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No Deal Under the Leagues New Revenue Sharing Plan

You know the popular phrase “More Money More Problems.” For the MLB in 2020 its “Less Money More Problems.”

On Monday, the MLB sent a proposal to the players union (MLBPA) for baseball in 2020. One of the most controversial parts of that proposal is how they are planning on dealing with the decrease in revenue this year. Most believed that money would be what holds up this deal from getting done.

The league is asking that all revenue from baseball this year be spilt 50-50 between the owners and players. You can understand where the league is coming from, in a conference call on Thursday MLB commissioner Rob Manfred said if there is no season, he anticipates the owners will lose billions of dollars. I know it is difficult to feel bad for billionaire owners. But they are plenty of MLB teams that have minority owners, yes still extremely wealthy people, but not at a level where they can take a loss this significant.

The pandemic has completely cut off any local revenue streams to the teams. Almost half of the revenue (local revenue) teams generate comes from ticket sales and other transactions from inside the stadium. That revenue is most likely gone this year. It is almost a certainty that if there are live games in 2020, it will be without fans. Teams like the LA Dodgers have huge local TV contracts, so they might be able to weather the storm a little better than small-market teams like the Twins or Royals. Without fans at games, the smaller market teams will really suffer this year. Most teams have already furloughed workers, they will most certainly have to drastically re-structure.

Like most anticipated the MLBPA is not happy with the revenue sharing plan. From a financial perspective, baseball is much different than the NFL and NBA. Those leagues are salary capped, and revenue splits have already been established. Baseball has no salary cap, and contracts are fully guaranteed. One of the best accomplishments of any players union in all major sports. The MLBPA would strike for 10 years before they would ever give that up.

Just look at some of these recent baseball contracts. In 2019 Bryce Harper signed a 13-year $330 million contract with the Phillies, and Mike Trout signed a 12-year $430 million contract with the Angels. Those contracts would never happen in the NFL, NBA, or NHL. Having no salary cap in baseball has made many players very rich over a long period of time, collecting a paycheck even well into retirement.

What really has the players worried about is it sounds like a salary cap. In an interview with The Athletic former player now MLBPA director Tony Clark had this to say; “A system that restricts player pay based on revenues is a salary cap, period. This is not the first salary-cap proposal our union has received. It probably won’t be the last. That the league is trying to take advantage of a global health crisis to get what they’ve failed to achieve in the past — and to anonymously negotiate through the media for the last several days — suggests they know exactly how this will be received.”

Just that brief statement gives great insight into an already fractured relationship between the league and players association. Even though they would never say it publicly, you can surely bet that the owners would love to implement some sort of revenue sharing salary cap system. Very similar to what the NFL has. You cannot really blame them; these contracts are ludicrous. But what are the Angels going to do? You cannot let a player like Mike Trout go to another team, you must pay him.

Asking players to take a pay cut in 2020 obviously did not sit well with them. Most outspoken is Blake Snell, the star pitcher for the Tampa Bay Rays. He said on Thursday that he would not play for a reduced salary. Makes sense, I would not want to do my job for less money, seems simple, but it is not. Granted these are millionaire athletes, who can afford to do that. Maybe that is exactly why it is not so simple. Also, the league is asking these players to risk their health while taking away their money. Just going to go out on a limb and assume not a lot of employees in this country would sign off on that.

Snell said, “Y’all gotta understand, man, for me to go — for me to take a pay cut is not happening, because the risk is through the roof,” Snell said while answering questions on his Twitch channel. “It’s a shorter season, less pay.

Snell continues, “No, I gotta get my money. I’m not playing unless I get mine, OK? And that’s just the way it is for me. Like, I’m sorry you guys think differently, but the risk is way the hell higher and the amount of money I’m making is way lower. Why would I think about doing that?”

Other notable players like Bryce Harper have come forward to support Snell’s opinion. He ain’t lying. He’s right,” Harper said. “Hey, he’s speaking the truth, bro. I ain’t mad at him. Somebody’s gotta say it. At least he manned up and said it. Good for him. I love Snell, man. Guy’s a beast, too. One of the best lefties in the game.”

The assumption right now is the deal will be rejected because of this, it seems obvious. We have yet to see a formal counter from the MLBPA, just a few statements that have been leaked to the media. What we do know for sure is unless the league and the players union come to a compromise on the financials, we will not have baseball in 2020.

This is all under the assumption that there will be no fans at games this season. If fans can go to games and reestablished that revenue stream. Then owners would feel more comfortable paying their players the full salary. But for fans to be at games this summer, that would require the league to obtains millions of COVID-19 tests. Then they can test each fan as they enter the stadium. Based on what we’re all hearing from public officials, that scenario seems highly unlikely.

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