SBJ/April 7-13, 2014/Labor and Agents

MLBPA takes hit in licensing revenue

The Major League Baseball Players Association last year generated its lowest amount of licensing revenue in nearly a decade, primarily the result of the loss of a lucrative video game contract with Take-Two Interactive.

The 2013 annual report for the union, filed last week with the U.S. Department of Labor, showed revenue from “other receipts,” where licensing income is listed and itemized, at $38.98 million. The sum is down 34 percent from the year before, and the lowest such figure for the MLBPA since 2004, before the arrival of more detailed reporting rules for American labor unions in 2005.

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. Still, 2012 marked the final year of a seven-year pact with Take-Two, parent company of 2K Sports and maker of the troubled “MLB 2K” video game series.

The company paid the MLBPA $16.3 million in 2012. That number fell to $1.66 million last year as the game developer surprisingly returned on a one-year deal to make “MLB 2K 13.”

Take-Two no longer holds a license with either the union or MLB Properties, and on multiple occasions called its 2005-12 baseball deal a drain on the company’s finances.

Other major payees to the MLBPA last year included trading card licensee Topps at $10.5 million; Majestic parent VF Knitwear at $6.4 million; and Sony Interactive Entertainment, maker of the video game “MLB: The Show,” at $3.5 million.

The late Michael Weiner, the union’s executive director from 2009 until his death last November, received $1.1 million in salary last year, as well as an additional $3 million payment. MLBPA executives declined to comment on the LM-2 report or any facet within it.

The next-highest-paid MLBPA employees were senior adviser Rick Shapiro at $705,000; general counsel David Prouty at $665,833; Tony Clark, previously director of player relations and deputy executive director and now Weiner’s successor as executive director, at $616,613; senior labor counsel Ian Penny at $530,000; and Timothy Slavin, director of business affairs and licensing, at $525,000.

The union’s new chief operating officer, Kevin McGuiness, was hired in January, and does not appear in this report for calendar year 2013 as a salaried employee.

MLB players early last year received a distribution of 2012 licensing funds totaling $33.87 million. The amounts, based on each player’s service time, were as high as $28,307 a player. The distributions were similar to the $28,041 licensing checks each veteran player received in early 2008, a comparable point in baseball’s collective-bargaining cycle.

But with licensing revenue down last year, the union’s asset base is also at a relatively low level. The MLBPA reported total assets at the end of 2013 of $92.77 million, down from $104.1 million at the end of 2012, and the lowest figure for the union since 2004.

Research director David Broughton contributed to this report

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