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MLBPA builds up asset base as labor tensions rise

Tony Clark, executive director of the Major League Baseball Players Association (Photo by Jim McIsaac/Getty Images)

With labor storm clouds brewing between Major League Baseball and the MLB Players Association, the union is aggressively building up its asset base and last year suspended normal licensing distributions to players.

According to newly filed report with the US Department of Labor, the MLBPA ended calendar year 2019 with an asset base of $165.9m. The figure is 53 per higher than last year, and 43 per cent higher than at the end of 2014, the comparable point in baseball’s prior labor cycle.

The MLBPA did not comment on the filling. But the motivations behind the fast-accelerating savings activity owe directly to the potential issues during the next round of collective bargaining with the league, set to occur next year in advance of the expiration of the current five-year deal in December 2021. 

MLBPA practice, like many other sports unions, historically has been to save money from group licensing efforts in escalating amounts during the course of labor contract cycles, and then redistribute those funds to players once a new CBA is reached.

But the 2019 annual report showed even more aggressive steps to stockpile money for a potential work stoppage. Compared to licensing distributions in 2014 that typically maxed out at $16,660 per player in 2014, the union last year did not make any such regular distributions to players. And in turn, the MLBPA’s cash holdings grew during the course of calendar year 2019 from $18.6m to $24.5m, its holdings in US Treasury securities increased from $54.1m to $75.4m, and its other investments rose from $29.7m to $59.6m. 

The union recently ended a bruising round of labor negotiations with MLB to restart the 2020 season that ultimately ended without a negotiated agreement the number of games, and MLB ultimately imposed a 60-game regular season that is beginning July 23. 

The labor saga over the past several months amid the ongoing Covid-19 pandemic exposed deeper rifts between the two camps that are set to create more issues over the forthcoming year to 18 months.

The MLBPA, meanwhile, also reported a 23 per cent annual increase in licensing revenue, reaching $74.97m in 2019. 

The annual report is based on cash and not accrual accounting, and payments are credited in the years they are received and not earned. As a result, views into the financial state of the organization can be deceiving. Still, the report showed the fourth consecutive increase in yearly licensing revenue to the union and the fifth over the past six years.

The MLBPA’s licensing receipts last year were led by longtime trading card partner Topps, which paid $18.77m to the union during the year. OneTeam Partners, a new collective created in part by RedBird Capital that pools the commercial rights of players from both MLB and the National Football League along with those from Major League Soccer and Women’s National Basketball Association, among others, supplied the union with $11.84m in revenue in 2019. 

Sony Interactive Entertainment, makers of the video game “MLB: The Show,” paid $9.59m to the union last year, ranking third among MLBPA licensees, followed by mobile game developer Glu Mobile at $8m. 

MLBPA executive director Tony Clark earned $2.28m in total compensation in 2019, roughly equal to his annual intake of the prior two years.