Firstly, let me preface this by saying that there are very legitimate reasons for the delayed 2020 season. Very real, serious health concerns. Sean Doolittle has made this very clear (on Twitter, of course). Players should not have to risk their health as well at that of their loved ones for our entertainment – just writing that sounds disgusting. But that’s not the message Tony Clark and the MLB Players Association is sending.
Instead, the union has expressed concerns over its players’ pay, it’s been the prominent detail (an understatement) throughout the hold-up. They’re not wrong to do so. It’s their job to defend, improve and optimize playing conditions. A big part of that is maximizing player salary. It’s also important to highlight that this stance is reactionary, not something the players are suddenly demanding. I’m going to avoid picking a side here, as doing so isn’t necessary to make my point. However for those who are picking sides there’s a selection to choose from. Are players entitled to their initial salaries, the contract they signed? Are they entitled to more than a prorated salary? Less? Again, let’s avoid those questions, because they’re not relevant to my point, if anything, their irrelevance is exactly my point. And besides, much of those questions have already been asked, answered and disputed.
By taking this approach from the onset the union is going to have a difficult time changing gears if they choose to begin leveraging the potentially infectious conditions of playing Major League Baseball in 2020. They’re not going to be able to request an altered financial situation because of health concerns after they’ve petitioned for nothing less than prorated salaries without using player safety as a bargaining chip. That all sounds very pro-owner, so again, I digress.
From a union perspective, it doesn’t matter whether players are paid twice their normal salary, or play for free. Seriously. Anyone who’s ever seen a stock ticker knows that nothing and no one can escape the wrath of ever-changing economic conditions. Call it the butterfly effect, common cause, it doesn’t matter, few things are unaltered by the global economy. Especially when the economy looks like it does now. For those who haven’t stepped outside (Firstly, great job self-isolating!) unemployment is sky high, you couldn’t pay people to buy oil and just about every industry has slowed to a standstill.
These conditions aren’t exclusive to their respective industries or markets; far from it. They impact everything and everyone, as many who have lost their job or are suffering from diminished pay knows. Baseball, even with rich owners, is also vulnerable. Again, in an increasingly poor effort to stay nonpartisan, I’m not going to assess owners and teams’ ability to pay players and stay afloat throughout a 2020 season, not today at least. But, finally getting to the point, I do want to shine some light on what’s going to happen if the players do, or do not, take a pay cut in 2020. Something I haven’t seen acknowledged enough, if at all. Money is a zero-sum game. And when the owners have less, the players get less. Pretty simple, right? There will always remain an inequality when it comes to the distribution of resources (based on when each player reaches free agency) but should the players take the field offering the owners a discount this year, owners will complete the 2020 season slightly better poised for 2021. If they hold their ground, then owners are likely forced to dip into their 2021 resources immediately.
Free agency is the power of the players. It represents so much of what a free market, America, and baseball are all about. But it is only as valuable as the owners themselves. MLBPA has insisted that instituting revenue sharing creates a salary cap. They’re right. But demanding their full prorated salaries, even rightfully, also bottlenecks future earnings. Either way, you’re capping, curbing at best, player salaries.
I’m writing an article about baseball and economics. No one’s getting away before they see a graph. It’s difficult to find extensive and consistent data and baseball salary, and as much as I wanted to extend my data at least a few years before 2008 the best baseball free agency resource I could find was Cot’s Baseball Contracts which is complete through 2009. With this data I created some aggregate numbers based on each off-season: average contract size (dollars), average AAV, and average years per contract. The trend is based on a 2013 index (to shoehorn into financial data):
To justify my previous claims I compared the value of the US dollar (No disrespect to my hometown Blue Jays), the price of oil and unemployment. Again, using a 2013 index (only because the US Dollar was at 0.99 Canadian Dollars then). Here are those numbers:
Before comparing the values, a short note on the labelling of years and seasons. The data points are labelled based on spending going into, or for that season. So the average contract length for 2015 is based on contracts signed in November of 2014 through March of 2015. The financial data is offset as the economic conditions influencing teams’ decisions occurred in the year prior (using the previous example, financial data used for the 2015 free-agent period is from 2014). Comparing the financial data to the MLB spending data shows a loose correlation:
MLB spending increased as unemployment had slowed, the US dollar crept up, and while oil prices diverged from MLB free agent spending in 2016, it roughly reflected similar trends. I’m not suggesting MLB spending is an economic indicator. But as with nearly everything else, economic conditions influence MLB club behaviour.
Even beyond the impact of the current economic climate on the ballfield, my ultimate intention here is to demonstrate how the owners’ resources impact spending. Obviously, this isn’t a foreign concept, we see it every year when contrasting the Dodgers and Pirates. But this data should show how even the Dodgers spending varies based on fluctuating resource availability.
So while MLB and MLBPA hammer out terms for what a shortened 2020 season may look like, perhaps the conversation should permanently be shifted to health and safety. Owners committing a fair share of money to players during a shortened season means an even weaker than otherwise only economically suppressed upcoming free-agent season. If the players take the pay cut, they can expect to see higher contract ceilings. For both owners and players, it doesn’t matter when the money is spent, the books will balance. If MLBPA insists on full prorated pay, as they should, they must be prepared for an equal and opposite reaction come November.