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MLB owners and MLBPA Negotiation - Updated 6/17/2020

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Wild Card Game - Baltimore Orioles v Toronto Blue Jays Photo by Tom Szczerbowski/Getty Images

For those who haven’t followed it, I wrote an article on the last proposal from the MLB to the MLBPA. I figured I would include a timeline / history and update on the newest proposal.

Here is a quick recap of the timeline from CBSSports

May 11th: Owners agree on a proposal to the MLBPA. Planned for 82 games, 50-50 split of revenues from players/owners, expanded rosters & playoffs.

May 12th: MLBPA states they previously negotiated pay, with the owners agreeing to pay players based on a pro-rated number of games. (i.e. 81 games would pay a 50% salary)

May 14th: Players agreed to the Universal DH. They vehemently reject the MLBAPA offer, believing the salary portion to have already been negotiated.

May 16th: Proposed Safety Protocols were leaked.

May 18th: Owners claim they would lose $640k per game without fans in the stands. They allegedly refuse access to their books to verify this information. Here is an article if you’re wondering why the MLBPA did not believe the owners claim.

May 20th: MLB Presents a new plan to the MLBPA.

May 21st: MLBPA returned to the table to negotiate elements of the Safety plan with focuses on frequency of testing, protection for high risk players, and sanitation protocols.

May 24th: It’s reported that players are willing to defer salaries till future years.

May 26th: The MLB proposed a sliding scale, where the players earning the most would take larger cuts than players making the minimum. (This is what we reported on above).

May 29th: The MLBPA goes public again that the MLB has still been unwilling to share documents that would verify their calculations of losses.

May 31st: MLBPA Proposes 114 game season to increase Revenue. Other key aspects included an option opt-out for the season for players unwilling to take the risk, expanded playoffs for 2 years.

June 1st: The MLB Owners stated they would be willing to pay the full salaries of players as agreed upon in March, but propose a 50 game season.

June 3rd: The MLB rejects the MLBPA’s proposed 114 game season stating they’d prefer a shorter season with a desire for post-seasons to be completed before November. Reportedly the MLB states they would not make another counter-offer.

June 4th: MLBPA’s Tony Clark announced that the players have ‘resoundingly rejected’ additional paycuts from what the MLB previously agreed to.

June 8th:

The MLB issued another offer to the MLBPA for a pro-rated 76 game season, offering 75% of their pay for the games played. Ultimately, the proposal is ~35% of their annual salary for a 76 game season.

For quick Math:

$10 Million Player * .469 * 0.75 = $3,517,500

(.469 is rounded to 3 digits for 76/162)

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An interesting perspective on earnings using the $10 mil example from the “worst case” that was proposed other than cancelling the season (100% pay but 50 game season) vs today’s offer

$10 Mil * .308 * 1 = $3,086,419 for 50 games

$10 Million Player * .469 * 0.75 = $3,517,500 for 76 games

As most of you will likely guess, the MLBPA rejected this offer as it is a significant cut from the original agreement between the MLB and the MLBPA. Essentially, the MLBPA has the leverage of a previously agreed to salary pro-rated to the number of games instead, the Owners have the leverage for determining the number of games to be played.

I do understand this is a negotiation with hundreds of millions of dollars at stake, but with the state of everything that’s going on today, I wish we could get to a resolution sooner than later.

I know this topic has elements that relates to a lot of different political issues. I’m asking everyone to please keep these discussions as non-political as possible as people often come here as an escape from all of it.

Additional details from Jared Diamond:

6/10/2020

As everyone anticipated, the MLBPA rejected the MLB’s offer. It’s rumored that they countered today with the following:

  • 82 Games @ 100% per game (50.6% of their annual contract salaries)
  • 16 Playoff games in 2020 and 2021 with cap on players share
  • Broadcasting Enhancements - (from what I read - adding Mic’s to the players to increase contact and focus without fans)
  • No pay or service time to players who elect not to play due to high-risk family members
  • All-Star Game and HR Derby AFTER the World Series for additional Revenue
  • Joint $5 Million dollar fund to support Minor Leaguers / support social justice initiatives.

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UPDATED 6/17/2020

Unfortunately, a week later and we are seemingly no closer to an agreement between the MLB and the MLBPA. With that said, it was an eventful week with on-going “negotiations”. So let’s catch everyone up.

Since the last update, the MLB and MLBPA brought another offer to the table.

MLBPA:

89-game season @ 100% of pro-rated Salary = 54.9% of Contract salary

Players can opt out of season but no service time unless they’re high-risk

Expanded Playoffs

MLB:

72-game season @ 70 % of pro-rated Salary = 31.11% of Contract salary

Players to waive ALL Liability in regards to safety

Potentially increased pay to 83% with play-offs

Roster size increases (30 for first 2 weeks, 28 for next 2, 26 for remainder of season)

As you can imagine, both were declined.

The startling news of course was Manfred coming out and stating he was not sure that there would be a 2020 MLB season, which was particularly of note given that he had stated 100% that there would be one just a week earlier.

In a statement from Tony Clark (head of MLBPA): “Players are disgusted that after Rob Manfred unequivocally told Players and fans that there would “100%” be a 2020 season, he has decided to go back on his word and is now threatening to cancel the entire season. Any implication that the Players Association has somehow delayed progress on health and safety protocols is completely false, as Rob has recently acknowledged the parties are “very, very close.” This latest threat is just one more indication that Major League Baseball has been negotiating in bad faith since the beginning. This has always been about extracting additional pay cuts from Players and this is just another day and another bad faith tactic in their ongoing campaign.”

So taking a look at that now, based on the agreement the MLB previously made, the MLB has an agreement in place to pay 100% of the pro-rated season based on the number of games and an agreement to act in good faith to play in as many games as possible. To have the league set the number of games, Manfred would need approval from 23 of the 30 clubs, and it is currently rumored that more than 8 teams would rather not play a season given the economics.

While it’s certainly possible that the league decides to cancel 2020, this is likely a negotiating tactic to attempt to force the MLBPA’s hand.

It is of an important note that while the pro-rated pay is an obvious sticking point, the negotiation in regards to liability and ensuring safety protocols is another major sticking point. In their last proposal the MLB requested that players waive ALL liability from the team, a very bold ask and in stark contrast that somewhat mitigates any value of the negotiated player safety protocols.

Now you may be wondering a bit, if the MLB has the ability to pull the trigger at any time, and has expressed a desire for a ~50 game season, why not pull the trigger today?

This is exactly the reason. There are 2 sides to this element of the negotiation, the way Jim Bowden frames it above, while accurate does make it look like the MLB was negotiating in bad faith as this stall tactic would eliminate the risk of grievance being filed. Manfred discussed the concern in regards to this and the way the MLBPA and their lawyer have presented it:

“Unfortunately, over the weekend, while Tony Clark was declaring his desire to get back to work, the union’s top lawyer was out telling reporters, players and eventually getting back to owners that as soon as we issued a schedule – as they requested – they intended to file a grievance claiming they were entitled to an additional billion dollars,” Manfred said. “Obviously, that sort of bad-faith tactic makes it extremely difficult to move forward in these circumstances.”

As for now, the MLBPA has begun a pretty aggressive Public Relations tactic of “When & Where” with players everyone stating their ready to put an added public pressure on the owners.

Another blow to the MLB’s PR department was the official announcement that they have closed on a billion dollar contract with Turner Sports for the League Championship series, paying ~$470MM just for the LCS - and it was noted that expanded play-offs would bring additional revenue on top of this number. Tough to announce these types of deals while crying poor.

For anyone that’s interested, MLBTradeRumors’ article outlaying the financials of baseball in recent years and why it’s a sticking point. The entire article is definitely worth a read but in a quick summary, the owners are asking the players to take part in the financial burden caused by lack of ticket sales. While player’s salaries have scaled with ticket sales, the overall revenue of baseball has skyrocketed as TV deals have taken hold. There is an excellent graph on the article showing that while overall revenues are now 3x what they were in 2002, the players salaries have not kept up (2x where they were in 2002), and the growth in players salaries has essentially stopped in 2015, with a few years of decline despite record highs in overall revenue.

UPDATED 6/17/2020 - Today’s News

It has been reported that Rob Manfred to meet face to face with Tony Clark in Arizona today. The MLB brought a new offer, and these are the details that have been reported so far:

  • MLB proposed a 60 Game Season @ 100% Pro-Rated Pay.
  • Season starting July 19th/20th
  • Expanded Playoffs in 2020 & 2021
  • Waiving of any potential grievance.

There were reports coming out originally claiming Manfred had stated there was a deal. It looks like that was taken a little out of context with Manfred later releasing an official press release.

MLBPA released one of their own

My overall take is that this was a significant step forward. It does seem to expose the MLB about their concern of the grievance of them not negotiating in good faith to play the highest number of games they could. I didn’t find discussion on waivers of liability. I’m cautiously optimistic that we’re moving towards an agreement!