IT’S MLB OWNERS WHO CAN AFFORD TO TAKE THE HIT
Players asked to accept massive risks while franchises have years to recover
Should Major League Baseball ever complete its slow meander toward a return, the Texas Rangers are scheduled to play in Globe Life Field, the shiny new ballpark built with at least US$500 million of taxpayers’ money. It’s not to be confused with Globe Life Park, the stadium just down the road in Arlington. That one, quite a lovely park, was built just 25 years ago, about 70 per cent on the public dime.
In Oakland, the Athletics are moving toward building a fancy waterfront stadium after decades of moaning about the creaky Coliseum. Though that building is to be theoretically privately financed, the baseball team is also a partner in the potential redevelopment of the Coliseum site. With the Raiders decamped for Las Vegas and the Golden State Warriors now across the Bay in San Francisco, the Coliseum site is a massive, valuable parcel of land and the A’s could reap fortunes turning its parking lots into condos and commercial sites.
Over in Arizona, the Diamondbacks have been grumbling about Chase Field, their suburban home, for over two decades, and their owners have been poking around downtown Phoenix.
They also entertained offers from Henderson, Nev., and went on a not too subtle fact-finding mission to Vancouver. Chase Field was partly funded by a sales tax increase, which was controversial enough at the time that a local official was literally shot over it. (She survived.)
It’s worth keeping these stories in mind as MLB owners and players fight over compensation in whatever a 2020 season might look like. As the two sides have negotiated — although that is really stretching the meaning of the term — over the past month, the league has insisted players must take steep salary discounts to cover the economic losses caused by a shortened season with, most likely, zero paying customers in the stands.
It’s a position that has won them a fair bit of sympathy. Many fans look at a proposal that would see Mike Trout’s salary reduced from US$35 million to
US$8 million and say it still sounds like pretty good money to play baseball. And it is.
Amid their proposals and counter proposals, MLB and its players are inching toward a middle ground and a deal they can stomach, even if they can’t stomach each other.
But it’s also ridiculous to think of a baseball franchise as a normal business. They don’t exist to simply turn modest yearly profits, earning X dollars in revenue and spending Y dollars on expenses. They are, in many cases, cogs in a much larger sporting empire, which are themselves held by even bigger conglomerates.
There are real estate plays, media deals and shopping-and-entertainment districts all tied up in this or that franchise.
The Toronto Blue Jays, of course, are owned by a company that owns part of four other big league sports franchises, a bunch of TV and radio stations, and will still overcharge you for your cellphone data.
When it suits them, baseball teams will promote themselves as grand civic institutions, which is how they get fat dollops of public money that they use to upgrade their facilities and increase the value of their franchise. And those values always increase. Fred Wilpon bought half of the New York Mets for US$40 million in 1986, and by 2002 it cost him almost US$400 million to buy the other half.
The Wilpons are looking to sell, and even though the Mets have been a gong show for years, the price tag is expected to be above US$2.5 billion.
Baseball players, meanwhile, pretty much just play baseball. Some have endorsement side hustles, yes, but they have a limited time in which they can produce on the field and a much more limited time in which they can earn market value for their services.
In this particular season, if there is one, they would also take on the risk of contracting coronavirus, in addition to the normal risk of an injury that could blow up their future earning potential, all for what the league hopes will be a fraction of their expected salary.
It’s no shock that they’re not clamouring to play under those terms. Players would donate a year of their short careers at a massive discount, and do so amid a pandemic that the league admits could yet make it too dangerous to finish the season.
And the owners, while overseeing ugly books for 2020, have plenty of time to make up for the lost revenues of this year, and all kind of ways in which to do it.
None of that seems likely to matter.
Amid their proposals and counter proposals, MLB and its players are inching toward a middle ground and a deal they can stomach, even if they can’t stomach each other. That they have taken this long to get to this point is an indictment of the leadership on both sides; someone needed to be the grown-up and push a resolution before the whole summer slips away.
But if you’re asking yourself which side of the two is better positioned to eat the losses for a time to ensure that baseball returns, it’s not the side that throws the balls and swings the bats.