SBJ/April 9-15, 2012/Labor and Agents

MLBPA’s asset base hit record $200.7M ahead of CBA in 2011

The MLB Players Association in 2011 built its asset base to a record level of $200.7 million, up 20 percent from the prior year, as it maintained its practice of accumulating funds in the latter stages of a collective-bargaining agreement.

The figure was listed as part of the union’s annual LM-2 filing with the U.S. Department of Labor, required by law and made public last week, for calendar year 2011.

In advance of a CBA negotiation, sports unions, including the MLBPA, typically withhold money that normally would be distributed to players. Those funds can be used for litigation and other costs arising from a work stoppage, and the money is returned if a stoppage is avoided.

The union and MLB last November completed with a minimum of rancor a new five-year labor deal for the 2012-16 seasons.

On a player-by-player basis, MLBPA distributions from licensing royalties also fell sharply last year, as expected, with maximum payouts to players dropping by more than half to $6,534 in 2011, compared with $14,080 in 2010. With the new labor deal now in hand, industry sources said, licensing money withheld in recent years was refunded to players during spring training. Those payouts will show up in the LM-2 filing for calendar year 2012, due next March.

A similar situation occurred in early 2007 with the distribution of more than $67 million in “special dues refunds” that had been withheld before the last labor deal in 2006.

MLBPA Executive Director Michael Weiner, in the union’s top leadership role since 2009, again earned $1 million in salary last year, continuing a practice held for years by his predecessor, Donald Fehr. The next-highest-paid union employees were senior adviser Rick Shapiro at $610,000 and a trio of attorneys: chief labor counsel David Prouty, who earned $530,000; senior labor counsel Ian Penny at $475,000; and assistant general counsel Doyle Pryor at $420,000. Former Chief Operating Officer Gene Orza, who retired from the union in March 2011, received $250,000 in gross salary.

The union’s revenue from “other receipts,” where licensing income is listed and itemized, was reported at $50.45 million, up 8.6 percent from the prior year. Payments are credited in the years they are received and not earned, and the LM-2 report is based on cash and not accrual accounting, so views into the financial state of the organization can be deceiving.

But the union for 2011 reported increases from many of its major licensees, particularly Topps, which boosted its payments to the union from $5.77 million in 2010 to $10.68 million last year. Other major licensing fees came from Take-Two Interactive, parent of 2K Sports and baseball’s exclusive third-party console video game producer, with payments of $15.4 million, up by nearly $1 million from 2010; VF apparel brand Majestic, with payments of $7.6 million; and Sony Interactive Entertainment, maker of the video game “MLB: The Show,” with payments of $3.52 million.

Take-Two for years has been the union’s single largest licensee, but the company’s contracts with MLB and the union expire after this season. The company’s “MLB 2K” video games have been noted money losers and erratic performers critically, meaning significant decisions await the union as well as MLB regarding their plans in the gaming space.

Union officials declined to comment.

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