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The “Smoking Gun” Email & the March Agreement Between MLB & MLBPA

New evidence confirms what we already knew: the March agreement between MLB & the PA called for negotiations if fans could not be in attendance at games. That doesn’t mean we’re any closer to a resolution.

Last week I wrote that “confusion reigns”. Nothing has changed in a week.

Since then the AP has presented financial details of the loss that owners are set to incur if games are played without fans.

Craig Edwards, among others, have fought back, questioning revenue sources and expense figures that MLB has leaked. (Follow the thread.)

Who is right? Who is wrong? My faithful readers will guess that I’m not prepared to take a side here. I haven’t yet seen evidence that is both compelling and complete enough to push me to say, “they’re lying” and “that’s the truth.” I still have no idea how much money (if any) the owners are set to lose if they pay players prorated salaries for 82 games with no fans beginning in early July.

“I don’t know” makes for boring writing, but this is what I do. Whether I’m breaking down baseball financials, Paul Goldschmidt’s advanced sabermetrics, or analyzing Matt Carpenter’s decline in strength, I’m going to stick to the conclusions I think those facts allow. Sometimes those facts lead to definitive or controversial declarations. (Harrison Bader, for example, is not really a fan of my work.) Sometimes I’m left shrugging my shoulders.

Today, I continue to shrug.

That’s the nature of analytics, especially when the information needed to make judgments about baseball’s financials are locked behind servers that only Chris Correa could hack. Baseball hasn’t opened their books. They won’t open their books. They’re probably leaking information that paints their financials in a decidedly pro-owner way. Everything else we have – from Forbes, Fangraphs, and other sites – are educated guesses that have a significant margin of error under normal MLB operating conditions. The reality of the pandemic has changed everything we know about revenue, expenses, and bottom lines.

That said, some facts do need to be considered about the original agreement between owner and the players in March and they have important implications in the current dialogue about MLB’s revenue-sharing proposal.

The March agreement between the players and owners was never made public. The information we have came largely through the media from leaks within MLB or the Player’s Association. We do know that negotiations centered around a simple give and take: the players agreed not to sue the owners for their full salaries from games that are canceled in exchange for an advance to cover immediate player needs and a full season of service time regardless of the number of games that end up being played.

Reports at the time of the deal indicated that such an arrangement was in place to cover games that would be canceled and not made up. With zero or extremely limited revenue coming into MLB, it made sense for the players to cut their pay so that the industry could remain financially viable during the shut-down.

Reports indicated that the agreement only covered canceled games. The agreement supposedly stipulated that future discussions would be necessary if the impact of the virus caused a drastic change in the way MLB operates – such as playing games with no fans.

Now, this has become a major sticking point. Players are arguing they have already reached a financial agreement on compensation that the owners are now unwilling to abide by.

Evidence surfaced yesterday, May 19, 2020, that supports the argument that MLB owners and the Player’s Association agreed to additional negotiations once a plan to resume games was in place. In typical sensational style, an article in the New York Post claims that MLB has a “smoking gun” that supports the owner’s claim.

Email between Patrick Houlihan and Dan Halem, both of MLB.
NY Post

The evidence is an email from MLB senior vice president of labor relations Patrick Houlihan to Dan Halem, MLB’s lead negotiator. The email details a conversation between Houlihan and Matt Hussbaum, the Player’s Association Deputy General Counsel, and Greg Dreyfuss, director of analytics and baseball operations.

In the email, Houlihan explains that “Rob” (presumably Rob Manfred) made it clear that “playing in empty stadiums did not work for us economically” and that “playing some limited number of games in empty stadiums” would be possible “if players agreed to reduce their daily salaries for those games, if it was part of a larger plan that made economic sense.”

The email acknowledges that PA rep Matt Hussbaum “confirmed that is what he thought” about the language in the deal, as presented by the owners. The implication (though it is not stated directly in the email) is that the Player’s Association not only understood this language but agreed to abide by it when they ratified the March proposal.

Of course, this article sparked a barrage of rebuttals from the Player’s Association, more side-staking from fans, and some Joan Callamezzo-esque “gotchas” from MLB.

MLBPA negotiator Bruce Meyer countered to the NY Post that “the contract itself is very clear that in the event of a partial season players will get paid pro-rata salary – whether with fans or without. And it doesn’t require any further concessions on pay from players who have already agreed to give up billions of dollars in salary in the event of a partial season in which they would be taking on unprecedented risks and burdens.”

The Player’s Association also notes that MLB and the owners still have not presented them with any economic proposals and until they do so they have no reason to alter that position. Meyer demands evidence of MLB’s economic claims and accuses MLB of leaking “self-serving internal memos” to the media.

MLB responded with an equally one-sided view, claiming they were glad that Meyer finally admitted “that the March agreement contemplates a subsequent negotiation between the parties if the 2020 season is to be played without fans” and says that MLB has not made an economic proposal because the Player’s Association “publicly rejected” such a proposal before it was made.

Meanwhile, the Post also reports that Yankees president Randy Levine is arguing three conditions must be cleared before games can resume with fans and players can receive their prorated salaries: 1) if there are “any bans on mass gatherings” that prevent fans in stadiums, 2) if people have to “quarantine for 14 days going in and out of Canada”, and/or 3) the commissioner has to “certify that it is safe to go to a ballpark.” At this time, none of those conditions have been met. Therefore, Levine concludes, any proposal to play games without those conditions being met necessitates a renegotiation of salaries. This, he claims, is not “my opinion” but is “what the text of the agreement says.”

Where does all of that leave us?

The email in question does agree with the owner’s claim and the points made by Levine. However, the actual language of the March agreement has not been released; all evidence about its contents is second-hand.

That makes the email more water pistol than “smoking gun”, doing little more than providing additional subjective support for the original media reports. We knew in late March that the original deal was limited in its scope, covering only the immediate: missed games, missed salary, and missed service time. The email supports the belief that MLB and the PA communicated about the possibility of future negotiations, but it does not support any claim that the PA agreed they would cut their salaries not does it outline the terms of any renegotiation.

Agreeing to the potential need to negotiate terms if games are played without fans is not the same as agreeing to accept the owner’s terms.

That leaves us with what we already have: a heated economic negotiation between firmly entrenched sides with a summer of baseball and billions of dollars in revenue in the balance.

Will it be resolved soon? I continue to believe that money will drive both sides to a resolution. Billions of dollars are about to be lost and both teams and players are going to want to get something out of this season. I don’t know what will happen. I still believe something will.