Financial state of baseball: New Quotes from Brewerfan Agent39

[trwi7]

I think everyone is making this too complicated.

 

[Boomer5]

I'm skeptical that there is collusion going on. I think it's just a combination of many thing.

 

1. Players are getting offers - just not outrageous ones. I mean, JD Martinez getting $25-30M/year for five years sounds pretty reasonable. And the relievers seem to have done pretty well for themselves.

 

If Hosmer is setting on a 7-year/$140M offer - and waiting for an eighth year - that's too bad. It's still an awesome offer. To say he's not getting a fair offer is not right.

 

2. Players just aren't that good. Let's be honest - there is not superstar on the market. There's some very good players - but no ace starters. No

 

3. Teams are just smarter. They realize how badly some of the big contracts have hamstrung teams and holding back. It's just good business.

 

4. There is a de facto cap with the luxury tax. Teams are reluctant to pass it for a variety of reasons. This has put a lot of teams that normally spend money in a bit of a holding pattern. They just don't have the cash to spend as in the past.

 

5. Next year's class is big - and teams want to save for that (which relates to the luxury tax).

 

6. The reluctance of the top free agents to accept a deal (Darvish, Arrieta, Martinez, Hosmer, etc.) is holding up a lot of things for others. It's just the way things work.

 

7. You get more and more teams willing to go into 'rebuild' mode (Tigers, White Sox, Marlins, etc.) - and are looking to shed long term obligations (which often means salary) and aren't willing to add salary.

 

I mean, does it really help Detroit to spend $25M/year to add Jake Arietta for the next five or six years? That's moronic. The team is rebuilding, and it simply doesn't help a team to spend that kind of money to help them win 73 games instead of 70 games.

 

I think this is huge. It takes teams out of the free agent market to a large degree. And then it puts more players on the trade market. Miami traded Stanton, Yelich and Ozuna - all very good players. And all the teams that got those players now don't need an outfielder - meaning the free agents have fewer option available.

 

In the end, it's a lot of reasons that probably lead to the current marketplace. I think it's foolish to thinks it's one thing.

 

The players and the owners have set up a system, and the system has gone in this specific direction. The owners are probably the ones who have benefited the most from the current CBA. It's worked well for them - but I'm skeptical of collusion.

 

But hey, you never know.

 

Brilliant post.

 

You could have bolded number 3. Teams pretty much all have the same data and they know that FA in general and especially to players over 30 is insane.

[brooks_quichenick]

Sure, maybe you can say that teams are getting "smarter" by not giving out big FA contracts to guys in their 30's, but that's the way the entire league is set up for the players! Their only chance to earn what they're actually worth comes in free agency, so if owners/gm's aren't going to participate (due to being just so super smart) and pony up in free agency anymore, then something has to give. The players have every right to suspect collusion, especially with the long history of it in the sport.

 

I don't want a player's strike as much as any fan, but I'll absolutely support the players if it happens. In the end, what needs to happen is the players getting paid what used to be their big FA money much earlier in their careers. Cut out the arb years, or at least most of them. Owners will always adjust and find ways to chip away at labor gains, so workers have to adjust in kind and fight back. Story as old as time.

[danzig6767]

Sure, maybe you can say that teams are getting "smarter" by not giving out big FA contracts to guys in their 30's, but that's the way the entire league is set up for the players!

Teams are willing to give lots of money to good free agents in their 30's, just not as many 5-10 year contracts when it's a near lock that most of those players will be in decline to deep decline on the back end of the contracts.

 

Good to great players who reach free agency in their 20's though will still get the mega contracts.

 

Keep in mind that one factor in this is that a number of good players like Yelich for example took early money and in doing so, they sold out free agency years in a risk/reward bargain struck between team and player.

 

FWIW, I agree with you that players should get around a roughly 50/50 split of revenues and thus if teams for the most part stop giving long contracts to free agents in their 30's, then in the next CBA adjustments can be made on when players can reach free agency.

 

Teams though can't be forced to make dumb decisions of years past by signing 30 plus year old players to contracts excessive in length which history has shown backfires more than it pays off.

[madbad2000]

Nice summary Reilly. Pretty much sums up all the reasons why things have converged. Perhaps that is what we should call this offseason...convergence vice collusion.

After next offseason the union will be unable to make these claims due to the record number of contracts being signed every week. Hard to claim collusion once that happens. Maybe then they'll claim the owners are colluding to drive prices UP?

 

What I would like to see is better pay for minor leaguers. It's almost criminal that these players have to skim by the way they do on a daily basis during the season with many working second jobs during the off season to save up for the next season. Spread the wealth a bit to help the game at all levels. It's fairly obvious the agents and players are negotiating right now through the media and hoping to scare the owners/teams into protecting their position by giving in to this years class. I don't see that happening. Once Darvish is off the market in the next few days you should see Cobb/Lynn go quickly enough as the runner up gets the next arm and so on. I would not bet against Arrieta trying to wait out the market and see who caves or gets a need due to injury in spring training/season. The longer he waits into the season, the less flexibility that teams have to add the size of his contract. Perhaps he does wait until midseason and joins a contender at half cost and a fresh arm. Would take some guts to do that as a player/agent.

[Montezuma]

It comes down to this, the perceived value is in the eyes of the player/their agent. The reality is what ownership is willing to spend. The remaining free agents ego's are in for a rough patch these next 4 weeks. I feel the Brewers need to relax and let the players start to panic, as they may be sitting in their living rooms complaining to their agents in March.

[Boomer5]

Sure, maybe you can say that teams are getting "smarter" by not giving out big FA contracts to guys in their 30's, but that's the way the entire league is set up for the players! Their only chance to earn what they're actually worth comes in free agency, so if owners/gm's aren't going to participate (due to being just so super smart) and pony up in free agency anymore, then something has to give. The players have every right to suspect collusion, especially with the long history of it in the sport.

 

I don't want a player's strike as much as any fan, but I'll absolutely support the players if it happens. In the end, what needs to happen is the players getting paid what used to be their big FA money much earlier in their careers. Cut out the arb years, or at least most of them. Owners will always adjust and find ways to chip away at labor gains, so workers have to adjust in kind and fight back. Story as old as time.

 

Oh I agree completely that the players are not being treated fairly when they should be at their peak earning years and are artificially held down their first 6 MLB years.

 

But the data says that only foolish teams sign players to 5 plus year deals to players over 30 and that has been proven time and again. So we are essentially looking at two different problems.

[SoCal Brew Crew Fan]

Reilly boiled it down really well. Teams have gotten smarter, all the FAs have question marks and the big teams want to get under the tax before next season. Credit to the Brewers for adjusting to the market and striking when things are cold.

 

If these agents really want to send a message to the owners, they should have their guys sign with the Brewers who are the one team that's trying. If the Crew wins they can prove signing these FAs pays off and it would help their marketing of FAs next season. Instead it's all bluster to try and use the Brewers as a pawn to drive up prices with the big market teams that these guys really want to play for. Put your money where your mouth is Boras and CAA...send your big FAs to the Brewers, not just your second tier guys.

[madbad2000]

Reilly boiled it down really well. Teams have gotten smarter, all the FAs have question marks and the big teams want to get under the tax before next season. Credit to the Brewers for adjusting to the market and striking when things are cold.

 

If these agents really want to send a message to the owners, they should have their guys sign with the Brewers who are the one team that's trying. If the Crew wins they can prove signing these FAs pays off and it would help their marketing of FAs next season. Instead it's all bluster to try and use the Brewers as a pawn to drive up prices with the big market teams that these guys really want to play for. Put your money where your mouth is Boras and CAA...send your big FAs to the Brewers, not just your second tier guys.

 

I like this idea, let the Brewers help you make a point. Everyone come to the Brewers for one year deals to ensure we don't lose draft pick compensation. Put some nice bonuses in there for performance/winning the world series and then hit the market next year. Or if you don't want to get lost in the shuffle with Harper/Machado/Kershaw lets do 2 year deals and then you hit market AFTER the salaries get reset to new highs. While it's tongue in cheek, that would be an awesome move by the players to "collude" and try to put together a winner in a small market club to make a point.

[Samurai Bucky]

 

You not taking a paycheck "to keep the company going", or working extra hours "to keep the company going" is your prerogative, and frankly really stupid. If your boss can't afford to pay you they shouldn't own a business. Period. Everyone else in the world shouldn't be expected to be ok with their labor being exploited just because you seem to enjoy it.

 

The players are workers, just like you. They make more because the profits in their industry are higher than yours. Why do you hate the players more than the owners? Does everyone here worship at the feet of their boss or something? I watch baseball to see incredible athletes do incredible things, not to root for the owners pinching pennies to inflate their massive portfolios of wealth.

What happens when you are one of the bosses? You know, one of those "owners" who is out to screw over the little guy?

[jerichoholicninja]

I think everyone is making this too complicated.

 

 

I think this explains it pretty well. Look at what happened a few years ago in the NBA when LeBron and a bunch of other stars were going to be free agents. Teams were setting themselves up for years before so they could sign those guys.

[markedman5]

http://amp.si.com/mlb/2018/02/02/brodie-van-wagenen-agent-free-agency-market?__twitter_impression=true

[jjgott]

http://amp.si.com/mlb/2018/02/02/brodie-van-wagenen-agent-free-agency-market?__twitter_impression=true

 

Pretty good article. Here's the $$$ quote: "Here’s the problem that players and especially agents have trouble accepting: they are working in a disrupted industry. A rise in intellect and information has fundamentally changed the economics of baseball, just as they have changed many industries. Corporate profits are up in a roaring economy while wages are stagnant? How familiar does that sound to many millions of Americans?"

[KeithStone53151]

http://amp.si.com/mlb/2018/02/02/brodie-van-wagenen-agent-free-agency-market?__twitter_impression=true

 

Pretty good article. Here's the $$$ quote: "Here’s the problem that players and especially agents have trouble accepting: they are working in a disrupted industry. A rise in intellect and information has fundamentally changed the economics of baseball, just as they have changed many industries. Corporate profits are up in a roaring economy while wages are stagnant? How familiar does that sound to many millions of Americans?"

 

Without the team control, wages wouldn't be down. Guys in their primes simply would be paid better, and veterans would be paid probably less than they are now.

 

I liked this article, they made a lot of good points that most media heads are either too stupid to figure out or it simply doesn't fit their agenda to point it out. Sounds a lot like non-sports related news...

[Oxy]

I doubt it would work, but it would be interesting if management and players could come up with a system to pay players based on their actual WAR (but please re-name the stat). Everybody gets a base salary and perhaps bonus' for every team win, then players get paid for their production. A 9 WAR player gets $25 mill (or some percentage of league revenue). A 0 WAR player and/or negative WAR player gets the base salary. Agreeing upon the parameters of the ultimate money stat would probably be a nightmare, but it could be re-evaluated every 5 years or so in order to reflect contemporary perceptions of value.

 

I have no idea how team control and Free Agency would work in a system like this, but the free agency system is already so broken whatever solutions are made would likely be better than the current system.

[LouisEly]

I'm skeptical that there is collusion going on. I think it's just a combination of many thing.

 

1. Players are getting offers - just not outrageous ones. I mean, JD Martinez getting $25-30M/year for five years sounds pretty reasonable. And the relievers seem to have done pretty well for themselves.

 

If Hosmer is setting on a 7-year/$140M offer - and waiting for an eighth year - that's too bad. It's still an awesome offer. To say he's not getting a fair offer is not right.

 

3. Teams are just smarter. They realize how badly some of the big contracts have hamstrung teams and holding back. It's just good business.

 

4. There is a de facto cap with the luxury tax. Teams are reluctant to pass it for a variety of reasons. This has put a lot of teams that normally spend money in a bit of a holding pattern. They just don't have the cash to spend as in the past.

 

5. Next year's class is big - and teams want to save for that (which relates to the luxury tax).

I posted pretty much these points in the Agent39 thread in the minor league forum without seeing this post first.

 

The installation of additional penalties for going over the soft cap creates additional risk for signing high-priced free agents to long term guaranteed contracts. Additional risk needs to be mitigated to have the same expected result.

 

Teams don't want to be saddled with the next Josh Hamilton, Carl Crawford, Pablo Sandoval, Albert Pujols, etc., contracts. Jayson Werth wasn't worth the last three years of his deal. The owners are starting to understand that players sustaining performance into their late 30's was more of a function of PEDs and not ability. Analytics are showing that players begin to decline in their early/mid-30s and that long-term contracts into a player's late 30's are a poor investment. If analytics are showing that... how do you argue?

 

If players want these long-term deals, they have to include opt-out clauses... for both the players, and the teams.

[reillymcshane]

Interesting 'tank tax' idea.

 

https://www.baseballamerica.com/columnists/tank-tax-push-teams-try-harder/

 

Basically suggests that teams that continue to stink won't necessarily get the best draft picks. Thus you don't have a team like Houston win 55-65 games for five years in a row - and keep getting the top pick or so in the draft.

[tigerbrew]

Players with huge contracts are taking up too much of the payroll away from the other players. I don't think there's collusion but rather a very uneven distribution of pay amongst players. The lower tier FAs are greatly affected by the top tier. Maybe there should be a salary cap for improved distribution of pay amongst players.

[madbad2000]

Interesting 'tank tax' idea.

 

https://www.baseballamerica.com/columnists/tank-tax-push-teams-try-harder/

 

Basically suggests that teams that continue to stink won't necessarily get the best draft picks. Thus you don't have a team like Houston win 55-65 games for five years in a row - and keep getting the top pick or so in the draft.

 

Wow, that tank tax idea is terrible. It will be incredibly hard to avoid the incentive to tank. Even with the luxury tax, baseball is still inherently lopsided in terms of how teams operate. The difference in small market and large market is significant to sustained success. Small market teams can win, if you follow your formula and it hits. Large market teams can more quickly recover due to their higher spending capacity. The tank tax idea seems to really benefit the big markets. If you are forcing teams to put together a middling roster to avoid tanking, you set up the teams that are able to put more talent on their roster to feast for longer knowing that the likelihood of these teams making the playoffs is very small. So while these lower teams may win 70 instead of 65, your playoff run is not affected either way.

 

Until you even that field like the NFL, you will never get rid of that incentive. The closest thing that would eliminate tanking is similar to soccer with relegation. The problem is that we don't have a lower league as that threat of relegation. The whole point of the draft is to balance the league by getting the best young talent to the teams that need it. The tank tax has the ability to really cripple a franchise for a lot longer than a tank period. I don't even see it as a tank period. I see it as a smart business strategy. Doing what you need to do for sustained success. Some teams can quickly reload ala the Yankees the past few years. Some need to strip it all down and build it back up. How you go about it depends mostly on where you are inherently allowed to compete within the system.

[Fear The Chorizo]

The NFL has had a salary cap structure for decades, yet still over 1/3 of its teams haven't won a super bowl...

 

The NBA has gone through many iterations of team payroll structure, but everyone basically knows who will be playing in the NBA finals before each season starts.

 

"competitive balance" is a catch phrase those two leagues actually don't have. The NFL's even field more or less muddles the distinction from bad to decent teams, while the cream still consistently rises to the top provided key players don't get hurt. To me it's less about the NFL payroll structure and more about their scheduling that allows for teams to get back into contention quicker in that league.

[MVP2110]

The NFL has had a salary cap structure for decades, yet still over 1/3 of its teams haven't won a super bowl...

 

The NBA has gone through many iterations of team payroll structure, but everyone basically knows who will be playing in the NBA finals before each season starts.

 

"competitive balance" is a catch phrase those two leagues actually don't have. The NFL's even field more or less muddles the distinction from bad to decent teams, while the cream still consistently rises to the top provided key players don't get hurt. To me it's less about the NFL payroll structure and more about their scheduling that allows for teams to get back into contention quicker in that league.

 

This is a little bit misleading though. In the game of basketball there are only 5 players on the court for each team. And a majority of the best players play roughly 2/3 of each game. As an example LeBron James effects the game he plays more than Mike Trout does.

 

In the NFL, since 2000 the NFC has had all but 4 teams make it to the Superbowl. The AFC has been more steady handed I will give you. But the parity in the NFC is pretty darn good.

 

But in all honesty I think it's the nature of the game itself. Baseball doesn't need to do much for "competitive balance" because even the best players don't really effect the game that much. It is much more of a true team sport. Where baseball lacks is if your a fan of a small market club it is hard to really fall in love with a player knowing that player will most likely leave at free agency because your team can't afford him. Imagine if the Brewers had Trout or Kershaw. No way they could afford either. Sure they could deal them for prospects and still win which is the ultimate goal. But it's hard to have that connection to specific players like Packer fans do with Rodgers/Favre or Bucks fans do with Giannis.

[Boomer5]

Teams have figured out the $8M per WAR model isn't viable.

 

It seems it's a lot closer to $4M per WAR based on recent contracts.

[MVP2110]

How long do you think guys will hold out for? At this point I don't think Darvish is getting much higher of an offer. Same for the other players.

[markedman5]

The NFL has had a salary cap structure for decades, yet still over 1/3 of its teams haven't won a super bowl...

 

The NBA has gone through many iterations of team payroll structure, but everyone basically knows who will be playing in the NBA finals before each season starts.

 

"competitive balance" is a catch phrase those two leagues actually don't have. The NFL's even field more or less muddles the distinction from bad to decent teams, while the cream still consistently rises to the top provided key players don't get hurt. To me it's less about the NFL payroll structure and more about their scheduling that allows for teams to get back into contention quicker in that league.

 

But financial disparities aren't the reason some. NFL teams are not successful.

 

All you can ask for is an even playing field .......if management is inept then they have nobody to blame.

[Oxy]

Teams have figured out the $8M per WAR model isn't viable.

 

It seems it's a lot closer to $4M per WAR based on recent contracts.

 

It all depends on how close you are to competing for the playoffs/WS, and what your current 40 man roster talent looks like in the pre-arby/arby stages of player's careers. If WAR is what it says it is (doubtful), adding a 2 WAR player to a 79 win roster at a 0 WAR position is far less valuable than adding a 2 WAR player to an 89 win roster at a 0 WAR position.