When Does The Lockout End? Answer: March 10th, 2022

[JosephC]

Liberty Media released their 2021 financials the other day offering a sneak peek into the Braves accounting...

 

https://blogs.fangraphs.com/the-braves-made-some-money-in-2021/

 

A couple key paragraphs...

 

The Braves enjoyed a banner year in 2021. Per their filing, they turned a profit of $104 million. That’s full-year OIBDA, or operating income before depreciation and amortization. That brings their four-year operating income, including the pandemic-marred 2020 season, to $193 million.

 

If you’re looking for a rough idea of how teams fared from 2018 through ’21, using the Braves’ numbers and lopping off $40 million from their results last season isn’t a bad start. That would tell you that the average team has made roughly $145 million in operating income over the past four years, even including a disastrous 2020.

 

Of course that second paragraph requires some extrapolation & educated guess work since we don't have the same access to other teams' financials, but it would appear the owners have been faring pretty well even with the pandemic wiping out a whole year of attendance in 2020, taking a bite out of attendance in 2021 & now probably losing some of the 2022 gate as well due to labor strife.

 

That was a really, really awful article. OIBDA is an accounting standard that is an estimate to show a company's profitability. It is not the actual profit. If this writer was fair and un-biased, he would have also pointed out that the very same report he got his numbers from clearly states the Braves operating income was 20 million. That was the actual profit.

 

Then he should have pointed out that early in the year the Braves were playing in front of empty or reduced crowds so the 20 million would have been higher in a normal, typical season. Then he should have pointed out that the Braves won the World Series so that would have boosted revenues, maybe not enough to off-set the early season attendance loss. How would you get accurate numbers for these, well I'm not asking for actual estimate, just that these factors be pointed out to the readers.

 

Then we could look at all of that...look at the 104 million at one end of the spectrum, look at 20 million at the other end of the spectrum, and then play the "I support the players no, I support the owners" game and try to bend the numbers...and in the end just admit that the Braves profit was 20 million but the OIBDA shows they are a profitable business and will very likely have bigger profits in the future.

 

Forbes has been covering the "Business of Baseball" for over the last decade and are generally thought to do a pretty good job with it. The last time I saw an estimate from them as to how much the average team makes in a year would have been somewhere in the 2018/2019 window and the average was thought to be somewhere around 40 million.

 

Shame on Fangraphs for posting what looks like a pure propaganda piece to me.

 

https://outsider.com/news/entertainment/atlanta-braves-report-massive-2021-revenue-major-bounce-back-pandemic-numbers/

[Jopal78]

So, the team made $193 million in profit in a four-year period in which they paid their players $474,521,814? Seems like the players did okay in that deal.

Except labor is an operating cost, not profit. Viewing the two as the same thing is wrong, as the players are literally the ones out there working to provide a product. Is the pay of the general manager profit, too?

 

I wouldn't say the players are providing the product. It is the owners who provide the product (an MLB game) to the paying customer. The players are more like a factory worker who helps create a finished product for the owner to sell.

 

To keep things in perspective, Disney had an operating income over 7 billion dollars in 2021. As someone else said earlier, baseball teams aren't the best investment in terms of generating profits, a billionaire would be better off buying Microsoft or Disney if annual profits is what they're after. With baseball teams, the real money making event occurs when the owner goes to sell the team (Attanasio bought the Brewers for 223 million in 2005, and even conservatively could sell it for more than one billion dollars, a nearly 500% return on his initial investment in less than 20 years).

[homer]

So, the team made $193 million in profit in a four-year period in which they paid their players $474,521,814? Seems like the players did okay in that deal.

Except labor is an operating cost, not profit. Viewing the two as the same thing is wrong, as the players are literally the ones out there working to provide a product. Is the pay of the general manager profit, too?

 

I wouldn't say the players are providing the product. It is the owners who provide the product (an MLB game) to the paying customer. The players are more like a factory worker who helps create a finished product for the owner to sell.

 

To keep things in perspective, Disney had an operating income over 7 billion dollars in 2021. As someone else said earlier, baseball teams aren't the best investment in terms of generating profits, a billionaire would be better off buying Microsoft or Disney if annual profits is what they're after. With baseball teams, the real money making event occurs when the owner goes to sell the team (Attanasio bought the Brewers for 223 million in 2005, and even conservatively could sell it for more than one billion dollars, a nearly 500% return on his initial investment in less than 20 years).

 

Factory workers are generally replaceable. If the Brewers replaced Corbin Burnes with Joe Replacement Level Pitcher....well, that would suck.

[OldSchoolSnapper]

 

Factory workers are generally replaceable. If the Brewers replaced Corbin Burnes with Joe Replacement Level Pitcher....well, that would suck.

 

I've often had the random thought that if you hypothetically did this with every player so that the gap among them wasn't really noticeable...would people really care?

[homer]

 

Factory workers are generally replaceable. If the Brewers replaced Corbin Burnes with Joe Replacement Level Pitcher....well, that would suck.

 

I've often had the random thought that if you hypothetically did this with every player so that the gap among them wasn't really noticeable...would people really care?

 

I guess we will see what college baseball TV ratings are if there's no MLB this year.

[Fear The Chorizo]

The players are part of the product and the most important part of it - they don't provide it, but they do play the game at the highest of levels that creates public demand and raises revenues. Without the best players in the world, the product certainly would be diminished and the drop in public demand to pay to watch it would cause revenues to drop - which would correspond to lesser players making less money.

 

It would suck for owners if Bryce Harper got replaced by Joe Replacement at Bryce's salary for the next decade....but it wouldn't sting near as much to the owner if Joe Replacement was making league minimum in a league void of superstars. Nobody would watch or be interested in it, though. Owners need the players just as much as players need the owners for both sides to milk the maximum amount of $ from us schlubs - if they don't find a way to maintain harmony with each other, we'll find plenty of other places to spend our money...particularly now when inflation is driving costs up so fast it seems like the price of a happy meal goes up from the time you order it to the time you reach the window to pay for it.

[homer]

Re MLB.tv

 

"Update on #MLBTV and MLB Audio subscription renewals: we will not bill for 2022 subscriptions today. Notification about renewal will occur once a new CBA is in effect. All current subscriptions will remain active until then. Subscribers, check your email for important updates."

[monty57]

So, the team made $193 million in profit in a four-year period in which they paid their players $474,521,814? Seems like the players did okay in that deal.

Except labor is an operating cost, not profit. Viewing the two as the same thing is wrong, as the players are literally the ones out there working to provide a product. Is the pay of the general manager profit, too?

 

I don't get what you're saying. Of course profits and expenses are different, as profits are figured after expenses are taken out of revenue. The GM's salary is an expense just like the players' salaries. The GM isn't an owner, so how does he/she figure into your argument?

 

If JosephC is correct that the average team profit is around $40,000,000, and the average opening day payroll in 2021 was $119,710,221, I think it's relevant to note that on average the owners bring home around 1/3 of what the players bring home.

 

Are you arguing that the owners should not be able to make a profit, and that they should only be allowed to participate in the gains when they sell the team? I'd have to believe that since Attanasio is one part of a membership group which owns a smaller revenue team, that Attanasio will get less income from the Brewers over the next few seasons than Yelich.

 

All I said was that the players seem to be doing pretty well, and you took offense to that. So, what is your argument?

[Brock Beauchamp]

So, the team made $193 million in profit in a four-year period in which they paid their players $474,521,814? Seems like the players did okay in that deal.

Except labor is an operating cost, not profit. Viewing the two as the same thing is wrong, as the players are literally the ones out there working to provide a product. Is the pay of the general manager profit, too?

 

I don't get what you're saying. Of course profits and expenses are different, as profits are figured after expenses are taken out of revenue. The GM's salary is an expense just like the players' salaries. The GM isn't an owner, so how does he/she figure into your argument?

 

If JosephC is correct that the average team profit is around $40,000,000, and the average opening day payroll in 2021 was $119,710,221, I think it's relevant to note that on average the owners bring home around 1/3 of what the players bring home.

 

Are you arguing that the owners should not be able to make a profit, and that they should only be allowed to participate in the gains when they sell the team? I'd have to believe that since Attanasio is one part of a membership group which owns a smaller revenue team, that Attanasio will get less income from the Brewers over the next few seasons than Yelich.

 

All I said was that the players seem to be doing pretty well, and you took offense to that. So, what is your argument?

I didn't take offense at all, I just don't care for the comparison of labor to profit, as the owners have additional reasons to own a major sports franchise: long-term valuation gains, public prestige, and loads of satellite corporations that are also likely gaining them profits every year.

 

And if the owners make a huge profit or no profit at all, it doesn't change my relationship to baseball in the slightest bit... but if the next Mike Trout figures he can make more money in football and pursues that instead of becoming the best baseball player in the world, the sport of baseball is diminished. So I care that players are being paid commensurate with other elite athletes, as that directly changes my relationship with baseball and its overall quality of play.

 

My point about general managers is that I've never seen anyone compare their salaries to owner profit, yet it's being done with players pretty regularly right now... but essentially, both are just labor operating expenses.

[JackNicholson1974]

I have no problem with an owner taking home "Only" 40 million a year. Or am I misreading this?

 

This isnt an owner making 1/3 what his employees make, its an owner making 40 million a year after running a business he didnt create, that he didnt start, that was running before he showed up and that he only got into because he was already a multi billionaire and the day after he bought the franchise it probably appreciated 10% and probably has darn near doubled in value since. Also the owner brings ZERO value to the franchise. ZERO. Value is brought by TV rights, market size, attendance, fan enthusiasm, players, a city paying for a stadium. Nobody says "my favorite team is the Brewers because I am a big Mark Attanasio fan, and if he ever sold the team I would stop watching."

 

So I dont back the owners much. The players sacrifice everything for a CHANCE to play in the majors and their careers are short. Many major leaguers never see a 1 million dollar pay check, a majority never make it to free agency. Yes they should be able to get everything they can. Pro owner fans always gripe that Max Scherzer types make 35 million a year. 30 teams x 40 man rosters = 1200 players. 450 of them make 1 million or more. About half that make more than 5 million a year. And those are generally guys who have put in a decade making far less than that.

 

I am eager to buy tickets this year to see specific players. Acuna, Tatis, Betts, Guerrero Jr, Judge, Soto. Those are the guys that drive the value fans pay for.

[Jopal78]

The players are part of the product and the most important part of it - they don't provide it, but they do play the game at the highest of levels that creates public demand and raises revenues. Without the best players in the world, the product certainly would be diminished and the drop in public demand to pay to watch it would cause revenues to drop - which would correspond to lesser players making less money.

 

It would suck for owners if Bryce Harper got replaced by Joe Replacement at Bryce's salary for the next decade....but it wouldn't sting near as much to the owner if Joe Replacement was making league minimum in a league void of superstars. Nobody would watch or be interested in it, though. Owners need the players just as much as players need the owners for both sides to milk the maximum amount of $ from us schlubs - if they don't find a way to maintain harmony with each other, we'll find plenty of other places to spend our money...particularly now when inflation is driving costs up so fast it seems like the price of a happy meal goes up from the time you order it to the time you reach the window to pay for it.

 

I'm not sure that nobody would watch. But for the fans who only care about specific players, yes they would probably be done with MLB, but as it stands now most fans root for a specific team. If all players on all teams were replaced, to the naked eye in the stands or on TV there would be no difference in the game.

 

It's only stat cast or the radar gun that would tell fans if a replacement pitcher is topping out at 91-92 instead of 98-99, or the spins on a curveball or the exit velocity was 86mph. If you go see the Milkmen play they still have breaking balls, homers, relay throws nailing the runner at the plate, outs made from deep in the hole on the infield, etc.

[JackNicholson1974]

If all players on every team were replaced, the fans would have no idea that product was any different.

 

Until all the players that left started their own league and then the fans of the Brewers and Yankees would wonder why they are watching what amounts to AAA or independant league level baseball.

 

Put logistics to starting a league aside. But lets not pretend that fans root for laundry. They only root for laundry because the laundry is being worn by the best players in the world. Take those players out and things become far less interesting.

[Fear The Chorizo]

I have no problem with an owner taking home "Only" 40 million a year. Or am I misreading this?

 

This isnt an owner making 1/3 what his employees make, its an owner making 40 million a year after running a business he didnt create, that he didnt start, that was running before he showed up and that he only got into because he was already a multi billionaire and the day after he bought the franchise it probably appreciated 10% and probably has darn near doubled in value since. Also the owner brings ZERO value to the franchise. ZERO. Value is brought by TV rights, market size, attendance, fan enthusiasm, players, a city paying for a stadium. Nobody says "my favorite team is the Brewers because I am a big Mark Attanasio fan, and if he ever sold the team I would stop watching."

 

So I dont back the owners much. The players sacrifice everything for a CHANCE to play in the majors and their careers are short. Many major leaguers never see a 1 million dollar pay check, a majority never make it to free agency. Yes they should be able to get everything they can. Pro owner fans always gripe that Max Scherzer types make 35 million a year. 30 teams x 40 man rosters = 1200 players. 450 of them make 1 million or more. About half that make more than 5 million a year. And those are generally guys who have put in a decade making far less than that.

 

I am eager to buy tickets this year to see specific players. Acuna, Tatis, Betts, Guerrero Jr, Judge, Soto. Those are the guys that drive the value fans pay for.

 

Professional sports majority owners are in a much more rarified air than professional athletes - There are 30 MLB majority owners (some of which are corporations themselves and nearly all of which are merely controlling owners over a pile of minority ownership stakes). The same sentiment about pro athletes trying to get everything they can, when they can applies to owners, it's just the arena is the boardroom and not the athletic field.

 

Profits for an organization are simply not profits for the owner to pocket and go buy an island or new fleet of jets for themselves - they are profits for the organization/asset that often get reinvested into the organization. That in turn improves its value and makes the principle owner more wealthy - however that wealth isn't realized until the owner sells...and no professional sports owner sells an organization they own simply for a return on investment.

[TURBO]

How many owners in MLB are 100% owners, with no others to divvy up profits with?

 

I'm guessing very few, so actually, if a club is making 40 million a year, and has to divvy that up between 8-10 other partial owners (with differing % depending on the % of the team each owner owns) then I think you could argue that the owners make very little and players could easily eclipse the amount made by an owner(s). In fact, there could be multiple players on any given team making more than the owner(s).

 

It's all silly, get a deal done and let's PLAY BALL!

[ewitkows]

MLB said they are fine with missing a month, so it looks like the season won't start till May

[JackNicholson1974]

So if say there are 8 minority owners on a team, what the heck are they all doing on a day-to-day basis for them to warrant 5 million dollar yearly salaries? I cant believe the amount of lapdogs here licking the boots of the owners. They bring NOTHING to the game at all. Nothing. Their ownership of a team is a narcissistic hobby for them And guess what, when they turn 33 their earning capacity doesnt drop by 90-95%. They can own the team until they die. Or sell it for many times what they paid for it.

 

EDIT - From Jeff Passan this week:

 

"Sports is a unique industry. Typically, workers make a product. In baseball, they are the product. The game of baseball is the framework, and in it exists two classes: players and owners. Players spend their entire lives chasing the major leagues. Just making it there is improbable. Staying long enough to make life-changing money is a miracle. Owners, on the other hand -- at least those who don't inherit their teams -- join the baseball world just as they would a country club: by buying membership.

 

If you went and got the next 1,200 best players in the world, the product would suffer greatly. If you handed MLB teams over to any 30 competent businesspeople, the sport would not suffer. Actually, it might improve. It doesn't take a billionaire to leverage a spot in a legalized monopoly with profound built-in revenues."

[brewers888]

I personally don’t care for either side but want the best system possible to help small market teams like the Brewers have as good of a chance to win consistently as the big market teams.

[Fear The Chorizo]

So if say there are 8 minority owners on a team, what the heck are they all doing on a day-to-day basis for them to warrant 5 million dollar yearly salaries?

 

I'm assuming this statement is based on a hypothetical $40M dollar annual profit divided 8 ways...

 

profit of a business does not equal salary for its ownership - it's not like they get the year end balance sheet and if the organization was in the black they get checks at the holiday dinner. All owners (minority and principle) of an organization have say in what an organization would do with an operating profit - oftentimes it's used to pay down financed debt within the organization or be used as capital for planned improvements to team facilities, player payroll, etc.

 

I'd assume some ownership stakes may include a form of dividend/bonus compensation if an organization is turning a significant profit, but I'd really doubt all annual profit just gets wired into owner checking accounts.

 

Player contract salaries and franchise profit/loss margins or estimated value appreciations are not and should not be compared like they are the same thing.

 

Sure, it's really tough to be good enough to be a major league baseball player - you've essentially got to hit the genetic lottery and have a bunch of breaks go your way to get there...but it's a LOT tougher and more expensive to become an owner of a MLB organization. Are some owners simply winners of the genetic lottery by being heirs to owning a team? Sure - but to me there's quite a bit of similarity between that and being Vlad Guerrero, Jr., or Prince Fielder, or Ken Griffey Jr., and so on.

[JackNicholson1974]

Come on with the it’s harder to be an owner. If an person wins a 2 billion dollar lottery he can instantly become a majority owner of an MLB team. Can he instantly pay the same amount and bat clean up for an MLB franchise.

 

You insinuate that being a ball player is dumb luck. It is a lifetime of work. That isn’t guaranteed. Being an owner takes already having billions and then writing a check.

 

I can see we will not see eye to eye on this, and that’s fine.

[Fear The Chorizo]

Fewer people are owners than there are HOFers....and forgive me for just not believing anyone has ever won a 2 billion dollar lotter ticket and then cashed it in to buy a team on a whim.

 

The skill of being a great baseball player is much different than the skill it takes to accumulate both immense wealth and the requisite amount of status to potentially become a pro sports team owner. You're trying to equate how well someone hits or throws a baseball to what a person has to do in order to make themselves a multi billionaire - two entirely different skillsets.

 

I never said being a professional ballplayer is dumb luck - what you're saying is becoming incredibly wealthy to the point where buying a multi-billion dollar toy of a company is a possibility is dumb luck.

[logan82]

 

Factory workers are generally replaceable. If the Brewers replaced Corbin Burnes with Joe Replacement Level Pitcher....well, that would suck.

 

I've often had the random thought that if you hypothetically did this with every player so that the gap among them wasn't really noticeable...would people really care?

Replace all the players and I will just have new players to cheer for. I cheer for laundry already.

[sixtolezcano16]

Here is a good take on the lockout. The way baseball is currently run, the future is bleak.

 

https://www.espn.com/mlb/story/_/id/33362477/inside-self-inflicted-crisis-boiling-mlb-lockout-deadline-arrives

[sveumrules]

Here is a good take on the lockout. The way baseball is currently run, the future is bleak.

 

https://www.espn.com/mlb/story/_/id/33362477/inside-self-inflicted-crisis-boiling-mlb-lockout-deadline-arrives

 

Agreed, Passan has had some of the best coverage throughout this whole ordeal for sure.

 

I just came across this AP article noting that combined MLB payrolls have actually declined since peaking at 4.25 billion in 2017...

 

https://apnews.com/article/coronavirus-pandemic-mlb-sports-business-health-7257a7c73e1e66aef4979986d5c5c864

 

That got me wondering how MLB salary growth compared to the NFL & NBA with their centralized revenue sharing over the last 10 years & these were the numbers I found...

 

NFL Salary Cap 2012: 120.6 million

NFL Salary Cap 2022: 208.2 million (72.6% growth)

 

NFL Average Salary 2012: 1.9 million

NFL Average Salary 2022: 2.8 million (47.4% growth)

 

NBA Salary Cap 2012-13: 58 million

NBA Salary Cap 2021–22: 112.4 million (93.8% growth)

 

NBA Average Salary 2012-13: 5.15 million

NBA Average Salary 2021-22: 8.25 million (60.2% growth)

 

MLB CBT Threshold 2012: 178 million

MLB CBT Threshold 2021: 210 million (18% growth)

 

MLB Total Payroll 2012: 3.15 billion

MLB Total Payroll 2021: 4.05 billion (28.6% growth)

 

MLB Average Salary 2012: 3.2 million

MLB Average Salary 2021: 4.17 million (30.3% growth)

[NYChez]

Looks like a 12-team playoff won out! (instead of 14)

[SomewhereInTime]

Looks like a 12-team playoff won out! (instead of 14)

 

The lesser of two evils I guess.