Any way the wind blows
By Ed Botti, June 5, 2020
I keep going back and forth on whether or not we will actually have a MLB season this year. Originally, I felt that baseball would do whatever it needed to get the boys of summer back on the field and play ball.
Over the last couple of weeks, I have written how the historical divide and distrust the two sides have had with each other over the years was going to be a huge barrier to getting a deal done for a shortened 2020 season. https://startspreadingthenews.blog/start-spreading-the-news/2020/5/22/uncharted-waters
Right on cue, we started hearing from the likes of Blake Snell, Bryce Harper and Scott Boros, and I thought to myself “here we go again”.
The truth of the matter is these two sides really do not like or trust each other at all, and the financial games these two sides engage in are pretty cunning and calculated.
As an example, not too many years ago, the owners recognized a pattern that was restructuring the economic playing field between these two bitter rivals.
Once a player or a team had presented a proposal for a compensation package to each other for an arbitration hearing, the clock would start ticking and they would have a reasonable window of opportunity to get a deal done before the hearing would begin.
If they did get a deal done and avoided the process, it was usually a splitting the baby type of deal (https://en.wikipedia.org/wiki/Judgment_of_Solomon ). Somewhere in the middle with neither party too happy. But, was the middle ground really a median, or was it artificially escalated?
It was actually a strategy utilized by shrewd agents.
By rolling the dice and proposing an above market, higher salary then they could possibly and successfully argue with an arbitrator, agents were manipulating the system by a creating an artificial median and exploiting a team’s willingness to settle against it.
In arbitration, there is no middle ground. You either win or you lose. Owners viewed this as risky when these escalated salary proposals were presented, and in many cases instead of risking a loss, they settled prior to the hearing, falling right into the trap.
That seemed to work for a bit but the owners got wise to it within the last two or three years.
To counter act that strategy many teams started to implement a firm policy whereas once the arbitration process began they would let it go to the arbitrator. By doing so, it would force the agents to defend the escalated salary proposal to the arbitrator.
This strategic move began to level the playing field, and agents were now forced to come back down to earth and submit salaries that they actually had a chance of winning in arbitration, and the owners now had a reduced gap in which to find the real midway point.
Both sides knew what the other side was doing; hence the distrust factor continued to grow.
Following this latest round of posturing and negotiating has been a back and forth title bout, in a certain sense. Some days it looks like neither side really wants anything to do with a shortened season, and reduced salaries, and on other days, it sounds like both sides are determined to get a deal in place at all costs.
The method of finding that midway point is being applied in the current 2020 negotiations.
Case in point, MLB proposes 82 games, MLBPA counters at 114, and the Owners then countered at 50, strategically creating a median at 82.
Owners last week proposed an 82-game schedule starting in early July, and MLB now says they do not believe that a negotiated resolution for an 82-game season is even possible anymore.
It’s getting very hard to track all these counter offers.
FYI- the last time a season was played with a team playing fewer than 82 games was in 1879.
MLB’s plan included a descending measure of pay cuts that would leave players at the $563,500 minimum salary level with 47% of their original salaries and top salaried players at less than 22% of what they had been set to earn.
MLBPA is insisting they receive the prorated salaries agreed to in the March deal, which would have given them 70% pay at 114 games.
The more games played, the more salary retained. The less games played, the more a salary gets cut.
It has been reported that 27 of the 30 teams would lose money with each additional game.
The March agreement called for both sides of this dispute to “discuss in good faith the economic feasibility of playing games in the absence of spectators.”
Games being played without fans is now a certainty and MLB claims large losses will be the result.
MLBPA disagrees and has made it very clear, further salary cuts are off the table.
The length of the season is a critical point to MLB, they do not want to play games past October and fear that a potential second wave of the virus could interrupt the postseason and put at risk $787 million in media rights revenue.
The March deal, which did not include the absence of fans, had the players receiving $170 million in salary advances and a guarantee that if the season is halted each player would get 2020 service time equal to what the player accrued in 2019.
MLB’s revised proposal lowered 2020 salaries from about $4 billion to approximately $1.2 billion, exclusive of signing bonuses, termination pay or option buyouts.
They also agreed to a $200 million bonus if the postseason was concluded.
MLBPA’s counter offer would have players’ salaries of approximately $2.8 billion, leaving each player with about 70% of his original salary.
Which means $1.2 billion vs. $2.8 billion.
That is a very wide divide.
In addition, the owners claim that virus testing would cost the league $40 -$50 million, and that a significant amount of double headers would cause even more economic damage to the teams.
Remember, the more games played, the more salary retention.
The players also proposed deferring $100 million in salaries to 2021 and 2022, if the playoffs are canceled.
Salary deferral is nothing more than a large accumulation of debt by the owners. In the current situation, I do not believe they will agree to it.
What have they agreed on? Expanding the playoff format from 10-14 teams and having a Designated Hitter for all games played in 2020.
MLBPA has also made it a part of their proposal that any “high-risk players, or players who live with a high-risk individual”, would be able to opt out of playing. MLB is willing to leave that on the table for now, but emphatically stated that other players who opt out would not get their salary, or their service time.
That’s a big issue because it would alter a player’s eligibility for free agency and arbitration, and postpone their big payday. MLBPA countered that with the players not getting paid, but receive service time.
It’s getting hard to pick a side, if indeed you do have to do so. We as fans just want baseball, but the divide among these two groups seems to grow each day.
At the very least, we no longer have to listen to the player’s rhetoric about not wanting to play for health issues. All cards are on the table, and this is strictly about money.
If the early July target to start the season is going to be met, then the two groups need to get a deal done in the next few days.
Hang in there everyone!