Thanks to an ongoing labor dispute, Major League Baseball is undergoing
its first work stoppage, its first lockout in more than 30 years.
Now, MLB Commissioner Rob Manfred, who has no chill.
Announced a lockout after a five-year collective bargaining
agreement between the owners of the 30 clubs and the players expired.
Now this does have negative ramifications for the players, for
instance, right now the calendar favors ownership.
Okay players can't sign free agent deals and
they're going to get anxious about that.
And that's according to Professor Michael LeRoy,
who's a sports labor expert over at the University of Illinois.
Now, there's also other ramifications for the players for instance, teams
are not allowed to talk to players, make major league signings or swing trades.
And facilities where the players usually train in, those are shut down,
they can't use them.
I mean, it's gonna be a difficult situation for the players and I think in
the near future potentially a difficult situation for the owners as well.
The reason why right now the owners get the advantages because
of where we are in the year, so the new baseball season isn't for a few months.
And so owners get to do this and the players might in their minds be persuaded
by the leverage that the owners are using but it doesn't seem that way so far.
So if players are able to hold fast through late January or even February,
the advantage will shift to the players in the negotiating process.
What I really want you guys to focus on is the parallel dynamics because
the dynamics are the same.
You really have this issue of the owners versus the workers,
the capitalist versus labor.
And you see that in professional sports as well, so
what is this labor dispute really about?
As I mentioned, the collective bargaining agreement has expired and
what the owners want is a continuation.
They want the status quo to remain, whereas the players are like, yo we've
noticed our pay dropped considerably while revenue has actually gone up for MLB.
What's up with that?
We wanna change the way these agreements are signed and moving forward.
We wanna make sure that there's something that's far more fair and
equitable for the players.
So we have some details on this in the next video, listen to it and
then I'll help decode a few elements of it.
>> Well, the players salaries over the last four or
five years have actually declined by 4 or 5%.
And at the same time, franchise values, sponsorship revenue,
TV revenue has gone up, so I think they probably wanna recalibrate that situation.
What's taken place actually, Scarlett is that the owners have really kind
of manipulated the structure of the payment to young players.
Meaning the transition from minor league to major league baseball and
the strict developments of that process.
And they've actually been able to bring the cost down that plus analytics.
And being more efficient in spending and targeting players has resulted for
young players a real decrease.
Of course you're hearing about all these big deals with the veteran players,
they're being paid well.
Where the problem is with the young to middle players.
It is stunning that the actual revenues for players have gone down over the last
four or five years and the numbers have really gone up for the owners.
So I really do think an average person looking on saying, hey,
if the owners are making more.
The franchises are making more, the players should actually make more.
So it really does look from the outside looking in that an adjustment,
a more equitable adjustment needs to be made.
>> And look, I agree with that, there is no baseball without the baseball players.
And we're not talking about the high,
again you hear about the high paid contracts.
But we're really talking about the younger players that are expected to play more
games, they're paid far less.
And at the same time they're noticing that these clubs are raking in the dough.
Because they have various revenue streams,
diversified revenue streams in order to make this happen.
So we're not just talking about ticket sales here.
Okay, we're talking about licensing, we're talking about other ways of making money.
And as we've noticed in the overall economy, that wealth doesn't
end up trickling down to the very players that we're talking about, let's watch.
>> Before the COVID-19 pandemic hit,
Major League Baseball was making money like never before.
In 2019, league revenues totaled $10.7 billion according to Forbes,
marking the 17th consecutive year of record revenues for the game's owners.
All of whom it's worth noting have seen the value of their franchises increased
exponentially in recent years too.
So that financial growth has to have trickled down to the players right?
Wrong, according to the Associated Press, the average players salary has actually
dropped more than 6% since the start of the 2017 season.
While the median salary has plummeted a whopping 30% since the start of
the 2015 campaign.
In fact, while many fans tend to view these labor disputes as billionaires
versus millionaires.
Nearly two thirds of the players on last year's opening day rosters had
salaries under $1 million.
>> And if you pay attention to the graphic that was flashed at the end of that video,
not only do two thirds of the players make less than $1 million.
35% make less than $600,000.
Now again, we're talking about huge chunks of money,
I don't make $600,000 a year, right?
That's a lot of money but
the longevity of a professional athletes career is incredibly short.
And remember they're the players, they're the ones who are generating the revenue.
And it looks as though the clubs, the owners are just taking in a massive
portion of that revenue for themselves and not sharing it with the players.
That's the issue at hand, right and there's also a lack of transparency.
The club's refused to be transparent about the financial situation of the clubs.
And the players are like, well, it's really hard for
us to know if you're treating us fairly or
paying us fairly if you refuse to be transparent about the financials.
Now, I do wanna talk a little bit about the longevity of players because it's not
as if they have lengthy career.
Is not like that they play baseball until they retire at 65,
that's not how it works obviously.
But how long is the average baseball player's career?
Well, a rookie position player can expect to play 5.6 years,
one in five position players will have only a single year career.
And at every point of a player's career, the chance of exiting is at least 11%.
Remember they can get injured at any time and
the injury could even be a career ending injury.
Position players who start younger and
begin their career in more recent decades all have longer and more stable careers.
Nevertheless, baseball careers are not compressed versions of
normal careers, but are substantially skewed toward early exit.
So in other words, players do have a far shorter period of time to earn money.
Build a nest egg to basically take care of themselves and their families for
the rest of their lives.
Now, considering that the MLB is raking in some big bucks which again would
not be possible without the players.
Owners should be sharing a larger piece of that pie with the players,
that's the big argument here.
Now, what else are the players taking a stand on?
Well, according to the New York Times, players feel that too many
teams are receiving tens of millions in revenue sharing from their counterparts.
Yet purposefully aren't competing for playoff spots.
So this was a complicated element of the debate that I didn't really understand
because you would think that the teams would wanna be as competitive as possible.
But when you're basing the sport off of this business
model that seeks to increase profits for the owners.
They're gonna wanna do what?
They're gonna wanna cut costs, including costs associated with the players.
And so what they're noticing,
what the players are noticing is that the money is not being invested in.
Let's say drafting players that are gonna give them a competitive advantage
instead of paying for.
Let's say veteran players who might help them
when some playoff spots, yes, playoff spots.
What they're doing instead is they're paying for players that are cheaper.
Another thing that's interesting is when they share the pie,
there's a minimum amount that is shared through the revenue sharing agreement.
So if you're a team that isn't really performing well,
you're still gonna get a minimum amount of money from that pie.
And the argument here is that it's unfair, right?
Because it's an anti competitive provisions that's included
in the now expired collective bargaining agreement.
So I hope I explained that correctly or did so
in a way that articulates what's really going on.
So essentially the players are arguing that there are certain anticompetitive
incentives.
Within the current collective bargaining agreement and they wanna do something
about it, this next video explains it in a little more detail.
>> Today instead of paying up for veteran studs,
many teams would rather take their chances with some unestablished youngsters.
After all, the current CBA allows teams to pay players the league minimum for
their first three seasons in the majors.
And their salaries are capped by the arbitration process for the next three.
And of course with those perverse incentives,
many teams are content to just flat out tank.
In fact, super agent Scott Boras recently characterized the current state of
baseball as a race to the bottom.
>> We've got problems and
we don't ever want a system that rewards being a lesser team.
You want a system that always rewards being the better team.
>> With so many teams tanking or
just generally avoiding veteran talent in the name of cost effectiveness.
You're left with an increasingly disgruntled group of players who have
watched their earnings drop off.
While the game's owners have gotten richer and
richer thanks to the lucrative broadcast deals and corporate sponsorships.
>> Yeah, what that guy said, he said it way better than I did.
So I'm glad I chose that video because it's a good explanation of why
the players are so frustrating, especially if you're a player for one of these teams.
One of these clubs that is very clearly not doing what it
takes to be competitive to make your way to the playoffs.
Players wanna win clearly, clearly they wanna win.
And so, look, the dynamics here are just so
similar to what we're seeing in other workplaces.
If you use this kind of business model and
this is the business model that prevails in almost every company.
There's gonna be this concentration of wealth at the top.
And the workers, yes while they might be better paid workers in
the case of professional athletes than other workers.
End up getting a smaller piece of the pie, even though they're the ones who
are generating the revenue in the first place, right?
And because of this interest in increasing profitability,
in concentrating that wealth at the very top.
Less of that money that's earned by the players gets invested into the players,
that's what the players are frustrated about.
That's what they're angry about and
that's the reason why they refused to continue on with the status quo.
They wanted better because they've earned it.
And so I'm actually proud of the players for sticking to their guns here.
It is a difficult situation because as I explained earlier,
you have the owners who have the advantage.
Considering where we are in the season, right in the preseason,
I guess you could say.
But this is not the first time there was a work stoppage for the MLB,
the last time that happened was in the 90s with a 232 day work stoppage.
That actually ended up canceling the 1994 World Series and
I guarantee the owners do not wanna see that happen again.
The viewership for the MLB was destroyed for
a long period of time after that work stoppage.
The owners, by the way of the Chicago White sox were pushing for
a salary cap on the players at the time.
Again this is back in the 1990s,
the players went on strike as a result of that and
then the owners decided to unilaterally install salary caps on their own.
But get this, then a district court judge Sonia Sotomayor
ruled against the owners which kickstarted a shortened 1995 season.
But as the Washington post reports,
owners continue to manipulate players service time.
By which young stars have their free agency delayed all the while by
making rosters younger or cheaper and that's the other issue here.
The players wanna be released from this service time earlier so
they can actually take advantage of their youth.
And the peak of their athletic careers to make the money that
they deserve to make as free agents, right?
But the owners wanna lock them down in these service agreements that last longer
than they should.
So we'll see where this goes, definitely check out Ricky Strum and
all of his sports reporting on this, I'm sure that he's on this.
It's a fascinating story and I love an opportunity to talk about something labor
related in an area that I am not an expert in and that's certainly sports.