What MLB players and owners are really negotiating about

Earlier this week, MLB owners presented their opening offer for a 2020 baseball season to their counterparts in the players’ union.

Their proposed plan to start the season in July includes half the amount of games, a redesigned divisional schedule to make it easier on players and staff, as well as a number of other logistical adjustments.

However, the central offer from ownership is a 50-50 revenue split with players, which the owners believe is reasonable based on the fact that the ticket and stadium-driven revenue from which they rely will be little to non-existent whether a season happens or not. Seems reasonable enough, right?

In his highly detailed account of the opening round of negotiations, ESPN’s Jeff Passan explains that unfortunately, the 50-50 split is likely to be a complete “non-starter” with the players’ union for a variety of challenging reasons.

First, the players feel that agreeing to split revenues in this way would resemble a salary cap, something they have strenuously avoided in the past. Second, and potentially harmful, is that the players believe both parties have already agreed to a simple pro-rated version of their salaries when they last negotiated in March. (Conversely, the owners believe the agreement was much more flexible and designed for further consideration. According to Passan, outside lawyers themselves disagree due to ambiguous wording.)

One thing that both sides appear to agree on is that if a season is to occur this year then negotiations must be completed by the beginning of June, at the latest, so that a condensed spring training can enable teams to work towards getting their players ready for July.

So as the sports-world’s greatest hope begins a two-week game of chicken, with billions of dollars to lose and the hearts of millions of fans on the line, both parties will have to address an important and challenging question – one that is being negotiated not only in professional sports but in every private industry and level of government due to the pandemic: What is fairness?

If we decide to avoid the philosophical rabbit-hole and stick to negotiation theory, we can find some solid ground. According to social psychologists, there are three types of fairness principles from which negotiators will attempt to claim value. They are: equality, equity, and need.

Equality means that parties should share any rewards, profits, or sacrifices equally, an argument the owners are looking to leverage by anchoring their opening offer with a 50-50 split.

Equity means that rewards or profits should be allocated based on who is contributing the most to the pie. For example, players are looking to frame the negotiation based on the fact that the game cannot be played without them, they are ones putting themselves at risk by gathering, and the ones who will have to live with various inconveniences such as restricted travel to see families.

Need states that the pie should be divided according to whoever most requires such resources or profits. And while this argument might not carry much weight in business normally, the pandemic has blurred many distinctions. For example, some have already pointed out that the billionaire team owners will be incredibly wealthy with or without a season, whereas the majority of the players and staff might depend on this year’s income to support their lifestyles.

Conclusion:

It will be fascinating to see how these differing versions of fairness evolve, how the parties will leverage them to frame their arguments, and most importantly, if some mixture of agreement can be found in time to save a sports season.

As a lifelong fan, I’m selfishly hoping that both parties can find their fairness balance.

For I, like Kevin James, miss baseball very much.

Tony Romo – Master Negotiator?

While former NFL quarterback Tony Romo was never able to secure his legacy with a Super Bowl trophy, he did just end up the highest paid sports analyst of all time, signing a historic long-term contract with CBS worth 17+ million dollars per year over the course of 10 years.

How did this come to be?

Avid fans of the sport know that Tony Romo has become the go-to must-hear football analyst over the past couple seasons. His incredible ability to predict what’s going to happen before it happens, while providing interesting and valuable insight on the strategy of the game has gotten so much attention that he’s even been dubbed “Romostradamus”.

After taking the broadcast world by storm, one would have to assume he would be set to make a killing when his contract expired this past February. However, the end result was a shock to many, including current NFL stars who make far less than Romo will now enjoy.

What exactly made the timing so ripe?

First, knowing that Romo’s contract with CBS was about to end, ESPN determined that signing him at a historic price before the 2020-2021 season would be a well made investment in their hopes of reviving their struggling Monday Night Football franchise. This created enormous leverage for Romo to encourage CBS to outbid their rival to retain him.

Second, Peyton Manning, after retiring as an all-time great NFL quarterback, was the next high-profile former player major networks were hoping to secure. However, despite being offered millions, and what would have probably been the highest paid sports analyst contract of all time pre-Romo, Manning decided he’s simply not ready or interested, creating even more Romo leverage.

Third, the looming multi-billion dollar negotiations between the NFL and major networks to renegotiate broadcasting rights as a follow-up to the currently being negotiated players agreement with the league. This agreement is set to redefine revenue sharing, and potentially bring future seasons to 17 or more games, an increase on the current 16 game format. Since the individual networks would like to be in a strong position in comparison to both the NFL as well as their competitors, having Romo as a top broadcaster makes him an incredibly valuable asset.

It is important to note that while Tony Romo could have let his contract with CBS expire before agreeing to a new one he did not.

All of this leads one to wonder – could Romo have known that conditions would be so ripe? So, amazingly, impressively ripe?

This would be hard to imagine. But at the same time, this is the man who made his name in broadcasting through his uncanny predictions and ability to express the future before it happens, all while looking on above the playing field.

Some do, after all, call him “Romostradamus”.