An End Of The MLB Lockout May Be Closer Than We Think
The Major League baseball owners and the MLB Players Association met again on Tuesday. It was announced afterward that "little progress" was made. However, realistically, each step of progress will usher the two sides towards an eventual agreement. And, it may be sooner than we are being led to believe.
Let's just take Tuesday's proposal by the Players Union to increase the minimum salary structure. According to Jesse Rogers of ESPN.com, "The minimum in Year 1 would be $775,000. It would go up to $805,000 in Year 2, $835,000 in Year 3, $865,000 in Year four and $895,000 in Year 5 of the deal. The league is offering a starting minimum of $630,000 in 2022."
Now let's take a look at those numbers. The owners are offering a $630,000 minimum salary. The players are requesting a $775,000 starting minimum salary. The difference is $145,000 per player per year. Say that number effects 10 players a year. It will be less but let's use it for argument sake. That is $1,450,000 per year for those ten players. The New York Yankees gross over $8 million per home game, just on tickets, merchandise and food. The Tampa Bay Rays do a little less than $2 million per game. Then there are TV rights fees and advertising revenue paid to each MLB franchise.
According to Baseball-Reference.com, "In Major League Baseball, 48% of local revenues are subject to revenue sharing and are distributed equally among all 30 teams, with each team receiving 3.3% of the total sum generated. As a result, in 2018, each team received $118 million from this pot. Teams also receive a share of national revenues, which were estimated to be $91 million per team, also in 2018." That's more than $200 million per year that each team receives on top of the other 52% of local revenues just for opening their doors! The owners are squabbling with the union on measures that will cost each team a small percentage of the yearly guaranteed money stream.
The long and short of the equation becomes that the owners will lose more money by canceling regular season games than they will save through most of these negotiated issues. Yes, the players don't want to miss paychecks but owners do want to lose ticket, advertising, concession, merchandise, MLB app nor television dollars. All of those add up to way more for these owners than the differential in these negotiations.
The salary tax cap going from 20% to 50% penalty is something the players union does not want at all. I believe that it is more of a bargaining chip to be negotiated down at the deadline to make something happen. Ultimately, the green will prevail and I believe that players will be showing up to camp next Tuesday.