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Major League Baseball Set To Lose $640,000 Per Game This Season

Courtesy of ZeroHedge View original post here.

Even with Major League Baseball restarting and playing a shortened 82 game season, the organization would still be expected to post a monster loss for the year due to the coronavirus lockdowns, according to the Associated Press

In fact, MLB will lose an estimated $640,000 per game played in empty ballpark, over an 82 game season. On May 12, the MLB released a document called “Economics of Playing Without Fans in Attendance” to try and open negotiations to begin a delayed season around July 4. 

Teams would still suffer a $4 billion loss and players would get about 89% of MLB’s total revenue. As of now, teams are arguing that they lose more money with each additional game played, while players are arguing that clubs lose less money with more games played. Teams and owners would also benefit from regional sports networks having more games to broadcast, as many owners and teams have a stake in such networks. 

Owners voted on Monday for player salaries to be based on a 50-50 split of revenue, which is framework that players are expected to reject. Teams have also submitted virus-testing plans to the players association. 



2015 White Sox–Orioles crowdless game, MLB’s first crowdless game

The Yankees would be expected to lose about $312 million this year. The Dodgers will suffer local losses of $232 million, while the Mets, Cubs and Red Sox would lose $214 million, $199 million and $188 million, respectively. 

Detroit and Baltimore would lose the least, with an expectation of posting negative EBITDA of $84 million and $90 million, respectively. Either way, the LA Times reports teams are going further into debt:

Teams project to increase their debt from $5.2 billion last year to $7.3 billion in 2020, leaving most clubs out of compliance with the labor contract’s debt service rule. MLB’s central office increased debt by $550 million to support clubs and is seeking $650 million more credit. MLB said many teams do not have the capacity to add more debt to fund losses in 2021.

Teams remain worried that a second wave of the virus during the fall could wind up decimating their finances, especially if the post-season winds up being cancelled. The post-season brings in about $787 million in media money and is a key part of the financial picture for the league going forward. 

The MLB says “2019 revenue was 39% local gate and other in-park sources, followed by 25% central revenue, 22% local media, 11% sponsorship and 4% other.”


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