Players make economic counterproposal as MLB begins most critical week in 25 years

Nobody ever decreed that Major League Baseball must resume spring training by the middle of June, open the season by Fourth of July weekend, play 82 regular-season games, and tie a bow on the playoffs by the end of October – or else.

Those were always soft targets, never set-in-stone deadlines.

It won’t exactly be curtains for baseball in 2020, then, if MLB and the Players Association can’t settle their differences by the end of the week. But if progress isn’t made over the next few days, it will become increasingly difficult to reach a compromise, even though the repercussions of 18 months (at least) without games would leave baseball badly damaged and perhaps beyond repair.

All of that makes this the most critical week for baseball since the 1994-95 strike.

Sunday brought a break in a four-day stalemate in negotiations, the players union offering a counter to MLB’s economic proposal. The highlights, according to ESPN and The Athletic: a 114-game season beginning June 30 and running through Oct. 31; full prorated salaries with deferrals for players who make at least $10 million (totaling $100 million) if the playoffs are canceled due to a second wave of the coronavirus; opt outs for players who don’t want to participate, with full salaries for those with pre-existing health conditions and only service time for all others.

It remains to be seen whether the owners will receive the players’ proposal any more warmly than the union did MLB’s 82-game, “sliding-scale” salary pitch last week, although it seems doubtful.

Owners have claimed that more games only mean more lost revenue for them, with ESPN reporting Sunday that some owners actually prefer to cancel the season to avoid further losses. MLB also strongly prefers to avoid pushing the World Series into November. The postseason, of course, is where teams reap the bulk of the national TV money.

Regardless, it’s moment-of-truth time for both sides.

It would be one thing if MLB scrubbed the season because medical experts or city/state governments didn’t sign off on the league’s 67-page manual for playing in the midst of a pandemic that has caused more than 105,000 deaths in the United States (still a possibility). It would be quite another if it all unraveled over money – specifically how much 30 owners and 1,200 players will lose this year – at a time when more than 40 million Americans have filed for unemployment since March.

Most industry observers can’t imagine the sides not coming together on an 11th-hour economic agreement to salvage an abbreviated season. Then again, these are the parties that wiped out the World Series in 1994 over a labor dispute.

» READ MORE: As MLB, players dig in on economic issues, much more than just 2020 season is at stake

“This is going to be a very tough thing to reconcile,” said Vince Gennaro, associate dean at NYU’s Tisch Institute for Global Sport. “I think there’s going to have to be significant concessions by the players to do this. And in the end, I don’t know who’s going to blink first.”

Neither side trusts the other enough to keep its eyes anything less than wide open. With negotiations on a new collective bargaining agreement looming late next year, the last thing that either wants to do is make a concession for one partial season that it won’t get back in the future.

The central issue is a March 26 agreement in which players agreed to prorated salaries based on the length of the season. Eighty-two games, as MLB proposed, would mean roughly a 50% pay cut for each player; 114 games, as the union countered Sunday, would be a 30% reduction; and so on.

But the owners claim that language in the March accord stipulates that the deal may be redrawn if conditions change, such as fans being unable to attend games. Commissioner Rob Manfred has estimated that gate-related streams – ticket sales, luxury suites, concessions, parking – account for an average of 40% of teams’ revenue, and the owners want the players’ salaries to be further scaled back accordingly.

"Just speaking as an economist, it just makes perfect sense that you wouldn't stop the salary adjustments at [what was agreed to in March]," Smith College economics professor Andrew Zimbalist said recently. "There'd be some further reduction based upon not having fans in the stands. That's just straight economics. There's no ideology there."

» READ MORE: MLB’s initial proposal to players insulting when you consider value of franchises | Bob Brookover

Last week, MLB proposed secondary cuts based on a sliding scale of income levels and totaling nearly $850 million, according to a source. Phillies star Bryce Harper, who was due to get paid $27.5 million in 2020, would have his salary reduced from $13.75 million in an 82-game season after the previously agreed-upon cuts to roughly $6.25 million, according to ESPN estimates. But teammate Rhys Hoskins, due to make $605,000 this year, would reportedly retain most of the roughly $302,500 (based on 82 games) that remained from the initial cut.

The union was “extremely disappointed,” a source said last week, by what it considered “massive” additional cuts and waited until Sunday to issue a counterproposal. The players, who would be incurring the greatest health risk by returning to play and have a finite number of years to maximize their earnings, have requested a more thorough audit of the owners’ books.

Washington Nationals star pitcher Max Scherzer, a member of the union’s eight-player executive subcommittee, made that clear in a pointed statement last week. The message was reinforced in an email from influential agent Scott Boras to his clients and obtained by the Associated Press.

It seemed likely that the union’s proposal would include salary deferrals to help ease the owners’ cash flow problems as a compromise to further reductions. But baseball will feel the economic effects of an abbreviated season well beyond 2020, according to experts, and Gennaro speculated that owners are unlikely to be willing to take on additional debt.

Presumably the week will bring more negotiations. What if the players trade secondary cuts in 2020 to gain leverage in the looming CBA talks? Could a short-term sacrifice lead to long-term gains, such as changes to the competitive-balance tax system that has served as a deterrent for many teams to spend in the free-agent market in recent years?

“If either side concedes too much on the current season, this partial season, that will set a tone for the future [CBA] negotiations and sort of set the bar," Gennaro said. "I think that needs to be handled delicately.”

The 2020 season – and perhaps even baseball’s future – hangs in the balance.

» READ MORE: In the age of coronavirus, we’re finding out just how much sports matters | Mike Sielski