John Henry begins crisis talks as FSG seeks to avoid financial headaches

Liverpool’s main owner John W. Henry was due to engage in crucial talks about the continued stalemate in baseball on Thursday.

In his position as a member of Major League Baseball’s Labor Policy Committee, the Fenway Sports Group supremo, which owns baseball’s Boston Red Sox, has been a key player at the table in deciding what happens next with the MLB.

Spring training for MLB teams is set to begin in just over a month, but a stalemate took effect between teams and players on December 2, as the shutdown was implemented for the first time in 26 years due to a row between the two teams, owners and the MLB Players Union (MLBPA) show (MLBPA) over The latest Collective Bargaining Agreement (CBA) has few signs of slowing down so far.

This calls into question not only the start of spring training but also the regular season itself, something that threatens revenue streams for teams and their owners, including the FSG.

The standoff arose out of the MLBPA’s members wanting a greater share of the revenue the MLB had been making since the last CBA agreement.

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The CBA is there to look after the interests of players and certify things from meal allowances and travel protocols to salary limits and how team revenue is shared.

Since the first CBA was introduced in Major League Baseball in 1968, there have been eight instances of labor disputes, some of which involved strikes that actually wiped out the entire post-season.

MLB revenue, which does not include the 2020 season that was hit hard by COVID-19, has risen from just over $9 billion in 2016 to $10.4 billion in 2019, something that is set to continue rising once the sport completely transitions itself out. of chaos. due to the epidemic.

The competitive balance tax (CBT) found in baseball has not kept pace with rising revenue, with CBT, while being used to try to keep league teams competitive, having also helped the teams keep payroll costs low.

The CBA expired on December 1 and no common ground was found after the talks, in which Henry was involved, there is now a threat to start spring training, or indeed the start of the 2022 campaign, after the owners decided to try and speed up the process by enforcing a moratorium on off-season work. To give them the best chance of resuming normal service in time for the new season, thus limiting any impact on revenue.

The two sides were due to meet again on Thursday to try to make some progress. It’s been 42 days since the start of the lockdown, with the two sides taking time to gather their ideas and find a way to find common ground, but the specter of a delay to the start of the regular season is worrying the team owners.

Opening day is scheduled for March 31 between the Red Sox and the Tampa Bay Rays at Fenway Park.

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According to USA Today, one of the MLBPA’s main focus points is that they want winning to be significantly more motivating. Currently, the model can see team owners purposely go to their establishments in one season and spend less in the hope that they have a higher chance of success by receiving higher draft picks as a result of poor field performance.

According to the Boston Globe, “This could mean a proposal that would eliminate draft pick compensation for free agents and/or create a sweepstakes for an as-yet-determined number of top picks.”

Another sticking point would be the MLBPA’s desire to reduce revenue sharing by $100 million, something MLB owners are unlikely to agree with.

The MLBPA has previously expressed concern about whether smaller market clubs are adequately reinvesting distributed revenue from larger teams into smaller market teams and has previously filed complaints against teams such as the Pittsburgh Pirates, The Rays, Billy Beane’s Oakland A’s and the Florida Marlins in past years.

The 2016-21 CBA requires teams to use revenue sharing funds to “improve their performance on the field.”

However, investments in things like scouts and player development staff tick these boxes without offering players direct financial benefits, something they oppose as a federation.

There is currently a minimum salary in MLB for players, which is $575,500 per year. There is a possibility it could be increased to $600,000, although that does not meet the MLBPA’s demands for a starting point.

Another problem that remains in limbo is raising the luxury tax threshold, as clubs are penalized with a tax for exceeding when only players’ salaries are spent. The bottom line is currently around $210 million, which is something MLB has shown a willingness to raise in the amount of $10 million. This is far less than the $245 million that the MLBPA was seeking.

There are many issues that need to be resolved before spring training begins, and the possibility of a delay to the start of the MLB season that could result in a reduced schedule is a concern for owners, with the cost already factored in from the economic impact of the COVID-19 pandemic and the shutdown of fans in stadiums.

Owners will likely have to give more to receive less. FSG and Henry will push for an outcome that protects the Red Sox’s revenue streams and their competitiveness as much as possible.


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