Is it happening? MLB forming an economic reform committee.

[Brock Beauchamp]

Oooh, this is exciting. After years of sitting on their hands while the game crumbled, MLB has been actively pursuing improvements to the game and I have to give them credit for making (mostly) right decisions. First, they ended the lockout in a relatively timely fashion. I could have gone with less drama but teams played 162, which I was doubtful would happen. I'm a big fan of most of the new rules changes, particularly the pitch clock.

A couple of months ago, they hired a former RSN executive to evaluate blackouts and how to end them. When Diamond showed signs of going belly-up, Manfred said MLB is open to acquiring the rights. All of this is good. It's long overdue, but it's good.

And now there's this bombshell. As always, subscribe to The Athletic, they're great. But for those who don't, I'll pick out a couple of nuggets.

https://theathletic.com/4226341/2023/02/19/mlb-economic-reform-committee-mets-bally/

Quote

In the wake of Steve Cohen’s spending and the financial turmoil at Bally regional sports networks, Major League Baseball has started an “economic reform committee.” Less than a year after MLB and the Players Association came to an agreement to end the 2021-22 lockout, the committee’s formation emphasizes that some MLB owners are unhappy enough that they want to discuss major change.

Okay, so this scared me a bit. The problem isn't that Steve Cohen spends so much, which has traditionally been how MLB approached this issue. They want to reel in the top spenders but do nothing for the bottom revenue teams, nor punish teams that simply refuse to spend. Not great.

But...

Quote

“When you start thinking about the opportunities in terms of a more national (broadcasting) product, it did lead into a conversation about our disparity issues on the revenue side,” Manfred said. “We have businesses that are literally not similar in terms of the overall revenue that they’re generating. And to the extent that you could find a new distribution model that actually helped on that disparity side, that would be the daily double. So people are having conversations that haven’t been had in baseball, and it’s really been owners talking to owners, which is a good thing.”

For the first time in a long time, I'm truly excited about the future of baseball instead of bracing myself against just suffering through the sport's refusal to address its long-standing problems.

[Steve71]

Great to hear that someone in MLB recognizes their game is in trouble with these inequities.  Whether they actually reach an agreement amongst the owners and then can sell it to the MLBPA is another thing all together.  I guess I will believe it when I see it, but this is at least encouraging.

[Jerr]

🤞

[Brock Beauchamp]

2 minutes ago, Steve71 said:

Great to hear that someone in MLB recognizes their game is in trouble with these inequities.  Whether they actually reach an agreement amongst the owners and then can sell it to the MLBPA is another thing all together.  I guess I will believe it when I see it, but this is at least encouraging.

I don't think owners need to clear revenue sharing with the MLBPA, I think they can make that change unilaterally.

Someone please correct me if I'm wrong about that.

[Bigfork Twins Guy]

I like a lot of things that I am hearing... speeding the game up, possibly opening up blackouts so we can see our home teams on MLB network if/when BSN goes under, and now the possibility of ownership agreeing on some form of revenue sharing.  Things are definitely looking up for MLB.  They will come Ray, they most definitely will come!

[DJL44]

33 minutes ago, Bigfork Twins Guy said:

I like a lot of things that I am hearing... speeding the game up, possibly opening up blackouts so we can see our home teams on MLB network if/when BSN goes under, and now the possibility of ownership agreeing on some form of revenue sharing.  Things are definitely looking up for MLB.  They will come Ray, they most definitely will come!

There is already extensive revenue sharing in MLB (48% of the revenue is pooled) but the incentives are all wrong. It would be great if they agreed to share all the TV revenue and let each team keep their local ticket, concessions and parking revenue.

[Richie the Rally Goat]

Related, The Athletic has a great story on what the potential Diamond Group/Bally RSN bankruptcy means for the three sports: https://theathletic.com/4219468/2023/02/17/bally-sports-rsn-nba-nhl-mlb-broadcasts/?access_token=12044139&redirected=1

The takeaway quote: “I hope we get to the point where on the digital side, when you go to MLB.TV, you can buy whatever the heck you want,” Manfred said Feb. 16. “You can buy the out-of-market package. You can buy the local games, you can buy two sets of local games — whatever you want. I mean, that is, to me, the definition of what is going to be a valuable digital offering going forward.”

 

in the article, it briefly mentions MLB’s plan B if Diamond does file.

I think that the potential Bankruptcy of Diamond is greatly accelerating the talks of MLB changing the financials as a whole, because the owners are in a pickle.

[Richie the Rally Goat]

3 hours ago, Brock Beauchamp said:

Oooh, this is exciting. After years of sitting on their hands while the game crumbled, MLB has been actively pursuing improvements to the game and I have to give them credit for making (mostly) right decisions. First, they ended the lockout in a relatively timely fashion. I could have gone with less drama but teams played 162, which I was doubtful would happen. I'm a big fan of most of the new rules changes, particularly the pitch clock.

A couple of months ago, they hired a former RSN executive to evaluate blackouts and how to end them. When Diamond showed signs of going belly-up, Manfred said MLB is open to acquiring the rights. All of this is good. It's long overdue, but it's good.

And now there's this bombshell. As always, subscribe to The Athletic, they're great. But for those who don't, I'll pick out a couple of nuggets.

https://theathletic.com/4226341/2023/02/19/mlb-economic-reform-committee-mets-bally/

Okay, so this scared me a bit. The problem isn't that Steve Cohen spends so much, which has traditionally been how MLB approached this issue. They want to reel in the top spenders but do nothing for the bottom revenue teams, nor punish teams that simply refuse to spend. Not great.

But...

For the first time in a long time, I'm truly excited about the future of baseball instead of bracing myself against just suffering through the sport's refusal to address its long-standing problems.

Agreed that revenue sharing probably doesn’t need MLBPA approval, but I have to believe a Salary Cap would. I imagine the only way the PA agrees to a cap, is if it comes with a floor (as a starting point).

agreed, the issue isn’t the Mets spending Monopoly money, it’s the Rays (and Cleveland, etc) spending so little.

[Brock Beauchamp]

9 minutes ago, Richie the Rally Goat said:

Agreed that revenue sharing probably doesn’t need MLBPA approval, but I have to believe a Salary Cap would. I imagine the only way the PA agrees to a cap, is if it comes with a floor (as a starting point).

agreed, the issue isn’t the Mets spending Monopoly money, it’s the Rays (and Cleveland, etc) spending so little.

A salary cap absolutely requires PA buy-in because it involves player salary. How the owners distribute their own funds may not be within the PA’s purview, though.

Ultimately, I think the MLBPA would agree to a cap if it came with a *real* floor. Not the $90m or whatever owners were trying to float a year ago but something like $140-150m. You have to capture 33-50% of teams with the new floor or I think the MLBPA tells owners to piss off. 

[USNMCPO]

58 minutes ago, Brock Beauchamp said:

A salary cap absolutely requires PA buy-in because it involves player salary. How the owners distribute their own funds may not be within the PA’s purview, though.

Ultimately, I think the MLBPA would agree to a cap if it came with a *real* floor. Not the $90m or whatever owners were trying to float a year ago but something like $140-150m. You have to capture 33-50% of teams with the new floor or I think the MLBPA tells owners to piss off. 

I disagree. The MLBPA and MLB have had an extremely vitriolic relationship for decades. Any of these changes that would have an affect on players earnings will be hard as possible to reach consensus.

[Fire Dan Gladden]

32 minutes ago, USNMCPO said:

I disagree. The MLBPA and MLB have had an extremely vitriolic relationship for decades. Any of these changes that would have an affect on players earnings will be hard as possible to reach consensus.

It will be hard, but not because of the players.

For all the discussion of FA, most players make (relatively speaking) very little.  Look at the Twins payroll to see the salary distributions.

I believe that if they instituted a salary cap/floor situation where the total dollars was still being spent and the revenue sharing between the players/owners stayed fluid, this could work.  The biggest issue (IMO) is that the Dodgers do not want to pay for the Marlins.  Each individual team has it's own revenue structure.  The rich do not want to pay for the poor.  

[Brock Beauchamp]

1 hour ago, USNMCPO said:

I disagree. The MLBPA and MLB have had an extremely vitriolic relationship for decades. Any of these changes that would have an affect on players earnings will be hard as possible to reach consensus.

The biggest reason the PA and owners have had such a vitriolic relationship is because the players keep losing ground in comparison to other sports. Lock salary caps/floors as a percentage of revenue as they do in other sports and I suspect the PA comes around.

The PA simply wants to make money so offer them guaranteed money. 

[dxpavelka]

At the end of the day the problem that will end up getting addressed is that you and I don't spend enough.

[wsnydes]

This seems far too logical for MLB to consider so I'll still be waiting to see it before I believe it, but this is certainly a positive sign if they follow through with it.

As always, when money is at stake, real change starts to be discussed.

[Beast]

Lol.  Manfreds comments.  What a joke.

I mean, no ****, Manfred.  Like this is something they’ve just figured out.  Fans have been bitching about it for 30 years.  You might as well fold 3/4 of the teams in the league at this point.  There is less parity in the MLB right now then any sport in history.

You have teams on the high end spending 5x the teams in the low end.  That is just absurd.  

It’s like a top tenured scientist coming out after decades of studies concluding the sky is blue.

Dollars to donuts says the reason for finally doing this is because the large market teams he’s carried the water for want it.  Sure as heck isn’t for Pirates fans.  It’s getting so bad Yankees fans are even tired of it.

[Trov]

19 hours ago, Brock Beauchamp said:

A salary cap absolutely requires PA buy-in because it involves player salary. How the owners distribute their own funds may not be within the PA’s purview, though.

Ultimately, I think the MLBPA would agree to a cap if it came with a *real* floor. Not the $90m or whatever owners were trying to float a year ago but something like $140-150m. You have to capture 33-50% of teams with the new floor or I think the MLBPA tells owners to piss off. 

Players will never agree to a cap.  They have stood on that since FA became a thing.  I have long said if they were looking out for the mid level players, they would agree to a cap with a floor, but the union is really not looking out for the mid level guys.  The minimum guys will always get the minimum.  The top paid guys will always make huge amounts.  With the floor the mid-level guys and vets will get more contracts.  Right now, teams save money with paying minimum guys or cheap cost controlled guys.  They are not as good as the vets maybe, but the vets are demanding much more money.  The teams would rather scrap the mid tier guys and either go big, or cheap. 

The only way you could go to a floor though is by having full sharing of media money and build the cap like in all other sports directly to the money being brought into the league.  Then the floor is a share of that and the cap is a share of that.  The issue is baseball has never done it that way, and unlikely to make that shift anytime soon.

[Trov]

I would love to see the MLB streaming for all local games.  The main question I would have is would TV still have home guys or for all the teams that were connected to Bally get brought into MLB broadcasting and have neutral single broadcast team? Personally, I like the homer team style, but if all games were being broadcasted by MLB it would make little sense to waste money on two broadcast teams. 

[Squirrel]

2 minutes ago, Trov said:

Players will never agree to a cap.  They have stood on that since FA became a thing.  I have long said if they were looking out for the mid level players, they would agree to a cap with a floor, but the union is really not looking out for the mid level guys.  The minimum guys will always get the minimum.  The top paid guys will always make huge amounts.  With the floor the mid-level guys and vets will get more contracts.  Right now, teams save money with paying minimum guys or cheap cost controlled guys.  They are not as good as the vets maybe, but the vets are demanding much more money.  The teams would rather scrap the mid tier guys and either go big, or cheap. 

The only way you could go to a floor though is by having full sharing of media money and build the cap like in all other sports directly to the money being brought into the league.  Then the floor is a share of that and the cap is a share of that.  The issue is baseball has never done it that way, and unlikely to make that shift anytime soon.

They wouldn’t agree to a cap before because the owners weren’t interested in a real, competitive floor and better revenue sharing. I think both parties need to give on this, but if the owners won’t, neither will the players.

[Brock Beauchamp]

6 minutes ago, Trov said:

Players will never agree to a cap.  They have stood on that since FA became a thing.

Because the caps that have been offered benefit only the owners. Again, the players want to make money. If you guarantee them money, they'll accept all sorts of things they've shut down in the past.

This can't be looked through the lens of "players hate salary caps" simply because they've rejected caps in the past. Look at the actual offers and what they would have done to player salaries. That's why players rejected previous caps.

[DJL44]

Salary caps would not incentivize Oakland or Pittsburgh to spend more money. They would only limit the Mets and Dodgers from spending more money.

MLB should have a $1M minimum salary already.

[roger]

As I followed the Correa saga and learning what the Mets were spending I kept thinking Steve Cohn is the a……. that is going to destroy baseball.  Was I wrong?  Are his actions and the Mets spending going to end up saving baseball?

[Brock Beauchamp]

Just now, roger said:

As I followed the Correa saga and learning what the Mets were spending I kept thinking Steve Cohn is the a……. that is going to destroy baseball.  Was I wrong?  Are his actions and the Mets spending going to end up saving baseball?

Yeah, frankly, I think you were wrong. What baseball needs is someone who simply doesn't care about the informal "rules" that owners have colluded over in the past. Someone who blows right past salary thresholds and exposes the BS the owners have been pulling for years (ie. using salary thresholds as soft caps but not doing anything to actually fix the much larger problem of low-revenue and low-spending teams).

Remember that MLB owners did not want to allow Steve Cohen to buy a franchise and this is exactly why they didn't want him in baseball. Which means we should all be supporting the hell out of Steve Cohen for being a madman. If the owners don't want something, fans should probably feel the opposite.

[DJL44]

1 hour ago, Trov said:

I would love to see the MLB streaming for all local games.  The main question I would have is would TV still have home guys or for all the teams that were connected to Bally get brought into MLB broadcasting and have neutral single broadcast team? Personally, I like the homer team style, but if all games were being broadcasted by MLB it would make little sense to waste money on two broadcast teams. 

I agree it would make little sense to have a road announcer crew for TV but they still do it for radio and there's even less money at stake there. Maybe you get a choice between the home TV crew or your team's radio feed.

[Brock Beauchamp]

1 hour ago, DJL44 said:

Salary caps would not incentivize Oakland or Pittsburgh to spend more money. They would only limit the Mets and Dodgers from spending more money.

MLB should have a $1M minimum salary already.

If we're just throwing out wild ideas how to make baseball way better, here's another one:

1. Change how arbitration works and update it to use the same metrics teams use internally to evaluate players (on a surface level, WAR).

2. Players are guaranteed a $1m salary and arbitration begins in player year two. By player year five, they're making 100% of what a free agent makes (25%, 50%, 75%, 100%).

Change that dynamic and it completely flips super-sized $300m guaranteed contracts on their heads. Players no longer need to push so hard at maximizing free agency in CBA negotiations because good players are hitting free agency with $100m earnings.

WHICH IS HOW IT SHOULD WORK

[gman]

I am more interested in how they would LOWER the cost of going to a game. Never going to happen.

[DJL44]

15 minutes ago, gman said:

I am more interested in how they would LOWER the cost of going to a game. Never going to happen.

If they get to keep all of their own ticket revenue they will be incentivized to fill the stands. Right now if a team receives revenue sharing they lose some money for every ticket they sell.

[wsnydes]

41 minutes ago, Brock Beauchamp said:

If we're just throwing out wild ideas how to make baseball way better, here's another one:

1. Change how arbitration works and update it to use the same metrics teams use internally to evaluate players (on a surface level, WAR).

2. Players are guaranteed a $1m salary and arbitration begins in player year two. By player year five, they're making 100% of what a free agent makes (25%, 50%, 75%, 100%).

Change that dynamic and it completely flips super-sized $300m guaranteed contracts on their heads. Players no longer need to push so hard at maximizing free agency in CBA negotiations because good players are hitting free agency with $100m earnings.

WHICH IS HOW IT SHOULD WORK

I like this approach, but I do wonder what this would do for player retention.  It's obviously just one piece to that conversation, but I'd be curious to know what the impacts that would have on a team's ability to develop and then keep a player that they've invested in.  

[Brock Beauchamp]

2 minutes ago, wsnydes said:

I like this approach, but I do wonder what this would do for player retention.  It's obviously just one piece to that conversation, but I'd be curious to know what the impacts that would have on a team's ability to develop and then keep a player that they've invested in.  

With better revenue sharing and a salary floor, it shouldn't be a huge issue if the team wants to keep those players. And it drastically alters how teams approach free agency, lengths of contracts, and a bunch of other things that currently favor the likes of the Yankees and Dodgers.

[wsnydes]

52 minutes ago, Brock Beauchamp said:

With better revenue sharing and a salary floor, it shouldn't be a huge issue if the team wants to keep those players. And it drastically alters how teams approach free agency, lengths of contracts, and a bunch of other things that currently favor the likes of the Yankees and Dodgers.

Right.  Part of that discussion is how teams adjust to that sort of structure.  Do the teams that currently spend little actually try to keep more of their players in that scenario?  Or do they find another way to scrimp on payroll anyway.  Since that structure takes some control away from the team's ability to budget in a long term way, how do they react to the potential of having a sudden and sizeable spike in year to year payroll based on their prospects coming up and performing well.  Obviously the benefit is that they're playing well and that lends to a better team, but do the current cheap teams just find another way to continue to be cheap?  That certainly affects a young team more than an average age or veteran team, but that's often how the cheap teams remain cheap.

[Fire Dan Gladden]

1 hour ago, Brock Beauchamp said:

With better revenue sharing and a salary floor, it shouldn't be a huge issue if the team wants to keep those players. And it drastically alters how teams approach free agency, lengths of contracts, and a bunch of other things that currently favor the likes of the Yankees and Dodgers.

To add on this comment...

Look at other sports like the NBA and NFL.  Instead of salary driving all the top end players to certain markets, every market has a chance to keep and build their star players.  If the salary choices are relatively similar, teams will be more able to retain players through team culture and such.  How else can other sports have cities like Green Bay, Buffalo, and San Antonio be successful?

Also, imagine you went to the MLBPA and gave them two options:

1) Player A makes $45m, Player B, C, D, E each make $2m
2) Player A makes $25m, Player B & C make $10m, Player D & E make $5m

Which option do you think the MLBPA would choose?  The total outlay is the same...