The Cubs found themselves Thursday at the center of rising tensions in the fight between owners and the players union over terms to play an abbreviated 2020 season during the coronavirus crisis — held up as a symbol of mistrust by the game’s most powerful agent.
In an email to clients obtained by the Associated Press, agent Scott Boras urges players to stand firm on the prorated-salary agreement with MLB struck in March and reminded them of record industry revenues and team valuations that were not reflected in salaries in recent years.
Boras used the heavily-leveraged Ricketts family purchase of the Cubs in 2009 and the family’s subsequent investment in Wrigley Field renovations that he also tied to debt financing in AP’s reporting of the email, which was confirmed by NBC Sports Chicago.
“Throughout this process, they will be able to claim that they never had any profits because those profits went to pay off their loans,” Boras wrote in the email. “However, the end result is that the Ricketts[es] will own improved assets that significantly increases the value of the Cubs — value that is not shared with the players.”
Recipients of the email were asked to “please share this concept with your teammates and fellow players when MLB request[s] further concessions or deferral of salaries.”
A Ricketts representative pushed back on Boras’ claim.
“The Ricketts family invested $750 million to save iconic Wrigley Field for fans today and for future generations. At every level they’ve built the best player facilities in the game,” Dennis Culloton said. “In 2019, the Cubs had one of the top baseball payrolls in the game. The fact of the matter is 70 percent of the team’s revenues which support the baseball operations come from having fans at the ballpark.
“Nevertheless, we thank Mr. Boras for weighing in.”
The Cubs were one of three teams to exceed MLB’s luxury tax threshold last year and carried a projected payroll into 2020 assured of exceeding it again, barring in-season trades of significant contract obligations.
Boras has talked publicly often in the past decade about the industry issues he raised in the email, including in relation to the Cubs.
It’s also not the first time the Cubs have been at the center of controversial issues during that time. Primarily as a response to new CBA restrictions on amateur signings and to the team’s heavy debt-management costs, the Cubs helped provide the modern-day tanking blueprint now widely in use — the first big-revenue team in the free agency era to use tanking to rebuild.
In this case, the Cubs example raised by Boras comes only two days after Tom Ricketts’ interview with CNBC in which the Cubs chairman suggests the club will make only 20 percent of normal revenue in a “best-case scenario” if an abbreviated season is played.
MORE: Cubs chairman Tom Ricketts: 'We’d definitely like to see baseball back'
Ricketts also estimated team losses include a 70-percent share of total revenues tied solely to stadium attendance.
Some have disputed his numbers — although few dispute the perfect-storm nature of this crisis as it relates to a big-market franchise that expected to start seeing a return on its sizable investment in a new TV network with a 2020 launch.
But owners, who have enjoyed a federal antitrust exemption for more than 100 years, never have opened their financial books to the union and as recently as 2016 and 2017 sold off its BAMTech streaming enterprise to Disney for more than $2 billion — resulting in $50 million payouts to each owner in 2017.
Counterintuitively, the next two free agent winters were the slowest since the collusion winters of the 1980s. And the average major-league salary dropped in consecutive seasons (2017-18) for the first time since the union began tracking salaries more than 50 years ago.
On Tuesday the owners proposed a sliding-scale formula for deeper salary cuts to play roughly half of a normal season — a proposal the union called “extremely disappointing.”
By Thursday the union still had not settled on what it might include in any potential counterproposal, much less when it might present one.
“Remember, games cannot be played without you,” Boras wrote in the email to clients. “Players should not agree to further pay cuts to bail out the owners. Let owners take some of their revenues and profits from the past several years and pay you the prorated salaries you agreed to accept or let them borrow against the asset values they created from the use of those profits players generated.”
On the issue of industry debt that could be impacting the kind of liquidity that might otherwise help owners withstand the crisis, Boras added:
“Make no mistake, owners have chosen to take on these loans because, in normal times, it is a smart financial decision. But these unnecessary choices have now put them in a challenging spot. Players should stand strong because players are not the ones who advised owners to borrow money to purchase their franchises, and players are not the ones who have benefitted from the recent record revenues and profits.”
One report Thursday suggested at least some owners would rather not play this season for fear of losing more money by playing an abbreviated season than not.
Ricketts does not appear to be in that group, saying during that CNBC interview the Cubs “definitely” want to get back on the field this year.
Part of the union’s position on sticking to the prorated-salary agreement from March involves owners’ continued unwillingness to provide enough financial documentation to support their claims of projected losses.
Said Nationals pitcher Max Scherzer, a member of the union’s executive board and a Boras client, in a tweet Wednesday night:
“After discussing the latest developments with the rest of the players there’s no reason to engage with MLB in any further compensation reductions. We have previously negotiated a pay cut in the version of prorated salaries, and there’s no justification to accept a second pay cut based upon the current information the union has received.
"I’m glad to hear other players voicing the same viewpoint and believe MLB’s economic strategy would completely change if all documentation were to become public information.”
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