MLB owners set to lose $1 billion in 2020, but that’s only half the story

Empty Fenway on Memorial Day (Getty)

While MLB owners falsely plead poverty, it’s true that with an 82-game season and revenue sharing, they’ll see a $1 billion loss, but that’s only half of it.

MLB owners take heed…

“Everyone is indeed entitled to their own opinions, but they are not entitled to their own facts.”

U.S. Senator Daniel Patrick Moynihan

The trouble many of us have with MLB owners is they tend to cherry-pick facts that serve their best interest. This is not an uncommon practice, except that it’s serving as static and noise in the current dispute between MLB and the players.

Mike Ozanian, who writes on Sports Money for Forbes, lays it all out in layman’s terms for us in a compelling story in which he verifies that MLB owners will lose one billion dollars in 2020 – even with a revenue split with the players.

The primary problem MLB owners are contending with is the absence of fans in the stands, a no-compromise reality that is due to COVID-19.

Television revenues are significant for all teams, nearly all of whom are supported by Regional Sports Networks (RSN’s), with a lucky few having an additional stake in privately-owned networks like YES (Yankees) and SNY (Mets).

MLB Owners Making Their Point

In either case, regular-season games are not the most prominent television source of revenue. It’s the playoffs that drive the profits, especially when the big-boys like ESPN, Fox, and TBS are on board.

ESPN in bed with MLB to the tune of $5.6 billion
ESPN in bed with MLB to the tune of $5.6 billion

Thus, MLB owners have a legitimate argument in wanting as few regular-season games as possible (proposing as few as 40). In contrast, the players wish to as many as possible (offering as many as 114) to boost their salaries.

Moreover, MLB players are paid only during the regular season. All revenue generated during the postseason is divided up as “bonuses” for the teams and players who participate.

Hence the standoff with neither side willing to budge at this moment.

MLB Owners Hit The Third Rail

It is at this juncture, though, the arguments of MLB owners hit the third rail and begin to fall apart. It’s not because they have lied to us. Instead, it’s more that they haven’t given us all of the facts.

MLB owners raking it in (
MLB owners raking it in (

The story in Forbes stands for you to read, so I won’t bore you with all the numbers as they are presented.

But we begin again by re-visiting the correct claim that MLB owners stand to lose a billion dollars this season – a minimum depending on a set of variables.

The story would end there if Mike Ozanian does not research to show that MLB owners are only giving us part, and not all of the facts.

Ozanian uses the same reference points to show that in 2019, MLB had total revenues of $10.5 billion. This was offset by operating expenses of $9 billion – generating a neat $1.5 billion in profits.

In 2018, MLB revenues set a (then) record of $10.3 billion. A conservative estimate of profits registered into the MLB till for 2018 is $1 billion.

Pourquoi – Where Did All That Money Go?

Now comes the big question MLB owners have yet even to attempt to answer – what did you do with that $2.5 billion you made the last two years – before you hit the skids this year?

It’s a legitimate question that fans, not only players, have a right to ask. There’s no mystery here. Consider the example of the top-notch Biology student in high-school who aces the first two exams of the year with 95+ grades.

On the third test, though, he falters and fails the test with a 60. He’s no longer an Honor Student, but he darn well passes the course with a well-above-average of 83+.

Cubs owner Tom Ricketts ready to cancel season (ESPN)
Cubs owner Tom Ricketts ready to cancel season (ESPN)

The posturing on the part of MLB owners like Tom Ricketts of the Chicago Cubs reveals the inconsistency.

Ricketts claims that most of the revenue goes right back into the team, which might be acceptable if there was a way of proving what he says is true.

MLB teams, you see, are exempt from federal antitrust laws that would require them to “open their books” for examination just as any other privately held corporation must do.

Even so, Rickett’s use of the word “most” is disingenuous and open to suspicion. If “most,” for instance, means (and we’ll be generous) 80% – then in whose pockets did the other 20 % go?

And more significantly, justifiably, why can’t that money be used to offset the losses this season – with the logical assumption that MLB owners will rebound and continue to share in record-breaking revenues throughout this decade?

God bless you if you got this far on a topic, so few fans care to follow. So why not join the chorus – can we please just F____in “Play Ball”?

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Author: stevecontursi

I am an amateur writer with a passion for baseball and all things Yankees and Mets.