There is a cold, uncertain winter coming for baseball.
No one is talking about it because they're heaving a huge sigh of relief over making it through the pandemic-truncated 60-game season all the way to the World Series. But a brutal offseason is coming, and the players will bear the brunt of the pain.
In the days since their latest postseason elimination there has been much discussion about the New York Yankees' top offseason priority, the re-signing of DJ LeMahieu. Rest assured, they will, but it will be the only significant expenditure they make on a player in a winter where -- like almost every other team in baseball -- they will be otherwise looking to cut payroll.
Here's the bottom line on what this season without fans has wrought on baseball:
Every team in baseball has lost a minimum of $100 million -- the larger market teams like the Yankees, Los Angeles Dodgers, Boston Red Sox and Philadelphia Phillies, between $175 and $200 million. Last week, the Phillies' Team Marketing Report reported they lost $186.1 million, while the Yankees were probably closer to $200 million or more. The lower-payroll teams like the Tampa Bay Rays and Miami Marlins -- accustomed to playing to three-quarters empty ballparks anyway -- lost considerably less. But they will get hit with an additional whammy of losing out on their customary $50 million (in Tampa Bay's case) to $70 million (in Miami's case) revenue-sharing payments. Or as one MLB exec noted to me: "You can't be paid revenue sharing from the other teams if there is no revenue."
As for the notion that baseball got partially bailed out this year by the massive national TV contracts, that is a misconception. The national TV, radio and licensing monies all go into the MLB Central fund from which approximately $65 million to $70 million per club is doled out at the end of the year. But this year that number is estimated to be about $50 million per club. The fact is, local revenue -- attendance, TV and radio, concessions, merchandising -- account for 80% of the clubs' revenue, and they were essentially nonexistent this year.
"Those revenues we will never recover," said one team exec, "but what's most concerning to all of us is the unknown about 2021. We don't know when, if or how many fans we're going to be allowed in the seats, so how do you go about determining revenues and payrolls?"
As a result, players can expect a deluge of nontenders this winter, meaning there will very likely be more free agents on the market than in any year in history. It brings to mind maverick Oakland A's owner Charlie Finley's laughed-at proposal to his fellow lords back in the '70s: There should only be one-year contracts, and all the players would be free agents every year. Then-players union chief Marvin Miller had to convince the players that, enticing as Finley's proposal may have sounded, flooding the market with free agents would be disastrous for them.
Agents such as Scott Boras scoff at the clubs' pandemic losses while maintaining it should be business as usual this winter.
"The reality is," said another club exec, "there is going to be a lot less dollars for the players this winter. There'll still be stupid owners who do stupid things, spending money they don't have, but for the bottom line there just aren't any revenues."
The madness of paying $300 million for one player started in 2014, with Marlins owner Jeffrey Loria giving a 10-year/$325 million contract to Giancarlo Stanton. And what did Loria care? He knew he was never going to be the one paying that off. In the first two years of the $330 million that Phillies owner John Middleton shelled out for Boras client Bryce Harper, the Phillies have failed to make the postseason. And even though Gerrit Cole more than lived up to his ace status in the first year of his nine-year/$324 million contract, when it came to the biggest game of the Yankees' season he found himself being removed after 5 1/3 inning.
Those should all be sobering examples of why, in those kinds of contracts, the owners can never get close to the value back.