Commissioner Manfred Provides Financial Update

Commissioner Manfred Speaks on the Finances of Baseball

This week, Barry Bloom of Sportico interviewed MLB Commissioner Rob Manfred regarding the financial state of baseball.

According to Commissioner Manfred, “Major League Baseball’s 30 clubs have amassed an unprecedented $8.3 billion [dollars] of debt from their various lenders.” Even if you are not working in the financial industry, that is a significant amount of money the game has lost this year. Furthermore, from an operational standpoint, the game “will post [a loss amount] of $2.8 billion to $3 billion dollars.”

Commissioner Manfred went onto state, “We are going to be at historic high levels of debt. And it’s going to be difficult for the industry to weather another year where we don’t have fans in the ballpark and have other limitations on how much we can’t play and how we can play.”

With so much uncertainty regarding the pandemic, it’s hard to try to forecast what the finances look like for every team in 2021. Additionally, without knowing how many or even if there will be fans in attendance, it makes it that much more challenging. In fact, trying to formulate what the 2021 season will look like is of utmost importance to Major League Baseball right now. There have likely been preliminary discussions regarding that very topic behind closed doors.

Regardless though, Commissioner Manfred has been clear on his stance regarding next season. In another article from last month, he said “playing in empty ballparks isn’t a viable option for the 2021 season.”

Effects of the Significant Amount of Debt

Much of this debt came as a result of teams enacting the 60-game schedule without having fans in the stands. Without fans, every single team didn’t receive profits from tickets, merchandise, food, and other revenue streams which essentially crippled them. As a result, many teams have had to scale back their off-the-field staff quite significantly.

On Monday, Evan Drellich of The Athletic hinted to the amount of layoffs that have taken place across the game. Collectively, “Major League Baseball owners this month have combined to lay off hundreds of people across different club departments.” Owners still have a responsibility of keeping their finances in check and this unfortunately contributes to that. That’s especially true regarding all of the uncertainty moving forward.

Another effect of this debt is going to be the pending offseason. Anyone around the game can try to identify who might be traded or who might sign where. However, no one knows for sure how the offseason will go. How much payroll will certain teams look to cut? How much money will be left to spend on free agents? All of those things remain unanswered and that’s where there is so much gray right now.

Final Thoughts on Commissioner Manfred’s Comments

In the end, only time will tell what happens regarding all of this. While it is unfortunate, this is the reality that happens in the real-world. Major League teams are forced to scale back their operations when faced with significant loss like any business or organization. That has certainly happened to this point. Regardless of what happens financially moving forward, baseball will make every attempt to make things normal again next year. Whether that includes fans in the stands and a regular 162-game schedule, remains to be seen.

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