but payrolls will shift to a per-game basis this year if a partial season is played. For the Twins, that means the players earn about $846,000 per game, with $111,111 of that going to Donaldson, $109,876 to Jake Odorizzi, $74,074 to Nelson Cruz, $38,580 to Max Kepler and $3,478 to a minimum-salary player such as, say, Cody Stashak.
TV money matters
Can they recoup that much without selling a ticket or a beer? It doesn’t seem likely. The Twins took in $79 million from gate receipts last season for 81 home games and one playoff game, Forbes calculated, and they were optimistic, team President Dave St. Peter said this spring, about selling 2.5 million tickets this year, their highest attendance since 2012.
Without those paying customers, the finances hinge almost entirely on TV.
The Twins don’t make terms of their contract with Fox Sports North public, but a Fangraphs.com compilation of rights fees last week estimated the Twins’ 2019 income from local TV and radio at $43 million. FSN didn’t broadcast all 162 games, but for our back-of-the-envelope guesswork, that’s roughly $250,000 per game.
National TV revenue from Fox, ESPN and Turner, which are tied to the postseason and essentially shared equally among the 30 clubs, more or less matches that payday. So if the Twins take in $500,000 per game, they stand to lose $300,000 to $400,000 every time they take the field, before accounting for the expense of whatever venue they are assigned.
Then again, the Twins made $43 million before taxes and interest last year, by Forbes’ accounting, and the value of the franchise itself appreciated by $100 million. The industry itself has almost doubled its revenue over the past decade and now takes in about $10.5 billion annually. Players’ salaries, on the whole, have not kept up with those increases, and baseball has slashed millions from its 2020 expenses by cutting its amateur draft to five or 10 rounds (yet to be determined) and limiting bonuses for those picked.
In other words, MLB teams are well-positioned to absorb losses, even substantial ones, during this emergency.
So both sides have an argument to make about how much players should be paid. It’s difficult to imagine, given how much the nation craves pro sports during this coronavirus pandemic, that the players or owners would risk a public-relations nightmare that a dispute over money would be.
For now, we can only hope that it becomes necessary to find a solution, because that would mean MLB has found a way to play ball again.