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Friday, June 05, 2020

Inside MLB’s financials fight—and the numbers to solve it

And there you have it. Distilled to the simplest form, Major League Baseball is in crisis because of a $326 million problem.

The players will say: That is $10,880,000 per team, or the cost of a decent No. 4 starter. And they are right.

The owners will say: That is another $326,400,000 on top of the $3.5 billion we are already set to lose. And though there is no publicly available documentation to substantiate those claims, the lack of gate revenues alone is a significant enough blow that some sympathetic to the union acknowledge the league’s finances have been hampered.

Now comes the difficult part. The negotiating endpoints have been established. So has the chasm between the parties.

RoyalsRetro (AG#1F) Posted: June 05, 2020 at 01:53 PM | 4 comment(s) Login to Bookmark
  Tags: coronavirus

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   1. Stevey Posted: June 05, 2020 at 02:10 PM (#5955568)
$640,000 might be the amount lost putting on the "next" game, but it's not the average loss per game. Passan's calculation of average salary per game less average local TV revenue per game misses out on all the national TV money, as well as any non-gate, non-tv revenue earned by teams (if you thought the ads on the walls around the field were bad now, just imagine what we're about to see). Those two numbers totaled somewhere around $3.6B ($10B in total revenue, less 40% of that coming from the gate ($4B), and another $2.4B in local tv rights) last year, or $1.5M per game. Considering that we're likely to get more national games than usual, through more games of the week and an expanded playoff, and every inch of wall covered by ads, and then virtual ads like we see at soccer games, I would bet that the majority of that $3.6B still comes in.
   2. Mayor Blomberg Posted: June 05, 2020 at 02:23 PM (#5955572)
some sympathetic to the union acknowledge the league’s finances have been hampered.

Well of course it ####### has. The question is how seriously. We'll never know without the open books, whereas we know exactly what the players lose.
   3. dejarouehg Posted: June 05, 2020 at 06:08 PM (#5955685)
and every inch of wall covered by ads,

You sure about this? Are companies locked into advertising contracts? (I genuinely don't know the answer to this.)

If there's a Phase 2 pandemic, would companies be in a position/have a desire to blow a lot of money on advertising?
   4. Zach Posted: June 05, 2020 at 06:12 PM (#5955688)
This is one of the best articles I've read on the subject -- using reasonable estimates and calculating the difference between different courses of action. You would really hope that a difference of a few hundred million in total salary could be overcome by motivated negotiators.

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