MLB’s Return-To-Play Proposal Involves Steep Pay Cuts

MLB's Return-To-Play Proposal Involves Steep Pay Cuts

Like major businesses, the economy of sports leagues is heavily affected by the COVID-19 pandemic. The MLB, for one, felt the most negative impacts of the virus. Based on its current revenue plan for the return of the season, it looks like the highest-paid MLB players might lose a huge chunk of their salaries.

The MLB released its long-awaited economic proposal and return-to-play plan this week, following plans to finish postseason before the second wave of the pandemic hits. Through an exclusive meeting with the players union on Tuesday, the league confirmed that they’re now working together to start the season this summer and accelerate revenue. One of the most pressing issues the board is facing today is salary distribution.

Under the proposal, all players must retain their salaries via a tier system. This means that players who are scheduled to earn more in the 2020 season will receive less. Highest-paid players will lose up to 80% of their salaries, but low-paying players can keep 50% to 90% of their pay.

Players with salaries ranging from $563,501 to $1 million can keep more than 70% of their pay. Players earning $1 to $5 million can keep half of their salaries. Those under the $5 to $10 million tier can keep 40% of their salaries, while players making more than $20 million per year could only keep 20% of their salaries.

The proposed scale goes like this:

$563.5K – $262K
$1M – $434K
$2M – $736K
$5M – $1.64M
$10M – $2.95M
$15M – $4.05M
$20M – $5.15M
$25M – $6.05M
$30M – $6.95M
$35M – $7.84M

The proposal garnered mixed reactions as the MLB is the only major sports league without a salary cap. More than that, it shares its postseason revenues with players. This is a big move, and members of the Major League Baseball Players Association (MLBPA) are already voicing out their concerns.

The MLB shares financial data with the MLBPA, but information about the league’s TV deals are private. MLBPA is not completely on board with the proposal, particularly the revenue-sharing plan. Some players and team owners also expressed their disagreement with MLB’s decision on social media.

Tom Ricketts, chairman and co-owner of the Chicago Cubs, recently said in an interview that they’re now looking for alternatives to recover their income because of the proposal:

“That’s particularly hard on teams like the Cubs…In the best-case scenario, we’re looking at recovering maybe 20 percent of our total income. So, that is where the rub is and that is where the discussion will go with the players over the next few weeks.”