MLB dodged disaster by agreeing to end lockdown, but other risks remain

The empty Salt River fields where Talking Stick spring training would take place in Phoenix, AZ.

Patrick Breen | USA TODAY Sports

Major League Baseball commissioner Rob Manfred flashed a huge smile Thursday night when he announced baseball’s return.

After nearly 100 days of an owner-imposed lockout, MLB on Thursday agreed to a new five-year labor agreement with the MLB Players Association. In the deal, players will see their minimum wages increased and a $50 million bonus pool for young players. Owners benefit from an expanded 12-team post-season and jersey patches that create new revenue.

But most important – MLB will play a full 162-game schedule after Manfred, and team owners played the “deadline” strategy and initially threatened to cancel games and not pay players .

“The way the collective bargaining process is designed to work under stature – it’s really driven by two things,” Manfred said. “Time and economic leverage. No deal materializes until those two things play out in a way to find common ground. I think we made a deal when it was possible to make a deal. OK.”

However, despite the deal and the full season remaining intact, MLB business may have suffered damage.

Los Angeles Dodgers center fielder Cody Bellinger (35) steals second base as St. Louis Cardinals second baseman Tommy Edman (19) takes the last pitch at Dodger Stadium during the Wild Card game of the National League 2021.

Robert Hanashiro | USA TODAY Sports

MLB teams missed their selling season

Former MLB executive Marty Conway followed baseball’s ninth work stoppage since it began last December. He called the discussions a “vicious period of negotiation” for MLB and the players. Conway said the league should fix its image, especially in smaller markets.

“These periodic venting of grievances weigh on this [MLB’s image]”, Conway said. “For some reason baseball has chosen to expose their interworkings more than the NBA and the NFL,” he added. “And that hurts.”

Conway, now a sports management professor at Georgetown University, said MLB clubs also missed their “selling season.” This is when clubs promote new players, the 2022 schedule, ticket packages and keep in touch with season ticket holders for renewals.

During the pandemic, MLB said 40% of its $10 billion business was related to attendance, which has been declining over the years. MLB drew a total of 45.3 million fans last season, in part due to pandemic restrictions. That number was down from 68.5 million in the pre-pandemic 2019 season. MLB’s attendance record was 79.5 million fans in the 2007 season.

As MLB engaged in labor negotiations, the consumer price index rose, Russia unleashed a war in Ukraine, and gasoline prices soared. That means small-market, non-competitive MLB clubs could be especially hard hit if cash-strapped fans can’t shell out the cash to pay for tickets.

The sales season might have helped alleviate this potential problem.

“It’s very important,” Conway said. “The day after the previous season, you want to inform your fans not only about the program, ticket prices and subscription packages. This sales season is essential.”

He added: “There will be markets where the rebound will be quick – Los Angeles, New York – but there are also a lot of markets – Baltimore, Tampa, Miami – they had quite a winter where they couldn’t to capitalize on the season’s sales.”

On Thursday night, MLB issued an apology to fans.

“I know the last few months have been difficult. There was a lot of uncertainty at a time when there is a lot of uncertainty in the world. Kind of like how the collective bargaining process sometimes works,” said Manfred. “But I apologize for that.”

Major League Baseball Commissioner Rob Manfred answers questions during an MLB owners meeting at the Waldorf Astoria on February 10, 2022 in Orlando, Florida. Manfred addressed the ongoing player lockdown, which the owners put in place after the league’s collective bargaining agreement ended on Dec. 1, 2021.

Julio Aguilar | Getty Images Sports | Getty Images

Manfred wants to fix a broken relationship

The commissioner’s apology came after Manfred said he was “generally pleased” that MLB had settled another labor dispute. And as a result, baseball once again avoided losing revenue under the watch of its commissioner.

On Wednesday night, MLB threatened to miss games through April 14 after previously postponing the first two series of the 2022 season — about 90 games. Manfred then said players would not be paid for missed games.

“Let me say this about timelines,” Manfred said Thursday. “Using deadlines, and extending deadlines, and determining when to set them and when to move them back is part of the art of collective bargaining.

“And that’s an art form that’s important in getting a deal done,” Manfred added.

When asked if MLB was outplayed because players were still an important economic playing field in the lockout, Manfred said it wasn’t about “who outflanked who.” He said: “My view is – there’s only one win, and that’s getting a deal. We’ve got one.”

Manfred said he would be more diligent in building relationships with players, some of whom have called for his ousting. He then called the terms of the deal – which includes a minimum raise to $700,000 with increases of $20,000 a year – an “olive branch” to the players to mend the fractured relationship.

“One of the things I’m supposed to do is promote a good relationship with our players,” Manfred said. “I tried to do that. I didn’t succeed in that.”

Manfred said he called MLBPA executive director Tony Clark “and expressed my desire to work with him.

Seattle Mariners shortstop JP Crawford (3) slides in third to advance on a sacrifice fly against the Oakland Athletics in the third inning at T-Mobile Park, September 28, 2021.

Joe Nicholson | USA TODAY Sports | Reuters

Player injuries and Covid concerns

After the lockout ended, Conway suggested the league respond to fan discontent based on national events, including the “Field of Dreams” game between the Chicago Cubs and Cincinnati Reds.

MLB returns to Dyersville, Iowa, in a stadium built next to a cornfield, echoing the scene from the 1989 movie starring Kevin Costner. Last year’s Field of Dreams game was a ratings hit for Fox, averaging 5.9 million viewers.

Additionally, Conway said MLB will use fan giveaways around the 2022 All-Star Game to be held in Los Angeles at Dodger Stadium. But the health of the players will be key in determining the success of these national events.

The lockout has wiped out most of spring training, a time when players prepare their bodies for a 162-game campaign. Usually, players have almost two months to prepare, but since MLB will start its year on April 7, players only have three weeks.

On Friday, Clark said player health was a concern heading into this season with another shortened spring training. He referenced the 2020 MLB season when spring training was halted due to the pandemic.

After sports shut down in March 2020, MLB didn’t restart until July — weeks before the start of a 60-game campaign. MLB returned to its 162-game schedule in 2021. But, after a year of player routines being affected by Covid, injuries have piled up.

Former MLB head coach Stan Conte was quoted last June in The New York Times after noticing an increase in leg injuries, including hamstrings, during 2021 spring training. , during the 2020 season, stars including Giancarlo Stanton and Aaron Judge of the New York Yankees missed time out with leg injuries.

“These (injuries) are still a concern,” Clark said Friday, responding to a CNBC inquiry about the matter. He added that MLB players are conditioned throughout the year, and “we take some comfort in that, but we always pay attention to how the schedule and how travel relates to it.”

There could be muscle overuse leading to injury as MLB needs to make up about 90 games it has postponed due to the lockdown. In a regular season — pre-Covid — that’s up from MLB’s 39 games postponed in 2019, 54 games in 2018 and more than 30 in 2017.

MLB will use doubleheaders to make up most games in 2022, but it’s still unclear how the league will reformat. But that could add three to five days to the season, which usually ends in early October.

Aside from injuries, another concern for the MLBPA: unvaccinated players. Restrictions in Canada do not allow unvaccinated players to enter the country. As a result, players who miss games in Toronto due to their vaccination status will not be paid and would lose time on duty.

MLB told CNBC that 2021 data shows 81% of “Level 1 personnel,” including players and key personnel who have access to players, have been fully vaccinated.

Player play offers part of new MLB contract

As MLB repairs its image with fans and players want to avoid injuries, the parties will see more revenue streams.

MLB can begin applying jersey patches and helmet decals immediately. New uniform sponsorships are estimated at $11 million per MLB team, according to measurement firm Nielsen.

MLBPA chief negotiator Bruce Meyer said players can now monetize promotional endorsement deals with sports betting companies.

Under previous labor agreements, MLB players were prohibited from promoting gambling companies, including casinos. In 1979, Hall of Famer Willie Mays was banned from MLB for accepting a promotional deal with Bally’s. MLB revoked the ban in 1985.

MLBPA did not provide details on the rules of the agreements. Nonetheless, the deals will likely mimic other deals that allow players to use their intellectual property in ads using non-MLB logos and apparel.

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