MLB’s Immediate Future Could Include Furloughs and Pay Cuts, Long-Term Economic Impact on Game Will Last Years

According to Ken Rosenthal of The Athletic, Commissioner Rob Manfred will suspend Uniform Employee Contracts as of May 1 in order to give teams more flexibility to deal with non-playing personnel. That’s a really cold way of saying teams will be able to furlough or reduce the pay of their employees. Teams will not be required to make changes, of course, and some — the Braves, Phillies, and Giants — have already guaranteed pay through at least the end of May.

Rosenthal noted that MLB’s decision could help “clubs facing the most significant financial duress,” though a more cynical person could rephrase that as “clubs exercising the highest levels of greed.” While estimated values should not be conflated with the liquidity required to maintain payroll, it’s hard to believe a large number of billion-dollar organizations would be unable to write checks for more than a few weeks.

Then again, the contracts in question apply to managers and coaches at all levels, some of whom are pulling down pretty significant salaries. And it should be noted that suspending the UECs could actually allow teams to get more creative with pay in order to make things work for now while also maintaining health and other benefits.

As with the creation of any loophole, this has potential to be leveraged in a variety of ways that span the ethical and moral gamut. Regardless of where each team ends up falling in that regard, we know for certain that all of their revenues are falling. Hard. The reality of the situation is that, even if baseball returns in some form this season, it’s going to take years to recover.

“In 2020, we just have to try to get the game back,” an unnamed general manager told Peter Gammons. “Then we have 2021 and 2022 to rebuild attendance and revenues, to determine where that takes free agency, arbitration, draft and other player compensations. Let’s be realistic — baseball is not going to be the same, just as the world as we know it won’t be the same. What we have to do now and in the next two years have to be focused on what we want baseball to be in 2023.”

That’s the same thing we’ve been saying here at Cubs Insider for a while now, and it’s not just a matter of money. Sure, that’s a huge part of it. Playing without fans could mean a loss of as much as 40% of a team’s total take for the season, the ramifications of which will surely be felt in the subsequent free-agency period. It could stretch further than that if precautionary measures, whether mandatory or based on individual choice, limit attendance beyond this season.

And that’s just the start of it, since the potential loss of the minor-league season and the drastic shortening of the draft will have obvious deleterious effects on player development. Not only will there be a great deal less talent coming into the sport, at least temporarily, thousands of young players may go a full year without participating in competition. Once the pipeline has been shut down, you can’t just turn it back on and have it flowing freely right away.

Perhaps the best way to think about it is getting your shower to run hot enough for your liking at the end of a really cold day. Depending on proximity to the water heater, you could be waiting quite a while. At the risk of dehumanizing young players with this analogy, I believe it, er, holds water. The development process takes years under ideal conditions, but nothing about this shutdown is ideal for anyone involved.

It is possible, however, that some sort of minor league season or a much larger version of extended spring training could be booted up in late summer to run deep into the fall. Team sites in the Dominican Republic could also host more players than usual in order to build competitive experience. Just as MLB and the players union are discussing the logistics of the regular big-league season, front offices are working in concert to determine the best way forward from a development perspective.

That may not be a temporary fix, either, as the potential doomsday scenario facing Minor League Baseball would see the structure as we know decimated beyond even MLB’s reported plans. Such a sea change in farm systems would necessitate new organizations and processes for developing players outside of or in addition to affiliated leagues. Maybe that’s a good thing in the end, but it won’t be pretty or easy at the outset.

Necessity truly is the mother of ingenuity and her tryst with Manfred is eventually going to result in her birthing a litter of baby giraffes on roller skates. I just hope enough of them figure out how to stay upright that we can recover as close an approximation as possible to professional baseball as we knew it. Could that really take three years?

If I’m being honest, which I have no reason not to, I think that target is pretty optimistic at this point.

Update: According to ESPN’s Jeff Passan, the White Sox, Marlins, and Red Sox have also committed to paying baseball-ops employees through at least the end of May. The White Sox are also offering season ticket holders a 5% interest on the money being held for 2020. The surplus from games not played will roll into 2021, which is a pretty cool deal for all five people who are eligible for it. I kid, I know the Sox have at least 39 season ticket holders.

Another team that has committed to paying baseball-operations employees through May 31: The Boston Red Sox, per sources.

Some teams continue to have concerns about cash flow. An option: to furlough employees with lower salaries who could be made whole via unemployment benefits.

— Jeff Passan (@JeffPassan) April 20, 2020

Update #2: Patrick Mooney of The Athletic reports that the Cubs have pledged to pay their employees through May as well.