Is it happening? MLB forming an economic reform committee.

[farmerguychris]

I'll believe progress is being made when I see some.  As far as we know this group may meet to say nothing needs to change despite evidence to the contrary in many fans view.

I think something has to change - you cant have one team fielding a team with 5X the payroll of another - the long term potential of this league will suffer if that is considered acceptable.  I hope they look to the NFL as a league with the parity they should strive for - I know there are a ton of differences, but hopefully they work towards that over time.  Would love to see a season start and any team in the league actually has a shot to win it all.

[DJL44]

11 minutes ago, farmerguychris said:

I hope they look to the NFL as a league with the parity they should strive for

The NFL shares all the TV money.

[4twinsJA]

Bally going bankrupt is too good of an opportunity for MLB to pass up. Although, Bally is going bankrupt, is it that great an opportunity. Maybe MLB needs to really look at the product they are producing, to make it more attractive to more people.

[farmerguychris]

1 hour ago, DJL44 said:

The NFL shares all the TV money.

yup

[Trov]

On 2/20/2023 at 8:23 AM, Squirrel said:

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.

I fully agree the players should look into it, similar to NBA and NFL then the players and owners can work together to grow the game.  However, it has been how many decades and the two sides still fight for every dollar for themselves.  They are both always trying to win the CBA and not figuring out what might be best for both sides.  The players do not trust the owners, and in last CBA there were talks about wanting to pull in non-baseball revenue into the talks.  Like some reports were players were claiming they should get money from property owned by the owners around the stadium.  The players almost always fight against everything the league does.  

Maybe if they could actually stop making the process a fight, but think about what is good for the game is good for both.  I am not blaming just the players, as the owners have been terrible to their players for years, and were making tons of money and barely paying the players their fare share. 

[Cris E]

On 2/20/2023 at 12:07 PM, Fire Dan Gladden said:

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...
 

Management will choose Option 1 every time. Remember Bill Veeck's wisdom: it's not the high cost of talent that gets you, it's the high cost of mediocrity.  And since everyone needs scrubs at one time or another, they better be cheap since there are so many of them. No one hates paying for the superstars because they produce, but when you need a temporary #5 starter for a month or two you want to be paying garbage wages so you can cut him when the crisis passes. For example the Twins had 14 guys start games for them last year and they want the guys at the back of that line to be making the bus fare they're talent is worth, not $5m.

[Cris E]

The trouble with this opportunity is that it's not a clean sweep. There are still a bunch of teams with really good deals that don't go through Bally that don't need to be broken up.  If you want to melt down the model and evenly distribute the money it somehow has to encompass those cases where the team owns the network or whatever. And current rosters and budgets are based on current revenue projections, so they'll only be changed over time.

But then the real trouble starts. Once you start getting away from concrete contracts from the local markets and move towards hypothetical shares of a national pool you lose the basis for the economics that have underlain baseball for 150 years. Even without the contracts that big money teams have already signed you're not going to get a chance to level the field.  The valuations for the Mets and Dodgers and Cubs and so forth are largely derived from revenues, and TV money is a huge part of that. You can't just put the Brewers and Yankees on the same budget without somehow compensating the Steinbrenners for a very material loss of value.

It's a tough nut to crack, and one that I don't think enough large dollar teams have the motivation to  solve. There are 14 MLB teams broadcast by Bally Sports: Angels, Braves, Brewers, Cardinals, Diamondbacks, Guardians, Marlins, Padres, Rangers, Rays, Reds, Royals, Tigers, and Twins.  Eyeballing it they mostly seem to be from the bottom two thirds of team revenue, with maybe Angels, Braves and Rangers in the top third. Not sure you'll get big money buy-in without at least one member of the country club set feeling the heat.

[DJL44]

1 hour ago, Cris E said:

It's a tough nut to crack, and one that I don't think enough large dollar teams have the motivation to  solve. There are 14 MLB teams broadcast by Bally Sports: Angels, Braves, Brewers, Cardinals, Diamondbacks, Guardians, Marlins, Padres, Rangers, Rays, Reds, Royals, Tigers, and Twins.  Eyeballing it they mostly seem to be from the bottom two thirds of team revenue, with maybe Angels, Braves and Rangers in the top third. Not sure you'll get big money buy-in without at least one member of the country club set feeling the heat.

The Cubs are broadcast by a joint venture between the team and Sinclair so they are probably also affected. AT&T is rumored to want out of their contracts - that adds Colorado, Houston, Pittsburgh and Seattle. The Yankees and Blue Jays already control their streaming rights because they own their RSN. MASN is a joint venture between the Orioles and Nationals which brings us up to 23 teams where MLB could negotiate control.

I think everyone else deals with Comcast or a joint venture with Comcast.

[DJL44]

1 hour ago, Cris E said:

Once you start getting away from concrete contracts from the local markets and move towards hypothetical shares of a national pool you lose the basis for the economics that have underlain baseball for 150 years. Even without the contracts that big money teams have already signed you're not going to get a chance to level the field.  The valuations for the Mets and Dodgers and Cubs and so forth are largely derived from revenues, and TV money is a huge part of that. You can't just put the Brewers and Yankees on the same budget without somehow compensating the Steinbrenners for a very material loss of value.

They're sharing 48% of revenue now. Conveniently, that's about the same revenue provided by TV broadcasting. They could decide to pool all the TV revenue and not pool the other revenue sources and get to nearly the same revenue sharing percentage.

[JD-TWINS]

On 2/19/2023 at 1:51 PM, 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.

Rays - Gurdians ……..Washington & Cincinnati are not great……probably 3-4 others as well, all in the $75 million or less group. Gotta be able to afford some competitive group as an owner! The Rays play in what is probably the most competitive division in the game year to year. They get it and seems others should be able to learn. Orioles are coming around!!

I get why the owners of the Red Sox & Yankees don’t want to magically have Kansas City be their equal in revenues!! I do think a cap (in 2023 $$$) could be $100M floor & $250M ceiling. The Mets Scherzer & Verlander make ($86M) more combined than 7 or 8 teams…….I’m into Capitalism, but that’s nuts.

No “tax” is going to slow Cohen.

$100M floor - $250M ceiling doesn’t seem to be a lot better but it cuts the current top to bottom spread in half……….Mets/Nationals.

[Otaknam]

On 2/19/2023 at 11:51 AM, 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.

It has to be both, the over spending by the Mets and others and bargain basement spending by others. The big markets in NY, Boston, LA, and other places have such lucrative TV contracts that signing players to exorbitant salaries for ten years, when they may only get six years of production, doesn’t really impact their financials going forward. Other smaller markets can’t afford that, creating a competitive disparity. Football solved that with TV revenue sharing. I don’t see the big boys going along with that in baseball. 

[Otaknam]

2 minutes ago, Otaknam said:

It has to be both, the over spending by the Mets and others and bargain basement spending by others. The big markets in NY, Boston, LA, and other places have such lucrative TV contracts that signing players to exorbitant salaries for ten years, when they may only get six years of production, doesn’t really impact their financials going forward. Other smaller markets can’t afford that, creating a competitive disparity. Football solved that with TV revenue sharing. I don’t see the big boys going along with that in baseball. 

 

2 minutes ago, Otaknam said:

It has to be both, the over spending by the Mets and others and bargain basement spending by others. The big markets in NY, Boston, LA, and other places have such lucrative TV contracts that signing players to exorbitant salaries for ten years, when they may only get six years of production, doesn’t really impact their financials going forward. Other smaller markets can’t afford that, creating a competitive disparity. Football solved that with TV revenue sharing. I don’t see the big boys going along with that in baseball. 

Bob Costas wrote a book years ago on the topic of MLB revenue sharing, with both a spending maximum and minimum for each team. It seems like the MLBPA would support a system like that since most of those players don’t get $200 + million contracts, only the elite. There is plenty of money to go around but greed always enters into the discussion when you pit millionaires against billionaires. 

[Richie the Rally Goat]

43 minutes ago, Otaknam said:

It has to be both, the over spending by the Mets and others and bargain basement spending by others. The big markets in NY, Boston, LA, and other places have such lucrative TV contracts that signing players to exorbitant salaries for ten years, when they may only get six years of production, doesn’t really impact their financials going forward. Other smaller markets can’t afford that, creating a competitive disparity. Football solved that with TV revenue sharing. I don’t see the big boys going along with that in baseball. 

10 billion dollars (the last reported revenue number I saw for MLB wide) is 10 thousand millions. We don’t know what happens inside of that 10 billion in revenue to have a clear picture of their cost of goods sold to know if they can or can’t afford what, but total opening MLB payroll last year was 3.5 billion.

10-3.5= 6.5 billion (6,500 million) gross profit less overhead (building operations, management salaries, etc) plus team revenue (the revenue teams don’t share like apparel and food sales) makes me think that even the poorest of the poor team can afford to spend more than they do.

Capitalism went out the door for MLB in the 1960s, the disparity amongst teams is self inflicted, and if the MLB got out of its own way to a actually deliver its products to fans in accessible modes, how much more could they earn? How many more fans could they attract if it didn’t cost $1,500 per year to watch baseball games only if you live in certain areas and if you live in others it costs $500 per year, and if you live in some areas there’s no amount of money you can spend. It’s nuts!

[Mike Sixel]

I don't trust either side to do well at fixing the game. Sixty percent of teams don't know if they are getting paid from cable this year!