Financial state of baseball: New Quotes from Brewerfan Agent39

[reillymcshane]

I've started this thread because one of the topics coming up in other threads is questions about whether collusion is going on within the game, plus general issues regarding the finances within the game.

 

I think it's a good topic, but it's creeping into other threads and really needs it's own home.

 

I've posted one article that was shared in another thread that I think is pretty interesting. It's by Jeff Passan, and it's about talks about whether the baseball's economic is broken, and talks in depth about collusion.

 

Read, share other articles, comment, have fun.

 

https://sports.yahoo.com/heres-baseballs-economic-system-might-broken-224638354.html

[pacopete4]

This is such a tough one for me because I can understand why the owners don't want to pay some of these guys for their diminishing performances in their 30's but I also get sick and tired of the owners making money hand over fist. It is absolutely disgusting with the Jeff Loria situation in Miami.

[TURBO]

Why is it that people get angry about owners making tons of money? I have seen this before, but I don't understand. It's their business, profit is what makes business either successful or unsuccessful.

 

If owners aren't allowed to make money, who would be owning the teams?

 

Should professional sports teams be non-profit organizations?

 

I have no issues what so ever with owners getting filthy rich, I do have an issue with the un even playing field based on a number of things,

 

I know some don't agree, but a salary cap is, and always has been needed in MLB.

[reillymcshane]

I don't know if there is really collusion going on in baseball, but I think there are many factors that are coming together that are probably suppressing salaries.

 

1. Teams are smarter. They know JD Martinez or whomever is going to be an albatross contract at age 36. They know having cheap, young players is a gold mine. They are just being more disciplined about things.

 

2. The Luxury Tax is serving as a Salary Cap for most teams. Teams don't want to go over that luxury tax line for more than a couple of years. It just gets really expensive.

 

3. I think we are getting more and more teams willing to blow up their rosters and lose for an extended period in hope of coming out on top. Look at KC, Chicago and Houston. These clubs - both big and small market - gutted their rosters, willingly lost so they could save money, avoid long term contracts, and get good draft picks. The result was a World Series parade.

 

I think there are more and more teams willing to go this path. This means fewer teams are playing in the free agent market. Even big market teams - like the White Sox and Astros - have avoided spending at some point as they rebuilt. It really hurts marginal players. I mean, last year there was no real need for Milwaukee to go after a Neil Walker or Josh Harrison. Perhaps this year it makes more sense. But last year we wanted to give our young, cheap guys the opportunity.

 

It seems like we have more haves and have nots each year - and less in between clubs. I mean, if you're going to lose 85 games, why not just lose 90 or 95 games?

 

In the past, Milwaukee often built a team that looked like it was a .500ish club. Then they hoped some things broke their way and they'd make the playoffs. However, that's shown to be a weak strategy, and we've quickly rebuilt the system and major league club by shedding contracts, being willing to take chances, being willing lose for a time.

[reillymcshane]

This is such a tough one for me because I can understand why the owners don't want to pay some of these guys for their diminishing performances in their 30's but I also get sick and tired of the owners making money hand over fist. It is absolutely disgusting with the Jeff Loria situation in Miami.

And there's a ton of money in baseball. Each owner this year will get $50M each - a share of the sale MLB's digital arm to Disney.

 

I read recently that 10 or 15 years ago, the players got more than 50% of the revenues. Now it's 35% or something like that (sorry I don't have the source).

 

Despite the drop in revenue percentage, player salaries continue to rise - so the players have generally been quiet. But we'll see what happens in the future.

[pacopete4]

Why is it that people get angry about owners making tons of money? I have seen this before, but I don't understand. It's their business, profit is what makes business either successful or unsuccessful.

 

If owners aren't allowed to make money, who would be owning the teams?

 

Should professional sports teams be non-profit organizations?

 

I have no issues what so ever with owners getting filthy rich, I do have an issue with the un even playing field based on a number of things,

 

I know some don't agree, but a salary cap is, and always has been needed in MLB.

 

For me, it's not about them making tons of money. That's all great with me. But when it comes at the expense of the general public like it did in Miami, to me that is completely wrong. These owners are making more than enough money to do right by their players, their fans, and their communities. And if they are not, then the MLB should rid themselves of these jokers because it is no good for the game.

[tmwiese55]

Long term they have to find a way to cap and revenue sharing system reminiscent of the NBA and NFL. The tax has been the precursor to it, each CBA needs to just get closer and closer.

[DHonks]

Long term they have to find a way to cap and revenue sharing system reminiscent of the NBA and NFL. The tax has been the precursor to it, each CBA needs to just get closer and closer.

 

 

That's ridiculous, and the sole reason why the NFL and NBA have broken free agency models. The only fair free agency in pro sports is MLB.

 

This article was well thought out. Some thoughts:

-It's interesting to note that players are more concerned with perks than $$.

-MLB needs to address the strategy of tanking. Nobody thought the Brewers were tanking last year, but perhaps MLB needs to have some policies in place where teams tanking teams do not get top picks. Perhaps a salary floor (like a cap) is needed. I'll get skewered for this, but I don't care if the Brewers win the World Series. I want them to be enjoyable and competitive. 75 wins in a bad season, 90 wins in a great season. I don't want to see the 1990's and early 2000's ever again! It's ridiculous to fans that teams feel they have a right to tank. The goal should be to build a competitive team AND a competitive minor league system--these are not mutually exclusive. I know the Marlins have had some good years, but this is insane that this is the 3rd or 4th major gutting of the franchise.

[monty57]

The stricter luxury tax (stiffer financial penalties and losing draft position) seems to be having an effect much like a salary cap. Teams will be willing to go over the cap for a time, but not for an extended period, and not by enough to lose draft position.

 

Huge market teams are already near the "cap," so they have to put the brakes on spending until some contracts come off the books. Then, they will have to determine which players are worth a large portion of their budget. We also need to remember that arby numbers are getting a lot bigger, so a team like the Cubs has to hold back on spending now in order to be able to stay under the cap as their players move into/through arby.

 

I think this will make baseball more competitive, but the Brewers' max payroll is still only around half of the luxury tax level, so they'll still be at a disadvantage.

 

As to collusion, I don't believe it. Teams still want to win, but they're getting smarter with their money. It's not smart to offer guys huge money contracts that take them into years well beyond their useful playing life. It's much smarter to load up on guys who will play roles on the roster for league minimum. Harper will get a lot of money, but why pay Chris Carter $11M when you can get Aguilar for $500,000, or sign Arrieta to take up 20% of your payroll during his decline years when you can get Chacin much cheaper?

[Fear The Chorizo]

Until baseball actually evens the playing field for what organizations can pay for on-field talent with both a salary cap and floor, there will always be the haves and have nots. To me, the solution includes:

 

1. more revenue sharing leaguewide, particularly revenues that are driven largely by market size (i.e., TV deals).

2. reducing the # of years of team control organizations have with rookie deals so players get paid for prime year production instead of waiting to reach free agency on the downside of their careers.

3. establishing an NBA-style salary cap tied to luxury tax penalties and a hard salary floor based on leaguewide revenues. Even a rebuilding team wouldn't have an issue meeting a salary floor if revenue sharing was increased and players reached arbitration/free agency a few seasons earlier in their careers than the current system allows.

[Patrick425]

Why is it that people get angry about owners making tons of money? I have seen this before, but I don't understand. It's their business, profit is what makes business either successful or unsuccessful.

 

If owners aren't allowed to make money, who would be owning the teams?

 

Should professional sports teams be non-profit organizations?

 

I have no issues what so ever with owners getting filthy rich, I do have an issue with the un even playing field based on a number of things,

 

I know some don't agree, but a salary cap is, and always has been needed in MLB.

 

 

Completely agree with all of this.

[bill hAll Star]

I think the main culprit of this offseason is mostly the luxury tax. Some of that involves teams wising up, but I don't think the 20 teams that sign a lot of longer-term free agents just woke up this offseason and all decided that they're done signing longer contracts.

 

So, no, I don't think this is an enlightenment period of not signing longer contracts. That may gradually be entering owners' minds over time, but I have a hard time believing they all woke up in the same offseason and got hit on the head with the realization, and what we're seeing is the new norm.

 

Maybe it's collusion because the owners are mad about the luxury tax and want change in the next CBA. Maybe it's all because they're going to all go bonkers next season and wanted to pay a lower tax level.

 

The threshold is bumping up by almost $10 million next year, so if everyone positions themselves under this current level, not only will they once again be reset and be a first-time offender in 2018 if they get one of the prized free agents, if they're smart, they can still come back down from that big number back under the threshold in subsequent years because the threshold is much higher in coming years.

[DHonks]

3. establishing an NBA-style salary cap tied to luxury tax penalties and a hard salary floor based on leaguewide revenues. Even a rebuilding team wouldn't have an issue meeting a salary floor if revenue sharing was increased and players reached arbitration/free agency a few seasons earlier in their careers than the current system allows.

 

I fear the day when MLB has an NBA-like system where someone has to have a law-degree to understand veteran exemptions, mid-cap exemptions, and Larry Bird clauses. I love the regulated free market system MLB has in place. The NBA's system is why nearly every team has zero chance of competing in the season and free agency. The NBA's system has long been broken and unfair to players, teams, and fans.

[Thurston Fluff]

Why is it that people get angry about owners making tons of money? I have seen this before, but I don't understand. It's their business, profit is what makes business either successful or unsuccessful.

 

If owners aren't allowed to make money, who would be owning the teams?

 

Should professional sports teams be non-profit organizations?

 

I have no issues what so ever with owners getting filthy rich, I do have an issue with the un even playing field based on a number of things,

 

I know some don't agree, but a salary cap is, and always has been needed in MLB.

 

While baseball shouldn't have to be nonprofit it does have an antitrust exemption no other business gets. I don't think you'll find a single owner who would prefer to do away with that exemption and operate under the same antitrust rules every other business in the nation has to follow. With that comes some amount of revenue sharing that normal businesses don't have to deal with.

[tmwiese55]

Long term they have to find a way to cap and revenue sharing system reminiscent of the NBA and NFL. The tax has been the precursor to it, each CBA needs to just get closer and closer.

 

 

That's ridiculous, and the sole reason why the NFL and NBA have broken free agency models. The only fair free agency in pro sports is MLB.

 

This article was well thought out. Some thoughts:

-It's interesting to note that players are more concerned with perks than $$.

-MLB needs to address the strategy of tanking. Nobody thought the Brewers were tanking last year, but perhaps MLB needs to have some policies in place where teams tanking teams do not get top picks. Perhaps a salary floor (like a cap) is needed. I'll get skewered for this, but I don't care if the Brewers win the World Series. I want them to be enjoyable and competitive. 75 wins in a bad season, 90 wins in a great season. I don't want to see the 1990's and early 2000's ever again! It's ridiculous to fans that teams feel they have a right to tank. The goal should be to build a competitive team AND a competitive minor league system--these are not mutually exclusive. I know the Marlins have had some good years, but this is insane that this is the 3rd or 4th major gutting of the franchise.

 

What? I never thought I'd see a Brewer fan argue for a seemingly uncapped system. Your concern of competitiveness will be moot and the Brewers will be back to being bottom rung feeder team if that was the case like it used to be. I guess you can put in a floor to help it (which NBA and NFL have too), but without the tax impeding the big markets they'd have more power than they already do.

 

I guess I don't follow at all how you think it's good for competitiveness to have some teams able to spend 250 mil while other like MKE can only spend 100. As opposed to the NBA and NFL who basically make everyone spend roughly the same. And if they do have situations that allow them to go way over in the NBA it has a massive tax penalty to help out the other teams, so it becomes pretty rare.

[KeithStone53151]

I read this article yesterday. Passan makes some good points about the system being broken. Finding something better will be difficult to say the least. Giving younger players money earlier in their careers is more fair, but will make it tougher for smaller markets to compete. I'm sure big markets won't want to increase revenue sharing to account for the competitive imbalance.

 

Much of the discussion this year is driven by this particular offseason. The factors driving this offseason come down to four things. The 2019 free agent class, the new CBA, the ridiculous asking prices of this years free agent crop, and younger/smarter GM's. I'm sure GM's are looking at historical deals and see the dangers of free agency.

 

There have been 16 contracts signed in free agency for over $100 million in the last 4 off seasons(not counting this one). Of those 16, 5 of those contracts were dreadful from day 1 with the player never having a good season(Heyward, Zimmerman, Sandoval, Hamilton, Ellsbury). Of those 16, 6 have delivered subpar results in my opinion to this point(Price, Greinke, Chris Davis, Cueto, Cano, Choo). 4 have delivered solid results to this point(Cespedes, Upton, Lester, Tanaka). 1 guy, Scherzer, has done what I'd consider exceeding expectations. And keep in mind this is so far, these are supposed to be the good years of locked in production...yet only about 1/3 of these contracts to date have worked out well for the team. A GM spends $400 million on 3 guys, and he should expect 1 solid performer, 1 subpar performer, and 1 absolute dumpster fire? That's wildly unreasonable, hence why GM's are reportedly willing to pay high salaries but less years. They'll pay for performance, but they don't want to get stuck paying a guy like Pujols $30 million/year to get fat and lazy and completely useless to a baseball team.

[monty57]

The only fair free agency in pro sports is MLB.

 

I don't know if that's true. A baseball player can spend much of his 20's in the minors, come to the majors for six years through his prime and not get offered a big deal after "team control" is over. He'll make more than a "normal person," but not nearly as much as a NBA or NFL guy will get in his initial contract after being drafted.

 

Actually, the way baseball is set up if teams stop giving dumb deals to older guys who have no chance of living up to them, then I think the union has painted the players into a bad position. Only the guys who are brought up in their early 20's and therefore hit free agency before their "prime" years will have a chance at getting paid anywhere near what everyday players in other sports make.

[jerichoholicninja]

Why is it that people get angry about owners making tons of money? I have seen this before, but I don't understand. It's their business, profit is what makes business either successful or unsuccessful.

 

If owners aren't allowed to make money, who would be owning the teams?

 

Should professional sports teams be non-profit organizations?

 

I have no issues what so ever with owners getting filthy rich, I do have an issue with the un even playing field based on a number of things,

 

I know some don't agree, but a salary cap is, and always has been needed in MLB.

 

 

Completely agree with all of this.

 

Ya, that makes no sense to me to be angry at the owners. And how much does an owner personally profit anyway? Mark isn't the only guy making money off the Brewers. After whatever profit there is is split between everybody that gets something I think we would be surprised at how little Mark actually takes home. Oh, I'm sure it's a lot compared to 99% of the population but rather small compared to what we all think.

 

And if the owners aren't keeping the money, the players will. Don't we complain enough about how much these guys make? Look forward to utility infielders getting $20M a year.

[KeithStone53151]

The only fair free agency in pro sports is MLB.

 

I don't know if that's true. A baseball player can spend much of his 20's in the minors, come to the majors for six years through his prime and not get offered a big deal after "team control" is over. He'll make more than a "normal person," but not nearly as much as a NBA or NFL guy will get in his initial contract after being drafted.

 

Actually, the way baseball is set up if teams stop giving dumb deals to older guys who have no chance of living up to them, then I think the union has painted the players into a bad position. Only the guys who are brought up in their early 20's and therefore hit free agency before their "prime" years will have a chance at getting paid anywhere near what everyday players in other sports make.

 

That is wildly untrue, laughable in fact. How is it fair when around 20 teams have no realistic chance at top free agents? How is it fair when certain teams have twice as much money to spend as others? Bryce Harper is going to be sought after by about 8 teams when the reality is all 30 should participate but won't as they clearly have no shot at him. The current system is like having a fantasy football draft and 20 teams not being allowed to pick until the 5th round. How is that fair? What a joke...

[tmwiese55]

The only fair free agency in pro sports is MLB.

 

I don't know if that's true. A baseball player can spend much of his 20's in the minors, come to the majors for six years through his prime and not get offered a big deal after "team control" is over. He'll make more than a "normal person," but not nearly as much as a NBA or NFL guy will get in his initial contract after being drafted.

 

Actually, the way baseball is set up if teams stop giving dumb deals to older guys who have no chance of living up to them, then I think the union has painted the players into a bad position. Only the guys who are brought up in their early 20's and therefore hit free agency before their "prime" years will have a chance at getting paid anywhere near what everyday players in other sports make.

 

bingo. If this trend continues this is going to be a big point during the next CBA. MLB: the league that forces guys to play for league min for like 6 years operating on one year deals is not the best model for the players best interests.

 

What does make the MLB situation different to figure out than the other leagues is the minor league system and how to manage that control and development.

[monty57]

I think the main culprit of this offseason is mostly the luxury tax. Some of that involves teams wising up, but I don't think the 20 teams that sign a lot of longer-term free agents just woke up this offseason and all decided that they're done signing longer contracts.

 

So, no, I don't think this is an enlightenment period of not signing longer contracts. That may gradually be entering owners' minds over time, but I have a hard time believing they all woke up in the same offseason and got hit on the head with the realization, and what we're seeing is the new norm.

 

Maybe it's collusion because the owners are mad about the luxury tax and want change in the next CBA. Maybe it's all because they're going to all go bonkers next season and wanted to pay a lower tax level.

 

The threshold is bumping up by almost $10 million next year, so if everyone positions themselves under this current level, not only will they once again be reset and be a first-time offender in 2018 if they get one of the prized free agents, if they're smart, they can still come back down from that big number back under the threshold in subsequent years because the threshold is much higher in coming years.

 

Just like teams saw the Royals win and all of a sudden started paying more for relief pitchers, teams have seen the last few World Series won by teams that focus on building a strong farm and developing a roster around cheap, young talent, so teams are starting to realize the value of cheap, young talent.

 

If the 2018 World Series is won by a team that pays a bunch of 35-year-olds $20M each, then maybe people will start believing that is a good strategy. But since the "Steroid Era" is gone and data from that era isn't being used to make rational decisions, teams are realizing that once guys hit their mid-30's, they are generally better off watching the game than playing in it, and very few guys in their mid-30's are worth eight figure salaries.

 

I fear the day when MLB has an NBA-like system where someone has to have a law-degree to understand veteran exemptions, mid-cap exemptions, and Larry Bird clauses. I love the regulated free market system MLB has in place. The NBA's system is why nearly every team has zero chance of competing in the season and free agency. The NBA's system has long been broken and unfair to players, teams, and fans.

 

My ideal world would have MLB acting as one business instead of 30 individual businesses. All revenue would be shared equally, and players would be on a free market from day one. Owners could decide where to allocate their money. They could spend a ton signing young kids, they could spend a ton of money on vets, or they could decide to pocket more then other owners. Well run teams would win instead of well financed teams having a big advantage.

 

But, as long as teams in big markets can sign TV deals worth ten times the Brewers' TV deal, there needs to be something in place to keep the game competitive. The arbitration / pre-arby setup is a horrible deal for the players, but it allows teams like the Brewers to compete. It's just too bad that they haven't utilized this a lot more during their existence.

[Thurston Fluff]

My guess is there are multiple things going on. Other teams saw the last three world series winners did not have a top ten payroll and figured why spend if there is another way to win? Many of the big spenders are trying to get below the luxury tax line. Some I'm guessing just aren't willing to spend but also if they get down now they can go over it again next year with less cost. With the potential players hitting the market next year it's worth it to wait one year. Most of the rest of the big spenders are in rebuild mode. Anyone else willing to spend realize there isn't the usual competition for the top guys and can afford to wait them out. I think teams realized waiting until close to spring training to sign players costs less than if they sign them right away. With fewer teams fighting over the players it's a good year to do that. Finally the trend is going away from spending on starters and position players and investing more on bullpens. While relievers are getting paid well compared to the past, they are still cheaper than starters or position players.

[Fear The Chorizo]

The NBA's system is why nearly every team has zero chance of competing in the season and free agency.

 

I think the flaws in the NBA's system have more to do with the game itself - teams only have 12 roster spots instead of the 25 or 40 that MLB carries depending on which roster would be subject to a salary cap. Also, the NBA system has issues because they cap what contract values can be for the best players - I wouldn't want that for an MLB system. I wouldn't want franchise tags or any of the NBA garbage that artificially inflates or suppresses FA salaries. Set up a salary cap that doesn't necessarily need to be a hard cap, but one that imposes luxury tax penalties for repeatedly exceeding it - then allow free market principles to drive player salaries and FA contracts, provided MLB truly has full revenue sharing to even the financial playing field for roster payroll.

 

There's got to be a better way, and paying young players earlier is definitely part of it.

[Thurston Fluff]

The NBA's system is why nearly every team has zero chance of competing in the season and free agency.

 

I think the flaws in the NBA's system have more to do with the game itself - teams only have 12 roster spots instead of the 25 or 40 that MLB carries depending on which roster would be subject to a salary cap. Also, the NBA system has issues because they cap what contract values can be for the best players - I wouldn't want that for an MLB system. I wouldn't want franchise tags or any of the NBA garbage that artificially inflates or suppresses FA salaries. Set up a salary cap that doesn't necessarily need to be a hard cap, but one that imposes luxury tax penalties for repeatedly exceeding it - then allow free market principles to drive player salaries and FA contracts, provided MLB truly has full revenue sharing to even the financial playing field for roster payroll.

 

There's got to be a better way, and paying young players earlier is definitely part of it.

 

Totally agree. I would like to see them reduce the number of options, or perhaps eliminate options after a certain age, and expand the rosters, both the 25 man and 40 man, to makeup for the loss of flexibility created by that. As it is we have guys who are in their upper 20's being forced to play in the minors when they are good enough to make a major league roster somewhere and start their arby clock before they hit their mid 30's.

[brewcrewdue80]

If we pay the young players more early, The Salary impact affects the amounts to give FAs, worsening this situation. Say you double the pre Arbs. What do most teams have? 12 in pre-arb avg? 15? 550-600k I'd guess doubled? to fit this idea? Well thats 7-10mil hit on a teams payroll. You're reducing 210-300 million that would be set to use on FAs.

 

The Luxury Tax is hurting this FA class, but its doing what it was designed to do, stop these big market teams from collecting every top FA. Meanwhile (we) Milw are being tied to the likes of Arrieta, Cain, Cobb and Lynn. Sorry Players Association, the goal to help make the sport competitive hurts your FA signings this year's offseason. Just how it all worked. Blame Philly as their rebuild is still in rebuild. Blame Miami and the Sale of their Franchise, where an Elite Player was moved to another team who now doesnt need to buy in this FA. But really, blame the Luxury tax when the Economy is nutz in the outside but that tax didnt know it was going to end up this way, so FAs see themselves worth more because why not? Rich are swimming in money these days.