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Old 05-14-2020, 12:34 AM
russian heel is offline
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Can someone explain to me this weeks MLB financial proposal to the players to play baseball in 2020?


I’ve heard a few STR hosts complain that the owners are bamboozling the players. Others say in this time of need, the players need to stop being greedy and play ball.

Here’s my understanding: instead of paying the players a prorated salary based on games played, as agreed in March, MLB owners want to instead offer the players a 50/50 split of the revenues this year.

1. I take it revenue sharing between players and owners would be something new.

2. If what I said in the 2nd paragraph is true, is the revenue shared evenly among MLB players?

3. One STR host says that if the players say yes, this will weaken their position on a new CBA. How so if this is a one year contingency deal? In other words, the players can just say, well we did that in 2020 because there was a virus: we are starting from scratch with the new CBA.

I’ve heard rumors agents like Scott Boras who represents some high salaried players will be against this proposal because they think it’s a ripoff especially since there will be no fans and if there’s another outbreak, the league will shut down so the revenue will be less.

I’ve however heard this deal might be favorable to low paid players, especially ones that need this season to get noticed for 2021 or will be free agents.

Finally another STR host said in essence the 50/50 split is a an opening for a salary cap. How so?


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Old 05-14-2020, 08:02 AM
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Quote:
Originally Posted by russian heel View Post

Hereís my understanding: instead of paying the players a prorated salary based on games played, as agreed in March, MLB owners want to instead offer the players a 50/50 split of the revenues this year.
This is mostly true, with the caveat that the owners have yet to make an actual proposal so unclear what the split would be.

Quote:
1. I take it revenue sharing between players and owners would be something new.
Yes this is a key point by the players. The owners have gotten large windfalls the last few years, especially from MLB TV. They were not willing to share extra profits, so why should players subsidize losses?

Quote:
2. If what I said in the 2nd paragraph is true, is the revenue shared evenly among MLB players?
Salaries would be prorated by an even percentage. So everyone will take a 50% hit, not everyone will get paid the same.

Quote:
3. One STR host says that if the players say yes, this will weaken their position on a new CBA. How so if this is a one year contingency deal? In other words, the players can just say, well we did that in 2020 because there was a virus: we are starting from scratch with the new CBA.
There is always concern about setting precedent. Owners could say this worked okay lets continue doing it.

Quote:

Iíve heard rumors agents like Scott Boras who represents some high salaried players will be against this proposal because they think itís a ripoff especially since there will be no fans and if thereís another outbreak, the league will shut down so the revenue will be less.
Scott Boras is usually against anything that limits players ability to make more money.

Quote:
Iíve however heard this deal might be favorable to low paid players, especially ones that need this season to get noticed for 2021 or will be free agents.
There will be extra roster spots so more players will be able to get trials in the majors, but those players are going to be hit harder with reduced salary and a shorten season will only allow for so much opportunity.

Quote:
Finally another STR host said in essence the 50/50 split is a an opening for a salary cap. How so?
Because it limits how much the players can collectively make.

Personally I think the owners made a short sighted deal and should adhere to it and that players should not agree to share losses until owners agree to give bonuses for profits. This take on Fangraphs mostly lines up with my position.
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Old 05-14-2020, 08:30 AM
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What's STR?
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Old 05-14-2020, 09:20 AM
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Sports talk radio.
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Old 05-14-2020, 09:32 AM
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Fivethirtyeight had a pretty good breakdown of the numbers or at least I thought it was them I can't find the article now. The current offer by management may actually be slightly more lucrative for the players then the prorated deal according to that breakdown which took all of the rosiest numbers for percent of revenue from people in the seats as well as reimbursements to various net works as well as increases in revenue due to expanded playoffs.

If I was a player I'd tell them to stick it. The goal for the player perspective should be for the owners to lose $5 this season after paying all of their costs. Not enough to go bankrupt but to make them pay from the excess they've been earning for the last decade. If you're not willing to share in good times the players shouldn't share the bad times. Of course, I feel the same way when unions and employees are begging to a piece of the pie when things are good but aren't willing to sell their house when times are hard.
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Old 05-14-2020, 10:13 AM
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I understand, emotionally, why the players would want the owners to lose money when they've been making lots of money, but there's two problems with that:

1. With due respect, fuck them. The fact that the players didn't get a bigger share of the pie as revenues grew was the players' decision! They're the ones who have always, always, without any bend whatsoever, insisted they be paid individually with guaranteed contracts and that no other scheme is acceptable whatsoever. It was their call all the way, and their insistence on characterizing it as the owners' decision is bullshit.

2. It's not true that the players don't benefit from increased revenue. They absolutely do. That's why salaries are so high.

The rise in players' salaries over the years to their currently astonishing levels is not because their agents are all negotiating geniuses. It's because MLB makes more money than it used to. Just in the last twenty years, MLB revenue has doubled. At the same time, player salaries have doubled. MLB salaries are now, inflation adjusted, four times higher than they were 40 years ago. It's revenue that drives player salaries more than anything else because it's revenue that makes players worth it. If MLB was making the money it did 40 years ago, you could not pay Clayton Kershaw $35 million (or its 1980 equivalent, which would have been about $10 million) because he couldn't possibly have been worth it; his success could not have made that much of a difference in revenue. New streams of revenue like MLB.TV absolutely will end up hiking salaries. It's not direct - the effect needs to motivate teams to bid salaries up higher - but the fact it isn't direct is what the players wanted.

3. There is no positive counterpart to COVID-19. It is astoundingly disingenuous of players to spew the bullshit that this is just the flip side of the owners keeping MLB.TB money. These allegedly huge windfalls are nothing of the sort; over the last 15-20 years the average per year revenue gain has been maybe five percent, adjusting away inflation. The revenue drop this year will be, conservatively, 70%. Even adjusting away the lowered costs, 50%. There is no way to handwave away not being able to sell tickets; that is a straight up 40% drop in revenue. It's devastating. This isn't some minor drop in revenue because of fan disinterest or a recession that sees merchandising sales drop. It's a gigantic natural disaster.

If players feel the owners can cough up more than 48%, fair enough; angle for a higher number, but demanding continued pro rated salaries is never going to fly, because the owners would be insane to have a season at all. (I hjave gone voer that Fangraphs article several times and have no idea what the hell they're saying, and their hope that teams will keep all their TV money is stupid. They're losing TV money right now.)

This isn't to say I believe everything the owners say; they've been lying nonstop since the days of Ty Cobb. The plain facts are, however, that they're going to lose 40 percent of per game revenue at least, and the idea they'll save 40% in per game expenses because they aren't selling tickets is just nuttily optimistic; I cannot find anywhere near that kind of savings.
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Old 05-14-2020, 12:29 PM
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Quote:
Originally Posted by RickJay View Post

3. There is no positive counterpart to COVID-19. It is astoundingly disingenuous of players to spew the bullshit that this is just the flip side of the owners keeping MLB.TB money. These allegedly huge windfalls are nothing of the sort; over the last 15-20 years the average per year revenue gain has been maybe five percent, adjusting away inflation. The revenue drop this year will be, conservatively, 70%. Even adjusting away the lowered costs, 50%. There is no way to handwave away not being able to sell tickets; that is a straight up 40% drop in revenue. It's devastating. This isn't some minor drop in revenue because of fan disinterest or a recession that sees merchandising sales drop. It's a gigantic natural disaster.

If players feel the owners can cough up more than 48%, fair enough; angle for a higher number, but demanding continued pro rated salaries is never going to fly, because the owners would be insane to have a season at all. (I hjave gone voer that Fangraphs article several times and have no idea what the hell they're saying, and their hope that teams will keep all their TV money is stupid. They're losing TV money right now.)

This isn't to say I believe everything the owners say; they've been lying nonstop since the days of Ty Cobb. The plain facts are, however, that they're going to lose 40 percent of per game revenue at least, and the idea they'll save 40% in per game expenses because they aren't selling tickets is just nuttily optimistic; I cannot find anywhere near that kind of savings.
If you only look at revenue you are vastly underselling how profitable owning a team is. Lets look at some of the worst owners in the history of the sport. Frank McCourt bought the Dodgers for $430 million. He managed them about as poorly as one could and ended up in bankruptcy. He did not take a loss. He did not sell them at a small profit. He sold them for more than 2 billion dollars a mere 7 years later. Did any of that 1.6 billion profit get shared with players? Jeff Loria drove two franchises into the ground. He spent roughly 50 million and made 1.2 billion. Nice work if you can get it.

I don't expect that COVID is going to have much effect on franchise valuations. And if they don't even at 0 annual profit, baseball teams are incredibly good investments. A one year blip where teams take say a $50 million loss isn't going to change that.

Thinking the players should move to revenue sharing model in general is fine. And I don't have a lot of sympathy for the players in general who have been shortchanged the last couple years. But the players stuck by their agreement while the owners want to change a mutually agreed deal.
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Old 05-14-2020, 12:50 PM
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Originally Posted by Hawkeyeop View Post
If you only look at revenue you are vastly underselling how profitable owning a team is.
In terms of the logic of having a 2020 season, it's what matters. Yes, you can make money by selling an asset that has appreciated, but why do the players deserve that money, too?
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Old 05-14-2020, 12:50 PM
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This would be a good time for the players to extract future increased benefits in return for significant concessions during these uncertain economic times.

Always, always support the players in these negotiations.
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Old 05-14-2020, 12:58 PM
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This would clearly be in the players' interests. Of course they should take a smaller piece of the pie this year in return for bigger slices in the future; those will be bigger pies.

The players usually do the smart thing, but in this case it's possible they won't. The MLBPA's position throughout its history has been to absolutely, positively resist any hint of a salary cap, revenue sharing and even revenue sharing among teams; their position has been absolute intransigence on all things in favor of higher MLB salaries and nothing else. This has been a really, really successful approach.

In this specific, once-in-a-century situation, it might not be.
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Old 05-15-2020, 11:56 AM
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As I see it, agreeing to accept prorated salaries based on the number of games played is fair and reasonable, but not really something the players had to do. I would go no further. The owners could have anticipated this scenario and provided for same in the contracts. If they did not, they deserve the risks associated with decreased revenue.
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Old 05-17-2020, 06:58 PM
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I would wish that both sides would abide precisely by the terms of their contracts. I don't know what that is precisely, and I don't really care. I'm sure those contracts have all sorts of weird clauses about various possibilities. If it's the case that they did not anticipate this event and in return one side gets hosed, well, maybe that would be bad for the players comparatively, as unemployment compensation is certainly is nothing like a major league contract, but at least when you're talking about professional sports at the major league level, no one is going to be begging for their next meal. It's a big money business; let the contracts be fulfilled as written. Why do otherwise?
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Old 05-17-2020, 11:24 PM
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let the contracts be fulfilled as written. Why do otherwise?
From a practical standpoint, having to pay full major league salaries with no, or significantly reduced income, could bankrupt some teams. A solution that avoids that is probably best for everyone. And there could be hardship for players making the league minimum, or in the minor leagues.....
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Old 05-20-2020, 02:14 AM
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Of course, I feel the same way when unions and employees are begging to a piece of the pie when things are good but aren't willing to sell their house when times are hard.
This. I've never understood the argument that employees should participate in revenue sharing. When the company has a good year, they want to share in those profits, yet they took no risk to earn the profits. When the company has a bad year and loses money, you don't hear about passing the hat around the office so the employees can share in the losses.
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Old 05-20-2020, 11:03 AM
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This. I've never understood the argument that employees should participate in revenue sharing. When the company has a good year, they want to share in those profits, yet they took no risk to earn the profits. When the company has a bad year and loses money, you don't hear about passing the hat around the office so the employees can share in the losses.
No, they usually just fire people.
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Old 05-20-2020, 12:51 PM
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This. I've never understood the argument that employees should participate in revenue sharing. When the company has a good year, they want to share in those profits, yet they took no risk to earn the profits. When the company has a bad year and loses money, you don't hear about passing the hat around the office so the employees can share in the losses.
In companies where employees earn stock options, they absolutely share in the losses. Whether those options are in actual shares of stock, or where private shareholders hold back a portion of their pay until year end when the books are balanced, there is absolutely risk at losing either valuation of equity or actual pay.
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Old 05-28-2020, 08:50 AM
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It appears there won't be a 2020 season. The owner's offer was basically to slash all high salaries by a truly enormous amount. It was an insult, and the MLBPA rightly told them to go to hell.

I don't even know if there will be a 2021 season. I think the owners are on the warpath again and want to use this pandemic crisis to break the union.
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Old 05-28-2020, 08:50 AM
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It appears there won't be a 2020 season. The owner's offer was basically to slash all high salaries by a truly enormous amount. It was an insult, and the MLBPA rightly told them to go to hell.

I don't even know if there will be a 2021 season. I think the owners are on the warpath again and want to use this pandemic crisis to break the union.
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Old 05-29-2020, 09:40 AM
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If there is no season, will the players get paid anything? Does it depend on the terms of each contract?
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Old 05-29-2020, 01:00 PM
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Beats me. I have no idea. They're so far apart they might as well be on different planets, and I don't know if the CBA accounted for this.
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Old 05-29-2020, 01:06 PM
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ESPN notes that today is the day Mike Schmidt retired mid season. He was one of the highest paid players in the game, but he wasn't playing up to his standards anymore, so he walked away from it.
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