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The biggest and most obvious reason is the individual revenue streams of different baseball teams. The Brewers pulled in $269 million in revenue in 2021, according to Total Sportal. At first glance, it sounds like the Brewers could spend more than the $112 million and change Sportrac is projecting as the landing point of the 2023 payroll. But looks are a bit deceiving.
Every ball club has large expenditures that aren't captured in a player payroll number. There’s paying the coaches, manager, trainers, front office staff, and the many people who make American Family Field (or Miller Park) work for 81 home games (plus, hopefully, post-season action). Scouts, the prospects in the minor leagues, the coaches and managers and trainers in the minors, the facility in Arizona for spring training… it all costs money. Suddenly, $269 million doesn’t seem like that much. The Los Angeles Dodgers' local television contract nets them roughly $250 million every season.
Now, could you look at the Mets, who have been spending a lot of money? Correa (although that deal may be off due to a medical issue), Brandon Nimmo, and Justin Verlander this year, Francisco Lindor not too long ago… not to mention a hair over $31 million for Robinson Cano and James McCann, who aren’t even on the Mets’ roster any longer. Those are some big-time deals.
That’s being done on the annual revenue of $302 million – so their Sportrac projection of a $326 million payroll in 2023 possibly puts them at a loss – before you even account for all the non-MLB payroll expenses a team will have in the course of a season. No owner can sustain such massive losses – even without the massive luxury tax bill the Mets will pay due to their league-high payroll in 2023. Sooner or later, Mets owner Steve Cohen will see the bill for this massive spending spree come due beyond those massive luxury tax payments the Mets already face.
The fact is, an MLB team – or any professional sports team – is, first and foremost, a business that has to make those who own it money or, at the very least, break even financially over an extended period of time. Now, that gets easier when a team is in playoff and title contention, but every team will have a bad season or two at one point or another – even the Yankees and Dodgers have had their struggles at times. Both also enjoy the benefits of huge media markets - and outrageously lucrative television contracts in place - to fall back on when they occasionally need to retool.
The Brewers, on the other hand, don’t have that kind of safety net when they mis-step. They have done well to maximize their revenue with a competitive team, even in the wake of the COVID-19 pandemic (which cost them the revenues from in-person attendance at American Family Field). But the cold reality of the matter is that Brewers owner Mark Attanasio doesn’t have anywhere close to Steve Cohen's resources, either in market size or overall wealth.
Given the developments in this off-season’s free-agent market, it may well be that even going full Bobby Bonilla will not be sufficient to keep Corbin Burnes in Milwaukee. Does this mean that the Brewers are doomed to be, for all intents and purposes, an AAAA team that develops stars for the Dodgers, Mets, Yankees, and Red Sox (among a few others)? No, it doesn’t, but for Milwaukee to overcome having one of the smallest markets in Major League Baseball, it will take a lot of planning and a long-term strategy to remain competitive.
Are the Brewers and General Manager Mark Arnold up to the task placed upon them by baseball's self-imposed economic structure?
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