This portion of the column is being written Monday, and in a perfect world, it will be outdated by breaking developments in the Major League Baseball Owner-Player negotiations by Wednesday. In fact Monday afternoon, after previously promising they had made their last offer to the Players, the Owners submitted a new proposal that would guarantee the Players an additional $200 million.
One of many things I learned working in professional basketball is team owners really, really don’t like to lose money. Or stated another way, a person with enough money to purchase a professional sports franchise has been a huge success in another line of work. Therefore the elements and concepts that made them wealthy will apply to owning a team. That part isn’t always correct, but let’s roll with the conceptual overview.
Last week ESPN’s newest Baseball Insider Jeff Passan wrote a lengthy column that included among other ideas, that if each team played 48 games, paying the players their full per-game contracted salary, in front of no fans, the losses per team would be $15.36 million. If MLB plays an 82-game season under the same parameters the losses would rise to $26.24 million per team. Keep in mind that MLB teams generate between 40 percent and 70 percent of their income from ticket sales and game-related operations such as parking, concessions, and novelty sales. All of that category appears to be wiped out for most of 2020. It is believed there is a small but vocal group of owners who are against playing any games this season under those financial constraints.
Passan was taking the editorial position of telling other people how to spend their money. Keep in mind that the number of off-field (not including players and coaches) employees a Major League Club employs starts at no less than 100 for a team in an average-size market, which is a tremendous amount of overhead. Add all of those numbers up and you’re talking about real money.
The Chicago Cubs are owned by the Ricketts Family, who according to some reports has spent a total of $1 billion doing the following: Refurbishing Wrigley Field; Building new office space for the team in the Wrigleyville Neighborhood; Developing from scratch the Marquee Sports Network, where all Cub games will be televised; and Building the Hotel Zachary, a 173-room hotel across the street from Wrigley Field. Even team wealthy owners, competing in a major market, are going to have trouble sustaining the losses described above. For the past couple of seasons, the Cubs ownership has put a hard cap on their own player salaries, which will eventually negatively impact their product on the field. The Cubs and the Ricketts Family will work their way out of the financial challenges eventually, but zero game-day revenue and a guaranteed multi-million dollar loss for a full season is significant.
The answer of course is that both sides will have to give up some of what they have demanded to this point, and for there to be some semblance of trust between Owners and Players for there to be a 2020 season and for the 2021 season to not include a lengthy player strike. Here’s hoping that happens.