Zack Greinke to Diamondbacks

[AKCheesehead]

Zack Greinke's new contract essentially amounts to One Million Dollars per start. Think about that for a moment or four.

 

Wow, and that's best case scenario, meaning he starts 34 games per year throughout the contract. This has been a somewhat depressing four moments here.

[MrTPlush]

NFL contracts are softened because of roster size and salary cap. Their salary cap is only $145mil...incredible. The NFL is making so much money player contracts would explode if that salary cap was lifted. Players would actually have a reason to go to free agency since right now you don't see young elite players hit FA.. I can't even fathom what a guy like Aaron Rodgers would fetch if he hit FA after his first Packers extension.

 

However the NFL would probably be a more balanced free for all since their TV deal is for the entire league and teams can't independently sign one.

[torts]

Anyone But The Cardinals!

[joepepsi]

Our country applauds entrepreneurs in all walks of life and don't begrudge the money they make. Entertainers like movie actors and rock stars make millions of dollars and Americans worship them. Baseball players are really self employed entrepreneurs. They are entertainers with unique talents that get paid what the market will bear. Yet fans are outraged (outraged!) by the money they make.

 

NFL players are more like employees. Teams basically decide if they want to pay a player or not. If not, the player looks to find work on another team. The league is constructed like a large corporate entity, where the owners make the money. It's funny you never hear anyone say, "I'm so sick of these NFL owners making billions of dollars a year."

[pacopete4]

So far the three too FA pitchers haven't landed in STL or CHI. I call that success.

[torts]

Agreed! Add pittsburgh to that list, too.

[SRB]

So far the three too FA pitchers haven't landed in STL or CHI. I call that success.

 

No, it's bad. We won't be competing for a few years (the only time these mega-contracts are actually worth it), so I would have preferred that Chicago and St. Louis sink themselves with albatross contracts for 3+ years from now.

[Thurston Fluff]

I was listening to someone talking about the current rise in baseball salaries recently. He said since the new tv contracts started, sorry do not remember the exact year he stated, revenue went up by 120%. Over that same period of time player salaries went up 60%. That means players got half the new revenue and the owners got half. That seems about the way it should be to me. I think the problem, at least for teams like the Brewers, isn't the players salaries as much as it is the way the owners share their half of the revenue.

[brwrsfan]

It's utterly ridiculous that MLB does absolutely nothing to limit these salaries. It's just gotten to the point of complete and utter ridiculousness.

 

MLB players make substantially more than all the other major sports (who also make way too much money). I simply don't get it and as I've said before, with each passing season I get closer and closer to not following any more until something changes - which to me seems like will likely never happen.

1. How exactly would MLB go about with a plan to limit salaries which wouldn't involve collusion?

 

2. The players are getting this level of money only because the owners are raking in huge revenues via monster cable TV rights packages, along with national TV money and cash from attendance. Maybe at some point the huge boom in TV rights bubble will burst, but right now at least, sports of all kinds be it pro and college are getting massive TV contracts because it's something which most viewers watch live vs recording shows on their DVR and fast forwarding right through the commercials. That fits me to a tee. I DVR nearly every show i like, but watch many sporting events live.

 

3. As for MLB salaries being higher compared to other sports, that's about to change with the NBA. Starting next season as the new NBA TV contracts kick in, their salary cap will rise dramatically in kind and thus will player salaries. So the top players in the NBA will make 30-plus million a year and the rest of their players will also see salaries rise just as will happen in MLB to where hypothetically just a slightly above average starting pitcher will command 15 million per or more.

 

The NFL players don't get the same level of money as MLB and NBA players do, but that has a lot to do simply with roster sizes. The overall pie of NFL salary money has to be split between 53 players, but only 25 in MLB and 15 in the NBA.

 

1 - Every other major sport has done it. The NBA has maximum salaries for players. The NFL, NBA and NHL all have some form of salary cap, which while it doesn't necessarily restrict a players contract, building a winner with an albatross of a deal is extremely difficult. MLB is the only one in which there isn't a level playing field, and as a result, the contracts have gotten drastically out of hand. If every team had a 30+ million dollar player, that's one thing (though still ridiculous) but that's simply not the case.

 

It's not the players fault they are getting these deals, it's 100% MLB that they have a system in place that has no restrictions. It's a larger issue obviously, but a salary cap of any kind would put an end to this and at least make it even for everyone. But that'll never happen at this point.

[gregmag]

I was listening to someone talking about the current rise in baseball salaries recently. He said since the new tv contracts started, sorry do not remember the exact year he stated, revenue went up by 120%. Over that same period of time player salaries went up 60%. That means players got half the new revenue and the owners got half. That seems about the way it should be to me. I think the problem, at least for teams like the Brewers, isn't the players salaries as much as it is the way the owners share their half of the revenue.

Wait -- If those numbers are right, doesn't that mean the owners are getting three quarters of the revenue increase while the players get only one quarter?

 

Let's say that, at T1, revenue is 10, and the owners and players split it, 5 each.

 

At T2, revenue increases by 120% to 22. If the players' take increases by 60%, it increases by 3, from 5 to 8. Meanwhile, the owners get the remaining 9 of the new 12, for a total take of 14 out of 22.

 

Obviously this is a crude model, but I think it tracks the point you were talking about. Am I missing something?

[QuevedosTongue]

The reason that other major sports have salary limitations that are stronger than MLB (MLB has restrictions, they just don't seem to matter with the amount of money coming in) is because the players union in MLB is much stronger than in the other sports. That has been true for years and is still true.

 

If you're thinking philosophically, yes the contracts being given out now are ridiculous. People who contribute very little of value to other people around the world are being paid exorbitant sums of money because they can hit or throw a baseball. Sounds crazy. But, in an economic sense, these numbers aren't crazy, they're just a by product of the regional TV money now flowing into the game. When the Brewers do a new deal, it will increase substantially, but until then they are on the poor end.

 

What is the Brewers TV deal? Information is unclear on that. They are in one of the smallest TV markets in MLB, so they are obviously on the low end. Based on a few things I've seen, it's somewhere in the $15 million to $30 million per year range, due to expire after the 2019 season. Contrast that with the Diamondbacks deal signed this year, guaranteeing Arizona "north of $1.5 million" over 20 years. So, they are guaranteed $75 million per season and it's likely they get some percentage of revenues each year once a certain threshold is reached.

 

Given the amount of money being thrown around, I would say that national revenues are picking up as well. All this will mean extra money in the Brewers coffers as well. Attanasio is smartly not going to spend it right now, but hopefully he will be willing to pick up the tab when the team needs it a couple years down the road.

 

Incidentally, Braun's contract is quickly becoming irrelevant long-term. In an industry flush with cash his 2016 salary ($19 million) currently ranks in the mid-30s and will not even be in the top 40 by the time the next season starts. I think it's likely the Brewers go into the 2017 season with no player making salary ranked in the top 65 salaries in baseball. So, while Braun's deal is a sunk cost and certainly is money that can't be spent elsewhere, it is no longer the albatross that some make it out to be.

[joepepsi]

1 - Every other major sport has done it. The NBA has maximum salaries for players. The NFL, NBA and NHL all have some form of salary cap, which while it doesn't necessarily restrict a players contract, building a winner with an albatross of a deal is extremely difficult. MLB is the only one in which there isn't a level playing field, and as a result, the contracts have gotten drastically out of hand. If every team had a 30+ million dollar player, that's one thing (though still ridiculous) but that's simply not the case.

 

It's not the players fault they are getting these deals, it's 100% MLB that they have a system in place that has no restrictions. It's a larger issue obviously, but a salary cap of any kind would put an end to this and at least make it even for everyone. But that'll never happen at this point.

 

MLB isn't a level playing field because that's the way the owners set it up. The players are only taking advantage of this set up, as in any economic situation. So, it shouldn't be up to the players to suffer via salary cap, since they didn't create the situation. MLB and the owners should fix it. Iirc, they have a level playing field with MLB.tv and other internet revenues. So, eventually, maybe a generation, this should right itself.

[MrTPlush]

Food for thought:

 

The D Backs TV deal is worth 2.5 times more than their old one was paying them. If the Brewers get a similar increase, which I would expect, they will go from $20mil to $50mil a year...that is an extra $30mil of extra cash flow. Couple that with the huge gains in revenue sharing lately and you are talking a lot of money we don't have now, but will have in the future. We will be in a similar position that the D Backs are in now. Lots of new money and not a high payroll. The Brewers going out and making a giant splash is not that outlandish come 2019ish. Maybe they don't go out and get Greinke/Price, but a Cueto level pitcher is certainly possibly. Maybe they still can't find a 1B and they sign someone like Chris Davis.

 

The league isn't getting more unbalanced...actually if anything it is getting more balanced. Were the D Backs players for a Zack Greinke type player 5 year ago? No, but they are now.

[3and2Fastball]

I don't have a problem with the size of the contracts. I'd rather have more of the money in the player's hands & manager's hands than the owners keeping almost everything. It does make me stop and say "wow" though.

[Bombers]

NFL contracts are softened because of roster size and salary cap. Their salary cap is only $145mil...incredible. The NFL is making so much money player contracts would explode if that salary cap was lifted. Players would actually have a reason to go to free agency since right now you don't see young elite players hit FA.. I can't even fathom what a guy like Aaron Rodgers would fetch if he hit FA after his first Packers extension.

 

However the NFL would probably be a more balanced free for all since their TV deal is for the entire league and teams can't independently sign one.

And that is the key. MLB needs this more than anything. Allowing teams to own their own cable networks and make gobs of money off of smaller markets playing them is the problem. The anti trust exemption is silliness. But at this point there is nothing baseball can do to fix it

[logan82]

The structure of baseball income is the real problem, not the salaries themselves. The income isn't centralized like it is for the other major sports. Milwaukee is the ghetto of MLB.

[SoCal Brew Crew Fan]

Absolutely, it's about the difference in revenues between teams. Revenue sharing and competitive balance items will ebb and flow over time between the owners.

 

Baseball isn't that much different from other similar "people" oriented service companies as far as their cost structure. Salaries and related are usually within a range around 60% of revenues. If a team wants to win and put butts in the seats, it takes people like Zack Greinke. If a company wants to win, it takes the salesman that has all the relationships or the engineer who invents the product.

[brewcrewdue80]

Food for thought:

 

The D Backs TV deal is worth 2.5 times more than their old one was paying them. If the Brewers get a similar increase, which I would expect, they will go from $20mil to $50mil a year...that is an extra $30mil of extra cash flow. Couple that with the huge gains in revenue sharing lately and you are talking a lot of money we don't have now, but will have in the future. We will be in a similar position that the D Backs are in now. Lots of new money and not a high payroll. The Brewers going out and making a giant splash is not that outlandish come 2019ish. Maybe they don't go out and get Greinke/Price, but a Cueto level pitcher is certainly possibly. Maybe they still can't find a 1B and they sign someone like Chris Davis.

 

The league isn't getting more unbalanced...actually if anything it is getting more balanced. Were the D Backs players for a Zack Greinke type player 5 year ago? No, but they are now.

 

 

Food for thought

If the Brewers tv revenue(worst in baseball I believe) is 20million and 2.5 times makes 50mil....

The Pirates likely the next worst revenue at 25mil X 2.5=62.5mil or 12.5mil more than Milw now and not 5mil.

That's the imbalance. It's worse not the same. You get to say NY and a former tv deal of 150mil X 2.5 becomes 375million or 325million more than Milwaukee's jump to 50mil. Vs the 130million advantage it was previously.

Revenue sharing isn't making up the Brewers 50mil to the Yankees 375million. In this fake sample. Maybe Milwaukee receives 50million to get to 100million but New York isn't being reduced 275million... 75 million maybe but top team in this example has gone from 120million base difference to 200million even after having more revenue taken away to prop Milw's up.

[tmwiese55]

One thing I didn't see mentioned in the thread is the structure of free agency in baseball being a factor as well. These salaries look outlandish but their somewhat subsidized by forcing guys to play for next to nothing(relatively speaking of course) their first 7 years. What the NBA max salary did was force the money to be spread out to the rest of the roster rather than 50% or more of it going to the true superstars (where it would really go if it was a free market). Instead you have backup players making 8mil, and now 12 mil that the cap is jumping up. Really the result is the same in the NFL too, but since they don't have guaranteed salaries it's a different animal and not easy to compare. If MLB had a real salary cap and allowed players to be free agents sooner it would balance things out a bit more throughout the roster and maybe these wouldn't look as ridiculous.

 

Yea it's going to be amazing to see what Harper gets since he will go all the way to FA. Trout would've gotten a monster too but signed early.

[MrTPlush]

Yes Milwaukee still doesn't have a high payroll, but everyone increasing pushes everyone closer in general ASSUMING they don't spike up the luxury tax in the next CBA. That is more than possible, but what we have seen so far is that team don't want to go over that luxury tax. As long as that continues and the luxury tax doesn't explode MLB should become more balanced. We shall see what the future holds of course.

[SoCal Brew Crew Fan]

Is there a mechanism to increase the luxury tax as revenues go higher? I'm not familiar with how it's structured.

 

Less PEDs have helped the competitive balance with the productive window post-control shrinking. If I'm the Brewers I keep pressing for stricter drug testing.

[MrTPlush]

Is there a mechanism to increase the luxury tax as revenues go higher? I'm not familiar with how it's structured.

 

Less PEDs have helped the competitive balance with the productive window post-control shrinking. If I'm the Brewers I keep pressing for stricter drug testing.

 

The luxury tax is agreed upon in each CBA. Including next year it has only changed once in the past 7 years by $10mil. They have had more of a rolling increase back in the early 2000s so it was increasing every year, but they have not gone with that recently. Basically the owners and MLBPA can decide to make it whatever they want.With all these massive gains in revenue lately the next negotiation should be pretty interesting. The smaller it is the better for the Brewers.

[Baldkin]

Is there a mechanism to increase the luxury tax as revenues go higher? I'm not familiar with how it's structured.

 

Less PEDs have helped the competitive balance with the productive window post-control shrinking. If I'm the Brewers I keep pressing for stricter drug testing.

 

http://www.hardballtimes.com/maybe-players-arent-aging-differently-after-all/

 

http://www.hardballtimes.com/wp-content/uploads/2015/08/chart_aging_b2r-650x488.png

The dark grey band is where the standard errors of the two lines overlap. Note there is no point along the curve where they don’t overlap. In other words, these lines are (statistically) indistinguishable. So while under the standard view of aging it appeared hitters were peaking very late during the “steroid era” and post-2005 a different aging trend prevails, this alternate view says hitters basically have been aging the same way for the last 25 years.

 

Because you remember the famous single old PED user, doesn't mean the aging curves have changed at all.

 

Sorry, I see this a lot and it just bugs me.

[Roderick]

Less PEDs have helped the competitive balance with the productive window post-control shrinking. If I'm the Brewers I keep pressing for stricter drug testing.

 

It seems to me that small market teams have less room for error, so if one of their starters is suspended for ped, that is going to effect them more than a big market team that will just buy another player to replace that one.

[Roderick]

Food for thought:

 

The D Backs TV deal is worth 2.5 times more than their old one was paying them. If the Brewers get a similar increase, which I would expect, they will go from $20mil to $50mil a year...that is an extra $30mil of extra cash flow. Couple that with the huge gains in revenue sharing lately and you are talking a lot of money we don't have now, but will have in the future. We will be in a similar position that the D Backs are in now. Lots of new money and not a high payroll. The Brewers going out and making a giant splash is not that outlandish come 2019ish. Maybe they don't go out and get Greinke/Price, but a Cueto level pitcher is certainly possibly. Maybe they still can't find a 1B and they sign someone like Chris Davis.

 

The league isn't getting more unbalanced...actually if anything it is getting more balanced. Were the D Backs players for a Zack Greinke type player 5 year ago? No, but they are now.

 

 

Food for thought

If the Brewers tv revenue(worst in baseball I believe) is 20million and 2.5 times makes 50mil....

The Pirates likely the next worst revenue at 25mil X 2.5=62.5mil or 12.5mil more than Milw now and not 5mil.

That's the imbalance. It's worse not the same. You get to say NY and a former tv deal of 150mil X 2.5 becomes 375million or 325million more than Milwaukee's jump to 50mil. Vs the 130million advantage it was previously.

Revenue sharing isn't making up the Brewers 50mil to the Yankees 375million. In this fake sample. Maybe Milwaukee receives 50million to get to 100million but New York isn't being reduced 275million... 75 million maybe but top team in this example has gone from 120million base difference to 200million even after having more revenue taken away to prop Milw's up.

 

I agree the league is getting more unbalanced. I thought for sure that it would end up okay when Selig got the internet is totally allocated evenly over all teams years ago. But the revenue hasn't moved to the internet, and I don't know if the Yankees Dodgers will ever let it be moved to that outlet, at least in a form that allows the Brewers to get an equal share.