An official MLB baseball sits on a base used in an MLB game with a lock and chain around it to represent the lockout 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 | fake images
Major League Baseball and the players’ union are approaching the ninth inning of their labor showdown. And the extra innings in this case would mean less baseball, not more.
The owners set a Monday as the deadline to reach an agreement; otherwise, they would push back opening day, which is currently set for March 31. Talks are expected, which will take place at the St. Louis Cardinals’ spring training complex in Jupiter, Florida. to continue through the weekend.
The two sides remain at odds over ways to restart the $10 billion business. MLB owners, who began the lockout Dec. 2, want only minimal changes to the current collective bargaining agreement. Players have other ideas on ways to earn more money.
Regular season games could be cancelled, players would not be paid for the full 162-game season and it could all turn out to be a disastrous development for MLB business.
Major League Baseball Players Association CEO Tony Clark, left foreground, and chief negotiator Bruce Meyer, second from left, arrive at Roger Dean Stadium in Jupiter, Fla., on Monday February 21, 2022.
Rum Blum | access point
‘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 these labor talks on a “lack of relationships” between MLB and the players’ union.
“They (the players) felt like the last two labor deals, so you’re talking 10 years, there wasn’t an equality or fairness part,” Conway said. “That told me that the new people coming in (CEO Tony Clark and new chief dealmaker Bruce Meyer) are there for one reason: to make changes.”
The clashes 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 grappled with Covid. That resulted in a 60-game campaign. MLB saved a big chunk of its national television money after completing the postseason and World Series. But the players missed out on full salaries during the 2020 season.
In 2018, the MLBPA filed a complaint, accusing MLB teams including Miami, Oakland and Pittsburgh of not spending shared revenue on players, which is against the rules. Add the frustration of declining wages and how executives are now running clubs;
Last November, Meyer, the players’ chief negotiator, sent a strong message.
“Players feel like the system got out of hand and really went too far in favor of the owners,” Meyer told The Atlantic. “The system is not really working the way it was traditionally intended to work. And that’s partly due to the groupthink we see at headquarters and analytics.”
The resulting talks have been contentious. Spring training games are already canceled through March 8. The trading sessions on February 18 lasted only 15 minutes. And the media leaks around the economic proposals persist.
The union wants changes to the MLB arbitration system so that players pay 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 had MLB and the union more than $130,000 apart in players’ minimum wages. The previous CBA set the MLB minimum salary at $570,500. The players’ union is seeking to bring that number down to a flat minimum of $775,000. MLB proposed $600,000, then $615,000. This week, he increased it to $640,000.
In exchange for more money, a revamped draft lottery system to address the problem, and a universal designated hitter for the national and American leagues, which would create more jobs, MLB owners want more to increase the teams that play in the league. postseason to 14 teams. from 10
Conway called these issues “high-cost areas.” Revenue sharing between teams and service time is “how the game works today,” she said.
“I understand what the players are looking for here, but it’s pretty substantial changes,” Conway said. “I don’t know if they’re prepared to not get all of that this time.”
Conway doesn’t think the owners are bragging about Monday’s deadline.
“I don’t think they are. They cut it down to 60 games two years ago,” she said. “So in that sense, I think they have a very good understanding of where their profit and loss are.”
Signs are posted outside Roger Dean Stadium in Jupiter, Fla., on Monday, Feb. 21, 2022. Baseball labor negotiations have moved to New York’s spring training stadium as players and owners join the talks, which they enter a more intense phase with perhaps a week left to save opening day on March 31.
Rum Blum | access point
A disaster for other parts too
Lost games would also hurt media partners. The deals with ESPN, Turner and Fox are scheduled to start in the upcoming 2022 season and will pay MLB an estimated $1.8 billion annually over this decade.
ESPN has the most significant amount of regular season inventory on national networks due to its Sunday Night Baseball package. And Turner Sports is also scheduled to debut with a Monday-Friday game. The thing is, most of the money on national television comes from postseason and World Series games.
Regional sports networks will suffer the most. If MLB games are delayed, already weakened RSNs worry about owing distributors and providing compensating inventory to advertisers. A network executive told CNBC that vendors are ready to put money into local MLB games but are waiting for a resolution of labor negotiations to get a sense of total inventory.
It’s unclear how many games MLB must provide RSN to meet contractual obligations, as each market is different. But the RSNs are important because they give MLB most of its audience during the season.
Additionally, local fees are vital for MLB clubs, including top-of-the-market teams like the New York Yankees, as clubs have ownership stakes in RSNs. The Yankees bought back their local RSN from Disney in August 2019 and the Yankees paid about $3.4 billion to get YES Network back, with the team adding Amazon as an investor.
The way this happens: MLB teams would return money to the RSNs, who would owe the distributors. And if no games are played, consumers could ask dealers for refunds. We saw this during the pandemic.
MLB is sure to suffer on the attendance front as well, as clubs lose gate and concession revenue. MLB drew a total of 45.3 million fans last season, in part due to restrictions around the pandemic. Still, it’s down from 68.5 million in 2019. And it’s a steeper decline compared to MLB’s record 79.5 million fans in the 2007 season.
As an example of how important attendance remains to MLB, clubs suffered massive layoffs due to lack of receipts during the pandemic. And Tom Ricketts, president and co-owner of the Chicago Cubs, projected a $4 billion hit to MLB’s roughly $10 billion in revenue without fans.
“I see the lack of games as a disastrous outcome for this industry,” Manfred told reporters on February 10. “We are committed to reaching an agreement in an effort to prevent 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.
Julius Aguilar | fake images
Will MLB recover?
At that same news conference, Manfred said MLB is “doing everything we can to get a deal done for our fans.” He also noted that he is “the only person who has made a labor agreement without dispute, and I made four of them.”
“Somehow, during those four negotiations,” Manfred added, “the players and the union representatives figured out a way to trust me enough to make a deal. I am the same person today as I was in 1998 when I took that job.”
However, it remains to be seen if Manfred can return to being the closer in the bottom of the ninth, avoid losing games and get a deal under his commissioner’s watch. And he, too, will need 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 also tried new concepts during the pandemic, like starting extra innings with a player at second base. And the league has already installed a three-hitter rule, designed to decrease game-delaying pitching changes.
That’s what the fans care about.
“It’s not money,” veteran baseball writer Thomas Verducci wrote in Sports Illustrated. “It’s the product. Baseball’s place in popular culture and the entertainment landscape is threatened by the way it is played, not its economic structure.”
And the longer the league and the players wait to fix MLB, they risk losing more paying consumers who are dealing 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? Many people will move on. And some people will say, ‘I’m paying $4 a gallon for gas. I can’t afford baseball.’”
