Owners have money to play season
It’s time for a basic lesson in baseball arithmetic and the incredible, shameless greed of major league owners. The bosses are – again – on the verge of bashing their sport to maximize their profits in an industry that pours vast increases in wealth on them each year as they whine.
The difference between Major League Baseball’s last rejected offer to its players for a return to play and the cost in salaries to have a reasonable 81-game season at full pay per game is about $600 million, or about $20 million per team.
MLB acts as if absorbing such a cost - for the sake of the game, for the sake of fans and (as we’ll see) out of basic fairness - is a pandemic-induced, sport-threatening catastrophe that must be avoided.
That’s a lie. A huge, mind-boggling lie.
Here’s why: The average MLB team has increased in value by more than $1 billion in just the past six years, from $811 million to $1.852 billion. That’s according to Statista 2020, but all estimates are similar.
What the devil is $20 million per team when the average team has been increasing in value by $173.5 million per year?
It is the cost of doing business and fabulous business at that.
As a frame of reference for who is getting richer faster - owners or players - over the past four offseasons, player salaries have increased by 1 percent. Owners’ revenue in that time has increased by 15 percent. Owners always have had it great but seldom better than now.
They just aren’t doing great at this split second because of the novel coronavirus. But they want you to ignore their vast wealth generation for decades, including huge boom times in the past 15 years with a compound annual growth rate in franchise value of 12.17 percent.
That rate, in layman’s terms, means the value of your team, even if you make zero profit each year, doubles every six years. Appreciation, baby! Those gains are leveraged even more because all owners use some borrowed cash to buy. We haven’t even mentioned plain ol’ profits yet.
So let me hear one more time why every owner shouldn’t be lined up and smacked in the face at dawn for repeatedly making almost-identical lowball offers to players while the 2020 season drips away?
Here are the details of what the owners wanted with their latest offer of a 72-game season at 70 percent pay per game. Oh, and the lucky players would have gotten a kicker up to 80 percent of full pay per game if their entire (expanded) postseason sion.
The owners wanted it all. First, they wanted a season - or at least 72 games, which they could say is the best anybody could expect in a pandemic. Then they wanted a champion to crown so the sport has continuity. In addition, they wanted the union to agree to 22 more playoff games in an expanded format to sell to TV this fall.
And finally - this must be a guesstimate because the owners refuse to open their books - MLB wanted its whole industry to break even (roughly $0.00) for 2020 at a time when the whole world is bleeding.
What would the players have gotten in return? At best a 64.5 percent pay cut and 100 percent of the risk of getting the coronavirus and, with bad luck, dying.
This is baseball. And always has been.
If you want an idea of what a fabulous deal it is to own an MLB team - and why so few of them come on the market - just look at the Lerner family.
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Lerners bought the Washington Nationals, the average MLB franchise was valued at $376 million. But the Nats were a better-than-average franchise because they played in the eighth-largest U.S. market with the No. 1 per capita income and D.C. was going to build them a new publicly financed ballpark. So they paid $450 million.
The current value of the Nats is estimated at $1.9 billion - a gain in 14 years of almost $1.5 billion. If the Nats’ 2019 World Series title ends up drawing bigger crowds and higher TV ratings, that will shoot higher. But the Lerners want to defer salary to Anthony Rendon until eternity.
Now it’s time for me to eat my number-crunching spinach. Skip the next three paragraphs if you want. On March 28, according to the Associated Press, MLB had 899 players on its rosters and injury lists at an average salary of $4.43 million. That’s a hair under $4 billion in total MLB salaries for the year.
The players’ last ask was 89 games at full salary per game, or about $2.2 billion. (Many people’s estimate of a solution - including mine - would be 81 games at full salaries per game, which would cost owners about $2 billion.) The owners’ latest offer - assuming the World Series was ultimately played, which would mean no season-killing second wave of the coronavirus - was the aforementioned 72 games at 80 percent of prorated pay, which comes to about $1.4 billion in player pay.
There’s your big argument: between about $2.2 billion and about $1.4 billion in 2020 salary - about $800 million. Once you sell those extra wild-card games, it would be less. So each team is fussing over maybe $25 million in an industry in which the average team has gone up in value by $1.5 billion in the past 15 years.
I’m not concerned for Max Scherzer. Or even the “average” $4.4 million player. But I do care about Wander Suero, 28, who will be in his 11th professional season with the Nats this year but who earned almost as much in his World Series check in 2019 as he has in his whole career in salary.
Austin Voth, 27, eighth pro year;