MLB’s Abysmal Debt Makes Upcoming CBA Crucial


MLB commissioner Rob Manfred (above) made headlines this week, announcing that the sports league was $8.3 billion in debt. (Courtesy of Twitter)

Major League Baseball (MLB) Commissioner Rob Manfred announced that the league and its teams have accumulated a total of $8.3 billion in debt from this past season to keep operations afloat with no gate revenue and limited sponsorship and merchandise revenue, as reported by Sportico’s Barry Bloom. 

The commissioner also mentioned that they will be posting an approximate operational revenue loss of $2.8 to 3 billion. For the first time since the pandemic started, the sports world has a glimpse into the financial ramifications of having limited to no fans inside stadiums. Major League Baseball will be hit hardest, as while the NBA and NHL were already 75% done with their regular seasons when the stoppage hit, MLB was only in the middle of spring training. It had to reduce its season to only 37% completion of its original 162 game season, less than half of what the NBA and NHL had with fans pre-COVID-19. 

This astounding number struck the sports world with a harsh dose of reality, making fans and sports business professionals alike realize how damaging this pandemic has been not just on the sports industry but also on the American economy as a whole. The Boston Red Sox, Baltimore Orioles, Oakland Athletics, Chicago Cubs and San Francisco Giants have all announced layoffs to team employees across different departments, with more clubs surely to follow.

This incredible amount of debt and mass layoffs from clubs amplifies the pressure on Commissioner Manfred and the Major League Baseball Players Association (MLBPA) to work together to strike a new agreement before the end of next year. Luckily for the MLB, they have just over 13 months to work out a deal with the MLBPA, and if the negotiations are anything reminiscent of the negotiations that played out in the media this past spring, they will need every minute of that time. 

Initially going into the negotiations in the spring, the league had the upper hand and a deal was never truly reached on the amount of games to play and proration of their salaries. This time around, the players had the upper hand due to having to prorate their contracts twice. However, that was before this new statistic regarding MLB Club and League debt was announced by the commissioner, which will put pressure on the MLBPA to cooperate with the league once again. 

If the MLB has to have limited fans in 2021 followed by a season that is locked out due to labor union strikes in 2022, with $8.3 billion in debt, the league and clubs could legitimately be at risk of financial collapse. It is crucial for the survival of the league that MLB and MLBPA collaborate to ensure the success of the league and its players for years to come. It would be a shame for a historic American institution since 1869, which has survived the Spanish Flu, the Great Depression and two world wars, among other historic hardships, to be taken down by this pandemic due to labor union disputes.