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Tuesday, April 21, 2020

MLB players say pay shouldn’t be cut if empty ballparks

NEW YORK (AP) — Major League Baseball players are upset over the prospect teams may seek additional pay cuts if games are played in empty ballparks due to the coronavirus outbreak.

Their anger was stoked last week when New York Gov. Andrew Cuomo said he was told by Mets chief operating officer Jeff Wilpon that the union would have to agree to lower salaries if games are played without fans.

A March 26 deal between the sides stated “the Office of the Commissioner and Players Association will discuss in good faith the economic feasibility of playing games in the absence of spectators or at appropriate substitute neutral sites.” The union points to another passage covering salaries in which players agree to give up 1/162nd of base pay for each regular season game lost.

“Players recently reached an agreement with Major League Baseball that outlines economic terms for resumption of play, which included significant salary adjustments and a number of other compromises. That negotiation is over,” union head Tony Clark said in a statement Monday.

Something to pay attention to, given what comes up in the coming year…..

 

QLE Posted: April 21, 2020 at 12:35 AM | 20 comment(s) Login to Bookmark
  Tags: behind closed doors, dollah dollah bills, y'all, players

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   1. The Duke Posted: April 21, 2020 at 08:04 AM (#5942578)
Of course this has to happen. Same with NHL, NBA, and NFL. The question is how it should be structured. To me, the right way to do this is simply proportionately cut player salaries x% based on what ticket sales bring in on revenue for each league. In the NHL, that percentage would be huge. In the NFL, I’m guessing small. MLB in the middle. The moment the stadiums open up, salaries go back to normal. If you do it any other way it will make it hard to negotiate player salaries in the offseason. You need to keep the baseline in tact.

Now, owners will never disclose sources of revenue so they’ll have to accept far less haircut than if they opened their books. Players want to get paid (and play) so they will have to accept more than they would like (0%). If I had to spit all, 20-25% for MLB and 50-60% range for NHL. NFL, 10-15%?
   2. Rally Posted: April 21, 2020 at 08:26 AM (#5942582)
Marlins get 1/30 of national TV contracts and MLBTV. I don't know how much that is, but it's a lot. If instead of playing before 2 paying fans they play in front of zero, their players might have a few cents knocked off the end of their payroll checks.
   3. Ziggy: social distancing since 1980 Posted: April 21, 2020 at 10:33 AM (#5942635)
The teams can demand whatever they want, but they also signed contracts. And the prickly point of a contract is that you have to honor it even if you don't want to.
   4. Stevey Posted: April 21, 2020 at 10:34 AM (#5942636)
Of course this has to happen.


Of course it doesn't. The owners could have just negotiated better, too bad for them. I'm sure that a handful of billionaires might still somehow be able to survive.
   5. Ron J Posted: April 21, 2020 at 10:56 AM (#5942650)
#3 and 4. Counterpoint though. If it becomes a survival situation (hah!) then players will renegotiate. See what's happening in sports where teams run closer to bankruptcy -- like soccer. Players will take a pay cut if they have to.

But this means opening the books (I think it's a legal obligation if you want to claim inability to pay. I know that did once happen with MLB though that was decades ago). And (as I think that hah! above shows) I'm beyond doubtful that ownership will want to do that.
   6. Jose Needs an Absurd Ukulele Concert Posted: April 21, 2020 at 11:04 AM (#5942652)
If I were the MLBPA I’d be perfectly willing to accept a pay cut..if the owners agreed to having their books opened and audited by an independent auditor chosen by the MLBPA so we can reach a fair determination about how much money the owners are losing during this process. If the owners aren’t willing to accept that (and they won’t) then I see no reason to trust them.

I suspect #5 is right though. A pay cut is all but inevitable and despite my hardline stance above not unreasonable. I think a straight percentage as laid out in #1 makes an incorrect assumption about where the money is coming from in professional sports. Between merchandising, TV money and the unearned revenue of asset value accumulation I’m a bit unwilling to accept the owners crying poor without some evidence.
   7. Stevey Posted: April 21, 2020 at 11:06 AM (#5942653)
Sure, if both sides agree to wipe out the deal they made, it can be cancelled. I don't think anyone is arguing that it is impossible for the players to agree to a pay cut. But that, simply, the pay cut doesnt "[have] to happen".
   8. Misirlou cut his hair and moved to Rome Posted: April 21, 2020 at 11:13 AM (#5942655)
They can cut the player's pay after they refund me and all the other MLB.TV subscribers they charged back in January. I just logged onto my account and not a word. Until I hear otherwise, I assume if the season is cancelled or severely truncated, they will just keep the money and pretend like it never happened.
   9. Stevey Posted: April 21, 2020 at 11:23 AM (#5942660)
They can cut the player's pay after they refund me and all the other MLB.TV subscribers they charged back in January. I just logged onto my account and not a word. Until I hear otherwise, I assume if the season is cancelled or severely truncated, they will just keep the money and pretend like it never happened.



The Indians offer the option to pay your season tickets as monthly installments from something like July of the previous year to April of the season in question. Even after the season was officially put on hold, they still collected payments from everyone for March as if nothing had changed.

I can almost get that they won't be quick to refund people, but to still collect money after you know games wont be played?
   10. Starring RMc as Bradley Scotchman Posted: April 21, 2020 at 11:37 AM (#5942673)
The owners would much rather lose money than open their books. Once the books are opened, ya can't close 'em.
   11. Ziggy: social distancing since 1980 Posted: April 21, 2020 at 11:38 AM (#5942674)
Re: #5, payrolls are guaranteed by MLB. The entire league would have to go under before this would be a threat to players' paychecks. And if we're at the point that all of MLB might collapse, then salaries for professional athletes is the least of our concerns.
   12. Adam Starblind Posted: April 21, 2020 at 12:12 PM (#5942695)
I think it's a legal obligation if you want to claim inability to pay. I know that did once happen with MLB though that was decades ago


I think this is correct as a matter of labor law.
   13. The Duke Posted: April 21, 2020 at 03:23 PM (#5942759)
Owners don’t have to play with empty stadiums. And more importantly, if the players don’t compromise, owners open and take a bath, it will depress player salaries for the rest of their career whereas a one time pay cut can lead back to the original baseline.

They’ve already creatively solved the early part of the issue ( no pay in exchange for no lost service time), so I’m guessing they will come to another compromise. What’s interesting is that both sides have been clear about what they care about. Owners care about current cash flow/profit, players care about future cash flow (service time ) - so there ought to be a basis for a negotiated solution.
   14. Stevey Posted: April 21, 2020 at 03:46 PM (#5942774)
And more importantly, if the players don’t compromise, owners open and take a bath, it will depress player salaries for the rest of their career whereas a one time pay cut can lead back to the original baseline.


Yes, instead of getting all the money they agreed to now, players can let owners keep some of it, which the owners will in turn promise to give some back to players at a later date. Why wouldn't the players just keep their money?

The players not compromising will have no effect on their future salaries once we get back to normal-ish and playing in front of crowds. And I can't think of a worse precedent for labor to set than to allow management the right to claw back salaries without opening the books and proving they cant make payroll but merely because they asked nicely.
   15. Steve Parris, Je t'aime Posted: April 21, 2020 at 03:55 PM (#5942780)
Contract enforceability aside, it is a very bad look for the players to demand their full pay when revenues will obviously decrease and society at large is struggling with mass unemployment.
   16. Karl from NY Posted: April 21, 2020 at 03:59 PM (#5942782)
If I had to spit all, 20-25% for MLB and 50-60% range for NHL. NFL, 10-15%?

I saw an article a week or so ago that spelled out each of these, though I don't remember exactly and can't find it again now. Percentage of revenue from ticket sales was something like 22-35% for MLB (varies the most per team), 25% NFL and NBA, 37% for NHL. Concessions and parking were on top of that though the numbers weren't specified.

How does postponement of games work for tickets - a postponed game doesn't have to be refunded, but is there a time limit on the postponement? Or can each team just postpone every game for a year (or even two) to avoid having to issue refunds? I could actually see it working out better for MLB to do that and avoid refunding than to play empty.
   17. Stevey Posted: April 21, 2020 at 04:15 PM (#5942797)
it is a very bad look for the players to demand their full pay when revenues will obviously decrease and society at large is struggling with mass unemployment


But not a bad look for ownership to demand to continue making a profit over keeping people employed.
   18. Walt Davis Posted: April 21, 2020 at 08:48 PM (#5942885)
I think this is correct as a matter of labor law.

Labor law -- what a quaint notion.

A "fair" solution is complicated, at least if they end up playing at all. All sources of revenue greatly reduced but other costs also greatly reduced. ML players currently get, what, 42% of revenues but that's in part in recognition that the minors, the travel, all the other logistic costs, tix sales, etc. combine to eat up other big chunks of that revenue. So revenue is cut by, say, 60% but players deserve a much larger piece of that pie, say 75%. That would reduce players from 42% of 2.5 X to 75% of X which works out to be 30% of 1.5 X. So revenues drop 60% but players only take a cut of about 30%. (All numbers hypothetical and obviously simplified but you get the point.)

Realisitically, if there are games, the key question will be how much can MLB extract from the TV contracts. I assume that, at best, MLB gets a proportional amount -- i.e. the contract calls for 162 games (minus ESPN/FOX, etc. dates) and we gave you 81, you pay us half. But somebody's gonna end up subsidizing somebody else. Even if there are games and they are televised, who's going to advertise and at what rates? What about all those RSNs partially owned by teams? Is it better financially for Marquee (Cubs) to declare bankruptcy or better for them to pay everything they owe the Cubs or the Cubs to accept less than the proportional share?

They’ve already creatively solved the early part of the issue ( no pay in exchange for no lost service time), so I’m guessing they will come to another compromise.

It was "only some" money in exchange for no lost service time. And if I recall, the teams get to deduct that amount if they end up playing some games this year ... so the players have already given a little on what they are paid if the season starts.



   19. The Duke Posted: April 21, 2020 at 09:01 PM (#5942888)
NBA at 25%. Would have guessed higher. Do they have really good TV contracts ?
   20. Karl from NY Posted: April 22, 2020 at 04:53 PM (#5943194)
Coming in late but I found a reference again: https://www.si.com/mlb/2020/04/22/baseball-lawsuit-refunds-coronavirus

According to Statista, gate receipts account for approximately 30% of MLB revenue. In contrast, roughly 22% of NBA revenue and 15% of NFL revenue derive from gate receipts (in the NHL, gate receipts account for approximately 37% of league revenue).

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