Even though no one outside of MLB and its owner can perfectly do a forensic analysis of the financial battle that has taken place – the owner, so far, has seen that – Jeff Passan does the best job he can, and you should read his article today.
MLB and MLBPA remain deadlocked keeping baseball back. In essence, this is a struggle for money in dollars. It’s shortsighted, there’s no need and has a solution. In @ESPN, I looked at baseball problems and found the necessary compromises: https://t.co/zfmivlOhmh
– Jeff Passan (@JeffPassan) June 5, 2020
There are many things in Passan’s work that carefully explores the elements of finance and narration in the battle between the two parties, but one of the most important things he does is truly successful. actual dollar total which represents the distance between the current owner and player.
We know that the owner is willing to pay proportionally full salaries for at least 48 matches. We believe that the players are willing to accept the 82 season game with full salary. So, if you can find out the actual losses faced by the league on an average per game basis, you can easily find out the actual money we are talking about. That’s what Passan did, with the best amount available, and the conclusion will make you very angry:
Therefore, between the time needed to finish the deal and the September cutoff, the 82 match season might be the most expected by the players. Seeing that they will receive the full pro flat in 1,230 total games, the projected loss from the owner based on the figure of $ 640,000 per game is very important for this exercise: $ 787.2 million. Compared to the projected losses that owners will face in the 48 season matches they are prepared to face, playing an 82 season match will cost more than $ 326.4 million.
And so Filtered to its simplest form, Major League Baseball is in crisis because of a $ 326 million problem.
That’s a lot of money in the absolute sense, but let me present it to you in several ways for context. One of them is, even in MLB’s warning that it might be too gruesome that income for sports will be under $ 3 billion this year, you are talking about nearly 10% of the revenue that drives this whole fight. Another way to contextualize that number, as Passan states, is $ 326 million actually less than $ 11 million per team.
Think about what the owners will actually say if they want to trade 34 games for your fans’ pleasure – at a time like this – for under $ 11 million.
(A bonus note that I don’t see other people talking about? Businesses can pass on their losses to future years for tax purposes, offset profits in the coming years, and reduce the tax burden that year (or, thanks to the new law, they can bring it back to offset profits in previous years) . So, effectively, losing $ 100 million this year can be partly recovered in taxes. Reduced salaries for players do not come with the ability to “get back” some money in the coming years. Of course, players don’t need to pay taxes on salaries that are “lost” this year, but a one-time blow to an individual human feels far different from a long-term blow to a business organization that can spread it..)
Now, then. I understand that the underlying problem – even the underlying mathematics – is far more complicated than that. There are many big questions about how real income is at the end of the day, there is a real risk of closing, and there are open questions about how to handle postpaid money (size and distribution). But without more access to books, how can the players know what they are even negotiating, before doing the best math they can like Passan doing?
There is also some mathematics in Passan’s work which shows that players can get it more money by playing a little more and taking a small salary deduction (under 10%), but they might decide that taking this establishment is more valuable in the long run than accepting this year’s deduction for more short-term money. If they want to take that principled attitude, I have no problem with that, but in fairness, we have to show that it will be a choice made by the players.
… follow the choices made by the owner to not only agree to pay the full-paid salary for 82 matches, and extract concessions that generate income from the players for additional events, longer postseasons, etc. When a possible bill for doing so might be $ 11 million per team (much of which can be recovered later through additional revenue opportunities and tax processes), it’s time for the owner to just suck it up.
How is it worth it to do * ONE ONLY THING * for players who have been hit in the last two CBAs? How inappropriate is the price to get sports back with positive conditions in the middle of a pandemic? How inappropriate is it to get your fans – oh, hey, remember fans? – More games this year?
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