The Baseball Calamity

Yesterday, I said that MLB owners and players continue to find ways to annoy each other.  Yesterday brought another proposal from the union – one for an 89-game season with players receiving full pro-rated pay.  Nothing on the surface of that proposal sounds outrageous but it was guaranteed to be shot down by the owners; and therefore, it was a waste of time.  And time is beginning to run out on MLB – – even though the sport is fiercely proud of the fact that it does not have a clock to determine the end of its games.

Here is what could have happened if the two sides had made a deal two weeks ago:

• Players could be reporting to “Spring Training 2.0” and getting physical exams today.
• Baseball practices and activities could begin tomorrow.
• Spring Training games could happen next Monday.
• Faux Opening Day could be July 4^th, 2020.

Think of the hoopla of Baseball Opening Day AND the Fourth of July comingled…  Baseball would be the top story of the day and there would not be much competition in the US for major sports for at least a month.  It would not save the 2020 season, but it might salvage it.  But the two operative words here for such a potentially rosy future are:

• NOT … and … HAPPENING

The impasse appears to be straightforward.  The owners want players to take a pay cut beyond merely pro-rating their salaries over fewer games than the normal 162 games; the union will not accept any deal that has any pay reduction beyond pro-rata salaries for fewer than 162 games.  I am not interested in taking sides here but I would like to suggest a few ideas that both sides need to consider when they get past this petty squabble and settle down to engage in World War III next year as the existing CBA expires at the end of the 2021 season.

First and foremost, the most important thing that both sides need to do is to recognize that every last fart and whistle up for negotiation is not worthy of a pitched battle.  The two sides may not be “besties”, but each side needs the other side.  I do not know what it will take for the lunkheads on both sides to grasp that unalterable fact but someone far more eloquent than I needs to get that message through to them.  As they sit down to reach a new CBA, they need to keep this thought in mind:

• The objective here is to find a way to share $11B per year this year and – if we stop shooting ourselves and each other in the foot – more money than that in each of the following years.
• That should not be a Herculean task!

I am going to do some back-of-the-envelope math here; it is not accurate, but it is illustrative.  According to the data I can find, 3 MLB teams were projected to have a total payroll for its 25-man roster over $200M for 2020 while 12 teams were projected to have a total payroll less than $100M.  The range from top to bottom was $202M to $46M.  My estimate is that the MLB average is $135M per team.  For the 30 teams, that puts the “total salary cost” around $4B.  That is a lot of money – – but it is also only 36% of the projected revenue of $11B.

I believe that a major breakthrough for the players would be to negotiate a salary cap with a salary floor.  I know the MLBPA has stayed away from anything like a salary cap since the days of Marvin Miller and look where it got them:

• 12 teams – 40% of the teams in MLB – are paying players to show up but have no intention of trying to win anything.
• Only 36% of total revenue goes to player salaries.  Great negotiating union guys on that one…

So how about this for a starting point when you consider a salary cap/floor structure:

• The salary floor for every team would be $150M.  That is roughly 40% of total revenue.
• The salary cap for every team would be $180M.  That is roughly 50% of total revenue.

Please note that total player salary would go up under this model because those 12 teams with payrolls under $100M would have to sign players – along with a couple other teams – and there is a linkage of the cap and the floor to total revenue for the game which puts the owners and the players on the same side when it comes to “growing the game”.

Oh, by the way, salary caps are not inimical to player compensation.  I will use the NBA and the NFL as examples.  A whole lot of basketball and football players make generational wealth in shorter careers than do baseball players.  By not tying player compensation to a percentage of revenue, the MLBPA has created a situation that is fundamentally illogical:

• Since owners can choose to spend or not spend whatever they want without any restrictions, the union has put a “bunch-of-billionaires-that-we-do-not-trust-as-far-as-we-can-throw-a-piano” in charge of how much players will earn.
• The union agreed to a system where owners who spend “too much” have to pay a “luxury tax” but owners who refuse to spend can sit their with their thumbs in their ears and rake in some dough.

And those are the folks who will try to perpetuate that sort of gestalt next year because the idea of a “salary cap” is as appealing as kimchee ice cream.

I said yesterday that there was a lot of cheese to be shared among owners and players.  I will not be surprised if the two sides do not find a way to dig themselves into positions that both diminish the amount of cheese to be shared AND arrive at a distribution model that is heavily tilted toward the owners.

I have more to say on this subject – – probably tomorrow.

Until then, consider this observation from Scott Ostler in the SF Chronicle regarding sports on TV during the COVID-19 isolation:

“The ESPN documentaries on Michael Jordan and Lance Armstrong were interesting. Now how about a documentary or two on people who become superstars without being bullies and jerks? Just to show the kiddies that it can be done that way.”

But don’t get me wrong, I love sports………