Did the owners ever want a deal?
Over the weekend, negotiations between the Major League Baseball owners and the Players’ Association about a new economic agreement to get the season started have broken down. The owners have accused the Players’ Association of a failure to negotiate in good faith while the players have publicly said that further attempts at negotiation would be fruitless and therefore the owners should just tell the players when and where to report.
The breakdown is the latest in a long line of troublesome negotiations between the players and the owners — and really Major League Baseball and anyone else these days.
There are a lot of similarities in how Major League Baseball worked to negotiate their new agreement with Minor League Baseball and now the Players’ Association. As I summarized those Minor League Baseball negotiations back in December:
And fundamentally, the league has treated the players the same way during these negotiations.
After all of this, they followed up with an accusation that the Players’ Association wasn’t negotiating in good faith. And while Ben’s descriptions of the offers aren’t totally accurate, it gets the point across on how these negotiations have gone because the owners never made a better offer to the players than they’d get played a 54 game season under the current agreement, something both sides agree that Major League Baseball can force. That’s an important part of this whole scenario, because I think you can argue that the owners never really wanted a deal.
Let’s dig into the math behind each of the three offers the owners made the players.
First we will need to figure out what our baseline is going to be. The total payroll of the 26 man rosters of all 30 Major League teams totals just shy of $4.1 billion. That’s a big number and big enough that most of us won’t really grasp what it means because the resulting number still feels just as big to us. Instead, let’s look at the median salary of a Major League Baseball player. For 2020, that’s $1.6 million. Still a big number, but more in line to what we think about when it comes to professional athletes and their contracts. Using the median salary means that half of Major League Baseball’s players would have made less than $1.6 million this season by playing all 162 games.
Back in late March, which feels like years ago, the owners and players agreed on a deal to prorate the players’ salaries based on the number of games played, expecting that there would be roughly half a season left after the world had successfully “flattened the curve” and emerged from the other side of a brewing coronavirus pandemic. But it didn’t take long before the idea of playing games without fans began to circulate and that owners wanted further concessions from the players.
The owners claimed that that March agreement gave them the right to go back to the negotiating table. There was some debate whether it did or not, but it wasn’t just the players that got things out of that March deal. The owners avoided a potential multi-billion dollar grievance by prorating salaries and maximized their opportunities to shorten the draft to five rounds and setting a maximum signing bonus for undrafted players among other cost saving measures.
In May the league leaked the idea that the owners had agreed to a 50/50 revenue split. However that offer was never officially proposed to the Players’ Association, but it was a tactical move. By making it public that they had offered a 50/50 revenue split, they were able to paint the players as being greedy when they asked for more because a 50/50 split seems fair.
The league would go on to make their first official proposal to the players at the end of May that offered a sliding scale of pay cuts. The lowest paid players would receive the highest portion of their salary while the highest paid players too the largest cuts. On the whole, it’s believed to have offered the players roughly 67% of their total prorated salaries for an 82 game season. Based on that number, that ends up being 33.9% of their regular full season salaries, which works out to $542,400 for the median player.
The league’s second offer guaranteed players 50% of their prorated salaries for a 76 game season, with an increase to 75% once the postseason was completed. Based on those numbers, the players were guaranteed 23.4% of the full season salary up to 35.2% if the postseason was completed. For the median player, that means a $374,400 regular season guarantee up to $563,200 once the postseason completed.
The league’s third and final proposal guaranteed the players 70% of their prorated salaries for a 72 game season with an increase to 87% once the postseason was completed. Based on those numbers, the players were guaranteed 31.1% of their full season salary up to 36.8% if the postseason was completed. For the median player, that means a $497,600 regular season guarantee up to $588,800 once the postseason was completed.
Throughout the entire process, the commissioner has maintained that the league has had the power to force a shortened season under the March agreement, meaning that players would make 100% of their prorated salaries for the games played. Such a season has been rumored to be about 54 games, which means that players would be guaranteed one-third of their regular season salaries, or $532,000.
But the owners want to go back to the well for further concessions.
In the latter two deals, the owners attempted to shift the risk for being unable to complete a postseason onto the players. Owners are reportedly worried that a second wave could end up cancelling the postseason. The owners aren’t stupid. They understand the risk, which is why they’d want to shift it off onto the players. Without a postseason, the owner’s offers become far less attractive:
- Offer #1: $542,500 for 82 games
- Offer #2: $374,400 for 76 games
- Offer #3: $497,600 for 72 games
- Forced season: $532,000 for 54 games
While the sliding scale of the first offer makes it difficult to really compare, since different players would be affected differently — one of the prime reasons the Players’ Association nixed the idea — fundamentally they’re asking the median player to play an additional 28 games for just $10,500. That’s 28 more games away from their families, 28 more games of injury risk, and 28 more games of exposure, 51.9% more games for less than 2% more money.
Then looking at the second and third offers, they both guaranteed less money for 76 and 72 games than the players could make for 54. So why would they accept that and take on the risk of the postseason that the owners don’t want?
Now I’m not the only person who can do math and I imagine that the owners employ a large number of people with that capability as well, and it’s important to remember that the owners hold all the cards here. They know exactly how much they make and they know exactly how much the players make. Whereas, the players only know what they make with an idea of how much the owners make.
Because of that, after the first offer, the players asked for more financial information to help them determine just how bad the financial situation was shaping up for the owners this year. The owners said no.
Then they turned around and made an offer to the players that would guarantee them even less money than the short season they were threatening. If the owners were really interested in an 82, 76, or 72 game season, they could have easily made a number that would have met the players in the middle. Instead they repackaged their existing offers and asked the players to assume more risk for little additional reward.
Then you have an owner go on the radio and claim to want to be partners with the players, like they are in the other three major North American sports, instead of adversaries at the bargaining table. But when their partner asked for more information to better help you, you said no?
We’ve also heard reports that there are owners who don’t actually want to play the 2020 season.
If the owners made the players an offer that made more sense than just letting the owners follow through on the threat of a shortened season under the March agreement, the players would have said yes. Instead, they didn’t.
And it’s the players who are negotiating in bad faith?
Because when you look at what’s actually happened, I feel like it becomes very clear that it’s not the players who are negotiating in bad faith.
Jon Doble has been writing about the St. Louis Cardinals since 2010. You can find him on Twitter at @GroundRuleDoble. Thank you for reading.