(New York) Major baseball has told players that if they receive their pro rata wages during a season of 82 games played in empty stadiums, teams will lose an average of US $ 640,000 per game, according to the documents. presented by the office of the players union commissioner of which the Associated Press obtained a copy.
The 12-page dossier, The Economy of Playing Without Spectators, presents a worrisome portrait for the $ 10 billion industry. It is dated May 12 and represented the initial stage in negotiations aimed at launching the season around July 4.
The teams say that the solution presented to save the season delayed by the pandemic of new coronavirus would still garner losses of four billion, while providing players with 89% of the revenue.
The owners claim that they will lose even more money with the presentation of matches. However, the players' union claims that the teams will lose less money if the matches are shown, in particular because the teams or owners are involved in other business sectors which would benefit from the presentation of the matches.
On Monday, the owners voted in favor of 50-50 revenue sharing, a concept the players have called a salary cap and will never accept. The teams also provided the players' association with a health and safety plan to resume business on Friday, but are still awaiting a response on the business plan.
The New York Yankees alone would lose $ 312 million in profits before interest, taxes, depreciation and amortization (EBITDA) and the Los Angeles Dodgers, $ 232 million. The team with the lowest EBITDA losses would be the Detroit Tigers, at $ 84 million.
The figures exclude the distribution of revenues from the central office, which would receive $ 1.34 billion in broadcasting rights.
Major baseball and its teams produced the numbers and the union requested access to the financial statements for verification.
According to major baseball, box office and stadium revenues represented 39% of team revenues in 2019.
Teams fear that a second wave of COVID-19 will be devastating on their financial situation if further government restrictions force the cancellation of the playoffs, which generate $ 787 million in media rights.
On March 26, major baseball and the union agreed that the players would receive a portion pro rata of their wages if the season was shortened. Under the deal, teams are already paying players $ 170 million until May 24.
Now that the teams have established a plan to resume activities in disinfected stadiums with no spectators effective from early July, major baseball maintains that the pro rata business plan is not workable. The players replied that an agreement had already been reached and that they did not intend to revert to it.
This agreement was however accepted with the idea in mind that the season would be presented to spectators. The two sides also pledged to "discuss in good faith the profitability of playing matches behind closed doors or in neutral locations."