CHICAGO — The Chicago Cubs were dragged into the middle of Major League Baseball’s fight over the proposed restart Thursday after a leaked memo from agent Scott Boras cited them as an example of why players should hold their ground on salaries.
Boras, who as of August represented 71 players on active rosters — including Cubs third baseman Kris Bryant, the team’s players union representative — told his clients in the memo not to agree to further pay cuts he claimed would “bail out the owners.” The Associated Press obtained Boras’ memo.
A proposal from MLB owners to restart the season is centered on a tiered system of salary cuts that takes a larger percentage from the higher-paid players and less from those at or near the bottom of the salary structure.
The MLB Players Association insisted it agreed in March to a proposal to prorate player salaries based on games played during a shortened season, but owners want further cuts to account for the loss of revenue from having to play in empty ballparks.
Boras told his players “the game can not be played without you” and asked them to share the concept with teammates and opposing players when “MLB requests further concessions or deferral of salaries” during negotiations.
“Let owners take some of their record 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,” he wrote.
The only team Boras cited was the Cubs, who are owned by the Ricketts family and valued at $3.2 billion, according to Forbes. Boras pointed to debt financing in the purchase of the team in 2009 and the subsequent renovations of Wrigley Field and development near the ballpark.
“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. “However, the end result is that the Ricketts will own improved assets that significantly increases the value of the Cubs — value that is not shared with the players.”
The Rickettses’ real estate company, Hickory Street Capital, built and leases the Hotel Zachary, several restaurants and businesses, an office building and Gallagher Way, the plaza adjacent to Wrigley Field. The Ricketts family owns 11 rooftop clubs. The Hickory Street Capital assets generate millions in combined revenues that don’t go into the team.
The Cubs responded to the Boras memo by pointing to the team’s high payroll and ballpark renovations.
“The Ricketts family invested $750 million to save iconic Wrigley Field for fans today and for future generations,” Ricketts family spokesman Dennis Culloton said in a statement to the Chicago Tribune. “At every level they’ve built the best player facilities in the game. In 2019, the Cubs had one of the top baseball payrolls in the game. The fact of the matter is 70% of the team’s revenues which support the baseball operations come from having fans in the ballpark. Nevertheless, we thank Mr. Boras for weighing in.”
The Associated Press, citing an MLB document, recently reported the Cubs would potentially lose $199 million paying prorated salaries to its players during an 82-game season in an empty Wrigley Field. Only the Yankees, Dodgers and Mets would lose more, according to the document. The Cubs declined to comment on the report.
MLB is hoping to restart the season by the Fourth of July, but the economic proposal thus far has been panned by some players, who believe it’s a non-starter. The agreement in March that called for prorated salaries is their only option, they say. Three of Boras’ clients are on the union’s eight-man executive subcommittee. Max Scherzer, one of those clients, issued a statement late Wednesday saying “there’s no need to engage with MLB in any further compensation reductions.”
A major league source with knowledge of the agreement between MLB and the union said the wording is “very explicit” and contends it said prorated salaries will be paid only if teams play in their home ballparks in front of fans. Without fans, he said, the agreement calls for “further negotiation.” If MLB paid the players their prorated salaries without revenues from attendance, the losses would be significant for every team, he said.
“As an industry … we’d be better off not playing,” he said.
MLB reportedly made more than $10.7 billion in gross revenue last year, up from $10.3 billion in 2018. Teams won’t open their books to players, so it’s unknown how much they would stand to lose by paying prorated salaries.
Either way, Boras suggested teams’ losses are irrelevant. He wrote that owners taking out loans to buy teams or fund renovations “in normal times … is a smart financial decision.”
Of course, these are not normal times. But Boras pointed out it’s not the players’ fault the owners made those investments, so bailing them out shouldn’t be an option.
“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 benefited from the recent record revenues and profits,” he wrote.
How Boras’ memo will be received by the vast majority of players who employ different agents remains to be seen. Reds pitcher Trevor Bauer accused Boras of “meddling” in a tweet, writing: “Scott Boras, rep your clients however you want to, but keep your damn personal agenda out of union business.”
But Boras has many of the top-paid players in the game, including many influential veterans. The battle over the potential restart of baseball is just beginning.
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