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

[OldSchoolSnapper]

Serious question: Would the Brewers really sell for $1.3 billion? I doubt anyone actually knows, but it seems awfully hard to believe.

[SoCalBrewfan]

MLBPA doesn't care about competitive balance. Their sole goal is to make sure their members get paid as early as possible as much as possible. That's it.

 

I'm not convinced that the owners writ large do, either. (Some might, likely those who feel they are at a disadvantage but still try to win.) I think it's a thing they say to justify attempting to pocket a greater share of the sports' earnings. I think a lot of Brewers fans see this through the lens of a small market fan and are more pro-owner than average, but I don't actually believe that the ownership groups in places like Boston or LA really give two hoots about competitive balance. Manfred has done a good job of keeping the owners on one page from a negotiating perspective, despite potentially divergent interests, but I think they are basically all motivated by greed and ego rather than any sense of fair play or economic justice.

[MrTPlush]

Serious question: Would the Brewers really sell for $1.3 billion? I doubt anyone actually knows, but it seems awfully hard to believe.

 

All it takes is one person with a lot of money. Wouldn't really shock me. Especially if said person has aspirations to move them to a bigger market.

[homer]

Serious question: Would the Brewers really sell for $1.3 billion? I doubt anyone actually knows, but it seems awfully hard to believe.

 

The Royals sold for a billion in 2020.

[xisxisxis]

MLBPA doesn't care about competitive balance.

And the owners do? The only outrageous local TV deal is the Dodgers deal. The Yankees, Angels, Red Sox deals are at the top, but they aren't in the same ballpark. In total their are 6 teams with large enough local TV revenue to financially argue against complete sharing of local TV revenue. Based on that MLB could vote tomorrow for complete revenue sharing. Why don't they? Because sharing would likely require a salary floor and I would bet a years salary that more than half the small market teams WOULD HATE TO LOSE THEIR CURRENT MASSIVE PROFITS. It isn't the big markets that are stopping revenue sharing, it's them plus enough of the small/mid-market owners that are stuffing their pants, shirts, wives, childrens, mistresses blouses, panties, bras with all of the massive cash they are making each year. Yeah, the owners really care about competitive balance right up until it reduces their incomes by $0.01.

[monty57]

https://www.mlbtraderumors.com/2022/03/ross-stripling-mlb-mlbpa-negotiations.html

 

Stripling is saying the owners tried to sneak things past them in the early morning hours as they were seemingly getting closer to a deal.

 

Doesn't seem to me like we're going to get a deal done any time soon. If it weren't for my kids' obsession with sports right now, I'd probably already have moved away from baseball until things get straightened out, but my 16 year old gives me minute-by-minute updates of what's going on so it's hard for me to step away.

 

I've never said that I'm going to stop buying a certain brand of car because of a lockout or strike, and I'm not going to stop watching baseball after these negotiations are over, but arguing about who's more at fault is probably a fool's errand. It's a labor negotiation. Both sides signed the last deal, so if one side feels they were screwed by it, it's at least partially their own fault, and the fact that we're missing baseball this year is partly the fault of both the owners and the players.

 

Once baseball is being played, I will still be glad that it's Attanasio in the owner's box and not Wendy Selig-Prieb, because who owns a baseball team does matter. I will also be glad that guys like Burnes and Woodruff will be pitching for us because who is playing for the team does matter. Until then, I don't see the point in arguing over "who's the bad guy?" when it's two sides trying to split up an enormous pile of money.

 

Both sides are doing far better than 99.5% of the people on this planet so the only reason anyone is getting mad at one side or the other is because both sides spend a lot of money on PR to make sure that fans get mad at the other guy.

[sveumrules]

Serious question: Would the Brewers really sell for $1.3 billion? I doubt anyone actually knows, but it seems awfully hard to believe.

 

The Royals sold for a billion in 2020.

 

This Sports Business Journal article tracks every MLB/NFL/NBA/NHL franchise sale since 1998...

 

https://www.sportsbusinessjournal.com/Journal/Issues/2018/11/26/In-Depth/Team-sales.aspx

 

I've listed just the MLB sales below...

 

1998 Dodgers 311 M

1998 Rangers 250 M

1999 Angels 147 M

1999 Reds 67 M

2000 Indians 323 M

2000 Blue Jays 112 M

2000 Royals 96 M

2002 Red Sox 700 M

2002 Marlins 158.5 M

2002 Mets 135 M

2002 Expos 120 M

2003 Angels 183.5 M

2004 DBacks 160 M

2004 Dodgers 430 M

2004 Rays 65 M

2005 Brewers 220 M

2005 Athletics 180 M

2006 Nationals 450 M

2006 Reds 270 M

2007 Braves 450 M

2009 Cubs 845 M

2010 Rangers 385 M

2011 Astros 615 M

2012 Dodgers 2.15 B

2012 Padres 800 M

2013 Rangers 593 M

2016 Mariners 661 M

2017 Marlins 1.2 B

2020 Royals 1B

2020 Mets 2.475 B

 

Using 2008 as a dividing line since it's in the middle-ish & no teams were sold that year results in the following splits...

 

10 years before 2008, 20 sales for 4.828 billion.

13 years after 2008, 10 sales for 10.724 billion.

 

Pre-2008: 2 sales per year for a 241.4 million average

Post-2008: 0.77 sales per year for a 1.072 billion average

 

That teams have sold with notably less frequency of late, despite their sale prices skyrocketing by an even greater measure, indicates to me that owning a team is pretty, pretty profitable these days.

[GreatNWwi]

Serious question: Would the Brewers really sell for $1.3 billion? I doubt anyone actually knows, but it seems awfully hard to believe.

 

The Royals sold for a billion in 2020.

 

This Sports Business Journal article tracks every MLB/NFL/NBA/NHL franchise sale since 1998...

 

https://www.sportsbusinessjournal.com/Journal/Issues/2018/11/26/In-Depth/Team-sales.aspx

 

I've listed just the MLB sales below...

 

1998 Dodgers 311 M

1998 Rangers 250 M

1999 Angels 147 M

1999 Reds 67 M

2000 Indians 323 M

2000 Blue Jays 112 M

2000 Royals 96 M

2002 Red Sox 700 M

2002 Marlins 158.5 M

2002 Mets 135 M

2002 Expos 120 M

2003 Angels 183.5 M

2004 DBacks 160 M

2004 Dodgers 430 M

2004 Rays 65 M

2005 Brewers 220 M

2005 Athletics 180 M

2006 Nationals 450 M

2006 Reds 270 M

2007 Braves 450 M

2009 Cubs 845 M

2010 Rangers 385 M

2011 Astros 615 M

2012 Dodgers 2.15 B

2012 Padres 800 M

2013 Rangers 593 M

2016 Mariners 661 M

2017 Marlins 1.2 B

2020 Royals 1B

2020 Mets 2.475 B

 

Using 2008 as a dividing line since it's in the middle-ish & no teams were sold that year results in the following splits...

 

10 years before 2008, 20 sales for 4.828 billion.

13 years after 2008, 10 sales for 10.724 billion.

 

Pre-2008: 2 sales per year for a 241.4 million average

Post-2008: 0.77 sales per year for a 1.072 billion average

 

That teams have sold with notably less frequency of late, despite their sale prices skyrocketing by an even greater measure, indicates to me that owning a team is pretty, pretty profitable these days.

 

This LA Times article provides net worth of principal owners, team values, etc. Annualized appreciation of each team is listed and ranges from -3.8% to around 20% with the typical appreciation around 10%.

 

https://www.latimes.com/sports/story/2022-02-28/mlb-billionaire-team-owners-roster-2022-lockout

 

I was trying to research how many owners each team has to get a better idea of how that profit pie is split up. A simple google search does not answer that question. Depending on how big that collective owners group is, the profit numbers being thrown around might not be that impressive.

[owbc]

Serious question: Would the Brewers really sell for $1.3 billion? I doubt anyone actually knows, but it seems awfully hard to believe.

 

The total net worth of the Forbes 400 was $47 billion in 2015. In 2020 it was $179 billion. That's a lot of money to compete for a finite number of major men's sports franchises.

 

I think what many are forgetting here is that the net worth of billionaires has been increasing at an absurd pace. That's part of why I laugh at the whole "millionaires vs. billionaires" thing. The difference is a factor of 1,000. That's like comparing someone making minimum wage (~$30K/year) to someone making $30 million per year.

 

I think $1.3 billion is way low. I bet the actual number would be closer to $2 billion. It sounds like the rumored NBA expansion fee is going to be at least $2.5 billion and possibly more. If you were selling your house right now, would price based on a comp from 2-3 years ago? No way, you're adding 20-30% to that number or more.

 

What the owners need to remember is that these pro sports teams are billionaire trophies. Manfred has complained that they are relatively poor investments. Duh. They are trophies. You can't run them like Amazon. And they can cash out at any time, but none of them have.

[monty57]

That teams have sold with notably less frequency of late, despite their sale prices skyrocketing by an even greater measure, indicates to me that owning a team is pretty, pretty profitable these days.

 

 

A + B does not necessarily equal C.

 

With the foresight that there wouldn't be any new trucks being made due to the chip shortage, I bought a new truck last summer. Right now, I could sell it back to the dealership for more than I paid for it, but even though I would have more money than I paid, I won't sell because then I wouldn't have a truck to drive.

 

As others have said, professional sports teams are status symbols for the rich. I'd go even further to say they are lifelong dreams that few can ever attain. Selling it, even if it brings a significant gain, means that you are no longer an owner and will probably never get the opportunity to own a team ever again. Plus, in an era of zero interest rates there aren't a lot of alternatives to grow wealth, so why not hold on to the appreciating asset? It seems to me to be a safer long-term bet than throwing the gains into Bitcoin.

 

I'd guess that owning a team is a pretty big write-off for people who otherwise have a lot of taxable income. With a baseball team, there is usually a way to put income back into the team so that you don't show a profit. When the Brewers' payroll was down they bought the A ball team and did a bunch of upgrades on the Arizona facility and on Miller Park. These upgrades help out for the future without adding taxable income in the present. A lot of business owners do this, so that while they are paying taxes on their income, they are able to improve their asset (the business) without paying extra taxes.

[OldSchoolSnapper]

A high valuation doesn't necessarily mean something is profitable though because that profit is only realized if sold. You have companies valued in the tens of billions that still operate at a loss year to year. Obviously can't do that forever but it does happen.

[JackNicholson1974]

Serious question: Would the Brewers really sell for $1.3 billion? I doubt anyone actually knows, but it seems awfully hard to believe.

 

The Royals just sold for 1 billion and the Marlins for 1.2, so yeah I think 1.3 is about right.

[JackNicholson1974]

A high valuation doesn't necessarily mean something is profitable though because that profit is only realized if sold. You have companies valued in the tens of billions that still operate at a loss year to year. Obviously can't do that forever but it does happen.

 

if owning a team was not profitable the owners would open their books and show all the world what a money pit it actually is. The fact that they dont tells me that the information would NOT benefit their cause if made public.

[Ron Robinsons Beard]

A high valuation doesn't necessarily mean something is profitable though because that profit is only realized if sold. You have companies valued in the tens of billions that still operate at a loss year to year. Obviously can't do that forever but it does happen.

 

if owning a team was not profitable the owners would open their books and show all the world what a money pit it actually is. The fact that they dont tells me that the information would NOT benefit their cause if made public.

 

Privately traded corporations rarely open their books. Doing so makes it quite difficult to attract investors if profits aren't high enough.

[OldSchoolSnapper]

A high valuation doesn't necessarily mean something is profitable though because that profit is only realized if sold. You have companies valued in the tens of billions that still operate at a loss year to year. Obviously can't do that forever but it does happen.

 

if owning a team was not profitable the owners would open their books and show all the world what a money pit it actually is. The fact that they dont tells me that the information would NOT benefit their cause if made public.

 

My point was more that trying to guess profits by looking at valuations isn't a great strategy. Retail is currently full of companies with multi-billion dollar valuations whose profits are shrinking every year. I'm not saying owning a team isn't profitable, just that I don't think we know how profitable it is. And it probably fluctuates a lot year to year.

 

My guess is that it is more like a cute toy for most owners, yes they make some money on it most years, but not something they are really depending on to make money.

[monty57]

A high valuation doesn't necessarily mean something is profitable though because that profit is only realized if sold. You have companies valued in the tens of billions that still operate at a loss year to year. Obviously can't do that forever but it does happen.

 

if owning a team was not profitable the owners would open their books and show all the world what a money pit it actually is. The fact that they dont tells me that the information would NOT benefit their cause if made public.

 

I don't think that true. They're not legally obligated to announce their financial records, so they aren't going to do so no matter what those records say. That said, teams (like any business) should make money. If they don't, they shouldn't exist.

 

What I don't understand is the concept that because a business (or the owner of a business) makes money they are necessarily not paying the employees enough. The main job of any business is to make money above and beyond expenses (aka turn a profit), or at least reinvest the profits into the business so that it will help in the future. For example, renovating the Arizona complex should help improve future teams, while paying a veteran $7-8M instead of paying a rookie league minimum may help today but it probably hurts the future, as they will have less money and the rookie won't get a chance to prove himself. This is true in all industries. Jeff Bezos grew Amazon by constantly reinvesting proceeds while not showing any profits. Shareholders and stock analysts gave him a hard time for not making a profit, but it seems to have worked out okay for them.

 

It made a lot of sense when the Brewers were pretty certain that they weren't going to win that they put money into projects focused on the future rather than signing some journeymen FAs to increase payroll. Now that they're vying for the playoffs, it makes sense to spend as much as they can on adding current talent, and not spending as much on projects for the future. But that doesn't mean they should stop spending on other things. Costs put into things like international training facilities and things like the "pitching lab" are very important. They are basically the R&D budget for MLB teams.

 

Wendy Selig Prieb was horrible at running the team, and the Brewers failed to field a .500 team for 25 years. I am very glad that Attanasio knows how to successfully run the team. If he makes some money from that, more power to him. By doing so, he is also able to pay his players more than the Seligs did. Well-run businesses can pay good employees. Poorly run businesses cannot.

 

The union makes a cut of every player's salary, therefore they are very focused on making sure as much money as possible goes into player salaries. I get that. They are doing their job by focusing all the attention on that one facet. It's important, and the players should be paid well. But the team also has to make sure it stays financially sound, or they will cease to exist as a team, so the management has a tough job, and they also deserve to be paid for it.

 

As I said in a previous post, getting upset over who may be getting the biggest slice when all of the slices are big is probably not worth the energy or anxiety. It takes a lot of smart people to run a multi-billion dollar industry, and all of them deserve to be paid for what they do. At the end of the day, I'm not going to be any better or worse off if some extra money goes to one side or the other, so I'm just hoping for a resolution that doesn't make it tougher for the Brewers and other small-market teams to compete.

[Opening Day]

There is a lot of talk about toiling in the minors and guys who get a cup of coffee in MLB. It seems misplaced to me. The players seem to me to be more focused on freeing up big market teams to give guys like Trout, Soto, Harper, Burnes (insert sad face emoji), etc an extra $100 mil or so than they do about the guys on the bottom. Maybe I’m reading the situation wrong, but if one of their main goals is to have big markets pay less to smaller markets, that’s not helping the “little guy” MLB’er. That’s just creating bigger top end salaries in top end markets while cutting the operating budgets of smaller market teams. More money might be spent on players, which is obviously the goal of the union, but those gains would more than likely be concentrated in a handful of players. And that’s fine, if that their prerogative, but it doesn’t make me feel anyway about a guy riding the bus in A ball, he’s irrelevant.

[owbc]

A high valuation doesn't necessarily mean something is profitable though because that profit is only realized if sold. You have companies valued in the tens of billions that still operate at a loss year to year. Obviously can't do that forever but it does happen.

 

if owning a team was not profitable the owners would open their books and show all the world what a money pit it actually is. The fact that they dont tells me that the information would NOT benefit their cause if made public.

 

My point was more that trying to guess profits by looking at valuations isn't a great strategy. Retail is currently full of companies with multi-billion dollar valuations whose profits are shrinking every year. I'm not saying owning a team isn't profitable, just that I don't think we know how profitable it is. And it probably fluctuates a lot year to year.

 

My guess is that it is more like a cute toy for most owners, yes they make some money on it most years, but not something they are really depending on to make money.

 

Exactly, that was the point Manfred was making when he said that investing in the stock market is better than investing in an MLB club. I don't disagree with that, but the message that came across to the fans was simply that owners are simply trying to maximize the return on their investments. Which is a really sad and disappointing message to get from the commissioner of baseball. Especially because it's not an isolated incident -- literally every decision Manfred has made as commissioner has been about maximizing probability. During a tenure when the product on the field has noticeably deteriorated.

 

Bud Selig recognized that what is good for the fans is good for profitability. Attendance was one of the metrics that Selig cared most about. Manfred is not concerned about whether baseball is "healthy" or not. He is solely focused on how profitable baseball is in the short term. The means to achieve that goal can mostly be summarized as "cutting costs".

 

Manfred and the owners are fully entitled to that perspective and ultimately, yes, on the surface this is all about a labor negotiation which will eventually be resolved. Maybe they are right that the fans will come back, certainly the NFL has not only survived but thrived doing things that could be considered far more evil than anything MLB has done. And to me I guess that's the big question -- are baseball fans different than NFL fans? Will they react differently?

[torts]

No labor union in America is going to show up to work without a collective bargaining agreement with the employer.

 

The players showed up to work in 1994 without a CBA.

 

Correct. Plenty of labor unions show up to work without a contract having been renewed. Teacher unions, healthcare unions, food service unions, etc. It has become more common in the last decade or so, and allows members to keep the strike option as a final action.

 

https://www.labornotes.org/2013/02/working-without-contract-strategy-whose-time-has-come

[645]

This is a must see to understand what happen.

 

[gebc1997]

This is a must see to understand what happen.

 

 

I had a feeling

[xisxisxis]

This is a must see to understand what happen.

What a waste of time. I didn't make it past 5 minutes of clearly a pro-owners take on every bargaining issue. I especially love how when discussing the expanded playoffs and how those evil players turned it down because they thought teams wouldn't spend as much yet there was no mention of the ALREADY negotiated $130M deal with ESPN to televise the extra round of playoffs and NO plan to share any of the additional revenue with the actual players. Don't know what the link to Boras was and don't care. It's all just PR BS.

[gebc1997]

This is a must see to understand what happen.

What a waste of time. I didn't make it past 5 minutes of clearly a pro-owners take on every bargaining issue. I especially love how when discussing the expanded playoffs and how those evil players turned it down because they thought teams wouldn't spend as much yet there was no mention of the ALREADY negotiated $130M deal with ESPN to televise the extra round of playoffs and NO plan to share any of the additional revenue with the actual players. Don't know what the link to Boras was and don't care. It's all just PR BS.

 

Well, at least you had an open mind.

[gebc1997]

I want somebody , without saying that manfred is an idiot or that the owners don’t open the books, what about the latest proposal was not good for the players.

 

Show me one thing that outwardly hurts the players.

[owbc]

I want somebody , without saying that manfred is an idiot or that the owners don’t open the books, what about the latest proposal was not good for the players.

 

Show me one thing that outwardly hurts the players.

 

Their salaries have been dropping while revenue has been increasing. The MLB proposal would further increase the gap between revenue and salaries. MLB could accept everything in the players’ proposal and have extra money left over given the TV revenue increases that are locked in.

 

If the players’ piece of the pie is smaller, that hurts them.