MLB clubs to take sizable financial hit in 2020 season with no fans

Bryce Harper.
Butch Dill-USA TODAY Sports

While the player’s union won’t see many issues with Major League Baseball’s health and safety parameters listed in their 67-page report, a major point of contention will continue to be the players’ compensation during a season that will likely be played in empty stadiums.

MLB — which is pushing for a revenue-sharing plan — told its players that their desired prorated salaries would contribute to an average loss of $640,000 per game, according to a report by the Associated Press.

The league put forth a revenue-sharing plan that was accepted by the owners on May 11, offering the players a 50-50 split of money that comes through television and sponsorship profits — a concept that the player’s union is viewing as a salary cap.

It’s a pivot from an agreement between the league and its players, who came to terms on a prorated salary structure on March 26, just two weeks after spring training was canceled and Opening Day was postponed.

A prorated salary is compensation in which players are owed the amount of their salary proportionate to the number of days they worked.

But MLB and its teams stand to lose approximately 40% of their revenue by holding games without fans, who provide a sizable chunk of profit based on ticket sales, parking, concessions and merchandise purchasing at the ballpark.

Regardless of the players’ salary structure, the amount of money teams are expected to lose is staggering and varies depending on the market they play in.

Under prorated salaries, though, per the AP report, the Phillies would lose approximately $159 million “when calculating their earnings before interest, taxes, depreciation and amortization,” 10th-most among MLB clubs.

The New York Yankees would lose $312 million in local losses this season, the most among any team.

Of that $312 million, $100 million is from the bonds that financed the team’s stadium, which opened in 2009, and has already been paid for this season.

After the second-place Dodgers’ projected $232 million in losses, the Phillies’ divisional rival, the Mets, stand to lose $214 million.

There is growing concern that a possible second wave of the coronavirus this fall would cause another shutdown in baseball and “devastate finances,” seeing as the postseason brings in $787 million in media revenue, per the AP.

Teams are expected to follow MLB’s lead and increase their debt in 2020, but the league admitted that a number of its teams don’t have the capacity to add more debt to fund losses next year.

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