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MLB Players Association boosts licensing, savings activity

The Major League Baseball Players Association boosted its licensing revenue in 2018 to $61.1m (€54.6m), a 12.7-per-cent jump from the year before, as the union boosted its activity in digital goods and other emerging product categories.

The union’s licensing revenue for last year was detailed in its annual report, known as the LM-2, recently filed with the US Department of Labor. The licensing receipts were led by longtime trading card partner Topps, which paid $13.1m to the union during the year and has expanded its own business in recent years through the development of its on-demand card service Topps Now. Sony Interactive Entertainment, makers of the the video game “MLB: The Show,” ranked second at $7.9m, followed by mobile game developer Glu Mobile at $6.1m. 

Union officials also credited the spike in licensing revenue to both a historically plentiful base of marketable young stars around baseball, and a heightened emphasis with its licensing partners on accelerated product development efforts.

“Companies that have emphasised quick-to-market strategies that take advantage of micro-moments in the game, as well as big opportunities to promote players’ on-field performance, are seeing significant bottom line lift,” said Tim Slavin, MLBPA chief of business affairs.

The annual report is based on cash and not accrual accounting, and payments are credited in the years they are received and not earned. As a result, views into the financial state of the organisation can be deceiving. Still, the report showed the third consecutive increase in yearly licensing revenue to the union and the fourth over the past half decade. 

The LM-2 report also outlined an acceleration in the savings activity by the union during the second full year of a five-year labor agreement with MLB that expires after the 2021 season. MLBPA practice, like many other sports unions, historically has been to save money from group licensing efforts in escalating amounts during the course of labor contract cycles, and then redistribute those funds once a new collective bargaining agreement is reached. 

But labour sources said the unusually slow free agent markets of the past two offseason has prompted the MLBPA to heighten its savings activity and reduce annual player licensing distributions even more in preparation for a potentially more contentious round of bargaining come 2021.

The report showed the union’s asset base at the end of 2018 standing at $108.5m, compared to $92.8m at the end of 2013, the comparable point in baseball’s prior labor cycle. Players last year received as much as $16,500 each in licensing distributions, compared to $28,307 in 2013. The union’s assets are concentrated heavily in US Treasury securities and other investments.

MLBPA executive director Tony Clark earned $2.2m in total compensation in 2018, equal to his 2017 intake.