MLB Salary Dispute Explained—How Much Players Are Set to Lose and What Happens Next

Baseball isn't any closer to returning after negotiations between the MLB Players Association (MLBPA) and the MLB have reached a standoff. As it is often the case with baseball, the impasse is of financial nature and the MLBPA is expected to present a counteroffer to the MLB's demand for additional pay cuts.

Opening Day was scheduled for March 26, but the novel coronavirus pandemic forced the MLB to postpone it indefinitely. While the league and the players' association agreed in March that players would be payed on a prorated basis once the season eventually gets underway, the MLB's latest proposal has gone down like a lead balloon with baseball's highest-paid players.

In a statement posted on Twitter on Wednesday night, Washington Nationals ace Max Scherzer made clear the players would not entertain the prospect of further salary cuts.

"After discussing the latest developments with the rest of the players, there's no reason to engage with MLB in any further compensation reductions," said Scherzer, a member of the MLBPA's executive sub-committee.

"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."

Here's a breakdown of where the MLB and the MLBPA are at the moment and the potential next steps.

What is the MLB proposal?

On Tuesday, the MLB presented its plan for an 82-game regular season, which would begin in July after three weeks of spring training. The regular season would finish on September 27, with the postseason to follow through October. Predictably, the thorniest issue is the league's proposed salary cuts.

Under the league's proposal, baseball's biggest stars would have to accept a drastic reduction in salary, while lower-paid players would be less impacted. Players making up to $1 million per year—which, according to ESPN estimates, make up 65 percent of the players—would receive around 80 percent of their prorated salaries.

The league minimum salary in the MLB stands at $563,500 this year, which works out to $285,228 on a prorated basis over 82 games. Under the current proposal, the MLB would apply a further 10 percent cut to the latter figure, leaving players with a $256,706 salary.

The percentage cut from the prorated salary increases as salaries rise. Players who make $1 million would receive about 82 percent of their full prorated share, while players who make up to $5 million would receive around 56 percent of their salaries.

Players making up to $10 million would make less than a half of their prorated salaries, while the game's superstar would pocket around 30 percent of their prorated salary.

The proposal also includes $200 million in playoff bonuses—$25 million for the completion of the division series, $50 million for the league championship series and $125 million for the World Series.

Max Scherzer, Washington Nationals
Max Scherzer #31 of the Washington Nationals delivers the pitch against the Houston Astros during the first inning in Game Seven of the 2019 World Series at Minute Maid Park on October 30, 2019 in Houston, Texas. Bob Levey/Getty

What are the players saying?

As Scherzer made clear on Wednesday night, the players are firmly against the MLB's demand players accept further pay cuts on their already prorated salaries. Specifically, the players have complained further pay cuts will be particularly unfair to highly-paid players.

Under the formula proposed by the MLB, for example, Los Angeles Angels star Mike Trout would have a base salary of $5.75 million this season, compared to $19.1 million on a prorated basis over 82 games, which would already represent a significant reduction to his $37.6 million salary—the highest full-season salary in the MLB.

New York Mets starter Marcus Stroman and Milwaukee Brewers star Brett Anderson both warned the current proposal from the MLB had little hope of getting players back on the field.

This season is not looking promising. Keeping the mind and body ready regardless. Time to dive into some life-after-baseball projects. Hope everyone is staying safe and healthy. Brighter times remain ahead!

— Marcus Stroman (@STR0) May 26, 2020

Interesting strategy of making the best most marketable players potentially look like the bad guys

— Brett Anderson (@_BAnderson30_) May 26, 2020

"The proposal involves massive additional pay cuts and the union is extremely disappointed," the MLB Players Association said in a statement. "We're also far apart on health and safety protocols."

Is the MLB saving any money?

The question isn't as straightforward as it seems. In March, the league and the MLBPA agreed that players would be played on a prorated, per-game basis during the upcoming season. With the campaign not expected to begin until July at the earliest, the MLB is optimistic teams can play 82 regular season games this season, as opposed to the traditional 162-game schedule.

Paying players on a prorated basis over 82 regular season games would save the MLB in excess of $2 billion. The figure would swell by a further 33 percent under the plans proposed by the MLB earlier this week.

The league argues that extending the regular season to around 100 games, as the players are pushing for, could be financially detrimental as it would leave it open to a second wave of coronavirus, which could potentially wipe out the possibility of playing the postseason and with it the revenues guaranteed by the lucrative national TV deals.

What happens next?

The MLBPA will likely submit its counteroffer to the MLB which, according to ESPN and The Athletic, could include full prorated salaries but with deferments.

It is worth noting that the agreement the two parties struck in March gave league commissioner Rob Manfred the unilateral ability to determine whether the season will begin.

That means Manfred could find himself juggling the owners' demand for an 82-game schedule with the players' request to play a longer regular season.

As ever, when it comes to baseball, nothing is ever quite straightforward.