Dodgers projected by MLB to lose $232 million without fans

An MLB economic forecast projects the Dodgers would lose $232 million in earnings by playing the 2020 season without fans and without 50/50 revenue split.

Major League Baseball presented a grim economic outlook this week in making their case for a 50/50 revenue split among owners and players for the 2020 season.

According to a document presented to the player’s union, and obtained by the Associated Press, MLB owners believe playing an 82-game season in empty ballparks and with players earning a pro-rated salary based on the number of games played will result in $4 billion in losses and would disproportionately give players 89 percent of league revenue.

In detailing the losses expected from playing this season, the document provided earnings projections for each major league team. The Dodgers were projected to suffer the second largest impact in nominal dollars from local losses associated with playing the season without fans and without a new revenue split between the owners and players.

Economic impact was presented using EBITDA (earnings before interest, taxes, and depreciation), which is a measure used to evaluate overall financial performance, or profitability.

The Dodgers would lose $232 million in earnings based on MLB projections, which were calculated in conjunction with the teams, but without full transparency to the player’s union.

The New York Yankees are set to lose the most in earnings at $312 million, with their figure including $100 million in payments towards bonds used to finance Yankee Stadium, according to the document obtained by the AP.

The Dodgers were recently valued by Forbes as the second most valuable franchise to the Yankees. According to Forbes estimates, the Dodgers earn $185 million from gate receipts, which includes club seat sales. That represents 33 percent of their total estimated revenues of $556 million.

The Forbes numbers somewhat align with MLB’s numbers in the document presented to the player’s union this week. According to the Associated Press, MLB claims 2019 revenue consisted of 39 percent local gate and “other in-park sources.” Other in-park sources might include concessions, parking, and team store sales.

Obviously, MLB’s projections are designed to be used in negotiations with the players over how to split 2020 revenue, which has been dramatically impacted by the novel coronavirus. MLB and the player’s union came to an agreement in March on player salary that included pro-rated terms for the 2020 season, which the union is hesitant to now re-negotiate.