ORLANDO, FL (Nov. 3, 2020) – Is that a smile on the face of beleaguered baseball commissioner Rob Manfred? Could be. After all, he has to be feeling pretty good right now.
Why? Well, against heavy odds, Major League Baseball navigated the minefield of the novel coronavirus pandemic to finish the World Series. Baseball’s “bubble” plan – playing all games from each league’s Division Series through the World Series in two neutral ballparks while sequestering the teams in hotels – worked. The two clubs with the majors’ best records (Los Angeles Dodgers and Tampa Bay Rays) squared off in the Series. The Dodgers, one of game’s most iconic franchises, ended their long drought and enjoyed their first World Championship since 1988. And, the Rays, with one of the lowest payrolls in the majors, showed that you don’t necessarily have to break the bank on overpriced free agents to be successful.
OK, it wasn’t perfect. There were the historically low TV ratings for the Series, and the Dodgers’ Justin Turner playing in Game Six -- then selfishly and irresponsibly taking part in the team’s on-field title celebration -- after having tested positive for COVID-19. Still, the oft-criticized Manfred had plenty of reasons to smile.
I hope he remembers that feeling, though. Because from the euphoria of one of the baseball’s most storied teams winning the Series, MLB jumps right into what is expected to be a cold, bleak and dark off-season filled with uncertainty for the league and teams, and tough times for free-agent players.
MLB’s 2020 season forever will be known for the coronavirus pandemic and the truncated schedule, much as Willie Mays always will be remembered for his iconic, over-the-shoulder catch in the 1954 World Series; Pirates’ infielder Bill Mazeroski for his walk-off, title-winning grand slam in the 1960 Series; and Red Sox’s first baseman Bill Buckner for the groundball rolling through his legs in the 1986 Fall Classic. This off-season and the 2021 season will be remembered for the financial pain that the virus caused.
Nobody knows what next season will look like. When will spring training begin? When will the season start, and how many games (though MLB has drawn up a 162-game schedule)? Will fans be allowed to attend, and if so, how many? What will be the size of team rosters – 26 or 28 players? Will there be a universal Designated Hitter again? Will there be a minor league season? Will there be a safe and effective COVID-19 vaccine available, and when?
Questions abound, and no one knows the answers. The only certainties are that once again the virus will be in charge, and that there will be financial pain in 2021.
A Bleak Offseason Forecast
According to Manfred, Major League Baseball lost about $3 billion last year and has accumulated more than $8 billion in debt. It is expected that baseball will lose money again next season, since it is anticipated that attendance – which MLB says counts for about 40 percent of team revenue – again will be restricted due to the coronavirus. Plus, another shortened season is not out of the question.
Major League Baseball is above all else a business. And, like any business, when revenue declines so will spending. Especially when the drop is as sharp as it was for baseball last season. League attendance plummeted from about 68.5 million fans in 2019 to 0 in 2020. That’s like a car hitting a wall head-on at 60 mph. Just as with that car, there will be consequences.
“I think next year is going to be really bad,” one club executive told Evan Drellich of The Athletic. “We’re going to have a strike year or a lockout year the following. … Teams have lost hundreds of millions of dollars. The big markets have lost anywhere between $150 to $200 (million), middle markets about $100 (million), and the small markets really, haven’t lost anything. They got crushed because they got no revenue sharing.”
Under MLB’s revenue-sharing agreement, which has been in place for about a quarter-century, large-market teams like the Yankees and Red Sox share a percentage of their local revenues with less profitable, small-market clubs like the Pirates and Royals. It’s a savior for under-performing franchises. But, because of zero attendance, that well ran dry last season, and revenue sharing likely will not happen again in 2021.
As John Mozeliak, president of baseball operations for the St. Louis Cardinals, told St. Louis Post-Dispatch baseball writer Derrick Goold, the 2021 season for his team will be about trying to “do more with less.” It’s a theme being sounded throughout the league. Already clubs have moved to cut spending by laying off personnel, such as scouts and front-office workers, in their business and baseball operations. A number of franchises also are cutting salaries.
The next move: cutting payroll by releasing players and letting others become free agents. Teams across the league will face some tough decisions, and fan favorites well may become casualties.
Take the Cardinals, for example, a team which relies heavily on attendance. The club routinely draws 3-million-plus fans; last year, obviously, attendance dropped to zero. The team had a payroll of about $160 million in 2020. Because of that precipitous plunge at the gate, the Cardinals expect their 2021 payroll to be south of $160 million. How much, they’re not saying.
Teams Face Tough Decisions
Still, with about $100 million committed to just nine players, the Cardinals face some tough and unpopular decisions. For one, they have declined the $12.5-million option on second baseman Kolten Wong, who is among the finalists for his second consecutive Gold Glove award, in favor of a $1-million buyout. In normal times, picking up that option would have been a given; now he’s a free agent. The Cardinals also have allowed two huge fan favorites – right-hander Adam Wainwright and catcher Yadier Molina -- to become free agents. St. Louis has expressed interest in re-signing all three, but even at a reduced rate that will be tricky.
As St. Louis did with Wong, teams throughout the league are electing to exercise buyouts rather than picking up a player’s option, in effect paying him not to play for the club (though, in some cases, the teams hope to re-sign the player to a more team-friendly contract).
Though many buyouts are in the $1-$2 million range (when it is considered common to pay someone $1 million not to play for you, that’s an indication of how much money is involved in baseball these days), some are quite expensive: like $10 million for Chicago Cubs’ left-hander Jon Lester, $6 million for Colorado Rockies’ first baseman Daniel Murphy, $5 million for Arizona Diamondbacks’ right-hander Mike Leake, and $4 million for Milwaukee Brewers’ outfielder Ryan Braun. (The Cubs did, however, pick up the $16.5-million option on star first baseman Anthony Rizzo.)
Some of the moves were anticipated and logical: such as the Texas Rangers giving a $1-million buyout to right-hander Corey Kluber, who has struggled with injuries the past two seasons, in lieu of picking up his $18-million option; the Cubs declining to pay soon-to-be, 37-year-old Lester $25 million a year; the Diamondbacks opting out of Leake’s $18-million salary; and Tampa Bay declining its $15-million option on right-hander Charlie Morton, who was scheduled to be the team’s starter if the World Series had gone to seven games.
Between the players whose contracts have expired, those whose options are not picked up, and arbitration-eligible players who are not tendered contracts (thus making them free agents) the market will be flooded with available players this winter. That’s bad news for the players.
As of Oct. 31, some 175 players are free agents, and that number is expected to grow. The law of supply-and-demand, plus the austere budgets adopted by teams trying to recover from significant financial losses in 2020, virtually assures a depressed market that will have many of those players taking considerable pay cuts.
Molina is a good example. The Cardinals’ catcher made $20 million last season. At age 38, the future Hall of Famer is past his prime, but he remains one of the best catchers in the league, a solid hitter with off-the-charts leadership skills. He’d be a good fit for a contender needing a catcher. He’s looking for a two-year deal, and speculation is it could be in the $20-$25 million range – not much more than he made last season alone.
That’s the type of winter in store for many free agents, especially for those on the wrong side of age 30, with the market expected to be tough for all but the top-tier players. Many will have to settle for greatly reduced salaries. And, a number of players may have to accept one-year deals, in hopes that teams are able to increase spending in 2022.
Oh, the top free agents – like Houston Astros’ outfielder George Springer, Cincinnati Reds’ right-hander Trevor Bauer, Philadelphia Phillies’ catcher JT Realmutto, Oakland A’s shortstop Marcus Semien, and Atlanta Braves’ outfielder Marcell Ozuna -- will get sizable contracts, just not as lucrative as before. Nobody in this class likely is going to touch the 12-year, $365-million deal that outfielder Mookie Betts received from the Dodgers, or the $324-million, 9-year contract that right-hander Gerrit Cole got from the New York Yankees.
The flood of available talent means that this winter could be even worse for players than the last three off-seasons, when owners came under harsh criticism from the players union for the slow pace and lack of free-agent signings.
A More Contentious CBA Negotiation?
That does not bode well for negotiations when the current Collective Bargaining Agreement expires after the 2021 season. Especially given the acrimony that has been mounting between owners and players in recent years. Another slow free-agent market this winter likely would fan those flames of discontent and make what’s widely predicted to be a difficult CBA agreement even more contentious.
“I think you’re going to have a lot of those veteran players in their 30s making $2 million, $3 million, $5 million, those guys are going to be replaced by young players and I think it’s going to cause a lot of ill will,” the club executive told The Athletic’s Drellich.
While MLB has amassed $8 billion in debt and faces a potentially tough and lengthy negotiation (and possibly a player strike or shutdown) over the next CBA, there are those who contend the game is in good shape. They point to the recent $3.75-billion TV deal with Turner Broadcasting System, and the reported $2.4-billion purchase of the New York Mets by Steve Cohen.
Regardless of which side – owners or players – you are on, this promises to be a dreary winter for all in Major League Baseball. Button up, it’s getting cold out there.
Dennis Richardson is a writer/editor with Words Matter. He has an extensive background as a reporter, copy editor, sportswriter, sports copy editor, and senior special sections writer with newspapers in Missouri and Florida. He lives outside of Orlando, FL.
Photo credit: Lesly Juarez/Unsplash.com