The New CBA — Expanded Playoffs
The Collective Bargaining Agreement (CBA) between MLB and the Players Association (PA) expires on December 1st. The new CBA will be a hot topic this offseason. Negotiations could delay the 2022 season and potentially cause a lockout or strike. We will look at a number of changes you might see in the next CBA.
In the shortened 2020 season, we saw an expanded playoff format, with 16 teams competing for their shot to win the World Series. In 2021, MLB will return to the prior 10-team format. This quick shift in 2020 tells us all we need to know about why this matters.
In 2020, teams and players played a partial season in front of no fans, costing the players and teams massive amounts of money. Their only real revenue source was their TV contracts, so expanding the playoffs was one way to fill in an enormous gap.
The teams and players split the gates for the postseason, creating a player pool to be divided among playoff teams. This pool is comprised of gate receipts from all of the guaranteed games:
- 50 percent of the gate receipts from the Wild Card
- 60 percent from the first three games of the Division Series
- 60 percent from the first four games of the League Championship Series
- 60 percent from the first four games of the World Series
In 2019, this amounted to a player pool of $80,861,145.74. This total is then divided between the playoff teams based on how far they made it into the playoffs
The first thing to notice is that this pool is just gate receipts. This doesn’t include parking, concessions, merchandise, and the big one…the TV contract. In general, teams make a lot of their profits by making the playoffs, and they see a much larger share than the players.
Any expanded playoff would offer more money for both the players and teams. The problem with this is MLB and the PA have to figure out how to split that pie. This is a collectively bargained split. Both sides can agree that more revenue is better, but the players won’t agree to it with the current split.
The players should ask for more of the gate, including non-guaranteed games, and the teams should be happy to give somewhat more for the overall extra revenue.
The dollars at stake make expanding the playoffs far from a lay-up, but we should ask the other question: Outside of the monetary effect, are expanded playoffs good for baseball?
The first benefit is expanded fan interest deeper into the regular season and into the postseason. With more teams competing for more spots, fans will be more engaged. I think it is important to look at the extreme examples though where every team or just 2 teams make the playoffs.
In the scenario where every team makes it, the regular season would become somewhat meaningless aside from seedings. Fans would wait to tune in until the playoffs. In the scenario where just 2 teams make it, fans would lose interest quickly or have no hope at all. 2 and 30 are obviously poor choices, but what is the right number?
If we look at the last two seasons, 2019 saw 15 teams with winning records and 10 teams with 90+ wins (55.6% winning percentage). In the shortened 2020 season, 14 teams had winning records, and 9 teams had above a 55.6% winning percentage.
You can see that at 16 teams, you generally award a postseason berth to a team with a losing record. At 10 teams, the bar is pretty high. If we settle on 12 or 14 being the sweet spot, that leaves the question of what would a 12 or 14 team postseason look like and how does it fit into roughly the month of October?
Despite the one-and-done format, Wild Card games have been extremely popular. They could be part of either scenario. On the flip side, you don’t really want your division winners playing in a short series (<5 games) in the first round given the randomness of playoff baseball.
When you look at the lost money from 2020, I think it is inevitable we will see expanded playoffs in the next CBA. This will be good for the game, with the obvious question of good for whom?
