MLB, in the real business world, is an alien entity. In crisis mode, the party could soon be coming to a close…
Major League Baseball (MLB) is set to go to war with the players in the next round of negotiations when they sit down to come up with a new agreement, set to expire in 2021.
A $10 billion yearly business, team owners want a more significant piece of the pie back from the players. Fat chance of that happening say the players.
But first, a few annoying but very relevant facts:
Major League Baseball (MLB), with its 30 teams, generated around 9.9 billion U.S. dollars in total revenue in the 2018 season, almost twice the revenue generated ten years ago when total income was at 5.82 billion U.S. dollars.
On average, each team generated almost 330 million U.S. dollars in revenue in 2018. (statista.com)
Now, let’s add a dash of perspective.
Each year Berra played, the club offered, and he accepted a one-year deal. His highest salary was the $65,000 Berra earned in 1957 (in today’s dollars $595,284), which is close to the major league minimum salary today.
On the other side of the ledger, Ellsbury’s lifetime earnings total $175,681,999 (spotrac.com), the equivalent in 1957 dollars of more than $19 Billion.
There’s more – hang in there. In 2019, the average or mean one-year salary for a player in MLB is $4,360,000 – or roughly 70 percent of the total money earned by Yogi Berra in seventeen seasons.
Even as recent as 2003, the average salary of an MLB player was approximately only half ($2,370,000) of what it is today.
MLB: Ergo, the no-brainer conclusions
- Everyone associated with MLB – owners and players alike – make a lot of money.
- Player salaries today are out of control.
- In 1957, no team would even think about paying Jacoby Ellsbury the 1957 equivalent of $2.8 million when Yogi Berra, the MVP that season, made only $65,000.
- Guaranteed contracts are non-sensical, and they are unnecessary. One-year agreements for all but the top ten percent are necessary, and they make sense.
- If the players can operate with a union, why shouldn’t the owners be granted the same privilege – i.e., MLB needs a temporary period of legalized cooperation to allow the pendulum to swing back to the middle.
Answering the players’ objections
The Major League Baseball Players Association (MLBPA) will (rightfully) raise objections to anything that increases the owner’s share of the $10 billion in yearly revenues referenced above.
The players are already alarmed by the fact that from 2006 to 2017, the percentage in player compensation across MLB, MiLB, and amateur signings was 56.5%.
In 2018, the figure was 54.8%. This occurred as the growth of league revenues increased at a faster pace than compensation back to the players grew. (forbes.com)
Nevertheless, there are ways to even the playing field so that owners cannot put extra revenue earned at the expense of the players in their own pockets.
MLB: The Ballpark Builder
Shame on MLB for allowing teams to play in sub-standard venues.
In Oakland this year, the Yankees had to vacate their clubhouse and dugout while workers swept feces from overflowing bathrooms away.
In Tampa, the team wins 95 games, but they can’t draw fans to their delipidated dome.
MLB should build, or at least fund a good portion of the funds needed to build state of the art facilities and stadiums for these and other teams.
MLB Pension Reform
In 2011, an agreement was reached so that players who appeared in the major leagues for less than four years from 1947-79 will receive payments of up to $10,000 in each of the next two years under an agreement between Major League Baseball and the players’ association.
At the time, then-Commissioner Bud Selig said: “Sometimes in life, it’s just the right thing to do. I believe baseball is a social institution, and with that comes social responsibilities.” (kentucky.com)
A mere pittance by today’s standards, and it’s time to “do the right thing again,” so Hank Aaron and Willie Mays don’t need at their age to criss-cross the country to appear at card shows and auto-expos to earn a few bucks signing autographs.
MLB: Supporter of college baseball programs
The annual MLB June College and Amateur Draft is a misnomer – it’s overwhelmingly a draft of players from colleges across America.
College baseball is where talent we see tomorrow is developed today.
Money spent by colleges on their baseball programs (forget about football) can better be spent on financial aid for students and academic programs.
MLB needs to pay their fair share for reaping the benefits they get from these college players.
Summarizing a few key points
Major League Baseball is or should be in crisis mode. The alleged cheating scandal brought on by the Houston Astros is no joke, and the real fallout is yet to be felt.
The dispute between the Yankees and Jacoby Ellsbury that seeks to nullify (at least) the final year of his guaranteed contract will be precedent-setting – no matter which way the outcome goes.
MLB and everyone associated with the game are teeming with money. Television contracts, both local and national, add to revenues.
The U.S. Congress has historically been generous in exempting MLB from anti-trust laws that govern American businesses.
MLB should not take the exemption that changes everything for granted.
For reasons yet to be explained, MLB is drawing the attention of Congress with their intention to “re-organize” minor league teams. Translation – several teams will be wiped off the face of the earth.
As a writer who is not on the inside, I can only point to areas of concern as I’ve done in this story.
The real work that includes the specifics of anything new is a matter for the players and owners to decide.
As fans, we can only hope they see the writing on the wall that says – “The Party’s Over” before it’s too late…