I’ve written before about the problems with those of us in the baseball media writing uncritically and unwaveringly about Major League Baseball without deviating from team narratives. As the COVID-19 pandemic continues to paralyze the baseball world - and the world at large - we see that problem once again popping up, this time in the context of the league’s Arizona Plan.
Earlier this week, ESPN’s Jeff Passan wrote a column in which he discussed the state of baseball in 2020. Passan is an excellent writer and an ESPN columnist for a reason; I am neither of those things. But Passan has a following and a platform, which gives him some obligation towards objectivity. What we got instead was this:
The case for the owners is simple. Their businesses already are suffering. They don’t want to suffer more. And the long-term financial consequences are real.
The players certainly have a more emotionally resonant argument. If they play ... they’re going to be ones potentially sequestered for months at a time. If they play ... they’re the ones whose health could be at greater risk. If they play ... they’ve done nothing to prompt a lessening of their salaries.
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Far be it from me to play lawyer and financial adviser in the same column, but if nobody bends after the posturing and bickering and they’re staring at a scenario in which the sport will not return if they can’t find a financial deal, perhaps they consider deferrals.
Right now, the issue for owners is twofold: present cash flow and future earnings. Projecting those earnings isn’t easy, but saving money right now is — if players agree to delay payments slightly. Minimum-salary players could get their full salaries and those in arbitration and beyond receive percentages in 2020 and the rest spread out over the following five years.
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All of this, by the way, is taking place against the backdrop of Minor League Baseball’s disastrous power play in which it planned to fight MLB’s attempts to cut upward of 40 teams from the minor leagues. With the backing of big-name politicians and social-media circles, the strategy actually looked relatively canny. Then the coronavirus hit.
Frankly, Major League Baseball couldn’t have gotten friendlier coverage if the league had written its own press release and Passan had repeated it verbatim. Here is an ostensibly neutral baseball journalist accepting without evidence that MLB teams are suffering sufficiently to warrant a reduction in the players’ contractually mandated wages, whilst chalking up those players’ objections to “emotional resonan[ce]” rather than legal requirements. Here is a purportedly impartial sports reporter suggesting that players take a pay cut - for a deferral is a pay cut because of the time value of money - in favor of billionaire owners who are worth orders of magnitude more than the wealthiest baseball player on the planet.
That’s not just irresponsible journalism. It’s morally, factually, and legally wrong.
Let’s start with Passan’s proposal that players should take pay cuts, via deferral or otherwise. As a legal matter, there is simply no legal basis for the League to demand that players be paid less. The Uniform MLB Player Contract actually has language which covers this kind of eventuality:
Note the operative word here: suspend. In other words, the contract picks up where it left off after the emergency is over. Nothing in the contract says that the player gets paid any less as a result of the emergency. That language was incorporated into the Collective Bargaining Agreement on page 346.
Now, the players decided to renegotiate those terms in the agreement to preserve service time, and in so doing arguably opened the door for the league to argue for a reduction in salary. That said, the league still has to explain why it isn’t “economically feasible” to pay the players their contractually-agreed salaries - and that brings us to Passan’s second point, assuming without proving that teams cannot afford to pay players their full salaries in 2020.
Let’s take, by means of example, the small-market Pittsburgh Pirates, owned by Robert Nutting. How much do they make?
Forbes Magazine estimated that the Pirates are worth $1.275 billion in its annual franchise valuations published Wednesday.
That valuation ranked 20th out of 30 teams. The New York Yankees led Major League Baseball with an estimated value of $4.6 billion and the Miami Marlins ranked last at $1 billion. The valuation represented a 1 percent increase from last year.
Kevin McClatchy led a group of investors that bought the team for about $90 million in 1996. Ogden Nutting was among those investors, contributing $2 million, and Bob Nutting became the principal owner in 2007.
Forbes estimated the Pirates’ operating income at $39 million, up $4 million from last year. The Pirates’ $76.6 million opening-day payroll was the third lowest in baseball.
Of that $39 million profit (against over $250 million in revenue), only about half - $20 million - comes from the team’s television contract. The Pirates’ 2020 opening day projected payroll sat at $69 million, a decline of over $7 million. Meanwhile, the Pirates increase in value by about one percent year over year, which is about $10 million a year, the smallest increase among all MLB teams. All of this is to say that it’s entirely possible - if not plausible - that the Pittsburgh Pirates turn a small profit this year even if they pay all of their players their full salaries. And if the Pirates can do it, literally any team can.
In other words, there’s simply no evidence - none whatsoever - that COVID-19 poses an existential threat to any Major League Baseball team. If the pandemic were to stretch into 2021 and beyond, the calculus would of course be different. But MLB franchises are growth assets that increase in value by tens of millions of dollars simply by existing. A one-year blip doesn’t change the television contracts or long-term growth potential of an MLB franchise.
Contrary to Passan’s baseless assertion, there is no public evidence whatsoever that COVID-19 will cause long-term ramifications for MLB profits. So when Passan says that MLB owners’ businesses are suffering, that’s frankly an overstatement bordering upon rank exaggeration. Will MLB owners make money this year? Only if they don’t pay their players as much. But that hardly counts as “suffering” for billionaires, and avoiding a one-year loss to ensure that MLB team valuations continue to rise uninterrupted is simply not the job of team employees. Not every NBA team increases in value every year. As much as MLB owners may want to be like the NFL, where team values rise every year, even NFL teams don’t make money annually once taxes and depreciation are factored in.
Then Passan says that the players’ argument is emotional, an inherently dismissive tack, particularly when juxtaposed with his argument that teams are “suffering.” The reality is that team owners have a contractual - that is, a legal - obligation to pay their players, and that’s before you get to the reality that bargained for assumption of the risk of contracting COVID-19 must as a matter of law be accompanied by consideration. By contrast, what Passan is asking the players to do in his “suggestion” is accept a pay cut - for a deferral is a pay cut - and the risk of contracting so the owners can continue to make more money in franchise appreciation value than Bryce Harper makes in a season. I already explained why that proposal makes no sense whatsoever.
Then, at long last, Passan argues that Minor League teams trying to stay in existence constituted a “power play.” That might make 30 billionaire ownership groups feel good about themselves, and if that was Passan’s target audience he did a phenomenal job. But the reality is rather different. The loss of a quarter of minor league baseball results in the elimination of literally thousands of jobs, from concessionaires to public address announcers to ticket attendants, to say nothing of players themselves. There was absolutely nothing necessary about eliminating minor league franchises to improve minor league pay or conditions - as I’ve written before.
In other words, MLB is threatening to cut 40 minor league teams in order to save $20 million, even though the league makes 90% of that figure back in the form of payments made by minor league teams. And whilst it’s true that the Yankees do have more minor leaguers than anyone else— as many as 340 in 2018— there’s no reason why every team couldn’t match the feat. After all, the total annual pay for all minor leaguers for all teams across all levels is less than ten million dollars. That’s right— all minor leaguers earn, combined, about half of what Mike Moustakas will earn in 2020.
To put it another way, MLB is eliminating 42 teams to save an amount of money equal to 0.2% of MLB’s annual revenue, because the league said that money was necessary to increase pay. That’s not a typo. Zero. Point. Two. Percent. To call a request for $20 million from minor league baseball a “power play” when Major League Baseball makes $11 billion in a single year is, frankly, an almost insulting level of obfuscation, and one which essentially means that Passan thinks his readers are fools. It’s not a power play, except perhaps by MLB owners grasping at every possible dollar.
We talk about MLB players making too much, but we never have the same conversation about team owners or billionaires. It’s time we truly fathomed just how wealthy billionaires are. Mike Trout, the highest paid player in Major League Baseball history, would have to play at his current salary for the next twenty-five years and spend nothing just to match the “poorest” MLB owner, Stu Sternberg - and only if Sternberg made no money for the next 25 years. But it’s the players who we want to surrender their salaries, even though they - not the owners - produce baseball.
Last year, I wrote this about baseball media in the context of domestic violence.
That’s why we in the baseball media need to do a better job of breaking that cycle. People are more than assets. Some actions are just wrong. Some things should not be turned into redemption stories for clicks. We owe it to the fans, the players, and ourselves to be more representative; white people should not be the primary disseminators to the public of information about a system which still retains vestiges of its deeply racist roots, and men should not be the primary disseminators of information about toxic masculinity and its effects. We need to have the humility to know when our writing will do harm, and how. We need to have the humility to know when not writing will do harm. And we need to decide what the cost of our unquestioning fealty to this sport is, and whether we can live with that in the years to come.
The same, frankly, is true of baseball’s economics. In this culture and society, we have a problem. We idolize billionaires. We consider them the apex of achievement. We make excuses for them - in the press, in our homes, in our daily lives. And yet...fully a third of Americans are just one paycheck from being homeless. No one is ever one paycheck from being a billionaire. Our media reflects our values. A reporter asking employees to take a pay cut so that billionaires might become even wealthier is not just factually and legally dubious. It’s morally reprehensible. Jeff Passan should be better than that. That he isn’t is an indictment of sports media as a whole, and contributes to the very problem of inequality surrounding us on a daily basis.
Sheryl Ring is a litigation attorney and Legal Director at Open Communities, a non-profit legal aid agency in the Chicago suburbs. You can reach her on twitter at @Ring_Sheryl. The opinions expressed here are solely the author’s. This post is intended for informational purposes only and is not intended as legal advice.