MLB Owners to Everyone: “Believe me, don’t believe your lying eyes.”

Sometimes it truly smacks me in the face that I’m truly a child of the 1980s. When writing this essay, a single song came to mind.

Negotiations are not sporting events. While both sides are trying to get the best possible position, usually at the expense of the other side, negotiations break down when they are conducted in bad faith, usually when one side is lying.

To quote Eric’s TBLA article of January 13, 2022:

“After those December 1 negotiations, when the players and owners could not reach an accord, MLB locked out the players at midnight, and commissioner Rob Manfred said in a statement, “We hope that the lockout will jumpstart the negotiations and get us to an agreement that will allow the season to start on time.” [emphasis added.]

Or the above quote from the Commissioner is an example of showing me that you are lying without admitting that you are lying.

Or put another way…

It is worth breaking down what is going on right now, because at first glance, it appears complicated, and while it is, it’s understandable. So time for a breakdown.

The Owners’ Argument: “We’re broke - we promise!”

Like a cheating lover caught in the act, MLB is trying to get everyone from the players to the general public to believe what it is saying rather than believing the financial numbers in front of them. Frankly, most sports journalists are generally terrible at covering labor issues because they are far afield from what they know and what they are good at. That’s fair - I am not an economist by any measure. Truth be told, I do not claim to be.

At my core, I study, I learn, and I find patterns. These assertions tend to lead people to think that I think and I know things. I apply these skills to the ongoing strife. This essay argues that the current labor strife is merely a continuation of most of the arguments made prior to baseball’s resumption in 2020.

The gist of the labor strife boils down to this:

• OWNERS: “YOU’LL TAKE WHAT WE GIVE YOU!”
• PLAYERS: “NUH-UH! YOU’RE HOLDING OUT ON US! WE WANT OUR FAIR SHARE!”
• OWNERS: “NUH-UH! WE’RE BROKE! WE’RE LOCKING YOU OUT UNTIL YOU SETTLE DOWN!”

The problem is the owners’ financial claim of poverty that falls apart pretty quickly under examination.

From a Forbes article from before baseball started back up in 2020 by Kurt Badenhausen, on May 29, 2020:

Owners are pitching a different picture [as to their finances]. In its presentation this month to the players, MLB said cumulative annual earnings before interest, taxes and depreciation (EBITDA) have been within $250 million of break-even since 2010. The union is wildly skeptical of these figures. [emphasis added.]

The article continues with a chart, which I now reproduce for you:

The dark blue numbers are the average MLB team value. The numbers keep going up, spiking considerably in 2015. The light blue number is the EBITDA amount. Based on the available data, if the owners’ argument was accurate the light blue bars on the chart would be flat and no more than $250 million USD. As you can see the light blue bars just keep getting bigger and bigger, almost keeping pace with the average valuation of the MLB clubs.

On this ground alone, it would appear that the MLB Owners should have far more money available than what they are claiming. With that said, something rings false about the Owners’ claims for a different reason.

“Hodie omnes divites si Deo placet effecti eritis” (“Today, if it pleases God, you will all become rich!”)

Believe it or not, the above quote was an actual battle cry from the First Crusade. It doesn’t really have anything much to do with anything in this dispute except for thematics.

Even Forbes noticed the spike in MLB franchise value in 2015, which stands out because a sudden increase in the value of an asset like that doesn’t make a whole lot of sense unless there was some drastic change...or there is a valuation bubble of the franchises.

By Mike Ozanian, on March 23, 2015:

“...The average baseball team is now worth $1.2 billion, 48% more than a year ago, the biggest year-over-year increase since we began tracking team values in 1998. A record 15 MLB teams are now worth at least $1 billion, up from five in 2014. [emphasis added.]

In 2015, in the span of a year, an additional 10 teams are worth more than a billion dollars?!? How...

After discussing how the New York Yankees were just as valuable as the Dallas Cowboys, which were less slightly valuable than Real Madrid, the most valuable pro sports team in the world at the time, the discussion in the article shifted to familiar topics:

The Los Angeles Dodgers, worth $2.4 billion, land in second place three years after Guggenheim Baseball Management bought the team and Dodger Stadium for $2 billion from Frank McCourt. The Dodgers raked in more than $120 million in local television money last season, the the [sic] most in baseball, as part of the team’s 25-year, $8.35 billion deal with Time Warner Cable. The team also leads MLB in attendance, with 3.78 million fans coming through the turnstiles during the regular season.

Okay - that analysis makes sense. The Dodgers were (and currently are?) flush with television money and consistently lead the majors in attendance, which means more money was spent at the ballpark. The article continued:

The San Francisco Giants had the biggest year-over-year gain, doubling in value, to $2 billion. The Giants’ three World Series titles over the past five seasons have helped the team nearly double revenue, to $387 million—with much of the increase coming from sponsors like Adobe, Coca-Cola, Diageo, Lexus, MillerCoors, Oracle, Safeway, StubHub, State Farm and Yahoo. Since 2011, the Giants have been among the top four teams in attendance and with the launch of the Social Media Café at AT&T Park in 2013 are among the leaders in using social media to enhance fans’ stadium experience.

The owners of the Giants are planning on leveraging the team’s strong brand by developing Mission Rock, an urban community that is expected to be ready by 2020. The project includes office space for businesses, residential buildings, renovation of a historic pier, pedestrian-only alleys and green streets, recreational and cultural facilities and restaurants and retail stores. [emphasis added.]

I have highlighted something to keep in mind for later - it is not specific to the Giants, but an important piece of the puzzle. Moreover, it is worth pointing out that the Mission Rock project is nowhere near done. Still, that is a trend: teams going into the land development business...why does this fact ring a bell?

Jessica Christian / The San Francisco Chronicle

The 2015 Forbes article continued:

The St. Louis Cardinals are baseball’s biggest anomaly. Despite playing in one of the smallest markets, the Cardinals are MLB’s sixth most valuable team, worth $1.4 billion. During the 19 seasons Bill DeWitt has owned them, the Cardinals have posted a winning record 16 times and have been in four World Series, winning the title in 2011 and 2006. Since moving into their new stadium in 2006 the team has never finished below sixth in attendance and has placed second the past two seasons. The Cardinals also pull in baseball’s highest local television ratings. And with Ballpark Village, the Cardinals have made the area near Busch Stadium a destination for dining and entertainment. [emphasis added.]

That is actually true, but what the article doesn’t say is that the area outside of Ballpark Village is essentially urban blight with a myriad of empty buildings. It’s not to pick on St. Louis, but the contradiction is right there. But again, more land development outside the ballpark...I swear that I remember something like this situation before...if only I could remember...

Michael Elizondo

Michael Elizondo

The 2015 Forbes article continues:

Revenue growth and higher enterprise ratios (enterprise value divided by revenue) account for the rapid escalation in overall team values....

Television money is driving the sport’s top line growth. In 2014, broadcasting and cable money accounted for $2.88 billion, or 37% of baseball’s $7.86 billion of revenue. Just five years earlier, television proceeds were $1.73 billion, or 29% of the sport’s $5.91 billion of revenue. During the past five years, mega cable deals for the Dodgers, Seattle Mariners and Los Angeles Angels of Anaheim have kicked in, and last season MLB began new national broadcasting deals with ESPN, Fox and TBS that will pay a total of $12.4 billion over eight years—more than double the previous contracts. [emphasis added.]

More television cash in on the way. The Texas Rangers begin a $3 billion, 20-year cable deal this season (the team received a $100 million signing bonus in 2012). In 2016, the Philadelphia Phillies start a $5 billion, 25-year deal and the Arizona Diamondbacks begin a new cable deal that is reportedly worth $1.5 billion over 20 years. Meanwhile, the St. Louis Cardinals are in the midst of negotiating a richer cable deal.

Okay - that analysis also makes sense. In 2015, some teams are flush with TV cash with more TV cash on the way. That bump in TV money makes up part of the difference in value but it does not get them all the way there... The article continues:

Each of MLB’s 30 teams went up in value by at least 20%. Why? Higher enterprise ratios are being fueled by the stock market’s six-year bull run (which has inflated asset values and created a lot more potential buyers than sellers of teams), baseball’s unmatched inventory of live, DVR-proof content, real estate development around stadiums, higher profitability (which reduces the need for capital calls) and the incredible success of Major League Baseball Advanced Media, the sports’ digital arm that is equally owned by the league’s 30 teams. [emphasis added.]

So the stock market has basically gone straight up since 2008 with a deviation at the start of the pandemic is fueling the rise in team valuations. Enterprise valuations are merely a different way to determine the value of acquiring something, which considers both the market value AND both long and short-term debt subtracted by cash on hand. In this context, adding more debt is good for the bottom line. Plus the teams are buying real estate. I swear I’ve heard these thoughts somewhere before...if only I could put my finger on it...give me a minute...

The 2015 Forbes article makes the final substantive conclusion:

Transaction scorecard: In 2009, the Ricketts family paid $845 million for the Cubs, Wrigley Field, 25% of Comcast SportsNet Chicago and some nearby real estate. The deal valued the Cubs at three times revenue. In February, the family sold small pieces of these assets for an enterprise value of $2.25 billion. The value placed on the Cubs alone was $1.8 billion—six times revenue—the highest-valuation ever created by the purchase of a non-controlling interest in a sports team. Like the Cardinals and Giants, the Cubs are also developing the land near their stadium as a destination place. [emphasis added.]

Overall, baseball has never been as big or as profitable.

Wait, so in six years, after the Ricketts family bought the clubs for $845 million, the Cubs are suddenly worth a billion more dollars and the Cubs are also in the land development business...it’s a theme...why can’t I remember why this situation is so familiar?!?

Back to the Future, well...Present.

And seven years after that sale of the Cubs, the valuations of teams have only risen and yet MLB’s owners are now claiming poverty – arguing, among other things, that the damn players make too much. Never mind the fact that the owners are the ones offering and signing the contracts, in order to keep the financial status quo.

However, from 2010 to 2020, the value of the average MLB franchise went from an average of around $500 million in value to $1.5 billion dollars in value. Even the perpetual trainwreck that is the Miami Marlins sold for $1.2 billion. And their stadium is a weird building in a rundown part of Miami (sorry, Miami - I do like Little Havana) that is a colossal pain in the butt to get to.

Michael Elizondo

Michael, that’s not Miami! Yeah, you’re right - that’s Chase Field in Phoenix.

Michael Elizondo

Michael, that’s still not Miami! Yeah, you’re right - that’s the Great American Ballpark in Cincinnati.

I am just seeing if folks are actually paying attention – if you didn’t click – would have you known? (Hopefully.) There you go. #FreetheStatue

Michael Elizondo

Yeah, the Marlins’ sale price probably should have been a tip-off that baseball is probably in the middle of a valuation bubble. After all, the Marlins are “The Producers” of baseball.

(And yet, they have two modern titles compared to the Dodgers’ one. Baseball...baseball...)

Back to the May 2020 Forbes article:

Forbes’ estimates have MLB clubs in the black at an average EBITDA of $800 million for the past decade. Forbes’ profits include those from non-MLB events in cases where teams operate the stadiums, collect that revenue and are responsible for those expenses. They do not include profits from team-owned regional sports networks or mixed-use developments around ballparks.

Taxes and interest expenses on debt eat into those profits. Owners have also plowed remaining cash flows into new stadiums this decade for the Texas Rangers, Atlanta Braves, Miami Marlins and Minnesota Twins; mixed-used projects in Chicago, Atlanta and other cities; huge stadium renovations in Los Angeles, Boston and elsewhere; and new spring training sites for a handful of teams. [emphasis added.]

That’s five more teams in the land development business, apart from the ones that we have previously mentioned, and that counting does not even touch any renovations or spring training additions.

The data in the chart demonstrates that the owners are raking in more cash than ever and it seems that they are spending it just as quickly…so what is the problem?

I have been lying to you: I totally know why I remember this situation. Frankly, we all should. And this problem should feel weirdly familiar to you too.

In a pit-of-your-stomach; that-can’t-be-right sort of way. It is fairly obvious for Dodgers fans if you think about it. An owner that was trying to become a land baron but he drove his team right off a financial cliff into bankruptcy. Need more to figure it out?

I’ll give you a visual hint:

Photo by Kirby Lee/Getty Images

Two words: Frank. McCourt.

Remember him? The man who literally drove the Dodgers into a financial ditch. The man who still gets paid as part owner of Dodger Stadium parking lots — Editor’s note: the team pays $14 million annually in rent for the lots to a joint entity owned by McCourt and the Guggenheim ownership group, though McCourt does not receive or share any annual parking revenue — which is why I refuse to park there under 99.9999% of circumstances.

Sadly, there appear to be more “owners” like him in Major League Baseball, than folks like Steve Cohen or the Guggenheim Group (…hopefully? - no one has taken a look at the Dodgers books recently, as far as I know.)

Okay, so either:

1. The owners are telling the truth about being broke, but based on all the math and reporting that I just showed you that assertion literally cannot be true.
2. The owners are lying about being broke and the players are fighting for their fair share, which would shake up the status quo of the past 20-plus years.
3. The owners are lying about being broke and they are unaware that are they are broke because no one tends to recognize being in a bubble until right after it pops.

Arguably, prompt two is the best-case scenario for the owners because that third option occurred to me when drafting this essay. What if the teams are not as valuable as the market thinks they are, i.e. so the owners are spending more than they ever have before, in part due to the belief that their franchises are valued higher than the valuations support. This change in circumstance would mean that if the valuations were to drop, they would owe more...than the teams...are worth...wait, a minute...they would be underwater...

Valuations where debt is overvalued to the point of a sudden crash and the market comes crashing down? It’s the 2008 Great Recession on a small scale!

Mind blown.

But, at the risk of bringing back those spooky memories of 2008 and understanding the seemingly ready-to-pop liquidity crisis on the part of most, if not all, of MLB’s owners, we should probably get on the same page as to what that actually means.

The Great Recession Simplified and its Relation to the Current Lockout

Most folks who do financial work (and legal work for that matter) give things complicated names to make other people think that they are the only ones in the world who can do the work. This action is done for many reasons, most notably for our purposes so that they are left alone to do said work. I have never practiced law like that because there is no added value if you do not understand what your attorney is actually doing.

Most people still do not understand how the 2008 financial calamity occurred, as most folks tend to reflexively blame immigrants, poor people, and teachers, and go about their day, which is factually wrong.

Blaming immigrants, poor people, and teachers for the crash is a lie. Plain and simple. Much like the malarkey you probably believe about the McDonald’s Hot Coffee lawsuit, which I do not have time to break down for you right now. (If you want extra learning, click on the video below, otherwise, we need to keep moving.)

There are generally not a lot of innocents in the 2008 economic debacle, but some folks are way more guilty than others. The spark of that event was a confluence when taken to absurd levels created a financial catastrophe (overly easy access to credit, deregulation of banking, massive amounts of banking and corporate greed, a failure to consider that housing prices could go down, predatory lending where massive amounts of money were siphoned from the lower and middle class to the one percent, an absence of governmental and corporate oversight, stagnating wages, corruption at the rating agencies, a designed system that could only fail, which it did at once, practically overnight) that I do not have three-plus hours to break it all down for you.

But I have to try because the alternative is screaming “Serenity Now!” and running away from my keyboard.

There are two sentences to keep in mind though in understanding the crisis. The first sentence is this one: at one point, banks realized that they could make WAY MORE money as to selling bonds based on mortgages than servicing the mortgage itself.

And you instinctively react: “that sentence does not make any sense,” congratulations, you have more sense than most folks who were working in finance at the time of the crash.

If you want the layman’s explanation of 2008, please watch The Big Short, Margin Call, and Too Big to Fail – an unofficial trilogy of movies from different directors and years that show the financial crisis from three different angles [the people who saw it coming (“The Big Short”) / the people who made it happen or greatly profited from the collapse (“Margin Call” as the firm is basically Goldman Sachs) / the people who had to “clean” it up (“Too Big to Fail”)].

Three clips from three different movies. You will laugh, you will cry, and you will be furious in equal measure, especially when you learn three facts:

1. Only one banker went to jail over this meltdown.
2. The banks took the money that the American people gave them, lobbied Congress to kill needed reforms, gave themselves large bonuses anyway, and exacerbated the length of the crisis by not actually lending the money as they were supposed to.
3. Originally, the banks that took the bailout money balked at conditions being put on the money because (I kid you not) they saw the money as “government intrusion.”

(If someone does take me up on watching The Big Short, Margin Call, and Too Big to Fail, you should watch The Other Guys as an ancillary palette cleanser as the film is a different view of the financial crisis from a side angle (it is a buddy cop movie, first and foremost), Watching The Other Guys is also an excuse to sneak in as many TLC references as humanly possible in your day-to-day life…because I totally didn’t do that after I saw the movie…sure, I didn’t. Adam McKay does good work, but he can be a bit shrill.

Anyway, the main point related to baseball (which is why we are here) is where that mess truly threatened to go nuclear and affect everything, or how people making bad bets as to housing nearly brought down unrelated companies like General Electric and McDonald’s because money stopped flowing throughout the economy because banks were not lending to each other because all the bad bills came due all at once, which meant we were literal hours away from the fact that no one could get their money.

When the money stops flowing, that is a liquidity crisis.

Here is the second sentence, in the form of an analogy, that you need to understand 2008: blood is as to people, as money is as to an economy. If either stops flowing, that is very, very, very bad.

At the risk of making folks lose their respective lunch, I found something cool, gross, and horrifying to illustrate my point.

Georg Wieselthaler / The New England Journal of Medicine ©2018

Needless to say, we could have a scale model of that very looming crisis occurring in the ownership circles of baseball. Whether the contagion spreads is an open question.

Back to the 2020 Forbes article for the last time:

With the above spending, owners are not sitting on a pile of cash. They are actually facing a liquidity crisis, as my colleague Mike Ozanian has written. It’s 2008 all over again, and each MLB owner owns a dozen condos in the financial crisis but is struggling to meet their monthly mortgage payments. [emphasis added.]

An MLB spokesperson told Forbes on Friday that their business has been barely breakeven recently. “During the last 5 years, based on the audited financial statements shared with the MLBPA, cumulative industry EBITDA is $208 million or an average of $42 million per year,” per MLB’s statement. The league says free cash before capital expenditures, which has averaged $334 million annually, was negative each of those year [sic], primarily from interest payments. Forbes’ profits estimates have skyrocketed in recent years, with salaries essentially flat since 2015 and revenue up well over $1 billion. [emphasis added.]

[Scott] Boras and the players argue the owners’ non-player spending has built valuable assets with their teams, regional sports networks (16 teams own a piece of one), real estate developments and other businesses. Franchise values have quadrupled since 2010, to $1.85 billion from $491 million, by Forbes’ count. Even the worst-run organization in the sport, the Marlins, sold for $1.2 billion in 2017.

The back-and-forth between owners and players during a pandemic is turning the public against both sides. Any agreement will force owners to endure significant financial losses and massive salary cuts for players. But baseball is in major trouble if it can’t find a solution to divvy up its billions. One person involved in the negotiations offered a bleak outlook when asked about a possible compromise: “It’s not looking good right now.” [emphasis added.]

That article is from 2020 and needless to say, we had baseball. But this financial reckoning was deferred but not deterred because as demonstrated most of the teams became land barons and yet are still claiming poverty.

The deferred, but not deterred, financial reckoning as of December 2021, prior to the lockout

Rewind to December 2021, the Collective Bargaining Agreement (“CBA”) is about to expire. Imagine you’re an owner: you have the Commissioner in your pocket (look Ma, look at this meat puppet!) and you need the players to take a drastic haircut to help pay for the bad bets you have made because while you are rich on paper, by all accounts, you are (should? might?) be barely able to pay the day-to-day bills related to the servicing at that debt to the point that one bad push makes the problem snowball into an avalanche right quick.

You cannot fully admit you cannot (or are about) to have difficulty paying the day-to-day bills because then the League will find a way to take your team away. (See: McCourt, Frank.) Or worse, you could cause a death spiral of valuation leading to a self-fulfilling prophecy of bankruptcy, loss of the team, and probable financial ruin...which will still (somehow) yield a bailout/tax write-off.

I would make a joke about that assertion, but I’m not that [bleeping] funny! (/hat tip Lewis Black.)

You could take on more debt, but that act isn’t sustainable (hence the dig up, stupid GIF earlier) because you know, all the land you bought. Also, in this context, because you are leveraged to your eyeballs buying up land and other additions – hence, you likely have no more access to easy credit. You are treading financial water.

You can bring in outside money, but then:

1. You’d have to open your books and if the players get wind that the scheme to claim poverty isn’t working, they’ll likely strike (remember you haven’t locked them out yet) and any player-led labor stoppage might bring the party to a rapid halt (moreover, what if the person you want to bring in wants to change things or put you on a financial diet – you can’t have that);
2. You’d have to share the perks of being an owner (which is doable I guess, if they are willing to play ball (ha.) but that takes time you might not have); and
3. You’d have to settle on getting/having less money overall in the name of debt service, which again slows down if not stops the party

So yes, clearly unacceptable options if you aren’t willing to fess up and come clean.

Well, you can defang the players! Greedy bastards! That’s how you will keep costs down!

The players cannot strike if you beat them to the punch, hence you lock them out. You remember the horror of 1994/95 – you cannot let the players set the pace. You lost out on playoff money, after all. You can’t have that. Need moar playoffs. Moar money! MOAR!!!

(Never mind that an expanded postseason cheapens the regular season, which is the major selling point of baseball. But sure, turn baseball into hockey – that will surely work and it’s not like baseball has an attendance problem or anything- spoiler alert: yes it does (unless you are the Dodgers - high five everybody!), and that problem merits its own essay in the near future.)

So you’ve locked the players out. Now what?

So the players proffered a counter to your last offer before the lockout. What will ratchet up the pressure on the players to settle and bend to your whim? Do not respond. Sit on it. Make them sweat. Make the threat of canceling/delaying spring training bring the players to heel.

As a hypothetical owner, we will rely on our default position of how it is billionaires versus millionaires and players are being greedy for wanting to be paid for playing a children’s game yadda yadda yadda – everyone should know that song by heart now.

Heck, you can practically see the headlines shaming the players for not bending to your epic wisdom. (see: anything by Ken Rosenthal, Buster Olney, or Ken Nightengale). (Spoiler alert: see the follow-up essay.)

This statement basically brings us to now.

The Owners’ Position doesn’t make any sense if you take five minutes to think about it

Now if you have been paying to what I have been writing, you will likely notice that there are quite a few flaws to the owner’s position.

• Point 1.) If no one is paying attention, there is not a lot of leverage to be used against the players.

If there is no leverage against the players, then the players have no incentive to fold. Normally, the owners are able to pillory the players in the court of public opinion because of the billionaires versus millionaires narrative yadda yadda yadda…

But that strategy does not really work, if you locked out the players, especially when the general public is not paying attention. Especially if there is a compelling alternative in other stuff to do. If anything, it is the equivalent of taking your ball and going home at the first instance to try and save face; and it is only going to serve to tick the other side off and (more importantly) no one, apart from baseball obsessives like us, are paying attention right now. And our general response has not been “fine, bah to baseball!” It has mostly been “…eh. Let’s talk about some word game app, which was bought by the New York Times.” Neat.

• Point 2.) The players did not strike – the owners locked the players out at the literal first opportunity the moment after the CBA expired.

By definition, if someone literally prevents you from going to work, and you are willing to go to work and you are not willing to accept a crummy deal, then by definition, it is not your fault that you are not working.

No one forced the owners to lock out the players when they did during the heart of football and basketball season when all but the most dedicated of baseball fans are paying attention, just because the CBA elapsed. That fact ties directly into the first point, if you cannot rally public opinion, because no one is paying attention, it is harder to demonstrate that the players are a greedy, ungrateful lot. And, as such, you cannot apply leverage that does not exist.

• Point 3.) The owners have basically left themselves no room to maneuver.

As shown above, the owners’ default position is that we are tapped out and even though on paper, we are making money hand over figurative fist, this gravy train cannot slow down. No, you do not get to look at our books to prove it, players!

Negotiation is about the idea of “give and take.” In my day job, if I am negotiating with someone and they keep giving me a ridiculous position after ridiculous position: I stop negotiations and pursue other methods of resolution because life is too short to waste on stupid. Furthermore, if you refuse to interact with me during a negotiation, you do not get to whine to other parties that I am somehow being unreasonable.

So if the entire strategy is to make the players bend in a total victory and you cannot accept anything less than total victory, by definition, there is no room to maneuver.

• Point 4.) The Players can wait out the Owners.

Unless I am missing something huge, the Players do not have a liquidity problem. The Players have a strike fund and can wait out the Owners’ collective temper tantrum. Remember all that whining and moaning coming from the Owners about the loss of revenue from playing games in an empty stadium prior to baseball starting back up in 202 – what I do not recall hearing, because it likely is not true, is that the owners would make more money without games.

Based on everything I have laid out above, by definition, that statement likely cannot be true. The players do not need to not lose money, they just need to lose less than the Owners before they break or drive the sport off the cliff.

Or put another way…

• Point 5.) The Players are ticked due to 20+ years of inequities purchased with “labor peace.”

Yes, things are great if you are a Mookie Betts / Corey Seager / Max Scherzer / etc. But if you are not, you have legitimate grievances, say Owner collusion of not paying journeyman free agents or service time manipulation to artificially delay free agency. Some of this inequity is the players’ fault, as apparently, they did not have a lawyer as lead negotiator, which apparently was one of the main reasons they got rolled in the last two CBAs.

Those losses will not be undone overnight, but it is likely worth checking out who the players actually hired to represent them—oh my god, they hired Bruce Meyer?!?! His accomplishments in sport alone merit an essay on what a big deal that likely is, but unfortunately, I am out of time. (Soon though...soon.)

While any lost regular-season games would be a colossal embarrassment to baseball as a whole, this reckoning of lost regular-season games would likely be the financial straw to break a few owners’ backs…provided anyone from the players can take a yes for an answer on that swings the pendulum back towards some measure of equity. The trends of the past 20 years didn’t happen overnight and they likely cannot be undone in one fell swoop unless the players are willing to play hardball and leverage the everloving crap out of the situation.

The problem with this approach is that push the envelope too far and any victory might be pyrrhic as the fans/media turn on you from being the victims to being greedy a-holes.

It looks like the players are going to avoid that pratfall because they have already dropped several demands are focusing purely on economic issues, putting the onus back on the Owners to proffer a solution...or so I thought.

And Another Thing... (A Reference to the Posthumous Hitchhiker’s Guide to the Galaxy Book, which we generally don’t talk about.)

So in a little peek behind the writing curtain, I try to submit essays for Eric’s review well in advance because my real job does suck up a lot of my attention. Plus, I have a weekly quota to meet in order to get paid and I’m a writer that does not like to scramble about.

But then two items of note arose that seem to dovetail perfectly with what I am arguing and I just could not let it go.

From Ken Rosenthal and Evan Drellich, The Athletic, on January 31, 2022: (paywalled)

...Brighter days should be ahead for the industry, even with the decline of the regional sports network model presenting another potential hit for the owners. In these negotiations, the league is seeking to boost revenue in a number of other ways. Its requests include expanded playoffs, advertising patches on uniforms and an increase in the number of special events domestically and internationally. Legalized gambling offers meaningful potential. And eventually, the league also plans to expand by two clubs, and commissioner Rob Manfred has said the fees for each could be in the range of $2.2 billion. [emphasis added.]

We knew that the owners wanted “moar” playoffs. The expansion of legalized gambling is news (and seems incredibly problematic), but when official events are sponsored by Draft Kings, the cat seems out of the bag.

Assuming there is expansion at some point, using the above number, that would be 4.4 billion divided amongst the 30 teams would be about $150 million direct to each team, which would not help with any immediate liquidity crisis, but it is a scenario I did not even consider. (Get more owners - obviously.)

From the day before print:

It seems like the Owners are requesting federal help to resolve a lockout that they literally started. Well, the optics are not great, but if it helps resolve —

[30 minutes later.]

Okay, let’s get to the conclusion.

Conclusion

And if the debt crisis ended there, so would I, but really there are two other examples that tie to the colossal short-sightedness of baseball’s owners that I was going to include here, but frankly they deserve their own long-form essay, which is exactly what they will get. But I plan to focus on the lockout issues first because that situation is still ongoing.

Based on my research, it sure looks like the Owners are on far shakier ground than is widely known, which is likely very much their own damn fault. When (note I do not say if) the ground collapses in on them is an open question of timing. I freely admit that there is always the possibility that I am wrong. But based on everything I have found and how hard it is to get raw numbers, I do not think I am wrong. Time will tell though, after all, it’s not my money.