PHOENIX — Everyone take a deep breath, exhale slowly and chill.
There will be a Major League Baseball season in 2020.
Forget all of the rhetoric, vitriol and nastiness between MLB and the Players Association during these first few days of negotiations.
A feud between these sides over economics has been going on for the past half-century.
Don’t believe that while every other major sport – including baseball leagues in Taiwan, South Korea and Japan – are figuring out ways to play games during the pandemic, MLB will sit this one out.
They will play.
The season may not start on July 4th weekend as hoped. It may instead start later in July.
But it is happening.
There’s too much money at stake, and everyone knows it.
Oh sure, players are seething at MLB’s proposal this week that would slash the biggest stars’ salaries by nearly 60% of their original salary playing an 82-game season.
And guess what?
The owners will be just as livid at the union’s counter-proposal by the end of this week that refuses to reduce their pro-rated salary, perhaps demanding that they play at least 100 games with the regular-season extending into October instead of ending Sept. 27.
Washington Nationals Cy Young pitcher Max Scherzer fired a shot late Wednesday night when he tipped off the union’s stance:
“After discussing the latest developments with the rest of the players there’s no need to engage with MLB in any further compensation reductions,” Scherzer said on Twitter. “We have previously negotiated a pay cut in the version of prorated salaries, and there’s no justification to accept a 2nd pay cut based upon the current information the union has received.
“I’m glad to hear other players voicing the same viewpoint. MLB’s economic strategy would completely change if all documentation were to become public information.”
And that came hours after Cincinnati Reds star pitcher Trevor Bauer ripped Scherzer’s agent, Scott Boras, on Twitter, accusing him of being a destructive influence in negotiations.
“Hearing a LOT of rumors about a certain player agent meddling in MLBPA affairs,’’ Bauer said. “If true – and at this point, these are only rumors – I have one thing to say… Scott Boras, rep your clients however you want to, but keep your damn personal agenda out of union business.”
MLB and the union, who may not be able to stand the sight of one another at this moment, still are business partners and will resolve their economic issues.
MLB will remind the union that owners will lose about $2 billion if they play regular-season games without fans in attendance and concessions and parking revenue. It all translates into about a 40% loss of their projected revenue.
It will cost them nearly $700,000 to play regular-season games with no fans, the owners insist.
Now, they need to get the players to believe them.
The players are furious they are being asked to take another salary cut, after agreeing to a prorated salary on March 26, but the owners say that deal was based on having fans in attendance. The provision is right there in black-and-white with Commissioner Rob Manfred having the power to not start the season without fans in the stands. The players have a different interpretation.
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Yet, what is overlooked in this dispute is the issue of service time.
The union fought for players’ service time in their original agreement, and the owners consented, assuring players would receive a full year of service no matter if a game is played in 2020.
How much was that worth?
Try $600 million.
Players who are first-time arbitration eligible players receive about $300 million in increased salaries.
And those who reach free agency for the first time earn about another $300 million in annual salary raises.
This is why the union surrendered their right for the players to be paid for a full season, no matter how many games were played, realizing the value of a full year of service time.
It means you’re a year closer to salary arbitration, when your salary can jump from less than $1 million to $10 million. There were 192 players a year ago who qualified for salary arbitration, which has resulted in an average of $754 million in spending the past three years. All-Star outfielder Mookie Betts set a record in January with his $27 million salary for an arbitration-eligible player.
It means you’re a year closer to free agency. There were 131 players who qualified for free agency last winter, which has resulted in $1.722 million in contracts the past three years. All-Star pitcher Gerrit Cole received a record $324 million last December from the New York Yankees.
It was an issue that had owners splintered, with a few believing they were giving up far too much by letting players reach arbitration and free agency a year early, no matter how many games were played.
Now, is a different story.
The owners are unified in their belief that the players should take the same 40% reduction in revenue they are incurring playing games without fans. MLB lawyers came up with a sliding scale in pay reduction similar to the one teams are using to cut salaries, with their highest-paid employees taking the biggest cuts. The Washington Nationals just announced a plan in which employees earning $100,000 or less will receive a 10% pay cut, while those earning at least $300,000 will receive a 25% cut.
In this case, for players such as Mike Trout and Cole – who were scheduled to earn $36 million this year – they are taking a whopper of a pay cut. In MLB’s proposal, players who were originally scheduled to earn $35 million or more this year will now be paid $7,843,363, which includes a postseason bonus. Considering that the union already agreed to be paid on a prorated scale, that translates to a 55.7% pay cut from the $17.7 million prorated salary the players in the upper class are scheduled to earn based on an 82-game season.
But, the players who earn $1 million or less – which consists of 65% of all major league players – would receive a 14.2% pay cut.
Here is an example of the salary reduction sliding scale MLB proposed to the union, obtained by USA TODAY Sports.
The owners insist under this proposal that players would receive about 60% of the clubs’ projected 2020 revenue, compared to 47% of a year ago.
The union isn’t buying it and wants proof
No one is naive enough to believe any team will turn a profit this year, but as the players will remind you, clubs weren’t turning around and handing out Christmas bonuses on the profits they’ve turned every year, either. Forbes estimates that clubs earned about $5 billion over the past five years, which MLB strongly disputes.
It will be MLB’s turn to provide their counter-proposal next week, and this time they may come up with an overall pay reduction plan without differentiating between the highest-paid and lowest-paid players.
There’s no reason to offend the biggest stars of the game. They’re the highest-paid players for a reason. They’re the ones who are the biggest gate and TV attractions.
The sides will come up with a compromise.
Maybe MLB will agree to let the players keep the $170 million in advance fees that ended May 24.
Maybe the union will figure out a way to share the risk if a second wave of COVID-19 hits this fall, cancelling the World Series and costing MLB about $1 billion in TV revenue.
Maybe they can figure out a deferred-payment plan.
Maybe they’ll agree to try to play 100 games, taking their chances they can safely play into mid-November.
But, rest assured, assuming municipalities are open for business, and the safety and health protocols are satisfactory for everyone, these two sides will find a way.
It just takes time. There’s no deadline in these negotiations.
So, sit back, relax and try not to be caught up in the war of words.
We are going to have a baseball season.
Major League Baseball has no choice.
Follow Bob Nightengale on Twitter: @Bnightengale