Plenty of money

[Mr. Brooks]

Those numbers just don't add up at all. Teams have at least 150 MiLB players x 30 teams. And if you were only talking about full season ball then there are close to a 100 players/team.

100 players x $80k (currently average 20k)= $8M per team. Ben seems to have the math right, he just incorrectly thinks that total is league wide, when it should be per team.

[Kevin]

One minor league "lifer" recently made the major league 40-man, and it was the first year that he said he'd be able to show an income over $30K. He'd spent almost a decade in the minor leagues, working all the way up to AAA. If you're okay with that staying the same, that's all well and good, but I'd rather see those players forced to alter their lives for a decade rewarded for it.

But they're not forced to alter their lives.  They sign contracts that they are not forced to sign.

I think minor league players are underpaid but they're not forced in to it.

[kab21]

 

100 players x $80k (currently average 20k)= $8M per team. Ben seems to have the math right, he just incorrectly thinks that total is league wide, when it should be per team.

That was what my napkin math was showing. 8M is a pretty significant expense for a team. I think they could certainly increase the pay though. Perhaps doubling (an extra 2M/team) would be huge for the MiLB players and be somewhat manageable for the team.

[Tomj14]

 

That was what my napkin math was showing. 8M is a pretty significant expense for a team. I think they could certainly increase the pay though. Perhaps doubling (an extra 2M/team) would be huge for the MiLB players and be somewhat manageable for the team.

The teams will recoup that money somehow, remember the teams don't pay the salaries the fans do. Adding 8 million in payroll would raise the tickets of the major league games by about a dollar give or take.

[Mike Sixel]

If your business can only survive by paying wages so low people can't live, then you need a new business model. I know not everyone agrees, but it seems to work pretty well in every Western country but this one....

 

Minor league players are under paid. In addition to how low their wages are, they aren't paid for spring training, or extended, or any time like that. They have to pay for their own equipment. I'm assuming most here aren't paying for their desk, work computer, and other equipment every year. I'd pay every player in A+ or above some number, say, 50K, plus food. In A and lower, I'd give them free housing and food and some smaller pay number. And, an equipment allowance. And I don't mean 1 meal a day.....

[rdehring]

 

On this issue, Jeff Passan's piece at Yahoo today is incredibly good and worth the read...

 

https://sports.yahoo.com/donations-cindy-hyde-smith-reveal-mlb-league-can-remedy-grievous-error-035527945.html

 

The incredible thing to me is the amount of money spent on lobbying by MLB. It's been estimated that to bring the salary of every minor league player employed in the game to at least $100K, it would cost an additional $8 million (and that's if NONE of the minor league players are on 40-man rosters, which so many are, so there's likely additional savings, but I digress...). That's total throughout the entire league, not for each team. Yet, there's $3.7 million directly from the league donated to Congress over the last 17 years, let alone what owners privately gave, to ensure minor league players were underpaid in the spending bill provision tacked into this spring's spending bill in Congress.

 

Some of this gets into a blurry off-topic/baseball mixture, but the money is definitely around for MLB and individual teams to do much more for their players.

I am all for increased salaries for minor league players.  But I believe your estimate of $8 million for all of baseball is not accurate.

 

The Twins have almost 200 minor league players throughout their organization...with at least 180 not on the 40-man roster.  About a hundred of these are in the lower levels (DSL, GCL, and Appy League) where I expect they earn $15,000 or less per year.  To bring all of those to $100,000 would cost at least $8,500,000 (100*$85,000) for the Twins only.   And that doesn't include all of their four full season teams, which would add several more million.

 

I understand all the arguments saying this is like an apprenticeship and the cost of making it to the big leagues.  Still doesn't mean these kids should be under the poverty line, however.  Would be fantastic if these kids in the rookie leagues got at least $25,000 with reasonable raises for all the full-season teams with perhaps a $50,000 minimum.  That would probably cost the Twins a couple million dollars a year and I for one think it is something the Twins and baseball should consider.

[biggentleben]

 

Those numbers just don't add up at all. Teams have at least 150 MiLB players x 30 teams. And if you were only talking about full season ball then there are close to a 100 players/team. 

 

It's ADDITIONAL $8 million, not $8 million total.

[biggentleben]

 

100 players x $80k (currently average 20k)= $8M per team. Ben seems to have the math right, he just incorrectly thinks that total is league wide, when it should be per team.

 

No, it's additional. There are multiple minor leaguers who are on 40-man rosters and make that much already in each org, plus you are taking the difference for each player to $100K, not pure $100K on each player.

[biggentleben]

 

But they're not forced to alter their lives.  They sign contracts that they are not forced to sign.

I think minor league players are underpaid but they're not forced in to it.

 

In many cases, the player is providing for his family out of the country. They aren't forced to sign the contracts, but there is often some tremendous misleading by the teams about what they'll be providing and paying for in the training between seasons.

[Mr. Brooks]

No, it's additional. There are multiple minor leaguers who are on 40-man rosters and make that much already in each org, plus you are taking the difference for each player to $100K, not pure $100K on each player.

My math reflects those things.

There is no way it's only $8 million across the whole league.

$8 million across the whole league would only be about 3k per player.

[USAFChief]

The teams will recoup that money somehow, remember the teams don't pay the salaries the fans do. Adding 8 million in payroll would raise the tickets of the major league games by about a dollar give or take.

Ticket sales don’t work that way. Teams already charge what they think maximizes revenue. If they thought they would increase revenue by charging $1 more, they would already be doing so, but their internal sales and marketing staff tells them not to, because decreased sales at the higher price would actually result in less revenue, not more.

 

You’re correct that the teams would get the money from somewhere though...most likely by reducing major league payroll. Which is probably highly correlated to why the MLBPA doesn’t fight the issue.

[TKGuy]

Oh good. I hadn’t read a “Pohlads are cheap thread” in a while. Let’s go sign someone for let’s say $23 million a season and then listen to fans bitch that he takes too much payroll and doesn’t hit 35 HRs.

[Hosken Bombo Disco]

 

Oh good. I hadn’t read a “Pohlads are cheap thread” in a while. Let’s go sign someone for let’s say $23 million a season and then listen to fans bitch that he takes too much payroll and doesn’t hit 35 HRs.

not relevant to the discussion, actually

[kab21]

 

It's ADDITIONAL $8 million, not $8 million total.

the math doesn't even come close to adding up. Milb ballplayers make 10-20K/yr. 8 Million dollars only gives 100 minor leaguers the raise that you are talking about. There aren't nearly enough players on the 40 man roster to reduce the total number of minor leaguers needing a raise to 100. 8M/yr/team is a much closer estimate.

[Vanimal46]

 

Behind the Athletic paywall.

[biggentleben]

So far, every player that has signed has received more AAV than projected.

[Vanimal46]

[darin617]

Are the Twins setting up to tank for the next couple of years or what? I don't want them to make dumb signings just to spend money though.

 

My opinion their 2 newest players CJ Cron & Jonathan Schoop seem wrong to me.

 

Cron played in AL East with all those hitters parks to pad his stats. Tyler Austin may have got better stats with a full year of AB's.

 

Schoop could be a nice bounce back player this year but they could have fixed 2 holes if they would have signed a good shortstop and move Polanco to 2B.  We may have more potential power but the defense will suffer because of it.

[old nurse]

 

payroll is set by the revenue, not value of the business

[Rosterman]

Money still has to come from somewhere to pay expenses each season. But the value of a franchise, somehow, keeps growing. It behooves a franchise to carry some debt (write-offs and such each season) and we seem to remember that Carl Pohlad borrowed up to the max against the value of the team from banks other than his own, for some reason...like people borrowed against their houses because of the supposed increase in value and pocketing the money.

 

 

[Mike Sixel]

Putting aside the value of the teams rising faster than payrolls (yay for capital if you like them more than labor).....the Twins need to increase payroll 50% to reach 90% of the average payroll.....

 

but, this post was started because there is clearly plenty of money in the league to pay players more.....

[old nurse]

 

Money still has to come from somewhere to pay expenses each season. But the value of a franchise, somehow, keeps growing. It behooves a franchise to carry some debt (write-offs and such each season) and we seem to remember that Carl Pohlad borrowed up to the max against the value of the team from banks other than his own, for some reason...like people borrowed against their houses because of the supposed increase in value and pocketing the money.

You can depreciate the players on the team when you bought it. There is no write off after that. Writing of interest payments  saves tax money but does not pay for the interest.  That is not good business.

[Vanimal46]

I posted Gleeman's thread because of this first chart I saw... The narrative to build Target Field was to increase spending to stay competitive. Well, that's been a lie other than the 1st year Target Field opened.

 

[Richie the Rally Goat]

 

payroll is set by the revenue, not value of the business

Inferred from the Braves article: This is what the team claims, but I don't think we have enough information to assume that payroll is relative to revenue. Teams held by privately held organizations don't have to share their books.

 

The value of the business is based on many factors, one of which is potential profitability. 600% value growth compared to 120% payroll growth means a perceived significant chunk of margin goes in the Pohlad's pockets.

[old nurse]

 

Inferred from the Braves article: This is what the team claims, but I don't think we have enough information to assume that payroll is relative to revenue. Teams held by privately held organizations don't have to share their books.

 

The value of the business is based on many factors, one of which is potential profitability. 600% value growth compared to 120% payroll growth means a perceived significant chunk of margin goes in the Pohlad's pockets.

The NHL, NBA, NFL by collective bargaining all set the salary cap by revenue, not value of the teams. In articles about salaries Tony Clark talks about the percentage spent on salaries  based on revenue.  Perhaps you would be so kind as to find a business that bases what they spend on the worker's payroll as a percentage of the value of the business.  There are businesses that pay management on the basis of their stock.

There have been a quote or two in the past about

[Richie the Rally Goat]

The NHL, NBA, NFL by collective bargaining all set the salary cap by revenue, not value of the teams. In articles about salaries Tony Clark talks about the percentage spent on salaries based on revenue. Perhaps you would be so kind as to find a business that bases what they spend on the worker's payroll as a percentage of the value of the business. There are businesses that pay management on the basis of their stock.

There have been a quote or two in the past about

the point is, we don’t know the revenue to know if the pegged rate of salary to revenue is actually what they say it is.

 

The valuation of the team is an indication of profitability. Profit is the difference between revenue and cost.... 5X value growth over cost growth indicates high profitability. If value rose at the same rate as cost, it’s probably not as profitable.

[old nurse]

 

the point is, we don’t know the revenue to know if the pegged rate of salary to revenue is actually what they say it is.

The valuation of the team is an indication of profitability. Profit is the difference between revenue and cost.... 5X value growth over cost growth indicates high profitability. If value rose at the same rate as cost, it’s probably not as profitable.

The valuation is a guess, not take it to the bank actual.. So you really don't know the value, either. The percentages bandied about really have no meaning. The Forbes guess at valuations are as good as their revenue guess. 

Warren Buffet was reported to think the value of a business is profit dived by the rate for long term T Bills.  Forbes guessed profit at 24 million. TBill rate and math would put the Twins value at 850 million with the best coupon rate I could find.  Clearly different than the Forbes fin valuation. The Miami Marlins as reported by statistica over the last 5 years has averaged 3 million a year in profit. Clearly valuations are not tied to profitability

 

[Mr. Brooks]

It's fair to ask then, how Dave St. Peter still has a job if he can't even manage to outpace league revenue growth with Target Field, compared to the monstrosity that was the Metrodome.

[Vanimal46]

I've been thinking about this lately as I fully believe there is plenty of money in baseball. Free agency is broken and needs a severe overhaul by the next CBA. If Machado and Harper, 2 of the most coveted/star-studded free agents since A-Rod can't sign a contract in a quick fashion it's over.

 

Some potential fixes for free agency and re-allocating the money:

 

- Implement a negotiating window from Jan 1 to Feb 28. The most painful part of the Offseason is the seemingly endless window where teams can negotiate and sign with players. Teams clearly have no incentive to sign players early, so let's create some urgency. Only allow players to sign with new teams for 2 months.

 

- Implement a salary floor/cap system. The luxury tax is already a fabricated salary cap that teams don't want to cross anymore. Make that the cap. Every team in baseball should be able to maintain a $100 million payroll floor. If they are financially not able to do it, move that team to a city that can generate better revenues.

 

- Start a pay for current performance program. In this risk-averse sport, no one wants to play for any decline years. Yet everyone blissfully ignores the amazing value players provide while under pre-arbitration contracts. Since the owners are no longer holding up their end of the bargain, the good players should get paid when they're currently doing well.

[Mike Sixel]

If you don't spend to the floor, left over money goes to the minor league rosters.... Or, less good, left over money goes to any player that made the 25 man during the year.