The economics of canceled baseball games

The MLB’s lockout will have a big impact on players, teams, and local businesses.

Baseball may be a “national pastime,” but a favorite pastime of baseball is labor disputes.

Since 1972, there have been 9 instances of strikes or lockouts in Major League Baseball (MLB).

Most recently, on Tuesday, the MLB’s owners failed to reach an agreement with the players union, resulting in the cancellation of 91 games across the league.

And there are big implications

Baseball is a big business, with the average MLB team worth $2.2B. A lockout would affect everyone:

  • Players don’t get paid if games don’t get played. Collectively, players stand to lose ~$20.5m for each day that’s wiped off the schedule.
  • Teams: One estimate pegs the average revenue per MLB game at ~$4m across tickets, food, and merchandise.
  • Local businesses surround ballparks, and they’ll miss out on some of their biggest days of the year.

There’s also lost broadcast revenue and stadium workers that won’t get paid, among other things.

So what’s the hold up?

In short, players and owners can’t agree on things like a salary floor and the number of teams that make the playoffs.

Critics have been skewering MLB commissioner Rob Manfred for pushing a sport that’s already losing fans even closer to irrelevance.

Hopefully the parties can fix things before this pastime literally becomes a thing of the past.

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