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Zulgad: Is MLB really making return about dollars and cents?

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#61 The Wise One

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Posted 22 May 2020 - 01:57 PM

Whenthe Twins had low payrolls in 12,13 or 14 They pocketed large profits.Pohlad said that the profit isn't carried over for the future. I have no problem with the players wanting to keep their profits. All they have to do is look at what an owner would do.

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#62 The Wise One

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Posted 22 May 2020 - 02:08 PM

 

But you're missing the point--the product is only inferior for 2-5 years, unless you're assuming that all the top prospects, college players, and HS players refuse to play for the owners in some kind of solidarity play with a union that doesn't represent them OR their interests.

 

Individual teams also aren't guaranteed to perform worse--it's not like the Twins have to scrap all their current MLB players, but no other team does.True, implementation of a permanent lockout of current players will result in a greatly reduced bar for overall quality compared to current, but everyone is operating with that new lower bar, so the comparative quality across the league won't shift all that much.And, as I've discussed before, that bar will rise every year, as the new players get better.Essentially, the owners would simply be frontloading 6-10 years of roster churn into one year.

 

Finally, while Mike Trout is an asset, he quite possibly could be an underwater one--Albert Pujols certainly is.That is the crux of what I'm saying here--if the owners can't make money this year, or perhaps next due to current situation, and if there's going to be a work stoppage in 2022 anyways, why not get out from under your underwater assets (the players as a whole), and reset the economics in your favor now?

 

If the owners decide to do that, there's not a whole lot the players can do, other than figure out a way to start their own league, and that's a much tougher proposition than the owners simply accelerating future roster churn.It would also require the players to in all likelihood make salary concessions at least on par with, if not greater than, they would be doing with the owners now and their proposed 50/50 revenue split.Essentially, the players would be taking an enormous risk for no reward, if not a negative reward.

Fernandez died in 16. There still is no replacement on the horizon for the Marlins. Not all players are easily replaceable. 2-4 years for pitchers you say. Certain players do not come around that often. 


#63 Major League Ready

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Posted 22 May 2020 - 05:37 PM

 

We are all living in a much different world — no need for the attacks. I have no idea what the business side of baseball looks like at this moment, or what the models show, but let’s say that the owners will lose more money playing this year than not playing. Meaning, not playing at all will be less harmful financially.

So let me ask you. At what point does the curve bend the other direction, and the owners need the players to get back on the field? This year’s postseason? Next year? The year after?

 

It's not that hard to get a fairly reasonable estimate of revenues. I have tried to steer the conversation to what that revenue looks like because I don't know why anyone would comment strongly one way or the other without some idea of the financial realities.

 

The Twins TV contract is less than 40M for the full year.They also get revenue from the league. Sconnie did offer a post earlier and estimated it would be around $9M for this half season. What other significant revenue do they have that does dependent upon fan attendance? Sounds like $30M plus on-line merchandise sales. Maybe they can get 6 weeks with fans in the stands at 1/2 capacity or something along those lines. There is just no way they break even if they play so the owners should be getting credit for being willing to play knowing they will add to already large losses.

 

I could be wrong about them not playing if they have to take these additional losses. Reason being baseball economics are unique. Most businesses cant cut what they pay personnel and retain employees.However, MLB pays 8X that of the next highest paid professional baseball league. In this case, owners can just spend less and make it back over time. We will see many non-tenders. Goodbye Eddie next year. Teams could also spend far less in free agency. We shall see how it plays out.

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#64 diehardtwinsfan

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Posted 22 May 2020 - 06:40 PM

 

It's not that hard to get a fairly reasonable estimate of revenues. I have tried to steer the conversation to what that revenue looks like because I don't know why anyone would comment strongly one way or the other without some idea of the financial realities.

 

The Twins TV contract is less than 40M for the full year.They also get revenue from the league. Sconnie did offer a post earlier and estimated it would be around $9M for this half season. What other significant revenue do they have that does dependent upon fan attendance? Sounds like $30M plus on-line merchandise sales. Maybe they can get 6 weeks with fans in the stands at 1/2 capacity or something along those lines. There is just no way they break even if they play so the owners should be getting credit for being willing to play knowing they will add to already large losses.

 

I could be wrong about them not playing if they have to take these additional losses. Reason being baseball economics are unique. Most businesses cant cut what they pay personnel and retain employees.However, MLB pays 8X that of the next highest paid professional baseball league. In this case, owners can just spend less and make it back over time. We will see many non-tenders. Goodbye Eddie next year. Teams could also spend far less in free agency. We shall see how it plays out.

 

hence my point... you run those numbers for NYY and a few others, and they are still massively profitable. 

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#65 Hosken Bombo Disco

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Posted 22 May 2020 - 07:09 PM

... ...my bet is if the players are not willing to concede some salary if there are not fans, the owners will be hesitant to start a season.

I didn’t agree with everything you said but the last part I think you nailed it. There are many variables but the big one is the fans need to come back. And my assumption is that they won’t want to or won’t be allowed to, not this year and probably not next year either. Like you, I can see a scenario where the owners lock out the players.

So that leaves us in a possible situation where fans won’t get to cheer their favorite teams because the richest multi-millionaire players won’t accept a pay cut from owners who would rather burn their franchises to the ground than give an inch to the enemy. Or as Michael Scott once said:

IdealisticEthicalGreathornedowl-size_reswin win win.
He measured the achievements of others by what they had accomplished, asking of them that they measure him by what he envisaged or planned.
- J. L. Borges

#66 sftwinsfan

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Posted 22 May 2020 - 07:21 PM

It seems pretty obvious the prior agreement was to discuss things further if there were no fans, there's a clause in the agreement, the emails point to it being discussed with the player's rep as well. Either their negotiator didn't bother to inform them of this or they're not being completely genuine in their argument that they seem to know nothing about it. Still some regardless of what's out there will be anti-owner, I just don't care one side or the other. It seems like getting emotionally involved in a salary dispute between a group of Executive VP's and the CEO. Both sides will be fine either way and neither side cares about the average guy/gal making $50k/year.

 

I think players and owners should agree to a 3rd party accounting firm to go over the books, that way nothing is leaked specifically. Get a rough estimate of what revenue will be expected to be for this year based on those figures. Then use the ratios vs what it would have been with fans and agree to a percentage of the player's salaries being paid. Maybe that ratio points to paying the players 60% of their 82 game salaries, start there and maybe up the minimum salary a player will receive and juice the number up a bit say the players will receive 65-70% as a good faith measure. Provide enough documentation and establish good faith to show that if true, with no changes, they will lose less with no baseball and then the players get nothing. 

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#67 old nurse

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Posted 23 May 2020 - 04:07 AM

 

But you're missing the point--the product is only inferior for 2-5 years, unless you're assuming that all the top prospects, college players, and HS players refuse to play for the owners in some kind of solidarity play with a union that doesn't represent them OR their interests.

 

Individual teams also aren't guaranteed to perform worse--it's not like the Twins have to scrap all their current MLB players, but no other team does.True, implementation of a permanent lockout of current players will result in a greatly reduced bar for overall quality compared to current, but everyone is operating with that new lower bar, so the comparative quality across the league won't shift all that much.And, as I've discussed before, that bar will rise every year, as the new players get better.Essentially, the owners would simply be frontloading 6-10 years of roster churn into one year.

 

Finally, while Mike Trout is an asset, he quite possibly could be an underwater one--Albert Pujols certainly is.That is the crux of what I'm saying here--if the owners can't make money this year, or perhaps next due to current situation, and if there's going to be a work stoppage in 2022 anyways, why not get out from under your underwater assets (the players as a whole), and reset the economics in your favor now?

 

If the owners decide to do that, there's not a whole lot the players can do, other than figure out a way to start their own league, and that's a much tougher proposition than the owners simply accelerating future roster churn.It would also require the players to in all likelihood make salary concessions at least on par with, if not greater than, they would be doing with the owners now and their proposed 50/50 revenue split.Essentially, the players would be taking an enormous risk for no reward, if not a negative reward.

"Underwater" assets are not the player's fault.Players sign a contract. Sometimes they are team friendly, sometimes not. When a team signs a new television contract, new stadium deal or anything else that jumps the revenue of a team the players do not universally share thw bounty, why should the player suffer the momentary downturn

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#68 Major League Ready

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Posted 23 May 2020 - 08:23 AM

 

hence my point... you run those numbers for NYY and a few others, and they are still massively profitable. 

 

Apparently, you completely missed my point or you would not believe this validates your point. Basically, I said most people are forming an opinion without any reasonable assessment of the financial facts. You are assuming those teams would be massively profitable without providing any validation of for your assumption they would be "massively profitable." How much do those teams make with fans in the stands? Now reduce revenue by gait receipts, revenue from concessions, and merchandise sold at games. What's the total? Forbes estimate for net profit has never exceeded $100M. Revenue from the sources cited above are obviously more than $100M. So, how will they be massively profitable?

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#69 Major League Ready

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Posted 23 May 2020 - 08:42 AM

 

"Underwater" assets are not the player's fault.Players sign a contract. Sometimes they are team friendly, sometimes not. When a team signs a new television contract, new stadium deal or anything else that jumps the revenue of a team the players do not universally share thw bounty, why should the player suffer the momentary downturn

 

These kinds of revenue increases are anticipated and payroll budgets are adjusted accordingly. IE Arizona signing Greinke after landing their TV deal. There are many other examples but they pale in comparison to simply looking at the increase in MLB salaries as compared to any other industry in the United States over the past 25 years.

 

It's not like MLB had trouble attracting players in 1995 when the average salary was $1.1M. According to this Forbes article, the average salary in 1995 was 1,110,766.Adjusted for inflation using this online toolthat would equate to $1,621,718.Players earned an average of 4.4M in 2017 which is 270% of the rate paid in 1995 after adjusting for inflation. 

 

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#70 ewen21

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Posted 23 May 2020 - 06:14 PM

 

Apparently, you completely missed my point or you would not believe this validates your point. Basically, I said most people are forming an opinion without any reasonable assessment of the financial facts. You are assuming those teams would be massively profitable without providing any validation of for your assumption they would be "massively profitable." How much do those teams make with fans in the stands? Now reduce revenue by gait receipts, revenue from concessions, and merchandise sold at games. What's the total? Forbes estimate for net profit has never exceeded $100M. Revenue from the sources cited above are obviously more than $100M. So, how will they be massively profitable?

Pretty much this, but even more so the players fail to see the big picture because of this "umma get mine!" mentality and it just won't play in the general population.Maybe with some stat heads and baseball addicts (which I am).Baseball might stand to get a huge shot in the arm by coming back and taking their salary loss just like millions and millions of Americans have.Public opinion and support would give them much more leverage than fighting for their dollars now.  

 

To me this debate has nothing to do with rich vs. wealthy.It has to do with the players (once again) not getting it.A small fraction of baseball fanatics are going to get behind the players and that is what is happening here as I expected.The larger portion of society isn't going to and the people who are casual fans (and there are a lot of those) won't either.

 

Again, average player salaries have increased by over 500% over the last 20 years.How long is that supposed to continue?Forever?And let's be clear about this.The money has come out of our pockets.The more demands the players make and the more they get the more we are going to spend to watch baseball.I am not interested in spending any more money.There needs to be a correction in player salaries because it is totally stupid at this point.

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#71 Sconnie

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Posted 23 May 2020 - 07:56 PM

Pretty much this, but even more so the players fail to see the big picture because of this "umma get mine!" mentality and it just won't play in the general population. Maybe with some stat heads and baseball addicts (which I am). Baseball might stand to get a huge shot in the arm by coming back and taking their salary loss just like millions and millions of Americans have. Public opinion and support would give them much more leverage than fighting for their dollars now.

To me this debate has nothing to do with rich vs. wealthy. It has to do with the players (once again) not getting it. A small fraction of baseball fanatics are going to get behind the players and that is what is happening here as I expected. The larger portion of society isn't going to and the people who are casual fans (and there are a lot of those) won't either.

Again, average player salaries have increased by over 500% over the last 20 years. How long is that supposed to continue? Forever? And let's be clear about this. The money has come out of our pockets. The more demands the players make and the more they get the more we are going to spend to watch baseball. I am not interested in spending any more money. There needs to be a correction in player salaries because it is totally stupid at this point.

A reduction of player salaries doesn’t automatically mean a reduction in ticket prices.

Below are average ticket prices annually for the Twins and payroll annually on opening day.

2013 was a 20% haircut in payroll from 2012, but ticket prices were only 2% lower than 2012.

https://www.statista...e-ticket-price/

https://twinstrivia.com/salaries-2/

Also MLB revenue as a whole is growing right along w/ payroll.

https://www.statista...mlb-since-2005/

You may not be willing to pay more, but it’s not clear the market has been set.

I’m not sure if this means anything for current Covid world... but it seems like 2020 might be a lost cause w/ the high unemployment.
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#72 Major League Ready

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Posted 24 May 2020 - 06:03 AM

 


Also MLB revenue as a whole is growing right along w/ payroll.

https://www.statista...mlb-since-2005/

You may not be willing to pay more, but it’s not clear the market has been set.

I’m not sure if this means anything for current Covid world... but it seems like 2020 might be a lost cause w/ the high unemployment.

 

Yes. Revenue increased and owners were willing to spend that revenue. They definitely could have retained more net earnings but the free market system worked. Owners wanted to win and they were willing to spend within the limits allotted by the growing revenue. Now that revenue has shrunk dramatically, some players (not all) are basically saying I don't care if the revenue is not there, I still want mine and a small percentage of fans site the revenue growth as you have here but still cant understand why they should not get every dime they would have with normal revenue. Most of the working world is going to turn hard on the players if this attitude persists.

 

Most of the world understands that owners have been quite reasonable in terms of greed. I read somewhere the average net profit for teams is around 12%. That's healthy but not crazy. What would happen If owners decided to give a 1.5 billion dollars to charities, and take it out of player salaries player salaries. The average player salary would be roughly $3M instead of $4.4M. Would they lose any talent. Is there another league that would pay them more? Would they still make far more than 99.9% of the rest of the world. Would their Jobs still be far more fun than 99.9% of the rest of the world. This is the perspective of Americans who work hard to make a living when they hear players speaking out that they should still get "their money". Most people who work hard to make a living recognize just how fortunate MLB players are to receive this enormous compensation for a playing a game.

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#73 ewen21

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Posted 24 May 2020 - 06:23 AM

 

A reduction of player salaries doesn’t automatically mean a reduction in ticket prices.

 

I am not motivated by that as much as I am disgusted with the way some of the players have reacted.

 

THis isn't about the owners for me.It is about the players just not getting it during an unprecedented time.They stand to make more than enough money during a time when so many of the fans have lost their jobs, their income, their lives.Take the hit like so many other Americans have and move forward. 

 

If you want to advocate for the players here then I guess I'll let go and give you the last word.There isn't a chance in the world you will convince me to come to the player's side on this one since I don't see this is as a player vs. owner thing.It isn't from my perspective. 

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#74 Sconnie

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Posted 24 May 2020 - 07:13 AM

Yes. Revenue increased and owners were willing to spend that revenue. They definitely could have retained more net earnings but the free market system worked. Owners wanted to win and they were willing to spend within the limits allotted by the growing revenue. Now that revenue has shrunk dramatically, some players (not all) are basically saying I don't care if the revenue is not there, I still want mine and a small percentage of fans site the revenue growth as you have here but still cant understand why they should not get every dime they would have with normal revenue. Most of the working world is going to turn hard on the players if this attitude persists.

Most of the world understands that owners have been quite reasonable in terms of greed. I read somewhere the average net profit for teams is around 12%. That's healthy but not crazy. What would happen If owners decided to give a 1.5 billion dollars to charities, and take it out of player salaries player salaries. The average player salary would be roughly $3M instead of $4.4M. Would they lose any talent. Is there another league that would pay them more? Would they still make far more than 99.9% of the rest of the world. Would their Jobs still be far more fun than 99.9% of the rest of the world. This is the perspective of Americans who work hard to make a living when they hear players speaking out that they should still get "their money". Most people who work hard to make a living recognize just how fortunate MLB players are to receive this enormous compensation for a playing a game.

I’m sure the players understand the perspective of fans, as do the owners. I’m not sure we have common understanding of owner greed.

What would happen if your employer, or my employer told me they were docking my pay so they could give it to give it to charity?

As I work in a job with high mobility I would take my services elsewhere. As MLB holds a unique exclusion to antitrust law, and there are no competitive leagues, players couldn’t exactly take their services elsewhere.

Further, an action like this, could put MLB’s unique exemption from antitrust at risk. Their exemption is based (partially) on faith in a collective bargaining agreement. If the owners are able to take advantage of players with their unique control over the available market, the courts could overrule the antitrust exemption and put other leagues (NFL, NBA, NHL) at risk too.

The players would love a competitive league to leverage higher salaries against the MLB. The owners have a right to try to maintain margins, and need to control cost, but need to be careful of how they go about it.

It’s better to have a lockout and no baseball (especially w/ negative margins) than to put your monopoly at risk.

#75 Sconnie

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Posted 24 May 2020 - 07:50 AM

I am not motivated by that as much as I am disgusted with the way some of the players have reacted.

THis isn't about the owners for me. It is about the players just not getting it during an unprecedented time. They stand to make more than enough money during a time when so many of the fans have lost their jobs, their income, their lives. Take the hit like so many other Americans have and move forward.

If you want to advocate for the players here then I guess I'll let go and give you the last word. There isn't a chance in the world you will convince me to come to the player's side on this one since I don't see this is as a player vs. owner thing. It isn't from my perspective.

if this is an inequality thing, then why choose to target millionaires instead of targeting billionaires? Owners could just as easily say, “we’ve profited millions of dollars per year over the last 20 years, it’s a lost year, I will just acquiesce to get some baseball”.

Both sides look bad. Both sides fail to see the forest for the trees. As a teacher, I would assume you’d be a union dues payer, and pro union. That’s a fault of mine, I should never assume anything about anyone.

I’m management, one would think I’m anti union, but in truth I see unions as punishment of management for doing a crappy job of taking care of their employees. If the owners didn’t want this want this situation, they shouldn’t have created it in the first place.
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#76 laloesch

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Posted 24 May 2020 - 08:03 AM

They could push back all they want. As fans we could push back so much harder. We outnumber them and in the long run we can live without them. They can't live with out us.


EXACTLY. I'm not pitching (no pun intended) for either side. They are both greed SOB's that are spoiled rotten and entitled after decades of explosive upward salary and revenue growth. I like the sport but if they (owners and players) want to squabble and lose the whole season in the process and thereby endure some belt tightening pains, well.... I think it looks good on them to be honest. Their salaries and lifestyles are rediculous anyways and when they start whining "ohhhhh we can't play for 50% salaries" my eyes glaze over and i have no patience to listen further. I mean seriously give me a break. 99% of American's will never make what you make on a one year average salary their entire lifetime to PLAY a DAMN SPORT or OWN a team were almost all of the stadiums were built from taxpayer (yeah that's our money) funded stadiums.
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#77 laloesch

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Posted 24 May 2020 - 08:16 AM

if this is an inequality thing, then why choose to target millionaires instead of targeting billionaires? Owners could just as easily say, “we’ve profited millions of dollars per year over the last 20 years, it’s a lost year, I will just acquiesce to get some baseball”.
Both sides look bad. Both sides fail to see the forest for the trees. As a teacher, I would assume you’d be a union dues payer, and pro union. That’s a fault of mine, I should never assume anything about anyone.
I’m management, one would think I’m anti union, but in truth I see unions as punishment of management for doing a crappy job of taking care of their employees. If the owners didn’t want this want this situation, they shouldn’t have created it in the first place.

Wow. I'm UAW and was UFCW in my early 20's and you absolutely don't get it. The job of the Union is not "PUNISHING" management or the owners it's protecting the employees. The statement you just made is why so many are anti-union.
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#78 Sconnie

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Posted 24 May 2020 - 08:35 AM

Wow. I'm UAW and was UFCW in my early 20's and you absolutely don't get it. The job of the Union is not "PUNISHING" management or the owners it's protecting the employees. The statement you just made is why so many are anti-union.

I appreciate your perspective, and I worded my statement poorly.

If organizations treated their employees the way they should, fair pay, fair hours, quality and safe work environment, etc, then why would workers choose to forego a portion of their pay in union dues? Why would they pay for something they already get for free?

If management fails to do their job, they earn a unionized workforce to leverage collective bargaining to earn what every human deserves in employment.
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#79 Nine of twelve

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Posted 24 May 2020 - 09:03 AM

 

if organizations treated their employees the way they should, fair pay, fair hours, quality and safe work environment, then why would workers choose to forego a portion of their pay in union dues? Why would they pay for something they already get for free?

If management fails to do their job, they earn a unionized workforce to leverage collective bargaining to earn what every human deserves in employment.

For employees, union dues are not "paying for something they already get for free". It's more like insurance premiums or attorney's fees than anything else. The purpose of a collective bargaining agreement is not to punish anyone. CBA's are simply the spelling out of provisions agreed to by both sides and of action to be taken if either side does not abide by the agreement. It benefits both management and employees to have this in place.

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#80 The Wise One

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Posted 24 May 2020 - 09:26 AM

 

I am not motivated by that as much as I am disgusted with the way some of the players have reacted.

 

THis isn't about the owners for me.It is about the players just not getting it during an unprecedented time.They stand to make more than enough money during a time when so many of the fans have lost their jobs, their income, their lives.Take the hit like so many other Americans have and move forward. 

 

If you want to advocate for the players here then I guess I'll let go and give you the last word.There isn't a chance in the world you will convince me to come to the player's side on this one since I don't see this is as a player vs. owner thing.It isn't from my perspective. 

The owners want the players to take less money and the players do not want to. It is illogical that if you are not on the player's side on this that you are not on the owner's side. Yes it looks bad that the players are fighting for every last cent when there are people's who live's are disrupted. The players would only be as the owners are, trying to maximize whatever money they can squeeze out for themselves.