Players And Owners Both Have Reasons To Extend This Stalemate

Image credit: Greg Lovett-USA TODAY NETWORK

Let’s just get it out of the way right now: no one knows how many games long the 2022 Major League Baseball season is going to be. Fans don’t know. I don’t know—considering this is my beat, if I don’t know, I feel confident saying the rest of the media doesn’t know, either. The players don’t know, and even the owners, whose idea this all is, don’t know. 

We all have an idea or ideas of how long the lockout and bargaining will drag on before there is a new collective bargaining agreement and a new start date for the 2022 season, but what we really have are guidelines for potential events on a calendar, not a one written in permanent ink. And the reason we can’t definitively say how many games will be missed in the same way I could, for example, confidently write years ago that we were heading toward a lockout, and confidently write that the start of the season was very likely in jeopardy once that lockout began, is because all of this depends on how far each side decides to push itself in order to get what they want. And what each side wants is about much more than just 2022’s revenues and paychecks.

We’ll start with those potential events, though. The first comes courtesy The Athletic’s Ken Rosenthal, who included it as part of a piece focused on criticizing the owners for even letting things get to this point:

April is typically a month of low attendance and revenue for many clubs, particularly those in colder climates. Local television contracts generally do not require clubs to issue rebates to their networks until about 25 games are missed, according to a source with knowledge of such deals. And the big money in the league’s national-television contracts comes from the postseason.

After missing 25 broadcastable games, some regional sports networks could begin asking MLB for rebates. Maybe some others give their teams a little more slack, or a little less, and while that could be a source of conflict among the owners—if a few are feeling more pressure than others earlier, that could be a problem for standing firm against the players—it’s also possible that owners, as a group, do not care about whether they need to rebate their local carriers. As Rosenthal mentioned, the most significant money is in the national-television contracts and the postseason. The owners might be willing to take whatever hit is necessary in the regular season so long as they believe they’ll get the postseason revenue at the end of things, whenever that end comes. 

Remember, for a moment, that the losses of the pandemic-shortened 2020 season were purposely overstated by the league, and never proven, either. As I said at the time when MLB revealed their supposed $3 billion in losses from that season:

For starters, even if we take the $3 billion in debt at face value, that’s spread out among 30 teams. That’s an average of $100 million: a $3 billion debt sounds massive until you remember that two-thirds of the league’s teams have principal owners who are billionaires, some many times over, and the other third is damn close. And that’s just the principal owners: if the $3 billion is accurate, it wasn’t just split up among 30 principal owners to around $100 million each, but all the minority owners, of which there are many and more all the time, as well. This isn’t quite as big of a figure we’re talking about now, is it?

Second, that $3 billion figure didn’t include the league’s revenue from RSNs, because they don’t have to report it. Of course losses are going to look significant if one of the most significant sources of revenue isn’t included! And third, as Rob Mains wrote here at Baseball Prospectus that same week, the kind of debt the league was talking about when commissioner Rob Manfred told Sportico MLB amassed $8.3 billion in debt is very deceptive. As Mains said, “Debt can be scary when you or I run up our credit cards in order to pay for necessities. It’s a lot less worrisome—hell, it’s good—when a company gets low-rate money thrown at it for a large premium real estate development.” You can probably guess what kind of debt MLB was racking up.

I bring all of this up now to point out that the league’s losses in a season in which they prorated player salaries and lacked have gate revenue didn’t financially destroy them in any way. They’ll have a gate to look forward to whenever the 2022 season does begin, meaning the actual losses, whatever they were, will likely be less than they were two years ago: the gate might not match national-television deals or RSN contracts, but it still accounts for roughly 40 percent of a team’s local revenue, since it includes tickets, parking, in-stadium merchandise, and concessions. The union can argue that they deserve to reschedule games to make things work, but if the delay is for two months, well, you can only sneak so many seven-inning doubleheaders in before it starts snowing at all of the Red Sox home games, you know? Which means the longer this lockout goes, the higher the chance that salaries are prorated because there will simply be no way to play all or nearly all of the season. 

All of this is a lengthy way of saying that the owners might be done making threats after 25 games once the RSNs start calling. On the other end of the spectrum, they might be willing to take whatever short-term financial hits they need to in order to get the deal they want, knowing that, at the end of this, they’ll still have the gate and postseason revenue to look forward to, all without having to pay the full extent of their most significant expenditure: player salaries. This is not a pleasant thought.

Rosenthal is right that the owners have the resources at their disposal to “outlast” the players. But what this paragraph posits is… what if they don’t? Yes, the players’ strike fund, which they’re pulling from to provide stipends to players while the paychecks aren’t coming in, is not as deep as the owners’ pockets. They’ve got 1,200 members splitting $178 million, which has already begun to be shared at $5,000 per player, and it’ll be $15,000 per player in April. It’s possible the Players Association won’t be giving the players on the 40-man roster expected to begin the season in the minors the full $15,000, but let’s just say that’s what’s happening since it would mean the fastest spending calculation: that means, by April 1, $178 million will have become $154 million—$6 million for the initial stipends, then $18 million for April. The PA could give all 1,200 members a $15,000 stipend for the next nine months, which would bring them to January, but then they would be out of cash assuming there’s no refilling of it before that happens. 

And they could refill it a few ways, either with creative barnstorming efforts or streaming events where they hit dingers or exhibition games where they let Twitch users tell pitchers what to throw, or players who have the cash to spare could help refill the fund. License the players’ likenesses out to Nintendo for use in a new Mario Superstar Baseball. Schedule an absurd number of meet-and-greets. Let Max Scherzer throw fastballs to teenagers and give whoever makes contact without needing to change their pants a cash prize. Let teenagers pay to try to knock an Astro, literally any Astro, into a dunk tank. There are options, if things got to where $178 million had become a much smaller number, is the point. 

There are concerns about extending team control due to a lack of service time the more games are missed during the lockout, sure, but service time results can be negotiated, too, like they were in 2020. Hell, how many games are played, and how many games will be paid for, are also going to have to be negotiated: the league can say “a deadline is a deadline,” and the union can say there won’t be an expanded postseason if a game is canceled, but these are bargaining positions, not immutable laws. In the end, the league getting the expanded postseason they want might come down to players getting the prorated service time they want. It’s not a definite, but it is a possibility that this is the kind of arrangement we end up seeing at the end.

Now, I’m not saying convincing YouTube to pay to host and stream the Resembles But Is Legally Distinct From The Home Run Derby event is going to be what wins the lockout for the players. The reason their comparatively meager fund might allow them to be the ones to outlast the owners is that it’s money the players can rely on that doesn’t rely on the other side.

Consider: the owners are unlikely to dip into their vast personal fortunes to keep the lockout running indefinitely. Teams rely too heavily on minority investors at this point for that strategy to work. Buying a small piece of an MLB team only pays off if it literally pays off, you know? If the stake doesn’t pay, it’s not valuable to resell, and if it’s not valuable to resell, well, franchise valuations start to dip. And since franchise valuations play a large role in not just resale value, but also amassing the kind of productive debt Mains wrote about, they won’t want that to happen. Unless the principal owners are going to start cutting checks to all of the minority owners for the investment returns they expected to get, then the owners can’t really utilize the entirety of the resources at their disposal to win this thing.

Regardless, the revenue the owners do have to look forward to is enough in theory. However, this plan to wait on the eventual gate and postseason revenues does mean that teams are reliant on the season starting eventually. It just doesn’t have to be after 25 games and the first phone call from their local broadcast partner. If there is no gate revenue because there are no regular season games, and there is no postseason revenue because there are no postseason games, then we’ve swung back around to where the owners are probably much more concerned about their finances than the players. 

Like I was saying, you can’t definitively say how long this is going to go on, because it all depends on which side is willing to push beyond their limits in order to get what they want. Is it both? Neither? Just one of them? They each have reason to push that far, since the owners want to put an end to this whole union thing right now, especially a union that has decided to fight back on a CBA for the first time in too long. The union can’t give in and let the owners get what they want, either, since their recovery from the damage of the last 10, 15, however many years of bargaining is such that it cannot be completed within a single CBA. They’re going to need to come away without letting the owners make real gains here, and then they’re going to need to do it again in 2027. If the owners get what they want here, when the players are all angry and righteously so, what hope is there for next time?

Who wants it more. That’s what it will come down to. How apropos for sports, no? What price is too high for the owners in their quest to crush the Players Association, a feat which would prove supremely lucrative in the future, in no small part because of the appeal that would create for new buyers. How much of the present are the players willing to give up in order to create a better future? Like with the owners, we don’t know the answer, but the fact that the messaging coming out of not just diehards like Scherzer, but also the notoriously silent on everything but the weather and the Eagles Mike Trout, focuses on this next generation and the idea that the game itself needs to become more competitive in order to thrive like it should… it makes it seem like they know the score, is all. That the union has remembered its purpose. Which in turn means the owners are only going to want the win here even more, to get them to cut that out. 

We could go back and forth like this all day, but instead, let’s just stick to what we know is absolutely true: it’s going to be a long spring. 

Marc Normandin currently writes on baseball’s labor issues and more at marcnormandin.com, which you can read for free but support through his Patreon. His baseball writing has appeared at SB Nation, Defector, Deadspin, Sports Illustrated, ESPN, Sports on Earth, The Guardian, The Nation, FAIR, and TalkPoverty, and you can read his takes on retro video games at Retro XP.