The owners are asking for massive pay cuts from the players.
Owners have presented players with a modified pay arrangement that would include a sliding scale, cutting salaries more at the top end, according to Jeff Passan at ESPN. Players had already agreed back in March to cut their salaries in relation to the number of games played, so with an proposed 82-game schedule, players will receive half of their 2020 salaries. But with fans unlikely to be able to attend any games, owners have pressed the players to accept further cuts to make up for the lost revenue.
Under the proposal, owners would divide salaries into tiers. Players in lower tiers would retain more of their money, while those at the upper end would take bigger cuts. This would be in addition to the pro-rated salary cut the players are already taking.
The salary scale in the proposal is:
— Jeff Passan (@JeffPassan) May 27, 2020
- $0 to $563,500 (league minimum) paid at 90%
- $563,501 to $1 million paid at 72.5%
- $1,000,001 to $5 million paid at 50%
- $5,000,001 to $10 million paid at 40%
- $10,000,001 to $20 million paid at 30%
- $20,000,001 and up paid at 20%
So, for example, Salvador Perez was due to earn $14.2 million in base salary this year. Under the agreement the union agreed to in March, he would make around $7.19 million. Under the owner’s proposal the first $563,500 owed to him would be pro-rated (50.6 percent), then he would retain 90 percent of the pay ($256,706). The money he gets from $563,500 to $1 million would pro-rated, and he would retain 72.5 percent of that ($160,185). His salary from $1 million to $5 million would be pro-rated, and he would retain 50 percent of that ($1,012,346). The money he makes from $5 million to $10 million would be pro-rated, and he would retain 40 percent of that ($1,012,346). The money he makes over $10 million would be pro-rated, and he would retain 30 percent of that ($637,776). Add that all up, and that is his 2020 salary ($3,079,359). Overall that represents a 78 percent pay cut over what he was expecting to make this year.
Players could also make bonuses with an expanded playoffs, with owners offering $200 million, according to Passan.
You can see how the entire player payroll would be affected under this proposal. The Royals would owe almost $20 million less than what they would pay under the agreement reached in March and $60 million less than what they were originally scheduled to pay.
Not surprisingly, the players have pushed back and are expected to reject the plan. The union released a statement saying, “The proposal involves massive additional pay cuts and the union is extremely disappointed.” Ken Rosenthal and Evan Dreilich at The Athletic have an anonymous agent quoted as saying, “I have never seen a collective response like I’m seeing today from the players,” adding, “They are livid.”
Owners previously offered a 50/50 revenue split this year, which players rejected on the grounds that any connection between salaries and revenues amounted to a salary cap. Owners have claimed they will lose $4 billion under the current arrangement with no fans, but players have insisted on evidence to back up those claims. Owners claim that gate revenues make up 40 percent of overall revenues, but players claim that an expanded playoffs could bring in $1 billion this year in TV revenues. They also argue that losses are part of the risk of owning a club, and that owners never offered to share more revenues when times were good.
Owners have also proposed safety protocols to mitigate the risk of the coronavirus that will have to be approved by the union. According to Passan, the two sides will have to agree on safety measures and compensation measures by early June if there is any hope of a season starting by the proposed target date of early July.
