MLB Looking To Move Athletics Back To Revenue-Sharing Recipient Status

The Athletics were singled out in something of a unique fashion in the last collective bargaining agreement, as their status as a revenue-sharing recipient was gradually phased out over the course of the five-year deal.  Under the terms of the now-expired 2016-21 CBA, the Athletics’ normal take of revenue-sharing funds dropped to 75% in 2017, 50% in 2018, 25% in 2019, and then nothing for the CBA’s final two years.

As negotiations about the new CBA (slowly) continue between the owners and players, the league is now looking to once again reinstall the A’s as a recipient of revenue-sharing, MLB Trade Rumors’ Tim Dierkes reports (via Twitter).  This appears to be one of the relatively few areas of common ground between the two sides, as the MLBPA is “willing to” restore the Athletics’ former status.

It remains to be seen exactly how baseball’s revenue-sharing system could be altered in the next CBA, though given the owners’ unwillingness to discuss any revenue-sharing changes whatsoever with the union, whatever changes are made could be pretty minor.  It could be that Oakland’s shift back into the recipient category might stand as the biggest move in this area, as the A’s will now stand to make tens of millions of extra dollars each year.

Under the terms of the last CBA, 48% of each team’s local revenues were placed into a pool, then divided equally among all 30 teams.  Since some teams’ local revenues are naturally much larger than others, this provided quite a windfall for smaller-market clubs.  While the exact figures weren’t known, MLB.com’s Jane Lee wrote in December 2016 that the A’s received over $30MM in revenue-sharing funds in 2016.

This will have a wider impact on the other 29 teams, as the revenue-sharing teams will now be paying a slightly larger share of that revenue pot with the Athletics now removed from the sharers list.  Likewise, the teams receiving funds will now also get a slightly lesser share of the pie, with the A’s joining the party.  There was also the concept of the revenue-sharing rebate for larger-market teams in the last CBA (as explained by The Boston Globe’s Alex Speier) though it isn’t known if a similar mechanism might be in place for the next agreement.

The seemingly neverending saga of the Athletics’ quest for a new ballpark was the reason for their initial inclusion on the revenue-sharing list, and now the reason for their return.  Despite the lack of revenue generated from the Coliseum, the A’s don’t exactly play in a “small market,” given the size of Oakland and the Bay Area market in general.  As such, the decision was made to gradually remove the team from the group of revenue-sharers, though with over five years now gone, the Athletics are still not much closer to landing that long-desired new stadium.

Amidst much speculation about a potential move to Las Vegas, there has recently been more positive momentum towards a new ballpark in Oakland.  The franchise’s longstanding concept of a new stadium in the Howard Terminal area was recently given a vote of confidence by Oakland’s City Council, which certified an environmental impact review on the project.

There are still more logistical hurdles to be jumped, however, and between those potential obstacles and the time necessary to actually build the ballpark and adjoining infrastructure, it is quite possible the A’s might not have their new stadium in place before the end of a hypothetical 2022-26 term of the next CBA.  More will be known about the Athletics’ fate (whether in Oakland, Las Vegas, or elsewhere) in the next few years, so by the time the next CBA talks roll around, it would seem like the A’s would again be removed from the revenue-sharing recipient category if a new stadium project is indeed up and running.

In the interim, the A’s will reap the benefits of additional revenue.  For Oakland fans wondering if this means the team will spend these new funds on player payroll, it’s worth remembering that Athletics weren’t big spenders in their previous era of receiving revenue-sharing money, so a sudden spending splurge probably isn’t likely.  Since the A’s wouldn’t get any new funds until the end of the 2022 season anyway, it won’t do much to forestall the speculation that the A’s will be looking to cut payroll and move at least some of their higher-salaried players once the lockout is over.

From the MLBPA’s perspective, it was almost exactly four years ago today that the union filed a grievance against the Athletics, Rays, Pirates, and Marlins about how the teams were allocating the money collected via revenue-sharing, as receiving those funds wasn’t reflected in any boosts in player payroll.  To that end, it might seem curious that the union would be okay with the A’s again joining the revenue-sharing list, though speculatively, there could be a bigger-picture tactic at play.  As much as the league has claimed that any negotiations about revenue-sharing practices are a non-starter in CBA talks, the Athletics’ situation itself counts as a notable change in the revenue-sharing plan, which the MLBPA might perceive as a crack in the owners’ stonewall on the subject.

Beyond just the extra cash, the A’s may also benefit in another fashion from being a revenue-sharing recipient, depending on how the new CBA addresses free agent compensation.  Under the last agreement, revenue-sharing recipients stood to land a compensatory draft pick directly after the first round if they had a free agent who rejected a qualifying offer and signed with another club for more than $50MM.  While teams that lost certain free agents would still be eligible for a compensatory pick in the league’s new proposal, it remains to be seen exactly what the criteria would be for that compensation, or if revenue-sharing teams would be in line for a greater draft reward.