Games need fans to make financial sense

SAN DIEGO -- As soon as possible, baseball wants to be what it often has been.

After world wars and 9/11 and every summer and fall.

"We want to give everybody something to look forward to," Padres pitcher Craig Stammen said this week. "Hopefully that's baseball."

Multiple players and fans have expressed similar sentiments in recent weeks. So have people from Major League Baseball and executives with the MLB Players Association, in private conversations and conference calls and interviews.

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"The one thing I know for sure is baseball will be back," MLB Commissioner Rob Manfred told ESPN last week. "Whenever it's safe to play, we'll be back. ... We will be part of the healing in this country from this particular pandemic. I think it would mark a real milestone in the return to normalcy."

For those starved for any kind of sensory stimulation or sports satiation, that likely rings true.

MLB and its players' union agreed not to start playing games until medical experts determine it is safe to hold large gatherings.

But they did allow the possibility of revisiting that stipulation, and Manfred has talked publicly about the possibility of beginning games without fans in attendance.

Financially, however, that is almost certainly not a feasible route for baseball.

"We'd be better off not playing," said one person involved in many of the talks between MLB and its players. "... To do so for any extended period, the losses are going to mushroom, it would be devastating."

Without fans paying for parking, buying tickets and food and merchandise, without revenue from in-stadium sponsorship revenue and corporations buying suites, all that is left is television money.

Unlike the NFL, in which every team received $255 million from the league's national television deals in 2019, MLB teams couldn't come close to covering their costs through TV money. Unlike NBA and NHL teams, which were deep into their seasons and had already collected the bulk of their gate and sponsorship revenue, baseball teams had hardly begun bringing in money when the coronavirus caused them to suspend spring training and delay the start of the season.

MLB's national and local television deals generate about $3 billion. Players are due approximately $4.5 billion in salary for the 2020 season. There are also benefits, social security and payroll taxes, plus the expenses of team staff and stadium workers necessary to stage games.

While player salaries would be prorated and other expenses would shrink in a shortened season, so would TV contracts.

The Yankees, who own their own network, and Dodgers, who get approximately $334 million a year from their local TV deal, are among a handful of teams who could conceivably weather a season played without fans.

But those teams still also generate some $1.5 million in revenue each home game from tickets, concessions and merchandise.

"Turnstile is always huge for everyone when you've got 81 home games," said David Carter, a USC sports business professor.

Carter sees baseball as having an advantage over the other major sports.

"It is the most affordable," he said, referring to the cost of attending games.

He did predict that every sport could have to deal with the possibility some people will not want to attend large gatherings, at least not right away. In baseball, Carter noted, that could be particularly true given MLB's older fan demographic.

MLB and the Players Association remain in discussions about what a schedule, compensation and other facets of a shortened season would look like.

As part of an agreement reached last week, each team will pay approximately $5.7 million over the next two months to cover the total $170 million advanced to players. Teams also agreed to pay minor leaguers $400 a week through May.

By the end of that period, it is expected MLB will be able to determine if the season can be salvaged and when it might start.

The sides say everything is on the table in terms of solution. That has included, according to two people aware of the talks, discussions about players accepting lower salaries for 2020 and teams sharing a greater portion of revenue.

Such moves are considered highly unlikely, but the two sources said in recent days the virtually countless variables and unknowns make everything to do with this situation impossible to predict.

"If we want to play," one player said. "We might have to do things like that."

Sports on 04/04/2020

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