Baseball for a long time has been regarded as America’s Pastime – a sport when played signifies that summer is around the corner. Due to the Novel Coronavirus, all sports have been canceled in the United States. For two months now, Baseball has tried to get back. An agreement has not been reached between the league and the players – mostly due to salary concerns. Baseball has lost a lot of money during this time with no games played and no fans present if the league resumes. Baseball is under a strict idea if the league doesn’t have a lot of money, the players should not get a lot of money. The pain should be suffered by everyone.
Traditionally, Baseball has made all of its money from television rights during the postseason, a pool of merchandise revenue, and purchases from fans. There is no salary cap – which is something to unique to this sport. Teams can spend as much as they want for players. A luxury tax is present, where teams have to pay certain taxes if they exceed a certain threshold of salary, but owners can still spend even if they have surpassed the luxury tax. In other sports, there is a hard cap where even with the luxury tax there is a maximum amount teams are allowed to spend.
Another unique thing to baseball is the financial pool they create. Revenue from all the ballparks is put into one big pot and split among all of the teams. This is to account for the differences between big markets like New York and Miami and small markets like Oakland. Owners, in the past, have never revealed their financial details or books. It is unclear how much they make from the league and how the split of revenue between players and owners occurs. Speculation has been as low as 40% for the players and as high as a 50 – 50 split in revenue from the league.
With COVID – 19, Baseball has put out a proposal to resume the league. 82 games would be played this season, with a 50 – 50 split between the players and owners in terms of revenue. This proposal includes no fans which would lower the revenue made from stadiums and would reduce the money in the pool between all 30 owners. Owners would have less money and they are calling on players to take a salary reduction. Players agreed to take a salary reduction on a pro-rated basis. Players get a certain percentage of their salary, for a certain percentage of regularly scheduled games they played.
The salary reduction is not enough for owners and they are looking for players to take even more of a reduction in salary. Last week, the league proposed an idea of a scaled salary pay cut. Players in the MLB making the most amount of money will get the highest pay cut while players making less money will get the least pay cut.
This idea has drawn a lot of criticism from the players. Max Scherzer who is entitled to get $15 Million dollars and a member of the players union board has stated “… there’s no reason to engage with MLB in any further compensation reductions”. Players are clearly opposed to taking a salary reduction, but not just because of financial loss. Rays pitcher, Blake Snell became famous for his complaints about the risk. Playing baseball still has the risk of getting COVID – 19. Snell, among others, is not willing to take that risk with a reduced salary.
With major disputes between the players union and the league over salary, except to wait a little longer before a deal is agreed to. Baseball is starting to distance away from common people with millionaires and billionaires fighting over money. Common people who have lost their job will be alienated after hearing people fighting over this money. Baseball will come back, but it will take longer than expected.