Major League Baseball makes its long-delayed return this week, kicking off an abbreviated 60-game season that promises fans some glimmer of normalcy during a most abnormal summer.

Things get underway Thursday night with the defending World Series champion Washington Nationals hosting the New York Yankees, and the Los Angeles Dodgers facing the rival San Francisco Giants.

Squeezing in a shortened season followed by a lucrative playoff schedule is critical to MLB, which lacks some of the financial guarantees of the National Football League and National Basketball Association and likely faces labor unrest next year. But even if teams are able to dodge another Covid-19 outbreak and complete the season, it won’t be baseball as usual.

Games will be played in empty stadiums without fans, depriving owners of a big chunk of their revenue. A dozen or so players -- including big names like Ryan Zimmerman and Buster Posey -- have opted out this year over coronavirus concerns. Rule changes such as allowing designated hitters in both leagues and starting extra innings with a runner on second base will likely test the patience of traditionalists.

“Baseball is faced with several fundamental issues, issues made more pronounced due to the pandemic,” David Carter, a sports business consultant and professor at the University of Southern California, said in an interview. “Combining the sport’s historic labor unrest, which may rear its ugly head again, along with the fact that the sport’s audience skews older than most, MLB has its hands full.”

Casting Doubt
All the uncertainties may also be starting to cast doubt on the value of the league’s franchises. Over the years, valuations have climbed to new heights, with five teams worth at least $3 billion each, according to the most recent Forbes estimate.

But with no fans in ballparks for the foreseeable future, the potential for lost television revenue and labor problems brewing, baseball faces unique financial challenges that may have prospective buyers asking whether the cost of acquiring a team is worth the uncertainty that comes with it.

“Baseball team values are a question mark,” said Marc Ganis, president of consulting firm Sportscorp Ltd. “There’s always been a gap between what somebody who is selling thinks a team is worth and somebody who might be buying thinks it’s worth. That gap is greater today. There’s an expectation among prospective buyers that there’s a meaningful reduction in value across the board.”

The sudden impact of Covid-19 on America’s pastime already appears to be affecting the sale of one of its premiere franchises. Hedge fund billionaire Steve Cohen offered $2.6 billion to buy the New York Mets before the deal fell apart earlier this year. Now bids for the team are in the $2 billion range.

The current uncertainty is a “significant part” of why bids are lower, Ganis said.
Social distancing has an especially pronounced effect on pro baseball because a large portion of team revenue -- 40% to 70%, depending on the club -- comes from stadium activities such as ticket sales, concessions, merchandise and parking. With no fans in the stands, that stream of money largely disappears.

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