SBJ/April 8-14, 2013/Labor and Agents

Big licensing checks for MLBers

Major League Baseball players received $131.8 million in checks from their union last year, more than $105 million of which had been withheld for several years prior to the union and MLB agreeing to a new five-year labor deal in November 2011.

The 2012 annual report for the MLB Players Association, filed last week with the U.S. Department of Labor, showed the large disbursement of withheld licensing money to players. The allocation, denoted as “special dues,” had been expected, since the MLBPA, like many sports unions, saves money from group licensing efforts during labor negotiating cycles and then distributes it once a collective-bargaining agreement has been reached.

The union’s executive board authorized the distributions in December 2011 and then made them Feb. 10, 2012. Veteran players in many instances received a total of $116,074 each. The funds also included a separate, regular distribution of 2011 licensing funds of $26.1 million.

The amounts, based on each player’s service time between 2005 and 2011, were far higher than the maximum individual licensing checks of $6,534 sent to players in 2011.

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

Union leaders said the practice of saving during labor deals will continue. “Historically, the union has maintained a collective-bargaining reserve, and we have begun to assemble a reserve for the next round of bargaining as well,” said Michael Weiner, MLBPA executive director.

Weiner, the union’s top leader 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 $675,000; David Prouty, then chief labor counsel and recently promoted to general counsel, at $565,000; senior labor counsel Ian Penny at $510,000; and director of business affairs and licensing Timothy Slavin at $500,000.

The union’s revenue from “other receipts,” where licensing income is listed and itemized, was reported at $58.8 million, up 16 percent from the prior year and up 27 percent from 2010. Payments are credited in the years they are received and not earned, and the report, also known as an LM-2, is based on cash and not accrual accounting, so views into the financial state of the organization can be deceiving.

But the union for 2012 reported increases from many of its main licensees. Take-Two Interactive, maker of the troubled “MLB 2K” video game series, was again the union’s largest individual licensee, paying $16.3 million, up by nearly $1 million from 2011. Other major payments came from trading card licensee Topps at $9.6 million; Majestic parent VF Knitwear at $7.6 million; MLB Advanced Media at $5.6 million; and Sony Interactive Entertainment, maker of the video game “MLB: The Show,” at $3.8 million.

Next year’s union annual report should show significant changes in the Take-Two payments, because 2012 marked the final year of the company’s seven-year pact for baseball’s exclusive third-party video game rights. After initially planning to let the deal sunset without a renewal, the company returned to make “MLB 2K 13” this year on a one-year contract thought to be at much lower fees.

Research director David Broughton contributed to this report.

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