I wrote a letter to the editor about the lockout
They didn't publish it.
MLB has been shut down for three weeks now, but that doesn’t mean there has been three weeks of furious negotiation between the league and the players union. According to a piece last week from Evan Drellich of the Athletic, the two sides aren’t going to meet to discuss “core economics” — the major sticking point in all this — until some time in January. The most optimistic of those out there seem to think that February will bring about a resolution, as the looming start of camps and the potential to lose games at the start of the season could force talks to get serious.
There are, however, reasons to be less optimistic. So let’s talk about it!
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Last week my local newspaper, the Peterborough Examiner, published a letter to the editor titled "Professional sports salaries are out of control." In it a seemingly well-intentioned fan bemoaned the extravagant dollar figures that are paid to top level athletes, comparing the work they do to much less well-compensated people, like doctors and nurses. "We are living in a broken world,” he wrote. “Sadly, priorities are upside down."
Later in the week the paper published a response to this letter from a decidedly less well-intentioned fan, who scolded the original writer about not understanding "the simplest law of economics in the free market society in which we live." This second writer concluded with an absurd little slice of conservative pabulum.
"If the letter-writer thinks this is somehow wrong, then perhaps he should have stayed in school, got his MBA and worked his way up the corporate ladder until he was making millions per year as CEO. Alternatively, he could have played hockey with a passion, become another Connor McDavid and made his millions that way.
Why didn’t he? Could it be that he wasn’t good enough? Well, he has plenty of company!"
Now that’s the kind of dumb-guy, point-scoring nonsense I expect from a small city paper’s letters to the editor section. The free market, baby! And while I’ll grant that this writer managed to get his reductive point across with impressive concision, which I’m sure had something to do with the Examiner’s choice to print this response, I think there was a better one they could have printed: mine.
And seeing as this is a baseball-related thing I wrote that didn’t end up getting used anywhere, and that it’s very much to do with the lockout we continue to be mired in, I figured I might as well post it here — plus some additional thoughts on where things currently stand.
Here was my response to “Professional sports salaries are out of control”:
Regarding Phillip R. Foster's letter about professional sports salaries, while I agree that we are living in a broken world — and we can certainly have a conversation about the destructive and immoral nature of capitalism if anyone wants — on this specific issue we can't only look at one side. Yes, some athlete salaries are astronomically high. However, in the case of Major League Baseball, currently about half the players in the league are in their "pre-arbitration" years, meaning they make the league minimum or something close to it. And yes, the league minimum in 2021 was $570,500, but most careers at the highest level are short, and it takes years of dedication and toil to get there. For example, minor leaguers in 2021 had minimum salaries of just $290 to $400 USD per week at rookie and short-season levels. Even Triple-A players have minimum salaries between $502 and $700 USD per week. And only just this fall have teams agreed to provide accommodation for their minor league players during the season.
This vast disparity between minor and major league salaries is unjustifiable, and the injustice of it all looks even worse once we start looking at what teams and owners make. The Toronto Blue Jays, for example, were purchased by Rogers Communications in 2000 for $165 million CAD. Four years later, after cutting payroll, devaluing their own product, and creating an untenable situation for the then-owners of SkyDome, they bought the building the team plays in for $25 million CAD — a fraction of the public money that was poured into constructing it, like so much ugly concrete, just 15 years prior. In recent reports about the company potentially looking to sell the club it's been stated that the team and building could now fetch $2 billion. In other words, franchise equity has increased by more than $90 million per year, on average, over the last 20 years.
There is a clear reason why: owning an MLB team is incredibly lucrative. The league itself boasts about this regularly. In 2019, for example, the last full season on which we have data, the league announced total gross revenues of $10.7 billion USD. They added that this marked the 17th consecutive year in which they had seen record growth.
Meanwhile, the league average player salary has been falling ever since reaching a record high of $4.1 million in 2017. The Players Association reported in February that the 2020 average would have been $3.89 million had a full season been played.
Record profits for owners while the slice of the pie for the players — the backbone of the sport, the people who are the product and the reason we watch — continues to shrink. That's not right. And while some of the salary numbers involved are certainly grotesque, arguing that they're too high is, in effect, arguing to keep money in the pockets of the billionaires eating sushi in their private boxes rather than the athletes that dazzle us on the field and make the games that we love.
Some will argue that player salaries are what drives the increasing unaffordability of attending games in person, but if that were true it would cost nothing to watch NCAA sports in the United States, where the players are not paid. It does not. Ticket prices are a function of supply and demand, because these are businesses like any other. And in a world of increasing inequality between the rich and the rest of us, between CEOs and their workers, MLB's players union ought to be supported as a very public — and hopefully successful — example of the power of collective action.
Yes, it's warped that some of these guys make so much in the first place. And the union's disregard for non-union members in the minor leagues makes that group less than ideal standard-bearers. But taking the side of the billionaires is not the way — here or ever.
We'll get another glimpse of the massive increase in MLB franchise equity in the coming weeks, after reports surfaced on Monday that billionaire David Blitzer — an executive with private equity firm Blackstone who also has stakes in the Philadelphia 76ers, New Jersey Devils, Crystal Palace, FC Augsburg, and more — is set to purchase 35% of the Cleveland Guardians, with a path to eventually secure majority ownership. Cleveland hasn't seen as big an increase in franchise value as the Blue Jays, but it's expected that 35% of the club today will cost Blitzer more than the $323 million USD the Dolan family paid for the club in November 1999. Sportico recently valued the club at $1.375 billion USD, meaning that it has "only" increased in value by $49 million per year on average over that span. But once concrete numbers on Blitzer's stake are known we'll have a better idea of the real world dollars here. (Another more theoretical example: Sportico has the Yankees currently valued at $6.75 billion, meaning they've added an average of $140 million of value per year since George Steinbrenner's group bought the club for $8.8 million in 1973.)
That billionaires keep leaping into the MLB ownership club is quite telling, especially when they're doing so with smaller market clubs like Cleveland. Or Kansas City, whose owner, John Sherman, was a minority shareholder in the Guardians but had to give that stake up after buying the Royals for $1 billion in 2019, which is why the Dolans are now partnering with Blitzer.
Also telling is the fact that by taking action to lock the players out they are fighting to protect a very lucrative status quo.
That, I think, is the prism through which fans need to view the current situation. Unfortunately, taking that view doesn't exactly lead to a lot of optimism about how this process is going to play out.
The players deserve a fairer deal from owners that have been squeezing them for years, using the competitive balance tax threshold as a de facto salary cap, manipulating service time to gain additional years of control and ensure that as many players as possible don't reach free agency until the most valuable years of their careers have passed, etc. The best leverage they have is to cost the league games, but — and this was a point that Arden Zwelling made on a recent podcaster roundtable episode of Mike Wilner's Deep Left Field podcast for the Toronto Star, which I was also on (keep an eye out for it!) — the owners aren't really going to feel that very much until playoff games are in jeopardy.
Back in May, when Forbes reported that the league had agreed to a new deal with ESPN, they totalled the value of the deals with all three of MLB's national US TV partners — ESPN, FOX, and TBS — at $12.24 billion over seven years. That's $1.75 billion per season, or $58 million per team per season. The main appeal of these deals for the networks is the playoff games, and for the clubs themselves this covers a period of the calendar when players — who only receive salaries during the regular season — aren't being paid.
If clubs can cover their expenditures with local TV money and various other revenue streams — or if they don't have to pay players due to a work stoppage — this national TV money is the kind of gravy that makes the whole meal worthwhile. Along with the year over year increase in franchise value, of course.
These massive deals make “tanking” very appealing too, which is something players have also been vocal in their concerns about.
Getting to the point where playoff games are under threat, however, would be disastrous for the sport. It would also be difficult for the union to maintain solidarity, especially considering — as I noted in my letter — how many members are not sitting on piles of money the size of the ones the top echelon guys can draw from.
It’s a tough spot. Or it will be, at least.
The difference between the owners’ words and their actions this month have been stark. Their negotiating tactics — such as delivering, in the words of lead union negotiator Bruce Meyer, “a proposal to make a proposal, if we would in advance agree to drop a number of key demands” — are unserious, or in bad faith. In his recent letter to fans, commissioner Rob Manfred claimed that "this defensive lockout was necessary because the Players Association's vision for Major League Baseball would threaten the ability of most teams to be competitive." But if the situation were as dire as he suggests billionaires wouldn’t be so keen to get into their exclusive club. Sources at Rogers wouldn’t be last month telling the Globe and Mail that the Blue Jays and their stadium are worth $2 billion. A team like the Texas Rangers wouldn’t have handed out half a billion dollars to two players within the last few weeks either.
Yet there doesn’t seem to be a whole lot of incentive at the moment for the owners to budge. The conditions are very much in place for a very long, very boring, MLB-less summer to follow this third straight Covid winter of ours. Ugh.
Hopefully it doesn’t come to that. Hopefully the owners will think of the good of the game and find a way to resolve their differences with the union in time to preserve opening day, which they will surely be able to do while keeping their incredibly valuable cash cow shitting out money for all time. But for anyone who has paid attention to how they have operated over the years, despite what they may bleat about their own generosity to players in the week before the lockout was made official, it’s clear that what they’re best at is thinking about the good of their own wallets.
According to Cot’s, the Yankees in 2021 had a lower opening day payroll than they did in 2005. The Red Sox' opening day payroll was lower than in 2015. The Rays' opening day payroll was lower than in 2010. The Orioles ran their lowest opening day payroll since 2004 — the Mariners since 2000. The Marlins had a higher opening day payroll in 2005 than 2021. Tanking teams in Detroit, Cleveland, Kansas City, Texas, and Pittsburgh were well below payroll levels they've reached in the past. Even the free-spending Dodgers had higher opening day payrolls in 2015 and 2016 than in 2021. Yes, the pandemic likely impacted that somewhat, but in an era of record-breaking revenues and franchise equity increases, massive national TV deals, skyrocketing ticket prices, constantly expanding premium seating options, and the relatively recent sale of MLBAM, this kind of blindingly obvious payroll stagnation really gives away the game.
Sadly, though, it’s the owners’ ball, and their court. They have plenty of cash reserves to grind the union into dust, and if that’s going to be necessary to fight to save a system that works this incredibly well for them, I have to believe they’re going to try to do it. Nothing they’ve shown in the first few weeks of the lockout suggests otherwise
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Your letter made too much sense and the logic was confronting for them. Plus it would have taken up too much advertising space. Thanks for posting and have a great Christmas!
As usual, spot on. I hope I don’t have to go through another year without baseball but if it can get some kind of solution to the problem, I’ll take it. Ugh is right.