Major League Baseball’s recent proposal to reconvene baseball was widely reported. This is largely due to the players resounding rejection of the proposal due to the suggestion that salaries be based on a 50-50 revenue split. Some of you may recall the famous strike and that its main focus was to prevent the league from enacting a similar plan. Needless to say, the players were never going to go for it.
In an attempt to sway the players’ union Major League Baseball presented a presentation stating that continuing payment of their prorated salaries would lead to an average loss of $640,000 per game over an 82-game season in fan-less ballparks, per Ronald Blum of The Associated Press. Blum continues:
Teams say the proposed method of salvaging a season delayed by the coronavirus pandemic would still cause a $4 billion loss and would give major league players 89% of revenue.
The teams hit the hardest would be most of the wealthiest teams: Yankees ($132 million), Dodgers ($232 million), Mets ($214 million), Cubs ($201 million), and Red Sox ($199 million). The Cardinals would be fifteenth in losses by these estimates at $136 million.
It is important to note that the loss does not appear to accurately factor in teams’ revenues from regional sports networks, or at least estimates the losses very conservatively. Former VEB Overlord Craig Edwards expands on this in his article on Fangraphs about this very subject:
To estimate revenue for an 82-game season, MLB cut revenues in half to $1.2 billion, and indicated “rights holders have already reserved rights to stop payments or demand refunds if agreed to inventory is not delivered.” These losses might be more theoretical than actual; RSNs might choose not to alienate their partners, particularly if they don’t lose any money.
Craig gives further explanation on reasons why the $4 billion estimated loss does not add up and rather than read my butchered paraphrasing, I urge you take a look for yourself.
The main takeaway, at least for me, is that there is a lot of uncertainty going into this season and there is not much that can be done to change that. One thing is certain though: the more games that are played, the less revenue will be lost. All parties involved want baseball to resume. Accomplishing that in the safest way possible seems like it should be primary focus.
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