MLB teams have reacted to the lack of revenue in various ways this week, as cost cutting comes into focus around baseball.
While the vast majority of clubs — including low-revenue teams like the Reds, Pirates, and Marlins — have committed to paying their employees through May as MLB makes tentative plans to return to action in June, some franchises have taken immediate measures to cut costs until games arrive.
Sadly, the only team to announce payroll cuts is your Tampa Bay Rays. The Oakland A’s were said to be circling the same decision, but (update) have since committed to paying their staff through May.
Of note: The Rays were the first MLB team to guarantee salaries to all staff until May 1, and now they are the first mover again, but this time the industry does not appear to be following their lead.
In an announcement made over Zoom calls yesterday the Rays announced that staff corresponding to events at the stadium will be furloughed, beginning on Saturday, with the vast majority of the remaining employees receiving pay cuts to help the organization stay fluid enough to kick back into full operations when the season is ready to commence.
As these are furloughs, the relationship between the Rays and the employee will continue, allowing the unpaid staff to still utilize health care coverage and apply for some benevolent assistance, per the Tampa Bay Times:
Staffers were told the costs of health insurance for anyone furloughed will be covered by the team, and there could be assistance for anyone facing significant financial hardships.
The Times also reported that the Rays leadership told staff that some employees could be impacted through the 2022 season, an ominous timeline being parroted across MLB front offices.
More creative solutions were available
While the Rays are the first — and thus far only — team to announce sweeping changes to their employment, other teams have opted for more creative measures.
Some franchises will hope to avoid cash refunds to ticket buyers by promising a 5% rate of return to those who have already paid for tickets and don’t demand their money back, such as the White Sox and Cubs.
The Pittsburgh Pirates, meanwhile, announced to their staff on Monday that the team would be suspending payments to retirement plans as a cost saving maneuver, but have committed to paying their employees through May.
The Pittsburgh Pirates rank 22nd on Forbes valuation list, and the Rays rank 28th, yet it should be noted that both teams were in the top-ten for operating income last year thanks to their relatively low payrolls and various cost saving strategies, ending the season on par with the Cubs and White Sox. Per Forbes, all four teams had operating income* between $66-$68 million in 2019, so it is unclear for an outside observer to understand why some franchises are not capable of paying their staff in full.
It remains to be seen whether the Rays were simply the first in furloughing staff, or the odd man out. It’s possible that other teams will follow suit if games are not set to resume, or if they do resume without fans in the stadium.
In addition to the furloughs, the Rays also opted to dismiss all of their nearly 30 interns across the enterprise, a move in step with other franchises.
UPDATE - The Rays will also be pursuing means to prevent ticket holders from asking for cash refunds on missed games.
#Rays have emailed season ticket holders that they can get a refund for March-April-May games, or they get credit for future payments, 2020 postseason games or 2021 season tickets with the incentive of a 25 percent bonus to spend on concessions and merchandise— Marc Topkin (@TBTimes_Rays) April 30, 2020
The Tampa Bay Rays declined to comment on anything related to this topic.
*Ownership stakes in regional sports networks, as well as related profits or losses, were excluded from operating income in the Forbes analysis.