June 12, 2020
Via E-Mail
Bruce Meyer, Esq.
Major League Baseball Players Association
12 East 49th Street
New York, New York 10017
Re:

Counterproposal

Dear Bruce,
I received your letter dated June 9, 2020. I acknowledge up front that I must
have misinterpreted your June 6th letter. I thought the letter reflected a willingness on the
part of the Association to discuss in good faith the economics necessary for the Office of
the Commissioner to waive its right under the March Agreement to resume the 2020
season only when there are, among other things, no restrictions on fan access. After
reviewing the Association’s counterproposal, I stand corrected.
Resolution of Dispute
Before I respond to the Association’s June 9th counterproposal, I think it may be
useful to review how we found ourselves in this position. The parties met on March 13
and 14 in Arizona to discuss how to address the emerging COVID-19 pandemic. On
March 13, President Trump declared a national emergency, and the Commissioner was
prepared to exercise his authority, under Paragraph 11 of the Major League Uniform
Player’s Contract (“UPC”) – which is a collectively bargained contract – “to suspend the
operation of the [UPCs] during any national emergency during which Major League
Baseball is not played.” So the Association’s rhetoric that players “remain opposed to
any further pay cuts” is quite misleading because players were never entitled to be paid in
the first place, under the plain language of their UPCs, when games were not being
played as a result of the ongoing national emergency.
During the discussions leading up to the parties’ March 26, 2020 agreement
(“March Agreement”), we made crystal clear to the Association that the Clubs would not
be forced to resume play without regular fan attendance because it was not economically
feasible to do so. We provided you with financial information showing the amount of
revenue from gate/in-park (approximately 50% of local revenue). The Commissioner
himself said during the negotiations, according to our bargaining notes, “We’re not
playing empty, it just doesn’t work for us.” The Association acknowledged as much,
which resulted in Section I of the March Agreement, providing the Office of the
Commissioner with the unilateral right to resume the season only when (among other
conditions) there were no restrictions on regular fan access in all 30 Major League

 

  
 

Bruce Meyer, Esq.
June 12, 2020
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ballparks. And the Association, for giving up essentially nothing because players had no
right under their contracts to be paid during the national emergency, received hundreds of
millions of dollars’ worth of benefits, including a full year of service for a shortened
season (the Basic Agreement requires 172 days of service for a full year), a full year of
service if there was no season, and salary advances totaling $170 million (which were
non-refundable if there was no season).
Everyone involved in the negotiations understood that if we could not resume
play with regular fan access, the parties would have a subsequent negotiation over
reductions to player compensation to account for the loss of billions of dollars of gate/inpark revenue the Clubs would suffer in that scenario. The Commissioner had two
conversations with Tony in which Tony confirmed his understanding that there would be
another negotiation over player economics if we could not resume with fans. Further,
Matt Nussbaum confirmed for Pat Houlihan on the morning the March Agreement was
finalized that he understood that players would be asked to reduce their daily salaries if
games could only resume without fans. And we believe that many of your player agents
understood, both from the language of the March Agreement itself and from briefings by
the Association, that there would be another negotiation over player salaries if play could
not be resumed with fans in all ballparks.
You suggest in your letter that the Association’s 89-game proposal at full daily
salaries “is made in the interests of settlement.” However, the parties are not engaged in
settlement discussions, and it is unclear what exactly you are trying to “settle.”
Nevertheless, it is clear to me that the parties’ differing interpretations of the March
Agreement has been a stumbling block to negotiating a resolution that is in the interests
of both sides. I would note two particular problems.
First, you have repeatedly asserted that we have some obligation to play as many
games as possible – or, in the words of your most recent letter, that we “owe” it to players
to do so. This assertion is flatly contradicted by the plain language of the agreement you
negotiated in March. Given the continuing restrictions on regular fan access in all 30
Major League ballparks, the Clubs are under no obligation to play any games, let alone
any particular number of games. As you well know, we negotiated that provision
precisely to protect the Clubs from being leveraged into the economically infeasible
alternative of playing in empty stadiums without a corresponding reduction in salaries.
Reduced salaries are, of course, the other problem. Section II of the March
Agreement contemplates that the parties will “meet in good faith to discuss” among other
things “the economic feasibility of playing games in the absence of spectators. . . .”
Despite the absence of the conditions for resumption of play in Section I(A), we have
provided the Association with our best projections of revenue in an effort to have this
discussion. In response, you have flatly refused to discuss any reduction in salaries and
have asserted that the March Agreement requires 100% prorated salaries even for games
in empty stadiums. This latter assertion is particularly troubling given that the very
premise of the March Agreement was the ability to play games without restrictions on fan
access and given that the bargaining history conclusively establishes that the parties
intended the phrase “economic feasibility” to encompass a discussion of salary

 

  
 

Bruce Meyer, Esq.
June 12, 2020
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reductions. We are convinced that the Association has purposely failed to fulfill its
obligations under the March Agreement, and has deprived the Clubs the benefit of their
bargain in the March Agreement – all while continuing to enjoy the lucrative benefits the
Clubs agreed to provide the Association in return, such as $170 million in salary
advances and full service time irrespective of whether or not games are played. This
failure to act in good faith has caused enormous damage to the sport.
Final Counterproposal for 72 Games
With that as the backdrop, I turn to the Association’s June 9th counterproposal.
The way we see it, the Association is asking the Office of the Commissioner to waive one
of the most important rights it obtained in the March Agreement – the right not to be
forced to pay players their full salaries while playing without fans – and has yet to offer
any concessions in exchange for our agreement. The “significant economic concession”
in your proposal purportedly was to move from proposing 114 games to 89 games. But
at 100% proration, this is a non-move because the Association does not have the right
under the March Agreement to determine how many games (if any) will be played in the
2020 season if the conditions in Section I(A) are not satisfied (which they are not).
In addition, while you continue to cite the “extraordinary burdens and risks” being
asked of players to justify your positions, those positions, at least in the view of our
medical advisors, increase the risk to the players you represent. You claim that our
position that the regular season must end in September “remains unreasonable and
unsupported” when we have repeatedly told you that our medical advisor (one of the
world’s preeminent experts on COVID-19) believes that a second wave of COVID-19 in
the fall represents a significant risk that should be mitigated. Meanwhile, you have not
provided us with any information from your COVID-19 expert (if you have one) that
disputes that view. (We also told you that our broadcast partners do not desire to
reschedule the October postseason broadcast windows.)
You have also taken the position that the Office of the Commissioner should
schedule as many doubleheaders as possible, even though one of the primary objectives
of the health and safety protocols is to limit the amount of time players are congregating
together in the clubhouse and on the field. If you have been following recent news, at
least twelve states have experienced a rising rate of Covid-19 hospitalizations in the last
week, including some states where our Clubs are located. In light of your stated concern
about the “extraordinary burdens and risks in the current environment,” and a health
situation that remains unpredictable and fluid in many areas, we must disagree with your
position that it is in the interests of player safety and health to both cram in as many
games as possible through the scheduling of doubleheaders and complete the postseason
in mid-November, a time when the Institute for Health Metrics and Evaluation is now
predicting worsening COVID-19 trends.
While we recognize that this essentially has been a negotiation with ourselves
because the Association has offered little beyond what we already have the right to do
under the March Agreement, we will make another attempt to reach an agreement that is
a win-win for both sides. The attached proposal is for a 72-game season that begins on
July 14 and ends on September 27, which is the longest season that can legitimately be

 

  
 

Bruce Meyer, Esq.
June 12, 2020
Page 4
 
 

scheduled at this point in the calendar. The substantial benefits that this proposal
provides to players include:

 



Total player compensation in excess of $1.5 billion. This represents an
increase of $71 million from our June 8th proposal, even with the 4 fewer
games.



Total compensation that is the equivalent to approximately 83% of player
salaries compared to 75% in our June 8th proposal.



Total compensation during the regular season of $1.2713 billion.
Compared to our June 8th proposal, this represents over $300 million in
additional compensation to players even if a postseason is not played, and
more compensation than players would earn, for example, in a 48-game
season under the formula in Section IV(A) of the March Agreement.



Assuming a complete postseason, every player will earn at least 80% of
his prorated salary, with the top salaried players earning more than $12
million.



A guaranteed $50 million Players’ pool in exchange for expanding the
postseason. This would guarantee the winners of the World Series a
postseason share of approximately $250,000, and the losers a share of
approximately $170,000. In the absence of a negotiated agreement, and
without fan access in the postseason, players may not receive any
postseason shares because, under the Basic Agreement, the Players’ pool
is comprised of gate receipts. If the players do not want to expand the
postseason because of your concern about the “additional burdens of
added games on many players,” we will maintain the existing playoff
format and there will be no guarantee of a player pool (which was being
funded from the additional postseason media revenue).



The right of any player to opt out of the 2020 season without salary or
service. Individuals who the parties agree are high risk may opt out while
receiving salary and service.



At the election of the Association, the elimination of direct draft pick
compensation in the 2020-21 offseason.



Expanded rosters for a portion of the season (as reflected in the draft
Operations Manual sent to you) that will allow more players to accumulate
Major League service and salary this season.



We, of course, also are willing to discuss utilizing joint dollars to help
support minor league players and programs designed to positively impact
social justice initiatives irrespective of whether we reach an agreement on
resumption of play. (I note that our Presidents of Baseball
Operations/General Managers have already committed their personal
funds to support social justice initiatives, which the Office of the

  
 

Bruce Meyer, Esq.
June 12, 2020
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Commissioner has matched).
This represents our final proposal for a 72-game season. You should let us know
by the end of the day on June 14 (Sunday) whether players desire to accept it.
Very truly yours, 

Daniel R. Halem