It's Never Been More Important MLB, Players Association Reach an Agreement

The stakes are too high for both sides not to make a deal to play some form of the 2020 season.

As the clock ticks, MLB and the Players Association are at odds on a financial compensation system that allows a shortened 2020 season. The rattling of sabers could be heard as you read various accounts of the union’s initial response to MLB’s sliding pay cut offer Tuesday; “disappointed,” “extremely disappointed,” “unhappy,” “bristled,” “ire,” and “driving a wedge” were some of the terms of choice. And so, people worried.

Nationals pitcher Max Scherzer added to the gloom Wednesday night when he released a statement that said players would not “engage with MLB” on pay cuts beyond a pro-rated basis. Even more pointedly, he also accused owners of dealing in a lack of transparency. He charged that “MLB’s economic strategy would completely change if all documentation were to become public information.”

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— Max Scherzer (@Max_Scherzer) May 28, 2020

This was a first offer between two sides with a long, contentious history of labor relations. And know this: the stakes never have been higher when it comes to getting an agreement. As the owners made their proposal Tuesday, I asked a long-time club executive who has been through many of the labor wars if he thought the two sides will reach an agreement.

“Are you kidding? Of course,” he said. “Of course they will. There will be a deal because the prospect of not getting a deal is unthinkable to both sides. It will happen because it has to happen.”

Using that logic, just think what happens if the two sides do not forge an agreement. Baseball will be dark for 17 months between Game 7 of the 2019 World Series and 2021 Opening Day–an eternity in the crowded entertainment space. Much of life’s choices come from the influence of habit. People will have moved on. They will be out of the habit of baseball.

Worse, people will resent baseball. Imagine a world in which the NHL, NBA, NFL, World Team Tennis, PGA Tour, National Women’s Soccer League, the Premier League, Nippon Pro Baseball–you name the league and the sport–find a way to play games in the age of coronavirus and baseball does not. People will assume that the reason baseball could not achieve what others did was because of labor strife. Billionaires and millionaires fought over money at a time of severe suffering and sacrifice.

Against the tide of that public sentiment, imagine teams trying to sell advertising and sponsorship for the 2021 season coming off a year with no games and amid an economic recession. Imagine free agency in that climate. Oh, and by the way, the Collective Bargaining Agreement expires after next season. Imagine those talks.

Now we’re talking years of possible economic harm to the game–this at a time when attendance has declined for seven straight years and the owners and players have done nothing about the pace of play, except to make it worse. Owners could panic into adding two expansion teams (Nashville and Montreal?) just to get the expansion fees to help cover their losses. (It happened as a hedge against the 1994-95 strike.)

Now you know why a deal is important. This assumes, of course, that safety protocols, the most important issue, satisfy all parties, including government and public health officials. The future of the game is at stake.

Baseball would love to restart an 82-game season on Fourth of July weekend in empty ballparks, kicked off by the biggest rivalries in the game. With 30-man rosters and 20-man taxi squads, that is possible if camps open June 13, allowing three weeks of training. And that is possible with an agreement by June 10. Given baseball’s labor history, you probably won’t see a deal until we inch up to that date.

Both sides are digging in. Both sides have stumbled. Owners first made the gaffe of floating the idea of sharing revenues 50-50, but never actually made such a formal proposal. Twenty-one of the 30 owners were not in the game when baseball lost the 1994 World Series over the idea of a salary cap based on revenue sharing, but they still should know the idea is a complete non-starter with the union.

The union sounded like little kids shouting “no backsies!” when it claimed a March agreement with MLB prevented any further economic talks on the possibility of playing in empty stadiums.

In the final proposal dated March 26, a copy of which was obtained by SI, Article I entitled “Resumption of Play” spelled out the very such possibility of re-opening talks: “The Office of the Commissioner and Players Association will discuss in good faith the economic feasibility of playing games in the absence of spectators or at the appropriate neutral sites.”

That agreement also suggests the All-Star Game will be played after the season. Under Article XII, “Player Marketing and Promotion,” MLB and the union will continue to have discussions “including but not limited to an All-Star Game and/or Home Run Derby after the regular season.” It also provides for “initiatives involving players to promote MLB’s return to play (before and after opening day).”

Perhaps the All-Star Game could be played on the off day before Game 1 of the World Series. Playing it after the World Series would be anticlimactic.

Looming over the need for a season is postseason television money. MLB gets about $1.3 billion from its national TV partners. About $787 million of that total is tied to the postseason–about 59% of all national TV money in one month. This year with an expanded postseason (seven teams each league) the take is expected to increase to $1 billion.

Mandi Wright and Kelly Jordan via Imagn Content Services, LLC

To get its $1 billion take in one month, baseball needs two things:

1. A regular season with enough games to make the postseason viable.

2. A postseason format as close as possible to the usual tiers of postseason play, which determined the value when the rights to those games were sold to the networks. In other words, no crazy March Madness type brackets.

Because that $1 billion pot is so important, some player pay would probably be tied to the full postseason being played.

How do the two sides get there? They negotiate. The owners’ first proposal of sliding pay cuts isn’t going to get it done (though many teams, including the Dodgers and Nationals, as well as many businesses, are using sliding pay cuts for employees as a way to deal with the economic downturn). Now the union must respond with a counteroffer. Is the union against the concept of sliding pay cuts, or is the math the problem? Does it prefer deferred compensation? And what about an extension of the CBA as a bargaining chip? It was used as such in the 1981 settlement.

Players may want to propose playing more games so they can earn more money. But such a proposal holds little appeal for MLB as long as games are played in empty ballparks–which figures to be the entire season. One hundred times zero (ballpark revenue) is the same as 82 times zero.

Any extension of the schedule is also problematic. MLB already is worried about a second wave of coronavirus coinciding with the fall flu season. Pushing the postseason into November puts that $1 billion pot at increased risk.

Meanwhile, officials on both sides are working on a separate agreement when it comes to safety protocols. The 67-page outline MLB sent players was exhaustive, but it was not a final document. Players can bargain off it, including negotiating for postgame showers (it can be done in shifts), the use of hydrotherapy pools and any other issue as long as it conforms to local executive orders.

Whatever agreement is reached on protocols, players, just like people returning to work and athletes in other sports, must recognize there is a nonzero risk. Players will and should have the option of opting out of playing if they are not comfortable.

Other sports leagues offer something of a road map. As the Premier League begins its restart, for instance, it conducted 2,752 COVID-19 tests in its first three rounds of testing. Twelve tests came back positive, a rate of infection of 0.4%. The Premier League insists that any players or staff that test positive are isolated for seven days. The Premier League has 500 players: 20 teams with 25-man rosters. Baseball has three times as many players.

I don’t try to solve complicated labor issues. I don’t think an agreement is coming when somebody makes a proposal and I don’t think an agreement is impossible when one side rejects it. I have seen baseball shut down eight times by labor disagreements, though not once in the past 25 years.

This time is different. Like many businesses in these unprecedented times, baseball is in such a fragile place that the incentive to find a way forward never has been stronger.