It’s Time For Compromise

The clock is ticking.

For weeks, baseball has been eyeing a return to play without fans in early July. That timeline includes a shortened spring training and extensive coronavirus testing for players before they take the field.

You can do the math as easily as I. There are days not weeks before MLB has to scrap those plans and either push their start date back into late July or August or cancel the season outright.

No one in the game really wants either of those options. There is too much cost involved – in both loss of income and loss of appeal with fans.

That means this week is the pivotal week. Let’s catch up.

The Player’s Proposal

On May 31, the MLBPA sent a proposal to MLB owners that included a 114-game season, $100M in deferrals, and opt-outs for players who aren’t comfortable taking the field during a pandemic.

The deferrals would go into effect if the postseason was canceled.

This proposal was a point of compromise for the players, who have no obligation to agree to any kind of salary cuts.

The Owner’s Response

This proposal did not fly with the owners. Since the beginning of these negotiations, MLB franchises have claimed that they will lose billions of dollars with no fans in attendance. Paying players for 114 games – 70% of their normal salaries – was a non-starter, as is the clause that deferrals would only be applied if public health concerns forced MLB to cancel the postseason.

The owners maintain that they have a finite pool of money they can use for player salaries and that pool would only cover 50 games.

Jeff Passan of ESPN reports that the owners are prepared to offer the players their full prorated salaries over a 50 game season with an expanded playoff system. They also believe that the agreement to cancel games in March gives them exclusive rights to determine the length of the schedule for the season when play resumed. (More on this below.)

Points of Compromise

At first glance, it seems like the players and owners are separated by an insurmountable chasm. The two proposals represent a 64-game difference. That’s a ton of monetary ground to make up.

However, buried in these proposals is something that we have not yet seen: the potential points of compromise.

Both the owners and the players have quietly thrown each other a bone. The players are acknowledging their willingness to accept deferred salary if it means more games. The owners, likewise, are willing to pay full salaries for at least 50 games.

Isn’t there some middle ground here that could work for both sides?

The midpoint between 50 and 114 games is 82. 82 games are almost exactly what teams normally play between July and the end of the season (give or take a few based on schedule variance). Let’s take that as a starting point.

How much would it cost owners to play 82 games instead of 50? MLB salaries total around $4 billion. That divides into about $24.7 million per game for the league. Right now, MLB is willing to pay players $1.2B for 50 games with no qualifications. 32 additional games would extend that to $2B — a difference of about $800M.

That’s the gap that needs to be made up. Here’s a crazy idea: what if the players and the owners split the cost of those extra 32 games this season down the middle?

The players would need to defer 16 games worth of salary, or approximately $395M. While that sounds like a hefty chunk of change to throw into future payroll, if that amount was spread out over 5 years instead of the proposed 2 years, that’s only an average cost of $2.63M in deferred payroll per season per club. The players, meanwhile, would get paid (eventually) for every game they play.

The owners, would need to come up with another $395M to spend on players this season, some of which will be covered by normal channels of income. Every extra game played means some income (and expenses) for the league. MLB could potentially make up the rest by exploring the possibility of extra income sources.

Additional Sources of Income for the Owners

Teams and owners are hoping that there is no second-wave of the coronavirus and that the league can bank extra funds from expanded playoffs. Fox and TBS are paying $500M and $300M respectively per year to broadcast playoff games. Expanding the playoffs could probably provide somewhere in the neighborhood of $100M in extra revenue for the owners.

The playoffs cuts that $395M gap down to $295. That’s a good start.

It’s also likely that ESPN and other sports networks, desperate for content, would expand deals with MLB to broadcast additional games. Why not have a national game as often as possible? If 10-15 extra playoff games are worth $100M, then how much are 82 or more nationally broadcast regular season games worth? It’s not crazy to believe that MLB could earn another $200-300M by selling game rights to a variety of sources, ranging from YouTube and Facebook to ABC/CBS/NBC and their sports networks.

Now we’ve closed that gap down to $0-95M.

It’s also possible that fans could be in attendance at MLB games later in the season. States are currently phasing in their re-open plans. If the current trend continues (regardless of actual coronavirus infection numbers), could there not be some kind of fan presence in ballparks late in the season?

The NFL, whose season also begins in September, is currently selling tickets to games in September. They are planning to open their season with fans. Why isn’t baseball considering that possibility?

If MLB were able to allow fans — even if attendance is limited to less than 100% capacity — into stadiums in September, that could allow up to 30 games to be run “as normal.” Normal is an environment where owners make a ton of money and players get their full salaries. Simply allowing for the possibility of fans in September — with no extra income from TV deals or other sources — is enough to bring the owners back to the 50 games that they are publicly willing to cover with existing revenues.

All of that might sound optimistic. However, a 50-game schedule practically minimizes extra regular season TV revenue and eliminates fan revenue, while turning the playoffs into a make-or-break windfall for owners. At the very least, an 82-game season spreads the risk out over a longer period of time and opens the door for diversified income sources that would not otherwise be available.

Added Pressure from a National Crisis

If the owners and players have financial reasons to compromise, I believe the current national crises (all of them) provide even more incentive.

Why did the deal in March happen so easily? Because both parties – players and owners – believed it would be terrible form to bicker with each other about money in the middle of a national crisis.

Here we are again.

Considering everything that is happening around the country, where does baseball’s labor woes rank on the scale of importance?

It’s low. VERY low. The collective national consciousness has absolutely no patience at all for players and owners who are feuding over a game. Especially when the other major sports have been able to implement a plan to return with much less friction.

I’m frankly sick of it and I completely lost my cool yesterday afternoon when Passan reported that MLB had rejected the players offer and was not planning to counter. Instead, he reported that they plan to force the players to accept a 40-50 game take-it-or-leave-it schedule.

I have calmed down a little after hearing a report from a high-ranking Reds official that play will happen and the two sides were “close”.

I don’t know what reports to believe anymore.

However, I do believe that compromise is possible and there is a path forward that would be painful but manageable for both the players and the owners.

I also believe that if MLB blows this and regresses into even more public feuding (or worse, a labor stoppage or lock-out), MLB could be facing their worst public relations catastrophe since the strike of 1994.

And they would deserve it.

It’s time for compromise, baseball. It’s time to bring the game back.