The Billion Dollar Major League Baseball Question

A lot has changed in 140 years, unfortunately some things have not. Since 1880, Memorial Day was a day of somber celebrations, BBQ’s and major league baseball. The league staggers game starts so there is always a game going on until 10:30 PM PST. This year baseball, along with so many other things, was taken from us.

The players union (MLBPA) and the league’s owners have been slugging it out at the negotiation table for the better part of 6 weeks now. For a while, the pay structure was the main hurdle with a nationwide unemployment rate currently in the US, now the amount of games is the major hurdle that will be cleared.

All summer we have been asking when we will get baseball back, I think the “million-dollar question” we should be asking is, ‘Do the owners want to bring baseball back?’  We have predicted from the beginning July 4th 2020 you can listen to our COVID19 baseball comeback Podcast.

    To answer that question, you first have to understand the owner’s mindsets. Team ownership is symbol of royalty in the US. Not only must you be obscenely wealthy, you also go through a vigorous background check. Your finances are audited with a fine-tooth comb and at the smallest hiccup you could be ineligible.

You can blame these precautions on one of sports greatest con-men John Spano (not Spanos). Spano effectively bought the New York Islanders with no money. Baseball ownership has been spotty as well. From 1984-1999 the Cincinnati Reds were owned by one of the most vocal racists in sports history, Marge Schott.

The same year we saw Schott finally sell the Reds, former Astros owner Drayton McLane, Jr. made an ominous choice of selling the naming rights of their new stadium to Enron Corporation. Three years they had to change the name overnight as Enron was exposed for their crimes. Current owners are all businessmen at their core. They don’t see baseball as a sport, they see it as a profitable market for them to exploit.

They don’t see players; they see assets that all have price tags on their ears. Nearly every decision that is made by them has a goal of making them the most money.         

  As of 2019 every MLB team was valued at one billion dollars or more. Currently Cincinnati Reds owner Bob Castellini has the lowest personal net worth at 400 million. Ten of the thirty MLB franchises have owners whose net worth is less than one billion.

All but one of those owners are in “small markets” (CLE, COL, SD, KC etc.). New York Mets owner Fred Wilpon has a net worth of only 500 million while the Mets current value is 2.3 billion dollars. These ten owners are fighting harder than most to keep player costs down for obvious reasons.

Owners have finally relented to a pro-rated pay scale depending on how long the regular season is. On June 1st, the MLBPA sent a proposal to the owners with a 114-game season. By that plan, the players would be entitled to 70% of this season’s salary.

For owners who are not making any money on tickets, concessions, and certain advertising opportunities, that is too much. As expected, the owners rejected the proposal and chose NOT TO send a counteroffer. In the search for the answer to our million-dollar question, this is a major clue.       

    Even before the MLBPA’s proposal was sent to the owners, Phillies IF Trevor Plouffe called out the owners. This was his exact tweet: Here’s a theory that makes too much sense not to post:Owners want to play the least amount of regular season games possible. 60 is the number baseball needs to have a full postseason. They will continue to run the clock out until 60 games is the only possibility.@trevorplouffe       

    Obviously, this shows you the level of trust the players have when negotiating with their employers. From a baseball fan’s standpoint, anything less than 81 games will feel like an exhibition season.

Whoever wins the World Series will have an asterisk, if it is less than 81 it will feel empty. No other sport is dealing with the struggles that major league baseball is. As if dealing with COVID regulations were not enough, a labor struggle is developing. A lost season due to a labor dispute may be the final nail in baseball’s coffin.   

        All the leverage lies with the owners. Unlike players, they have assets to live off of easily and they aren’t usually in the public spotlight. Most owners will show their faces at charity events or PR events. If you do not like a player, buy a ticket and boo him.

Don’t like an owner? Too bad, just ask a Mets fan. The ball truly is in the owner’s court. While most owners will say the fans are the most important part of the team, they know it is money. The country needs baseball now than ever, but the powers at be seem content to wait until the profit margins are acceptable.      

     As we patiently wait for the billionaires and millionaires to split up thousands of dollars one thing is true, major league baseball is in the midst of a PR nightmare. Millions are on unemployment, more are fighting an unjust system, all while men playing a kid’s game fight for relative peanuts.

Our “Billion-dollar question” has a complicated answer. While owners do want to bring baseball back, they will only do so when it is profitable.

Brandon Ferst brandonferst@ecosystemsbusinessconsierge.com

@ferstreport

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