PLAYING BALL HINGES ON TOUGH TALKS
Owners, players at odds over money, health concerns
Major League Baseball remains shut down amid the novel coronavirus outbreak; ballparks across the country sit empty, and Opening Day is still delayed. MLB and the players’ union are mired in talks to restart the sport, working to sort through health and safety concerns as well as economic issues. Here is what you need to know about those negotiations.
Q Where do things stand in regards to a 2020 Major League Baseball season?
A MLB and its players’ union are deadlocked in negotiations for the economic terms of a potential 2020 season, with no further talks scheduled. MLB officials are working to build consensus among owners for a heavily shortened season played without fans of around 50 games — though perhaps as few as 40 or as many as 60 — but they do not intend to formally propose that to the union.
Q What are the offers on the table?
A The union’s most recent proposal, made Sunday, was for a 114game regular season with players paid pro-rated shares (or roughly 70 per cent) of their 2020 salaries, with an expanded, 14-team post-season stretching through the end of November. MLB’S lone proposal, made May 11, was for an 82-game regular season with players’ salaries being cut on a sliding scale, with the largest cuts going to those making the highest salaries; on average, players would earn about 31 per cent of their original 2020 salaries under this plan. Both proposals have been rejected by the other side, and on Thursday players reaffirmed their strong opposition to further pay cuts.
Q What’s the drop-dead deadline for getting a season off the ground?
A There really isn’t one, but it would take roughly a month to go from a deal to an Opening Day, because pitchers would need a spring training of about three weeks to build up arm strength. This week had been considered a soft deadline for holding an Opening Day around July 4, and that target could still be hit if a deal were struck next week.
But if MLB were to play, say, 50 games, it wouldn’t need to start the season until as late as the second week of August. The only thing certain regarding the calendar is that MLB does not want to push its post-season into November, because the post-season is its biggest driver of revenue, and it fears a second wave of the coronavirus in the fall forcing the cancellation or suspension of the post-season. So, at the very least, this process could stretch on for another week or two.
Q What’s the significance of 50 games?
A In part, it reflects MLB’S contention that it would lose $640,000 for every game played in empty stadiums without financial relief from the players in the form of pay cuts, and 50 games’ worth of losses is the most they are willing to absorb. The concept, though, was meant to back the players into a corner. They would earn roughly the same overall amount of money under the terms of MLB’S original, 82-game proposal, even with the sliding-scale pay cuts, as they would in a 50-game season at their full, pro-rated salaries. In other words, MLB is telling the players: Here’s the money we’re willing to pay you. You decide if you want it over 50 games or 82.
Q If there’s no deal, does that mean no season?
A Not necessarily. MLB believes the March 26 agreement between the sides, which governed the terms of the stoppage of play, gives Commissioner Rob Manfred the right to implement the terms of the 2020 regular season — as long as each side agrees to the health and safety protocols. This is one reason MLB hasn’t formally proposed the 40-to-60-game concept — that would be its default plan if there is no deal struck.
Q What’s at the heart of the dispute?
A Money. Players want to be paid full, pro-rated shares of their 2020 salaries based on the number of games played; owners want players to accept pay cuts. Looked at another way: The union wants the maximum number of games, because player salaries, as things stand, are dictated by the length of the season. The owners want those financial terms to be renegotiated.
Q What’s the union’s argument for why players shouldn’t have to accept pay cuts?
A That owners are exaggerating their claims about lost revenue because their projections don’t include all revenue sources. That MLB refuses to open its books at the union’s request to prove those claims. That players, not owners, would be taking on most or all of the health risk by playing baseball amid a global pandemic. That owners have seen steady growth in revenue and franchise values over the years, and the risk of a downturn is inherent in any business venture. That owners don’t share unforeseen profits with players in good years, so they shouldn’t ask players to share in the losses in a bad year. That players’ careers last just over five years on average, while owners often own their teams for decades and thus are better positioned to withstand an economic crisis.
Q What are the owners’ arguments for asking players to accept a pay cut?
A That around 40 per cent of the sport’s revenue comes from having fans at the stadiums, in the form of ticket sales, concessions, parking and other sources. That the March 26 agreement called for the sides to “discuss in good faith the economic feasibility of playing games in the absence of spectators.” That the players, by MLB’S accounting, would receive almost 90 per cent of overall revenue under the 82-game plan if paid their full, pro-rated salaries, while owners would suffer about $4 billion in losses.
Q Couldn’t deferred salaries be a pathway to an agreement?
A The union believed it could be and offered to defer (with interest) up to $100 million in 2020 salaries until 2021 and 2022 in the event the post-season were cancelled or delayed — a very narrow concession designed to address owners’ concerns over cash flow, but the first time the union showed a willingness to negotiate at all over players’ 2020 salaries. It stood to reason the concept of deferrals could be expanded in future negotiations to give owners more immediate relief. However, the proposal went nowhere with the owners, some of whom have already maxed out credit lines and are unwilling to carry even more debt into 2021 and beyond, given the uncertainty over what revenue will look like then.
Q If Manfred implements, say, a 50-game season, what are the union’s options for challenging it?
A The union is opposed to the shorter season, but it isn’t clear what recourse they would have. They would have little choice but to play if MLB starts the season, or risk losing pay, service time and roster spots. But the players have other means at their disposal. They could withdraw their support, contained in their
May 31 proposal, for an expanded post-season, which MLB is counting on for additional revenues. Additionally, either side has the right to file a grievance during the negotiating process, but any such filing would probably lead to a messy arbitration process that could take months to sort through.
Q Would a 50-game season be considered legitimate?
A That’s in the eye of the beholder. In its modern history, MLB has never contested a season of fewer than 107 games, which is the average number of games played by teams in the strike-shortened 1981 season. Players appear to be of the opinion that 50 games are too few to be considered legitimate — and would require the copious application of asterisks to its champions and statistics — and many fans undoubtedly would agree. But others would almost certainly argue that any real baseball is better than none.
Q Where do things stand on the health-and-safety front?
A Both sides believe there is a deal within reach on this front. After speaking at length with government and public health officials, MLB sent the union a 67-page manual in mid-may with its proposed guidelines on keeping participants healthy, focusing on issues such as testing protocols and social distancing rules. The union sent back a list of suggestions and questions, and there has been ongoing dialogue between the sides. But despite the optimism, this remains a fluid situation — mainly because the extent of the spread of the coronavirus in the U.S. remains fluid. And some believe the virus remains at least as big a threat to the 2020 season as does the economic impasse. Many people in MLB took notice when two members of the Yomiuri Giants tested positive this week in Japan, putting in jeopardy the Nippon Professional Baseball league’s plans to open its season June 19.
Q Would players still show up for a 50-game season in the midst of a pandemic?
A That would be an important question no matter the season’s length. Giving players the right to opt out of the season was a central part of the union’s proposal. Under that plan, players deemed to be high-risk (because they or a family member have pre-existing medical conditions that would put them in danger) could opt out and still receive full pay and service time (the mechanism by which players become eligible for salary arbitration and free agency), and players deemed lowrisk could still opt out and receive full service time but not pay. But the 50-game concept complicates matters, potentially altering the calculation for players — such as those on the cusp of free agency — who may not want to risk their health just to earn roughly 30 per cent of their salaries.
The two highest-paid players in baseball, Los Angeles Angels centre-fielder Mike Trout and New York Yankees pitcher Gerrit Cole, at $36 million each, both have wives who are expected to deliver babies this summer. Baseball would have a problem on its hands if players such as Trout and Cole decide not to play.
Q How does the sport’s labour history play into this?
A The past couple of years have seen baseball’s labour atmosphere at its most contentious in decades, perhaps since the 199495 players’ strike. Players believe the strategy of tanking and the growth in influence of analytics within teams’ front offices have resulted in a devaluing of free agency. They have also bristled at the widespread practice of service-time manipulation, whereby teams use roster rules to keep players in the minors to delay their free agencies by an extra year. Owners contend their marketplace remains a free one, unlike leagues such as the NBA and NFL that have salary caps. Either way, player salaries have remained mostly flat for the past five years, even as revenue has steadily risen — a sign owners have benefited more than players from the industry’s growth. Even before this pandemic struck, the sides were pointing toward an epic labour negotiation when the current collective bargaining agreement ends after the 2021 season.
Q Isn’t it possible the sides are just posturing and there could still be a breakthrough in negotiations that leads to a deal for a longer season?
A Yes and yes. Although the sides appear stymied now, and the discourse full of vitriol, all it would take is one concession to spark a productive dialogue. The ideas of an expanded post-season and salary deferrals hold potential for further give-and-take. Also: The midpoint of each side’s current stance — the union’s proposal of 114 games at roughly 70 per cent of overall salaries and MLB’S concept of 50 games at around 30 per cent of overall salaries — happens to be 82 games at roughly 50 per cent of overall salaries. While that accounting favours the players, as it essentially reflects a pro-rated share of full salaries, MLB could get to a satisfactory place for the union by agreeing to pro-rated salaries for 70 to 80 games, or the union could get to a satisfactory place for MLB by agreeing to a small pay cut for a longer season. Neither side is willing to do that now, but we still don’t know what their true bottom lines are.
The Washington Post