The regressive $170 million salary advance

As part of the agreement between the league and players’ association, MLB owners are advancing $170 million in salary to the players. At the forefront, this seems like a victory for the union. It’s real money that can’t be clawed back if the 2020 season is ultimately canceled. There’s more to this than meets the eye, though.

The MLBPA frequently kicks its most vulnerable members (or future members!) to the side during its negotiations with the owners. We discussed this on this week’s podcast, particularly when it comes to the draft. This salary advance isn’t much different. Although an irrevocable $170 million sounds like a big chunk of change, there are significant caveats. From ESPN’s Jeff Passan:

The union agreed not to sue the league for full salaries in the event that the 2020 season never takes place, and MLB will advance players $170 million over the next two months, sources said. The MLBPA will divvy up the lump sum among four classes of players, with the majority of it going to those with guaranteed major league contracts. If games are played, the advance will count against final salaries, which will be prorated.

The key here? How the MLBPA will allocate the money among its members. The spread of the amount is clearly regressive as it goes to players who have been fortunate enough to sign guaranteed contracts. In other words, the already highest paid players will get most of this $170 million. I guess that’s not a surprise, but it would be nice if the union helped out some of its more junior members.

Today, we received more detail on how this money will be distributed from an AP report. Once you look down from the guaranteed deals, its based on the amounts per each players’ split contracts. Here’s how it goes over the sixty days of pay:

  • Guaranteed contracts: $4,775 per day ($286,500)
  • $150,000 salary in minors: $1,000 per day ($60,000)
  • $91,800 to $149,999 in minors: $500 per day ($30,000)
  • Less than $91,800 in minors: $275 per day ($16,500)

All pre-arb and arbitration players (to my knowledge, at least) sign non-guaranteed split contracts dictating salary in the majors vs. minors.

As you can see, things get hairy for those at the bottom two tiers. Granted, I understand that it’s not easy for fans to feel sorry for players losing out on paychecks when some have accumulated millions already via signing bonuses. Especially when so many people around the world have lost or are going to lose their livelihoods because of COVID-19. But we can’t simply assume that all big leaguers are wealthy or comfortable, either.

Take Mike Ford, for example. The Yankees signed him as an undrafted amateur free agent in 2013 for an undisclosed amount. You can safely assume any signing bonus was minimal, if there was one at all. He didn’t make the majors until last year, and according to Spotrac, he earned just under $240,000 in 2019. Definitely a nice living for one year! But remember, Ford had earned a pittance in the minor leagues for about five years.

Think about what Ford would have made given normal circumstances this year. Depending on his assignment, he’d have earned at least the prorated amount of the major league minimum ($563,500) and/or minor league minimum for 40-man players signing a second major league contract ($91,800). Instead, Ford’s set to earn $500 day during this sixty-day window. $30,000 is a nice amount of money over that time, no doubt, but that could be it for him all year. Plus, that’s before things like taxes, agent fees, and union dues. After finally breaking through for big money, Ford’s been set back to what he scrapped for in prior years.

You can do a similar exercise for plenty of other Yankees and players around the league. Two others that come to mind are Kyle Higashioka and Jonathan Loáisiga. The Yankees drafted Higgy is 2008 and gave him a nice $500,000 bonus. That said, he hadn’t received a full season’s worth of major league money yet. 2020 would have been his first time doing so. Meanwhile, Loáisiga received an undisclosed bonus in 2013 as an international amateur free agent (read: minimal). Since then, the righty has suffered various injuries. He finally emerged with the Yankees over the past two years, but it seems like his arm is a ticking time bomb.

Lastly, the newbies to the 40-man roster could be capped at $16,500 for all of 2020. These players, who have signed their first 40-man contracts, earn less than $91,800 on their split contracts in the minors. Here are the Yankees in this category, with amateur bonuses in parentheses: Deivi García ($200k), Estevan Florial ($200k), Luis Gil (?), Luis Medina ($280k), Brooks Kriske ($100k), Nick Nelson ($455k), and Miguel Yajure ($30k). Any way you slice it, this advance is a tough pill to swallow for this group.

Are there things in the world to be more concerned about than baseball players with non-guaranteed contracts? Of course. It doesn’t have to be a zero-sum game, though. We can feel horrible for all who have fallen ill and those whose livelihoods have been crushed by this pandemic. Meanwhile, it’s OK to feel frustrated with the players’ union (yet again). There are plenty of players who are going to be adversely affected by COVID-19. Unsurprisingly, the group most vulnerable are those the MLBPA typically least prioritizes.

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3 Comments

  1. Mr. Bootleg

    Sorry, read the room.

    I have a hard time supporting the players in just about anything after the whole Astros situation.

    The MLBPA has become everything people hate about unions all while not being what people like about and feel necessitate unions. They’re thugs.

    The MLBPA rules baseball. They set all the rules and the cow towing commissioner, Manfred, refuses to take them on for fear of a work stoppage. Yes, we don’t want that but at the same time, we cannot allow the millionaires Clark represents to rule the roost. All while MilB players starve. The activities of the union are advancing what people hate about baseball. It’s what’s driving fans further away from the game, not mound visits or LOOGY’s.

    It’s just flat out greed. And I don’t fault the players. Look how many players across all sports have stepped up, albeit more so in other sports. Clark and Manfred gotta go.

    • Derek

      I find this comment incredibly confusing and contradictory. I’m criticizing the union for completely screwing over its junior members and non-members.

      I also completely disagree that Manfred bends to the union. He has them right where he wants them.

  2. RetroRob

    For decades, it was regularly said the the strongest and best union in the world was the MLBPA. It was true. The work that Marvin Miller and Donald Fehr did not just for MLB, but ultimately all sports players, is unmatched. MLB only just got around to putting Miller in their HOF. The NFL players should push for Miller in their HOF, ditto for the NBA, etc. He didn’t work for them, but what he did for MLB ended up benefiting players in all sports.

    That, of course, was decades back. Miller would be unhappy by what the MLBPA has become today. In the end, it’s a union for millionaires, and that is because of Miller. He accomplished more than he ever thought possible. The members, though, make so much money it’s made it easier for MLB to begin to shift the equation back toward the owners. The MLB really don’t care about the minor leagues and that was a mistake. They MLBPA should be the MMLBPA. Majors and Minors. If the Union controlled all the talent, they would be able to negotiate stronger deals for all players.

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