MLB Heading To A Lockout

[Silent George]

I love the idea that the 1500 players in MLB should shut up and be happy with their deal BECAUSE Max Scherzer got a record contract. "You there, 31 year old journeyman reliever who still hasn't reached free agency, what are you complaining about? Look how well off Bryce Harper has it!!!"

[fabiani12333]

Originally Posted by Stech36

These are all reasonable contracts. None of these players are better than average major leaguers… most are barely better then a minimum salary AAA player

Average players are more valuable than that. That's why most of them are getting paid a lot more next season.

Teams are bargain hunting each offseason for veteran players who should be paid more than they are.

[fabiani12333]

Originally Posted by anusinha

I assume they will do nothing until Late January and then strike a deal at midnight right before spring training games would be cancelled.

What incentive do the players have for showing up on time to spring training? They dont need the full spring training to get ready for the season -- many gripe about it being too long. Do they financially benefit from spring training games?

[Silent George]

Originally Posted by fabiani12333

What incentive do the players have for showing up on time to spring training? They dont need the full spring training to get ready for the season -- many gripe about it being too long. Do they financially benefit from spring training games?

players get per-diems. Some players, like those with "spring training invite" contracts do get paid, as a specific part of their contract, since they might get released 2 weeks in and have missed out on that time trying to impress someone else.

It's generally regarded that hitters don't need a full spring, just a couple of weeks - pitchers, specifically starting pitchers definitely do, to build up stamina.

[fabiani12333]

Originally Posted by Silent George

players get per-diems. Some players, like those with "spring training invite" contracts do get paid, as a specific part of their contract, since they might get released 2 weeks in and have missed out on that time trying to impress someone else.

It's generally regarded that hitters don't need a full spring, just a couple of weeks - pitchers, specifically starting pitchers definitely do, to build up stamina.

The 2020 "Summer Camp" was only 3 weeks -- July 3rd - July 23.

I was listening to a podcast discussion on the possibility of spring training being impacted by the CBA negotiations. One person snarkily mentioned that starting pitchers dont need a full spring training anymore because most go only 5 innings lol

[base set]

Originally Posted by Silent George

I love the idea that the 1500 players in MLB should shut up and be happy with their deal BECAUSE Max Scherzer got a record contract. "You there, 31 year old journeyman reliever who still hasn't reached free agency, what are you complaining about? Look how well off Bryce Harper has it!!!"

The irony is that Scherzer is one of the players’ negotiators I believe.

[pewe]

HBS professors propose a novel negotiation / lockout / strike model that preserves the season AND creates strong incentive for both sides to find a beneficial agreement, eventually: https://www.bostonglobe.com/2021/12/...seball-itself/


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[pewe]

Originally Posted by mfw13

That's for two reasons:

1) the owners refuse to open their books

2) Quite a few small-market owners are taking their revenue sharing/TV rights money and running straight to the bank while fielding non-competitive teams

So while some people may have some level of negative feelings towards the players, the owners are loathed and despised.

What does it mean to you to “open the books”? And how does it differ from the transparency the teams and MLB have provided on all costs and revenues associated with games, media, and licensing revenue?


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[pewe]

Originally Posted by fabiani12333

Here's the list of 2020 offseason free agents and their contract:
https://www.mlbtraderumors.com/2021-...rt_direction-1

Notice how there were many free agents who have a track record and provided good value last season but got paid relatively little:

Adam Duvall -- 1yr/5m
Hunter Renfroe 1yr/3.1m
Mark Melancon 1yr/3m
Alex Wood 1yr/3m
CJ Cron minor league deal
Tony Watson 1yr/1m
Brad Boxberger minor league
Tyler Naquin minor league
Brett Anderson 1yr/2.5m
Rich Hill 1yr/2.5m
Brad Miller 1yr/3.5m
Anthony Desclafani 1yr/6m

How do you measure “good value”? Is it WAR / $?


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[Lonewolf]

Originally Posted by mfw13

2) Quite a few small-market owners are taking their revenue sharing/TV rights money and running straight to the bank while fielding non-competitive teams

So while some people may have some level of negative feelings towards the players, the owners are loathed and despised.

Yup, this is a problem. Time for Orioles and Bucs fans to get some real teams...

[rman112]

Can teams still sign managers?

[SearchPatrol]

Originally Posted by mfw13

That's for two reasons:

1) the owners refuse to open their books


So while some people may have some level of negative feelings towards the players, the owners are loathed and despised.

Interesting so lets relate this to cards.

Fanatics and the Owners have a deal for the team name and logo on a card. Should the players get a percentage of this? Then what about the players deal with the Fanatics. Do the players get to keep all of this? Or should this be shared with the owners? That's the old 1 for you and 2 for me.

[rman112]

Originally Posted by Silent George

I love the idea that the 1500 players in MLB should shut up and be happy with their deal BECAUSE Max Scherzer got a record contract. "You there, 31 year old journeyman reliever who still hasn't reached free agency, what are you complaining about? Look how well off Bryce Harper has it!!!"

Minimum MLB salary is more than 10 times the average U.S. salary..

[erock28]

Originally Posted by rman112

Minimum MLB salary is more than 10 times the average U.S. salary..

Playing devils advocate, the person capable of being on a Major League roster possesses a skill set that 99.9999% of Americans do not have. Not saying I agree with the player's logic/position, but we're not talking about being a cashier...

[mfw13]

Originally Posted by pewe

What does it mean to you to “open the books”? And how does it differ from the transparency the teams and MLB have provided on all costs and revenues associated with games, media, and licensing revenue?


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For me, it means showing the players (and fans) a P&L statement from a neutral, 3rd party, accounting firm.

[pewe]

Originally Posted by mfw13

For me, it means showing the players (and fans) a P&L statement from a neutral, 3rd party, accounting firm.

Assuming the owners have a diversified business portfolio, at what level of business boundary would you think is a relevant P&L for this evaluation?


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[rman112]

Originally Posted by erock28

Playing devils advocate, the person capable of being on a Major League roster possesses a skill set that 99.9999% of Americans do not have. Not saying I agree with the player's logic/position, but we're not talking about being a cashier...

What % of people make even half of an MLB minimum salary?

[inaka]

Originally Posted by erock28

Playing devils advocate, the person capable of being on a Major League roster possesses a skill set that 99.9999% of Americans do not have. Not saying I agree with the player's logic/position, but we're not talking about being a cashier...

Joey Chestnut, the undisputed hot dog eating champion, is ranked #1 in the world overall in Major League Eating, has a skill set that 99.9999% of Americans do not have, and has more championships than any other professional athlete, including anyone currently in the MLB....so that must mean top MLB athlete are overpaid.

I mean, if we're going to play devils advocate and go off on tangents, let's really go off on tangents!

[pewe]

Originally Posted by rman112

What % of people make even half of an MLB minimum salary?

5% of US households earn 50% MLB minimum (approx $275k)… 1% earn about the minimum… certainly depends on your MSA, as some regions of the US will be higher or lower %

https://dqydj.com/average-median-top...e-percentiles/


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[mfw13]

Originally Posted by pewe

Assuming the owners have a diversified business portfolio, at what level of business boundary would you think is a relevant P&L for this evaluation?

Obviously, I'm not an accountant. But a baseball team is a pretty unique business with pretty distinct characteristics, so I doubt it would be that hard.

On the revenue side, you've got income from ticket sales, concessions, team stores, national TV rights, local TV rights, other digital media rights, local radio, etc.

On the expenses side, you have player salaries, other employee salaries, minor league operations, stadium operations/maintenance, possibly stadium debt payments, etc.

I can't imagine it would be too difficult for a competent accountant.

And more importantly, the players union will NEVER trust the owners unless they open their books.

The Atlanta Braves were spun off by Liberty Media into a separate publicly traded tracking stock (which presumably has to file financial reports with the SEC), and there are other publicly traded sports teams with similar operating structures to baseball teams, such as Manchester United (soccer).

[pewe]

Originally Posted by mfw13

Obviously, I'm not an accountant. But a baseball team is a pretty unique business with pretty distinct characteristics, so I doubt it would be that hard.

On the revenue side, you've got income from ticket sales, concessions, team stores, national TV rights, local TV rights, other digital media rights, local radio, etc.

On the expenses side, you have player salaries, other employee salaries, minor league operations, stadium operations/maintenance, possibly stadium debt payments, etc.

I can't imagine it would be too difficult for a competent accountant.

And more importantly, the players union will NEVER trust the owners unless they open their books.

The Atlanta Braves were spun off by Liberty Media into a separate publicly traded tracking stock (which presumably has to file financial reports with the SEC), and there are other publicly traded sports teams with similar operating structures to baseball teams, such as Manchester United (soccer).

You may be right, but to your point about the simplicity: I guess I’d be surprised if they don’t already have the level of visibility into all those components that any additional accuracy doesn’t really matter.

My sense is the players are more frustrated with this: https://www.forbes.com/sites/mikeoza...h=2946220ad5ef

Synthesis: team valuations have gone up more rapidly than revenue and salaries over the last decade.

Sadly for the players and teams, my best guess is most of this valuation inflection has nothing to do with a booming business that can be seen on the P&L. Instead it is due to prolonged declining / low interest rates during that time period.

…and with inflation and tightening monetary policy, that golden era of interest rate arbitrage may potentially come to an end.

Ie teams became valuable because of macroeconomic situational luck that is running out. Not because they were hiding some pot of gold from the players.

In fact, the players had the same access to this wealth creation had they been investing their salaries wisely. The present value of their salaries and guaranteed contracts soared, too. I hope some / many of them took advantage of their skyrocketing personal equity value to build some nice wealth.


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[anusinha]

Originally Posted by pewe

You may be right, but to you point about the simplicity: I guess I’d be surprised if they don’t already have the level of visibility into all those components that any additional accuracy doesn’t really matter.

My sense is the players are more frustrated with this: https://www.forbes.com/sites/mikeoza...h=2946220ad5ef

Synthesis: team valuations have gone up more rapidly than revenue and salaries over the last decade.

Sadly for the players and teams, my best guess is most of this valuation inflection has nothing to do with a booming business that can be seen on the P&L. Instead it is due to prolonged declining / low interest rates during that time period.

…and with inflation and tightening monetary policy, that golden era of interest rate arbitrage may potentially come to an end.

Ie teams became valuable because of macroeconomic situational luck that is running out. Not because they were hiding some pot of gold from the players.

In fact, the players had the same access to this wealth creation had they been investing their salaries wisely. The present value of their salaries and guaranteed contracts soared, too. I hope some / many of them took advantage of their skyrocketing personal equity value to build some nice wealth.


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It always struck me odd that players think they are entitled to a percentage value of the team. You dont pay your gardener or housekeeper based on the value of your house going up.

[rwperu34]

Originally Posted by Silent George

I mean, just looking at Adam Duvall, the first name on the list, his 2020 stats prorates over a full season would have been worth 11 million to fangraphs. His 2121 stats worth 19 million. That's for the going rate of WAR. Dude hit 38 homers and a gold glove. Baseball reference values him much higher.

The idea that numbers might look right is based upon what we expect to see in the current financial setup of baseball. So saying they are paid correctly based upon what we thing those players should get in the current environment is a false premise.

Fangraphs depth charts had Duvall worth 0.8 WAR in 523 PA on Opening Day. That's 0.95 per 625 PA. That caliber of player should not see full time play and should be a bench player or platoon partner. I'd say paying for half a win, give or take, would be appropriate. Fangraphs valued each win at $7.9mm and Duvall made $5mm, so he was paid for 0.63 WAR.

[rwperu34]

Originally Posted by pewe

You may be right, but to you point about the simplicity: I guess I’d be surprised if they don’t already have the level of visibility into all those components that any additional accuracy doesn’t really matter.

My sense is the players are more frustrated with this: https://www.forbes.com/sites/mikeoza...h=2946220ad5ef

Synthesis: team valuations have gone up more rapidly than revenue and salaries over the last decade.

Sadly for the players and teams, my best guess is most of this valuation inflection has nothing to do with a booming business that can be seen on the P&L. Instead it is due to prolonged declining / low interest rates during that time period.

…and with inflation and tightening monetary policy, that golden era of interest rate arbitrage may potentially come to an end.

Ie teams became valuable because of macroeconomic situational luck that is running out. Not because they were hiding some pot of gold from the players.

In fact, the players had the same access to this wealth creation had they been investing their salaries wisely. The present value of their salaries and guaranteed contracts soared, too. I hope some / many of them took advantage of their skyrocketing personal equity value to build some nice wealth.


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Ding ding ding.

I don't see low interest rates going away any time soon though. Even if they did, I don't see how that would affect player salaries since they are tied to revenue and not franchise value.

[fulltritty]

Originally Posted by rman112

Can teams still sign managers?

I believe so. I was reading an article the other day about Brian Cashman announcing new coaching staff for the Yankees during the lockout.