Even though Major League Baseball (MLB) and it’s players were quite far apart on a deal needed to play a season this year, baseball will be played in 2020 and I don’t know why. Between issues with COVID-19, the locations chosen to play the games in, racism, homophobia, and the underlying issues related to owners refusal to budge on monetary issues and players a demanding full pay while playing less than half a season – the game is broken… Very broken.
Regardless of what is actually happening, this very public bickering could be the beginning of the end for America’s past time.
Take a look at the staggering figures below to get an idea what it must be like for owners of team’s must be facing when they look at paying players ever increasing salaries. Taking into consideration the very slight increase in attendance over the past 40-years (the league added more teams during this period), the total league payroll has gone from a quarter billion dollars to 4 billion dollars a year.
With less people attending games, the teams need to make up the revenue somewhere, right? You can only increase ticket prices so much, plus fans in cities with non-competitive teams historically draw fewer fans than cities with competitive teams. But it theoretically takes revenue to build a team, does it not? If fans stop showing up, then teams don’t have the revenue to field better teams. We’ve all been told that, at one point in time.
That might have been true, back in the day, but in present days, teams – even non-competitive teams – turn profits because of their TV deals.
TV deals range from a low of $20 million dollars to the Miami Marlins to $289 million dollars being paid to the LA Dodgers. The average seems to lie around $45 million dollars. With average payrolls of $133 million, and taking out the TV revenue, it still makes for a huge loss for the owners.
But the players want to get paid, and they want a piece of everything the owners make. When you consider the average of 10K fans per game in Miami, $15K in Tampa Bay, and $16K in Baltimore, you have to think how much longer this can go on.
Looking at Miami, for example, with $20 million dollars a year in TV revenue, and total team payroll of $75 million, the team begins the season down $55 million dollars. At 10K fans per game and an average ticket price of $22/game, the Marlins earn $220,000 per game, or $17,820,000 over 81 home games (around $18 million).
This does not include any additional revenues from parking, concessions or products sold, nor does it account for salaries of employees, advertising, rent, property taxes, concessions to be sold, or other costs like taxation.
What makes matters a bit more obscure is that teams drawing below a certain threshold are provided support from other teams, such as the Yankees who exceeded payroll ceiling by $52 million dollars in 2019 and had to pay a luxury tax of $26 million dollars – or 1/3rd of Miami’s payroll.
Throwing all of these numbers together, and staying in the space of averages and previous year’s reported figures, the Miami Marlins made around $250 million in revenue.
See how the players become skeptical of the owners figures?
Without fans, and that gate revenue, a considerable portion of the revenue disappears.
Attendance is dropping. Speculation is that it’s a result of outdated stadiums or a bad product on the field, but truth be told, it’s likely the $10 hot dog, $20 beer and $30 to park a car that has been driving fans away.
|Attendance||Avg Game Attendance||League Payroll||Avg Team Payroll|
With players now opting out of the 2020 season and citing issues related to negotiations, racism, sexism, cheating (yes you, Astros and likely Red Sox), it’s not putting the sport of baseball in such a good light. Certainly these cannot result in increased attendance, unless significant changes are made. MLB could lead the way and lure fans back to the stadiums in drove, if they took a back to basics approach, lowered ticket prices, and concession prices, kept people safe and put a diverse product on the field.
Or, they could fight over millions and billions of dollars while North Americans struggle with earning income, racism, sexism, and intolerance, and a general lack of respect for each others lives.
The ball is in your field, MLB… Batter Up!