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Report: MLB Projects $4 Billion Loss In 2020 Due To Empty-Stadium Games

Playing an 82-game season without fans in attendance and with players still making prorated salaries would cost Major League Baseball over $4 billion in free cash flow, as per a document presented from the commissioner’s office to the MLB Players Association earlier this week, The Associated Press reports.

Beyond the obvious medical and health concerns due to the ongoing COVID-19 pandemic, the issue of player pay has been one of the major obstacles in any attempt to launch the 2020 season.  The league has made the argument that players will need to accept further salary cuts than the ones already absorbed by the MLBPA as part of the March agreement between the two sides, as going ahead with a season without the added revenues of fans at ballparks would create too much of a financial burden for the league.  The players, on the other hand, have argued that the March agreement has already settled the matter, as players were to receive a prorated version of their original 2020 salaries based on how many regular-season games ended up being played.  In the event of an 82-game season, players would already be losing roughly half of their initially agreed-upon salaries.

The report from the commissioner’s office, a 12-page document titled “Economics of Playing Without Fans in Attendance,” details the purported losses facing the league under the current arrangement.  Every game would lead to a loss of roughly $640K, and all 30 teams would face losses of at least $84MM, as per a chart of projected earnings before interest, taxes, depreciation and amortization.  The Tigers are at the bottom of the list with an $84MM projected loss, while the Yankees would lose $312 in projected local losses — far more than the $232MM loss projected for the Dodgers, who place second on the list.  (This ranking doesn’t factor in money gained from MLB’s national media revenues.)

The AP piece details many of the main points of the report, including various figures detailing how projected 2020 figures will drop significantly from projected revenue for the year (before the pandemic wreaked havoc on the world), and how these numbers stack up in comparison to revenues generated by the league during the 2019 season.

While there is no question that all parties will take a big financial hit from the abbreviated 2020 season, the MLBPA has maintained that the losses faced by the league and team owners aren’t as dire as claimed.  To this end, the Associated Press writes that the players’ union “already has requested a slew of documents from MLB” for further clarification about the details of the original 12-page presentation.  Earlier reports have indicated that the owners will propose a 50-50 split in 2020 revenues with the players, which the union has already shot down as a non-starter in negotiations since the MLBPA views such a split as a version of a salary cap.

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