No matter what happens between Major League Baseball and its players’ union between now and the end of the month, the financial landscape of the sport will look much different in 2021.
It’s no certain a 2020 season takes place, and if it does, it obviously will be with far less revenue than enjoyed in previous seasons. Pay cuts and furloughs are becoming prevalent across MLB, and at least one team, the Oakland Athletics, reportedly can’t make rent at their own stadium.
The COVID-19 pandemic will leave a lasting imprint on the sport that will linger far beyond 2020, regardless of what happens with this season. For someone like Mookie Betts, who will be a free agent following whatever comes of this campaign, that could mean a long-term loss of tens if not hundreds of millions of dollars.
According to an ESPN.com story published this week, the league is losing around $75 million per day after making more than $4.2 billion last year in ticket sales, concessions and merchandise, which made up 40 percent of its annual revenue. Barring a medical miracle, that’s all gone this summer and fall, and that will be felt starting with next offseason.
There just won’t be as much money to go around for free agents like Betts. The 2018 American League MVP likely would have been in line for a contract at least on par with Bryce Harper’s mega-deal and could have even approached Mike Trout money. Those hopes likely are pipe dreams now, according to longtime baseball insider Peter Gammons.
“Free agency is not going to even be, there are no screams — free agency is going to be a whisper for the next three years,” Gammons said this week on The Score 670 in Chicago. “There are few people that I like better in baseball than Mookie Betts. I thought he was going to make between $350 (million) to $400 million.
“He’d be lucky to get up to $250 million in free agency this coming winter if they play. It’s just the reality of economics. It’s true in almost every business.”
In hindsight, had Betts and the Boston Red Sox come to terms on a long-term contract extension, the superstar likely would have walked away with more money when it was all said and done. But if he was hellbent on reaching free agency, you can’t blame him for turning down, say, $300 million from the Sox. No one could see this pandemic coming, at least not when negotiations were ongoing.
But what if this opens the door even wider for a potential return to Boston once Betts hits the market? It’s admittedly a long shot. If Betts truly wanted to be in Boston for his entire career, it’s reasonable to think he might have been a little more affable to signing a long-term contract before hitting free agency. But if the Red Sox were willing to offer Betts something in the neighborhood of $300 million, what about $250 million, as Gammons suggests? Or perhaps even less than that?
Of course, the Red Sox aren’t impervious to the financial crunch coming for all 30 MLB teams. But they’re also in a better financial situation than most across the league. Like other big-market teams, the Red Sox are able to generate regional sports network revenue (the Red Sox own 80 percent of NESN). That income isn’t shared among the rest of the league. Revenue sharing among clubs might not matter in 2020, as The Athletic reported last week the system might be put on hold for 2020. So, if MLB can find a way to make something of the 2020 season, the Red Sox might be in better position than a lot of other teams around the league.
It’s worth noting, of course, there are a handful of big-market teams like the New York Yankees and Chicago Cubs who also benefit from having an RSN. Oh, and if there’s no 2020 season, who knows what comes of it all.
Here’s the other thing: It might make most sense for Betts to take a short-term deal and hope the financial landscape looks better in 2023, as Gammons also suggested in the interview. Even if he doesn’t love, love Boston, it’s at least familiar. If the money isn’t going to be relatively astronomical, and it’s only for a couple of years, he’d have to at least consider a return to Boston, right? From a baseball standpoint, Betts rejoining a lineup with the likes of Rafael Devers and Xander Bogaerts looks to benefit all parties involved in the short term.
This is just a whole bunch of spitballing, but that’s all we can do at this point. No one knows what the sport will look like in six weeks, let alone six months or six years. But one thing is for sure: Players like Betts aren’t going to make the money they hoped for just a few months ago.
It will be fascinating to see how it plays out.