PHNX Arizona Diamondbacks Podcast - Sportico business writer Barry Bloom discusses D-backs' layoffs & future of baseball

Episode Date: May 30, 2020

Long-time baseball writer Barry Bloom joins the show to discuss the ongoing negotiations between the league and the player's association. We also delve into the Diamondbacks' long-term financial outlook following their recent layoffs, as well as the future of baseball as a whole. Learn more about your ad choices. Visit podcastchoices.com/adchoices Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Welcome back into another special edition of the Rattle Podcast. As always, my name is Jesse Friedman. And here in this special edition, we have the honor of being joined by Barry Bloom, who is a longtime writer for MLB.com. And then for Forbes, now he writes with Sportico, a job that he just took over there. And Barry is here with us today. Barry, thank you so much for your time today. We really appreciate it.

Thanks, Jess. Thanks for having me on the show. Absolutely. So we want to go ahead and jump into this whole situation. Obviously, the United States as a country is in rough times for a number of different reasons right now. But Major League Baseball is certainly no exception to that is there's this ongoing debate between the Players Association and the league. This is both an economic issue as well as a health issue, which I know is something you tweeted about yesterday, that a lot of people are maybe forgetting about that health aspect of things.

Barry, I'm curious, what is your outlook on this situation? I know that a lot of people said that around now we should know whether a baseball season is happening or not. And frankly, I don't think we really are there quite yet. But do you think that that's something that we will potentially know soon? And what do you think the outcome of this 2020 season will ultimately be? I think generally that, we're behind because the owners really wasted a good deal of time over the last three weeks

floating proposals, economic proposals to the players that they knew were not going to be accepted. And you go back to the March agreement where, you know, the two sides sat down and agreed to start splitting up the money for, whatever part of the season was going to be played. And the owners agreed to put $170 million into the pot for them. It was shipped to the Players Association for them to decide to split up. And that expires on June 1st, which is coming. They also had in the agreement a – A connoissell would say that if baseball did return for whatever portion of the season,

the players would be paid on a pro-rated basis for the games in which they're played the rest of their salaries. So essentially, it already amounted to a 40% decrease in their salaries for the year. As part of that, there was a group of stipulations which said that the players would be paid pro-rated if these three criteria were met. The first was being able to play in front of fans. The second was unencumbered travel in North America. and the third was the CDC or some organization nationally to be able to proclaim that it was safe to play. And as you know, we're here at the end of May and none of those conditions have been met. And I don't think even at the time that they thought it was going to be met.

So if these three conditions were not met, the owners could then go back to the players and try to re-negotiate finances based on the amount of a season that would be played, particularly in front of no crowd, and losing all the revenue that would be accrued from that, including ticket sales, sweet sales, club sales, souvenirs, concessions, signage, advertising, you just go down the list. The only money the owners say that they will have is about $1.7 billion in television money. So they came back and floated a 50-50 proposal, which said we'll give you half of that

television revenue to play an 82 game season rather than the prorated portion of their sellers to play the season. And it just, they never made that proposal. They floated it nationally through selected people in the media. Sure. The players, basically, the union discounted it is out of hand immediately. And by the time 10 days passed and they proceeded and made another proposal, it was for an economic system weighted towards the players that make less money rather than the players that make the most

who would get the biggest cuts. And that was a non-starter before it even got off the table. So, you know, there we are. I mean, basically, we're here waiting for the players to make a counteroffer. And I don't think they're going to make a counteroffer. I think they're basically going to say, we made an agreement to play a counteroffer. for a prorated portion of the salaries. And if you want to play the season,

it's up to you to figure out how to pay our salaries. You're committed to the salaries. And if you don't want, we won't play. And so there won't be a season. And then getting into the health and safety concerns, if I'm a player, I say, there's not one owner that's taking a health risk

going out there if you play another baseball season. But every player, despite a 67 paid, health and safety proposal that the owners made is subject to either getting the virus and perhaps die. And that's where they are right now. Yeah. What an interesting situation we have on our hands. I'm curious, Barry, a lot of people have started to take sides in this whole issue. Some people I know are on the players side of things, which I think is maybe the predominant position among the media. or at least the media that I certainly happen to be close to.

But there are certainly many other people in the media and at large who are on the side of the owners who are saying, you know, these people are taking quite a bit of financial risk in this situation. And, you know, it's up to the players to kind of come to them and be willing to take a pay cut like, you know, many other Americans are at this time with certainly an economically very difficult situation kind of coming across the entire nation right now. Do you take a side on this issue between the players and the owners? Well, let me put it this way. Unfortunately, the unions, whatever was remaining of the unions in this country have been

summarily busted all over the place in the last couple of decades. And you're dealing with a group of elite athletes that has probably the strongest union in the country. And if you see on the businesses that still have, unions or have company management that doesn't want to have a union so they take care of their employees, you don't see this kind of issue. And so the people around the rest of the country who are shaking it in the chops and have been laid off and fired, they're individual employees that will and they don't have representation. And when you don't have representation, that's what's going to happen to you. So, I mean, it's an apples and oranges situation. And so

the owners are going to make back their money at some point. The values of their franchises might deteriorate in the short term, but they'll ultimately come back. Sure. But on a health issue, if somebody gets sick and dies, you're not going to have ability to replace. You're that person. And to me, there's no amount of acceptable risk so that the owners can make their money. And I hear comparisons all the time to, well, the NHL is doing it, the NBA is doing it, they're talking about it. It's completely different labor situations, and both of those seasons have been played. The owners have gotten most of their revenue for the season. The players have received most of their salaries.

You go into the postseason into a postseason tournament, which both leagues is talking about, the NBA and the NHL, and the players don't get paid for that anyway. It's prize money, and any money that they're going to get paid on the side for it is extra in comparisons to what they've already

made. In baseball, you're talking about the last time the owners collected any revenue was last October. You know, they are in the situation right now that If they don't play this year, they will have not collected any revenue from October of 2020 to next year, or I should say October of 2019 to next year, April of 2021, before they'll be able to start recoup any losses.

They have to play spring training and fund spring training, and they don't receive any money in revenue until the season starts, nor do the players receive any money in salaries until the season starts. Plus another issue here is that the basic agreement which they're operating under, which has this year and one more year to go, have a clause in it fairly hidden, which gives the owners the right to reopen the agreement financially if a national emergency is called in the country for any reason,

which it was. If things normalized going into next season and the national emergency is pulled off, then the owners have to operate under the auspices of the remainder of the agreement, and every person who is under contract for next season has to be paid in full for the full season without them having collected any revenue for something like 18 months. So I think it's more in the owner's court

than it is in the players. Sure, the players are going to lose probably close a billion and a half dollars if they don't play, but the owners are going to lose a lot more than that. And let me caution you in saying that, that in talking to people who know the Diamondback situation, where they, yesterday, laid off 30% of their business operations,

and everybody else in the company took a pay cut, who remained, I was told that if they, even if they don't play the season, they're going to lose an excess of $100 million. If they do play the season, it'll be, it'll be higher than that. And next year, they have an opportunity to lose between $30 and $50 million, even if they play an entire regular season. So you're talking about huge amount of losses.

They say that really they're one of those middle-of-the-road teams that if they played the season, it would probably cost them more money than not to play the season. So to me, you have like three different stratas of teams in baseball. You have the big market teams like the Yankees and the Mets and the Dodgers. They stand to lose the most money in revenue because of this. The low market teams like Pittsburgh, Oakland, the two Florida teams, they persist on revenue sharing between $50 and $80 million in revenue sharing every year to make ends meet. and to even turn a profit.

There's not going to be any revenue sharing this season because there's no revenue. Sure. But the middle market teams, they're in a little bit of a different situation. And if you multiply the diamondbacks by 14 and 15 middle market teams who are all going to lose more money if you play the season,

considering the health conditions, I'd rather they didn't play the season. And I really do believe this. I think with a hundred and three, in excess of 103,000 people dead as of today from the virus, with the situation we're in around the rest of the country, with what happened last Memorial Day weekend, where people went shoulder to shoulder and partying in a lot of different places, the situation being here where when we were doing just fine in Arizona until the president came here, went to our governor.

The governor changed the course of it. He opened up the community a little earlier than it should have been. And cases, people in the emergency room and in the hospital beds have been, every day, this week. This is where we're basically going. By the end of June, early July, when you would be talking about starting a regular season, there might be as many as 200,000 people dead in this country, and you're not going to play any sport with that kind of amount of people dead and still escalating anytime soon. This is going to take herd immunity and a vaccine, if not both, before we can normalize again.

And I don't really think on a societal level, we're ever going to get there, where we were pre-pandemic, and that includes baseball. Yeah, I'm curious, Barry. I think from a diamond back standpoint, a lot of people, you know, hear those numbers that you threw out there of, you know, 100 million in losses this year, potentially 30 to 50 million next year, even if a season, even if a full season is played. And, you know, the Diamondbacks annual payroll usually, covers right around $100 million.

I mean, those numbers together comprise more than the Diamondbacks annual payroll. Do you think that this is the kind of situation that could have repercussions, you know, deep into the future for a mid-market team like the Diamondbacks that are not known to be, you know, big spenders in any sense other than, you know, maybe at the beginning of a contention window opening up with Catel Marte still on a really good contract and some, young pieces coming up through the system, hopefully here pretty soon. Do you think this could hurt the Diamondbacks here over the next few years in terms of their ability to go out and spend money?

Well, I don't think there's any doubt about it. I mean, and I've already written in one of my first pieces of Sportico that, regardless of what happens, whether you come back or not, but certainly if you don't come back and play this year, without any revenue and the way I illustrated it earlier in our conversation. There's not going to be very much money out there for free agency in this off season. Sure. And so it's not going to be, it's not going to be free agency as normal. You know, the diamond backs are not stacked with a lot of long-term contracts, except for, you know, bum garner probably at this point and a few other people. But I think

there's no question that their ability to fund, you know, to fund. a team on the field is going to be curtailed because the revenue that they're counting on is not going to happen in the next couple of years. And it could go into three years, you know, because we have no idea when this epidemic is going to end. You know, we're speculating that we'll be able to play starting spring training next year. But who knows? I mean, if you look at the 1918 influenza epidemic that struck this country in the world,

it took two good years and there were a number of different surges. When it started to flatten out, it came back with a vengeance in 1990, and 500,000 people in the country died, and 50 million people around the world died. and they didn't shut down the country at that time. And that was the result. And I'm not sure that there was ever a vaccine for it. What just happened was it got the people that it was going to kill. The people who survived had immunity.

And there was just nothing left. It just dissipated because there was no place up for it to go. And you could be looking at a good couple of years of that happening in this country, too, despite our modern medicine and everything that we can do, now in comparison to 100 years ago, we're still really in the same situation. Yeah, absolutely. I'm curious, Barry, from your standpoint, I think a lot of people are looking at this situation and they're starting to express, they're starting to express concern over the

future of Major League Baseball. And I know back in 1994, when the strike happened then in that whole situation ballooned, there were a lot of people who kind of lost interest in the sport or maybe lost respect in the sport because it just struggled from an economic standpoint to be able to get things back on the field. And I think especially in this situation with so many Americans out of work and so many Americans taking pay cuts already, I think there's really not much of an appetite at this particular moment for, you know, people to see this kind of economic battle going back and forth between Americans who are, who are relatively speaking very, very well off compared to the average citizen.

Do you think that moving forward, this is the kind of situation that could have, you know, long-term ramifications for the game of baseball and interest in baseball in a time where I think a lot of people were hoping that baseball could kind of come in and have a moment in the national spotlight? No, I don't. And I think that, you know, this moment in the national spot, that people want to play baseball is just ill-advised. I mean, it's a business and a sport that's susceptible to the economics and health concerns of everybody else.

And I've been covering baseball that this would have been like my 45th or 46th season. And, you know, go back through history and, you know, baseball survived the First World War. which was followed by the flu epidemic. It survived the Great Depression when nobody was coming to the ballpark. It survived, you know, the 1950s where the Dodgers and the Giants pulled up from New York City. The Dodgers, especially leaving Brooklyn, and they basically said fans in New York City were never going to follow the game again. You've had upteen strikes I've covered and lockouts. I've covered every one of them going back to 9.

1981 where 175 or so days of the season were lost in the middle of the season. And it was over how to compensate teams that lost free agents. It was just

when you go back and look at what they argued about, it was just over nothing. Yet, you know, the players stayed firm. They held on against the owners. And they set the tone for labor negotiations forever. And people said they weren't going to come back.

They were so upset that baseball, the players would strike, greedy owners, greeting players. You know, back then it was millionaires and hundreds of thousandaires, you know, as opposed to billionaires and millionaires now. But, I mean, the point is that by the end of that season, people were back in the ballpark and they were watching the playoffs. And it was a great playoffs that year and had an extra round for the season. the first time. It had a split season, and the Yankees and the Dodgers played in the World Series for the last time, and the Dodgers won the World Series. So, you know, you go to the 94, 84 strike,

which you mentioned, you know, where, you know, they struck on April 15th, on August 15th. It wiped out the rest of the season. It wiped out the playoffs in the World Series that year. They started with replacement players in spring training the next year after, you know, you know, a labor ruling by, at that time, Judge Sotomayor, who's on the Supreme Court now, you know, they wound up having to settle, and they want back to work without even a contract. You know, that's how stupid this stuff is. You know, and since then, you've had one really hectic, you know, labor negotiation in 2002, and the rest have been pretty dossal.

but in 94 people said they were never going to come back and watch the game that was it and you know then in 95 you had ripkin passing lu garreg for the most consecutive games played in 98 you had the great sosa mcguire home run run against uh you know to catch roger marath you had you know the quote unquote steroid error where baseballs were being hit out of the ballpark and also newer and better ballparks all over the country to replace the multi-purpose stadiums that sprung up in the 60s and 70s. You know, people always come back. Now, you know, then there's also attrition. But still, 60 million people came out to watch Major League Baseball last year. 40 million came out to watch Minor League Baseball. That's a lot of people. Yeah.

And their television ratings are not indicative of who's watching the game. it's basically there are so many ways of watching a baseball game or bits and pieces of a baseball game now that are not monitored by old-fashioned metrics that you know you don't know where what device or you know in what way people are actually watching the game because it's a day-to-day game and people follow it on a day-to-day basis it has a different you know basically flavor to it than any other game. And I think what will happen is, you know, there'll be some distaste to it just like there always is. And people will say they'll never go back.

But, you know, as I'm finding out about national elections, too, remember that when you had an election in 2016, all those people who were 14 years old in 2015 and didn't get to vote, in 2020, they're going to be 18. they're going to be eligible to vote. You have different generations changing, watching, habits change. Nothing remains static. So I think baseball for the long term is going to be just fine. And if people are myopic enough in this era to believe that Major League Baseball, because they can't work out the economic issues and the health issues to come back,

it's way more complicated than that, as I've illustrated. And so people shouldn't be so hard-pressed to think that the sport is telling them if it doesn't come back to play this year. Well, Barry, we know that no one knows this stuff about as well as you do. So we appreciate you coming on today and sharing your knowledge and insight that you've accrued over the years. You really appreciate your time today.

Yeah, thanks. Thanks, Jeff, for having me on.