Why baseball’s billionaire owners and millionaire players can’t get along


By Chris Isidore, CNN Business

Major League Baseball’s streak of 26 consecutive peaceful labor seasons ended early Thursday when The owner has locked the player. That’s bad news for fans of the sport, even if not a single match has been canceled as a result.

In the world of industrial relations, a managed strike is tantamount to a strike, as it shuts down business instead of letting union members continue reporting for work. In some ways, off-season locking in sports is something that isn’t an event. Assuming the two sides can reach an agreement in the next few months, no game, ticket sales or TV rights dollars will be lost.

But the fact that billionaire owners and millionaire players are unable to reach an agreement on how to split the estimated $11 billion in annual revenue is an indication of the financial challenges facing the game. national amusement and raised concerns that the dispute could drag to the point where the game was cancelled.

And even if baseball’s entire 162-game schedule is played out next year, the closing clearly shows that the era of labor peace is over.. A new era is beginning, one that could lead to strikes, network lockouts, and defeats in the future.

Unstable history

From 1972 until the final layoff that caused the 1994 World Series to occur, baseball owners and players never secured a new employment contract without some form of layoff.

Those 24 years of labor unrest changed the sport, providing freelancing opportunities and dramatically increasing both wages and revenue. But it angered more fans than watching their team take the lead and lose a game in the ninth inning.

Baseball commissioner Rob Manfred said the owners didn’t want to lock the door, but were forced to impose one of the players’ demands, which resulted in the sport’s collective bargaining agreement expiring on Thursday night. Private.

“We worked hard to find compromises while making the system better for players, by addressing concerns raised by the Players Association,” Manfred said in a statement. declare. “Unfortunately, it seems the Players Association has come to the negotiating table with a strategy of confrontation rather than compromise. They never wavered from the most extreme set of proposals in their history. “

But the players’ union said the impending shutdown, with many athletes still unsigned for the upcoming season, was just an attempt to try to split players’ solidarity.

“This closure is a drastic measure, no matter the time,” the union said. “It is the choice of the owner, clear and simple, specifically calculated to pressure players to give up their rights and interests, and to waive good-faith bargaining proposals that would bring benefits not only the players but also the game and the industry.”

Disappointed with the economy of the game

The negotiations come at a time when both sides feel that the sport’s economy is going against them and that they need to correct that in the current negotiations. That’s never a good situation when it comes to an employment agreement.

In 2020, baseball experienced a season shortened to a little over a third of its normal length, and playing there aren’t any fans in the stands due to the pandemic. And although the teams played a full season in 2021, attendance restrictions at most parks for most of the year and fan concerns about returning Crowded venues pushed attendance down 34% from 2019 levels. That took a significant financial hit losses for most teams.

But a more serious problem in the future could be the changing nature of how Americans consume entertainment.

For years, baseball revenue from television rights deals has been steadily increasing, not just from national broadcasters like ESPN and Fox, but even more from regional sports networks in the United States. various major markets around the country. Those rights deals are driven by the fees these networks can charge to the cable for each subscription they have, whether they’re watching the game or not.

But now, many Americans are moving away from cable and turning to streaming services. The Pew Research Center estimates that the number of US households with cable or satellite TV has fallen from 76% in 2015 to just 56% in 2021, and that decline is expected to continue.

Sports remain an attractive program for advertisers and broadcasters. It’s something that viewers often prefer to watch live rather than watch in person when they can skip the ad on the recording. But fewer and fewer people watch sports. That’s worrying about ownership, says Andrew Zimbalist, a professor of economics at Smith University and an expert in the sports business.

“Everybody realizes that there’s a shift in the ocean and you don’t want to be swallowed up by the waves,” says Zimbalist. “What baseball could benefit from, from 1990 until recently, is that 70% to 90% of people who didn’t watch the games paid cable fees for those transactions. If that changes, how do you compensate for it? ”

But the players are also feeling battered economically. In the last few years, wages have dropped.

The median opening-day salary of 2021 is still a healthy $4.2 million, but that’s down 5% from 2019, according to the Associated Press, and down 6.4% from the peak achieved. at the start of the 2017 season.

And that average is boosted by the massive salaries earned by the game’s biggest stars. The broad “middle class” of players has seen their wages fall even more, as average wages, where half of the players earn more and half earn less, was $1.15 million in early 2021, down 18% from 2019 and 30% below its record high of $1.65 million in early 2015.

“Obviously if you’re in the top 10, there’s never been a better time to be a footballer,” said Victor Matheson, a professor of economics at Holy Cross University. “Yes write a contract signed on the right and the left. But that is not true of the broad middle class.”

Trouble with free agent

That is one of the reasons the union, as well as many agents and players, claims that the free agency system is broken. Among the changes the union is seeking are allowing players to become free agents earlier in their careers, as well as fewer financial penalties for the sport’s highest-paying teams. . Manfred and MLB say that would reduce the competitive balance in the league and leave fewer teams a chance to win the championship.

Most of the players who are still without contracts are broadly middle-class, and the leadership could hope to create a divide among union members.

“For the owners, they can sweat a bunch of players over a two-month period without worrying about losing any revenue,” Matheson said.

One strength of the alliance during its heyday, when it was often seen as the winner of contract after contract, was that the players were battle-tested and completely unified.

Even older players who could lose one of their last paychecks on strike are willing to do so as they have seen what past strikes have achieved. And they were there to tell the younger players the importance of maintaining unity in an attack.

But today, not a single player has ever been put on strike or locked out, which hasn’t happened since the first layoff in 1972.

“They have a culture and history that says, ‘When we strike, we win. “When you don’t have that experience history, you’ll come in with fewer weapons.”

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