MLB Loan Ratchets Up Tension

Major League Baseball is loaning out funds to teams to help cover expenses for the upcoming season, according to The Athletic, but what happens next is anyone’s guess. 

The plan is that standard revenue sharing will be suspended, as it was last season, and the league will tap a credit line to provide half the funds that would normally flow from the big market teams, like the Yankees, Red Sox and Dodgers, to the smaller market ones.

Next year, those heavy hitters are expected to both resume their roles as revenue distributors while also providing the bulk of the loan repayment to MLB. However, there is some flexibility on next year’s payments, and that’s where things get complicated.

“They can say whatever they want for politics, the understanding is it’ll never be paid back,” a big market team executive told The Athletic.

The commissioner’s office denied that notion, saying that, “The presumption is that the money will be paid back.”

While the NBA and NHL have taken similar steps, MLB’s move adds tension to an already-fraught political environment ahead of the upcoming collective bargaining agreement negotiations.

Teams have increasingly leveraged the salary-depressing mechanisms in baseball’s contract structure when players are in their first six years, while putting less money into free agency.

The tension between the players and teams was further heightened when now ex-Mariners President Kevin Mather openly admitted to manipulating player service time last month.