An official MLB baseball sits atop a base used by MLB play with a padlock and chain around it to represent the lockdown between Major League Baseball (MLB) and the Major League Baseball Players Association (MLBPA) on 28 January 2022 in Lincroft, New Jersey.
Rich Graessle | Sportswire icon | Getty Images
Major League Baseball and the Players Union are approaching the ninth inning of their standoff. And extra innings in this case would mean less baseball, not more.
The owners have set a Monday deadline for a deal or they would delay opening day, which is currently set for March 31. Talks, being held at the St. Louis Cardinals spring training complex in Jupiter, Fla., are expected. to continue all weekend.
The two sides remain at odds over ways to restart the $10 billion business. MLB owners, who initiated the lockout Dec. 2, want only minimal changes to the current collective bargaining agreement. Players have other ideas on how to make more money.
Regular season games could be canceled, players wouldn’t be paid for the full 162-game season, and all of this could spell disastrous development for MLB’s business.
Major League Baseball Players Association executive director Tony Clark, left foreground, and chief negotiator Bruce Meyer, second from left, arrive at Roger Dean Stadium in Jupiter, Florida on Monday, February 21 2022.
Ron Blum | PA
“Lack of relationships”
“Very publicly, at least on the AP side, the lines were drawn early,” former MLB executive Marty Conway said, referring to the MLB Players Association.
Now a professor of sports business at Georgetown University, Conway served as an executive under former MLB commissioner Pete Ueberroth. Conway blamed the tension in those labor negotiations on a “lack of relationship” between MLB and the players’ union.
“They (the players) felt that the last two collective agreements – so you’re talking about 10 years – there was no equality or fairness,” Conway said. “It told me that the newcomers (Executive Director Tony Clark and new Chief Negotiator Bruce Meyer) are there for a reason – to make change.”
The beatings started early between MLB commissioner Rob Manfred and Clark. The two couldn’t agree on ways to start the 2020 MLB season as the world grapples with Covid. This resulted in a 60-game campaign. MLB saved a big chunk of its national television money after finishing the playoffs and the World Series. But the players missed out on their entire salaries during the 2020 season.
In 2018, the MLBPA filed a grievance and accused MLB teams including Miami, Oakland and Pittsburgh of not spending shared revenue on players, which is against the rules. Add to that the frustration of falling wages and the way managers now run clubs;
Last November, Meyer, the players’ chief negotiator, sent a strong message.
“Players feel like the system has gone haywire and really gone too far in favoring owners,” Meyer told The Atlantic. “The system doesn’t really work the way it was traditionally meant to work. And that’s partly because of the groupthink that we see in front offices and analytics.”
The resulting talks were contentious. Spring training games have already been canceled until March 8. The February 18 trading sessions lasted only 15 minutes. And the media leaks around the economic proposals persist.
The union wants changes to MLB’s arbitration system to get players paid sooner. Currently, it takes up to six years before some players are completely free of club control — a rule MLB owners want to keep.
A recent collective bargaining agreement separated MLB and the union over $130,000 in player minimum wages. The previous ABC set MLB’s minimum wage at $570,500. The players union is looking to push that number to a minimum of $775,000. MLB offered $600,000, then $615,000. This week, he increased it to $640,000.
In exchange for more money, a revamped lottery system to combat tanking, and a universal designated hitter for the national and US leagues, which would lead to more jobs, MLB owners want more for increase the number of teams playing in the playoffs to 14 teams. from 10.
Conway referred to these issues as “expensive areas”. Revenue sharing between teams and service time is “the way the game works today”, he said.
“I understand what players are looking for here, but these are pretty substantial changes,” Conway said. “I don’t know if they’re ready to not have it all this time.”
Conway doesn’t think the owners are bluffing with their Monday deadline.
“I don’t think they are. They took it down to 60 games two years ago,” he said. “So in that regard, I think they have a very good understanding of where their profit and loss position is.”
Signs are posted outside Roger Dean Stadium in Jupiter, Fla. Monday, Feb. 21, 2022. Baseball labor negotiations moved to New York’s spring training stadium as players and owners are joining the talks, which are entering a more intensive phase with perhaps a week remaining to salvage opening day on March 31.
Ron Blum | PA
A disaster for the other parties too
Missed games would also hurt media partners. Deals with ESPN, Turner and Fox are set to begin for the upcoming 2022 season and will pay MLB approximately $1.8 billion per year over that decade.
ESPN has the most amount of regular season inventory on national networks due to its Sunday Night Baseball package. And Turner Sports is also expected to kick off a weekday game. The thing is, most of the national television money comes from the playoffs and the World Series.
Regional sports networks will suffer the most. If MLB games are delayed, the already weakened RSNs worry about distributing duty and providing compensation inventory to advertisers. A network official said CNBC marketers are ready to pour the money into local MLB games, but are waiting for a resolution of union negotiations to get an idea of the total inventory.
It’s unclear how many games MLB must supply RSNs to meet contractual obligations, as every market is different. But RSNs are important because they give MLB the majority of its viewership during the season.
Additionally, local fees are vital for MLB clubs, including top teams in the market like the New York Yankees, as clubs own stakes in RSNs. The Yankees bought its local RSN from Disney in August 2019, and the Yankees paid around $3.4 billion to reunite with the YES Network, and the team added Amazon as an investor.
The way it goes: MLB teams would return money to RSNs, who owe distributors. And if no game is played, consumers could seek refunds from distributors. We have seen this play out during the pandemic.
MLB will surely suffer on the attendance front as well, as clubs will run out of gate and franchise revenue. MLB drew a total of 45.3 million fans last season, in part due to pandemic restrictions. Still, it’s down from 68.5 million in 2019. And it’s a steeper drop from MLB’s record 79.5 million fans in the 2007 season.
To illustrate how important attendance is still to MLB, clubs have suffered mass layoffs due to lack of admission receipts during the pandemic. And Tom Ricketts, president and co-owner of the Chicago Cubs, projected a $4 billion hit on MLB’s roughly $10 billion revenue without fans.
“I consider missing games a disastrous outcome for this industry,” Manfred told reporters on Feb. 10. “We are committed to reaching an agreement with the aim of avoiding this.”
Major League Baseball Commissioner Rob Manfred answers questions during an MLB owners meeting at the Waldorf Astoria on February 10, 2022 in Orlando, Florida.
Julio Aguilar | Getty Images
Will MLB bounce back?
At that same press conference, Manfred said MLB “is doing everything in its power to get a deal done for our fans.” He also noted that he was “the only person to have a labor agreement without conflict – and I signed four of them”.
“One way or another, during these four negotiations,” Manfred added, “the players and the union reps found a way to trust me enough to make a deal. I’m the same person today. only in 1998 when I accepted this position.”
It remains to be seen whether Manfred can be the closest again in the bottom of the ninth, avoid losing games and get a deal under his commissioner’s watch. And he’ll also have to fix MLB on the field to make the game more watchable and exciting.
MLB wants things like a pitcher’s clock to speed up games. Manfred has also tried new concepts during the pandemic, such as starting extra innings with a player at second base. And the league has already installed a three-hitter rule, designed to reduce game-delaying pitcher changes.
That’s what fans are interested in.
“It’s not about the money,” wrote longtime baseball writer Thomas Verducci in Sports Illustrated. “It’s the product. Baseball’s place in popular culture and the entertainment landscape is threatened by the way it’s played, not its economic structure.”
And the longer the league and the players wait to fix MLB, the more they risk losing paying consumers who are struggling with economic pressures like high inflation.
“Baseball has been resilient in many ways,” Conwy added. “The question is, how high does the ball bounce this time? A lot of people will move on. And some people will say, ‘I’m paying $4 a gallon for gas. I can’t afford it.’ buy baseball.'”