I don’t know how or why to fix the second part. Free market, nobody forced anyone to do that deal.
Offseason rumors
- Thread starter opes
- Start date
- Status
This system so heavily favors the owners they WILL never fix it. Then they will cry about the second part. There is no bunch of more entitled snowflakes than Sport Owners.
I wonder this too. Yet I also wonder what percentage of all contracts "work out". I have a gut feel that, however the characterization might be defined, less than half of all contracts work out as envisioned. So in the end, shouldn't more triggers be pulled - if for no other reason than to make a team more competitive in the short term - with all the appropriate caveats re. longer term fiscal health of the club being taken into account. I'm not talkin helter skelter pedal to the metal approach.
And also athletes are paid too much - and paid asymmetrically justified by some kind of trickle down theory.
I've written about it before, and my numbers are now wildly out of date, but at least through the first decade of the 2000s the MLB was a fairly rational economic market. Generally speaking, rational economic actors will only spend money if they receive at least as much increased revenue as increased spending (i.e. marginal revenue=marginal benefit). In the MLB, marginal revenue is pretty firmly tied to wins; each additional win earns more revenue, particularly as you get to the playoff level. The problem is that wins up until the low 70s are very low value; they don't move the revenue needle that much. So even starting with 48 "freebie wins" (48 wins being replacement level), you've got another 25 or so wins that, ceteris paribus, are worth a very small fraction of the "market value" of a win. Even the next bracket of wins, from low 70s to low 80s (basically the "borderline playoff contention") isn't worth all that much and will be worth well below that "market value". It's really just the mid 80s to mid 90s where you have high marginal revenue wins that make economic sense with the free agent "market value" of a win. Now, not all revenue is captured by these marginal factors, but much more is covered in the MLB than in other leagues. Only about 25-33% of revenue in the MLB doesn't really fit into a marginal revenue calculus, and that's the national stuff (TV rights, sponsorships, and non-team store merchandise), otherwise most everything is pretty well captured by that analysis (ticket sales, local media rights, local sponsorships, concessions, etc). But because there are just so many games, even if you took each team's share (it looks to be around $60M now), you'd run out of the entire thing just assigning $1M per win for the first 60 wins. Even if you throw out the first 48 and say you're only looking at non-replacement wins, even then you're only budging up the value of those low value wins from close to 0, to now being $2M. And of course, that's just for illustration purposes, that's not how value would ever be calculated by a rational actor.
This feels wrong, especially in leagues where there are salary caps and competitive balance tax penalties etc. I also think players like Betts, Otahni and Trout (as well as plenty from other sports - like LeBron James or Patrick Mahomes) would take issue with your statement.
More to the point, how can you make the statement that athletes are "paid too much" when you haven't presented their financial output? How can one make a statement like this when they don't have a full economic picture?
Edit: to add an example, what if Ohtani's economic value over the life of his contract is around ~$1B? Is that still too much? What if its ~$2B? How does one determine that athletes are overpaid?
Not only that but the system is so slanted that it has compelled star players like Acuna, Albies to take horrible deals because they didn’t want to assume the risk of waiting 6 years to hit FA. Now, the best player in baseball is going to be paid Yoshida money during his prime earning years. Braves may ultimately sign him to a career extension but they’ll be getting a nice discount to do so.
Young stars in the NBA and NFL get paid much more quickly than in MLB.
Dunno, not my job to try to fix, but one immediate (very rough) idea would be that if you have a 2 WAR season, you immediately become arb-eligible. Also teams should only have the rights to players for a fixed amount of years from when they're initially signed, not a fixed amount of time after they make it to MLB. That would eliminate at least some service manipulation.
Anyway, not the right thread. I started a thread with that same Shin-Soo Choo example here in 2018, maybe there might be a better place to continue this:
https://sonsofsamhorn.net/index.php?threads/baseball-is-broken-off-the-field-labor-relations-etc.22257
It seems to be fixing itself at the moment, with those four big Boras clients.
How do you figure? The Braves, in an ideal situation with arguably the best roster (and inarguably the most cost effective one), had an operating profit of 12% last year, and look to have been about the same level prior. That's good, nothing remarkable...and again, that's one of the best situations in the MLB. Baseball teams are ultimately still just a business, and they're not a particularly notable one in terms of proftability.
From a societal perspective, paying athletes millions while teachers go paycheck to paycheck is insane. It creates a very perverse set of incentives.
Also: There are 8.1 billion people on the planet, and only 780 are good enough to play major league baseball.
See @IpswichSox post below. Setting aside the value to society argument, the reality is that sustainable MLB level skills are very scarce.
That any of these people can produce a consistent level of output hitting or throwing baseball is a miracle of sorts and the market has spoken. Even if teachers are are more important to the fabric of civilization, we are more willing to pay for dingers and strikeouts than we are for academics. The filtering process and all of the costs for the people who attempt to play professional baseball need to be accounted for as well.
Its all well and good to make a few millions in your twenties but what happens to the majority of players who are out of the game by age 30? They still need to make a living and for most players the pursuit seems to be a singular focus so its not like they all just coast on the follow. To be clear, I am not suggesting people feel sorry for pro ballplayers. But if you think of a teaching career in terms of time its many multiples of a pro athlete so its probably a mistake to simply compare annual paychecks. Teachers should get paid a lot more too btw.
A 12% "Operating Profit" while the tax payers are funding their stadium, are you fucking kidding me? Do you need how many dictators Exxon Mobile needs to juice to squeeze by a 13% margin?
12% is insanely good especially since it is not looking at the value of the underline asset the team value growth. These team are making obscene money
Very Perverse? As opposed to the billionaires raking in billions then claiming poverty and stealing tax revenue away from municipalities that they can give to schools?
,
The problem lies in the supply of elite athletes who can play in MLB vs the demand for more socially beneficial endeavors. The obvious solution is to raise taxes on people rich enough to own sports teams and then use it to fund programs with higher social utility than pro sports.
Problem solved.
Hey, we agree on this!
The problem lies in the supply of elite athletes who can play in MLB vs the demand for more socially beneficial endeavors. The obvious solution is to raise taxes on people rich enough to own sports teams and then use it to fund programs with higher social utility than pro sports.
Problem solved.
I would say you're raising a moral issue, and it's clearly not limited to sports, but extends to all forms of entertainment. Tom Cruise got paid $100 million for Top Gun: Maverick, for example.
You're missing the main returns from owning a team if you're only looking at OP margin. The main returns are increase in asset values, which is of course why very few teams are owned by public companies (i.e., only the Braves) and everyone else is owned by individuals or funds that ultimately look to exit routinely.
For example the Red Sox have generated conservatively a 7-8x return for FSG over the past 20 years. That might not seem that great, but you take into account that probably ~60% of the capital is debt and suddenly you have a ~17x return on equity. Pretty serious business. Now of course FSG has used the Sox as a leaping board to buy all sorts of other businesses rather than fully exiting, but its still an incredibly profitable venture.
Yes. But please note my use of the phrase "and also" in my post above, meaning "and" (in addition to) "also" (follows a related point.)
(And no, municipalities should not be paying a monopolistic sport to build stadiums.)
Athletes aren't the example I would choose: athletes at least do something useful. They are useful in the same sense that artists are useful, in the sense of providing entertainment and meaning.
As a society, we allocate an awful lot of the social product to people to do things that are actively harmful, like figuring out loopholes in environmental regulations or marketing painkillers known to be dangerously addictive. Or even, like, SEO.
Compared to that, giving some dude $23m a year because he plays shortstop well might be a suboptimal allocation of resources, but it's not, like, a problem. A just society would still have shortstops.
As a society, we allocate an awful lot of the social product to people to do things that are actively harmful, like figuring out loopholes in environmental regulations or marketing painkillers known to be dangerously addictive. Or even, like, SEO.
Compared to that, giving some dude $23m a year because he plays shortstop well might be a suboptimal allocation of resources, but it's not, like, a problem. A just society would still have shortstops.
Players generate the value. The owners don't generally don't infuse capital in the product and when they do they see ridiculous return in the value of the asset. Complaining about the players being paid is complaining about the Free Market. Owners get grants from the state and see ridiculous riches. Sounds like something I can't quite my finger on.
Four Legs Good Two Legs Better!
Four Legs Good Two Legs Better!
My take on owners is that if they want money (or bonds or loans) for a stadium, they have to make an agreement, they have to declare how much money the surrounding area will make (as they always claim), opponents of the stadium then get to pick and expert. In 5 years the opponent's expert takes a look and makes a determination of how much money was actually generated. For every $1M below the estimate the owners have to do 1 year in prison. They can offset each year in prison by transferring 10% ownership in the franchise to the government entity that provided the money.
I think that’s only partially true. For example, I feel strongly that if Red Sox/Yankees fans support the team in such a way that the Red Sox/Yankees get a much larger than average amount of revenue, then the Red Sox/Yankee management should put a much larger than average amount of money back into the team.
Problem is, that likely means you’re overpaying some older guys. But, hell, I’d rather have my ownership do that versus buying a yacht. And, as we can see this offseason, there can indeed be pressure from the fans and media to spend if you can.
I actually deleted out a stretch in my original post talking about franchise values and debt loads because it was getting a bit far afield, but it circles back into what I was discussing before: teams operate as rational economic actors, and increasing franchise values are not marginal. That franchise values have averaged exceedingly high returns over the past two to three decades is not an underlying fact of the baseball industry, it's something we've seen across pretty much every league as sports have increasingly become the only reliable "live" content in traditional broadcasting. Notably, that's also not really a byproduct of the players either, just like Ant Edwards next contract isn't worth 40% more than Allen Iverson made in his career because Ant Edwards is so much better than AI, it's again, the guys in the MLB now aren't that much better than the ones who came before them...they simply happen to be playing in a time when sports, and advertising on sports in particular, is uniquely high value. The overall point I'm trying to make is that these teams are still run as businesses: you can complain all you want about how it's unfair, how the owners are snowflakes, whatever else you want, but those are the cries of a petulant child. MLB franchises are rational economic actors today just as they were 50 or 100 years ago...it's just now possible to actually make a more consistent profit thanks to TV and streaming than it was when you only had people coming through the doors.
Who is crying? Its fine for the owners to run them as businesses; they should. We shouldn't pretend otherwise and we shouldnt pretend or argue that they havent made outsized returns over the past 15-20 years.
Edit: Its pretty fair to criticize owners for crying poor and looking for public subsidies when they in fact do quite well. That's shitty behavior and should be called as such (just like any other rent-seeking business).
I wonder if that gravy train is about to end. The Angels and Nats were put up for sale recently, but both declined to go through with it. Maybe the people who have billions of dollars to drop on a sports team are looking closer at whether it's actually worth having one of the shitty ones.
If all professions were paid from a central government fund, you'd have a point. But entertainment and sports are elective expenditures, that gross billions of dollars. The talent of those fields (athletes and performers) deserve their share of that money, because that is who the fans are paying to see. It's an apples to oranges comparison. If classrooms were televised and supported by enormous sums of endorsements and advertising paid by wealthy car companies and beer companies and deodorant companies, they'd make more!
Of course, I agree teachers should be paid more. But education is a societal necessity and is subsequently paid with public money. It would be nice if we lived in a society that valued that, and dedicated more public money to teachers and schools. Though it is a totally separate matter to how money is earned and directed by virtue of people's recreational choices.
EDIT: And I say this as a professor at a public university who feels he is underpaid to do that job! (though I'm also a performer, so I guess I'm speaking out of both sides of my mouth!)
This entire conversation is a bit silly, and might be drifting into areas too political for the main board. But to keep it focused on baseball, I will say that a few people here ought to make an effort to recalibrate how they think about such things.
In the first place, baseball is a government sanctioned and regulated monopoly. There is no magical free market of players deciding to form their own teams and build their own stadiums and schedule their own games. (And yes, as an aside that's what ownership does: advertising, providing a physical place to play, personnel management, staff, etc. I'm not saying other hypothetical stakeholders couldn't fulfill those functions, but it's a libertarian's child-like perspective to think the stadiums just pay their own taxes, and water-bills, and power bills, and insurance policies, and repair and repaint themselves.) Because it is a monopoly, the public has very little choice in who they are paying to see. Even post-internet.
In the second place, the societal regulator on all human activities has always been (from the days of the Pharaohs) - laws and taxes. Both the apples and the oranges are allowed to be grown, and a certain number of them get put back into the seed pile (either through private incentive, or direct governmental regulation.) So the idea of teaching (not free market) and sports figures (not free market) being very different is fundamentally odd to me. Perhaps it's partially fueled by the myth of meritocracy inherent in sports that we so much enjoy? That there's some universal aptitude testing for skill X and when we see excellence displayed in this particular game, it means some sort of true selection has taken place? (I mean putting aside the PED issue, there's multiple millions of kids who don't have meaningful access to the sport.)
In the third place, all money is public money.
Last edited:
It’s interesting to me that they did the Hendriks thing and the Schreiber thing and the Fullmer thing and there weren’t rumors about any of them. The FO still doesn’t leak.
There were reports about them offering Schreiber in trade, along with Jansen and Martin, before he was traded. And of course Jansen is not too happy about the rumors that he's going to be traded.
I don't fault the Red Sox front office for this. They can't talk trade without letting teams know that Jansen is available, and they can't stop those other teams from leaking that Jansen is on the trade block. It's just the nature of the beast.
Very specific and intelligent response. I'll take my response off the this thread and DM you, cuz it would entirely political in nature!
Tomasi said yesterday Breslow was frustrated - he wanted to sign a #2 starter. That describes Montgomery but not Snell. We got a Kremlenesque statement from Kennedy that Breslow was operating under known parameters.
We got more info about Hernandez - who wanted a third-year. If you like the player not offering a third year makes no sense to me. It seems like a self-imposed policy that makes no sense.
This offseason is a disaster in terms of understanding ownership's commitment to winning. The only discernable strategy to improve starting pitching is to sell off at the trade deadline.
So my assumption that we would be signing Montgomery looks completely wrong, and there is no realistic plan to compete in 2024. I really doubt we will compete in 2025 either given only Bello/Crawford/Whitlock will be under team control.
We got more info about Hernandez - who wanted a third-year. If you like the player not offering a third year makes no sense to me. It seems like a self-imposed policy that makes no sense.
This offseason is a disaster in terms of understanding ownership's commitment to winning. The only discernable strategy to improve starting pitching is to sell off at the trade deadline.
So my assumption that we would be signing Montgomery looks completely wrong, and there is no realistic plan to compete in 2024. I really doubt we will compete in 2025 either given only Bello/Crawford/Whitlock will be under team control.
Is it worth giving JD Martinez a call at this point? Yes, it exacerbates the glut in the outfield and forces a bad fielder into left field (Yoshida). But boy, he's been a superb hitter in his career, and he had a great 2023. Sitting right there between Devers and Casas sure would look nice. Then maybe you trade Refsynder? Give Rafaela some time in AAA and if he forces his way up, you have a good problem on your hands.
Duran
Casas
Martinez
Devers
Yoshida
Story
O'Niell/Abreu
Grissom
Wong
On the kinda sad, I guess this helps a little options, they could tack to a RHH first baseman - Garrett Cooper or CJ Cron ...I suppose these two would be the equivalent of Duvall from a hitting perspective, but could at least capably back up first, which is a need ....in the least it sure seems they need a RHH with some pop still.
Duran
Casas
Martinez
Devers
Yoshida
Story
O'Niell/Abreu
Grissom
Wong
On the kinda sad, I guess this helps a little options, they could tack to a RHH first baseman - Garrett Cooper or CJ Cron ...I suppose these two would be the equivalent of Duvall from a hitting perspective, but could at least capably back up first, which is a need ....in the least it sure seems they need a RHH with some pop still.
Disclaimer: This will be a big stretch. But is it possible that the team's reluctance to sign long-term deals (the Hernandez situation) reflects a deep concern about the financial health of the game given the precarious position of RSNs and the cable model? I would think NESN would insulate the Sox to some extent from that issue but presumably it will face a lot of the same pressure, plus a league-wide collapse in revenue would presumably have some negative impacts game-wide...
Like I said, a stretch. But as in the post quoted above, I am trying to better understand the strategy and just wonder if that may be a factor. (Given the reported frustrations of Breslow, I don't think it's as simple as a new CBO came in wanting to use 2024 to assess the system and get his footing.)
Kenedy saying Breslow is operating under known parameters seems like a subtle way to blame Breslow for a loosing 2024. The guy is being thrown under the bus before the season even begins.
No. Any "loss" the Red Sox are going to experience is going to be self inflicted wounds from going on four years of terrible ownership. Baseball teams are absolutely making a killing (but once again pleading poverty). However the Red Sox has value growth has stagnated in comparison to its peers since Sam Kennedy has taken over.
I’m frustrated that Tomase hasn’t found that walkthrough tape yet. Seriously, I wouldn’t take anything that he says at face value. The guy is talking out of his ass.
I wouldn’t put it past the owners of a bunch of clubs though to drum up concern over the financial stability of RSN’s to collude salaries down. It would just be nice if the Red Sox weren’t in that group considering the amount of revenue that they bring in.
See I took that Kennedy trying to deflect criticism away from Breslow. He’s basically saying that they’re not allowing him to spend above what they want to spend so he has to move money if he wants to add, which is very difficult. That puts it all on ownership where it belongs.
Last edited:
I'm also definitely not siding with the owners by pointing out that Snell and Montgomery are likely not worth 6 or 7 year contracts. But agree that the system needs some fundamental changes, starting with
- while owners may cite the need to restrict free agency for a player's first several years (to recoup investment in player development and to reflect how few players make it), this should not be an excuse to severely underpay these players during that period. Although some minor improvements were made in the last CBA, these were token changes. There needs to be significant increases in minimum salaries, and maybe a pay scale (based on ABs, IPs, appearances, All-Star status, or even WAR or other performance metrics, etc) above the minimum. Arbitration rights could also be expanded, but even this system should be changed so that benchmarks are adjusted so that the outcomes for younger players more nearly reflect market values for second and third year players who are stars.
- revenue sharing needs to be fixed. Teams that receive revenue sharing need to have an obligation to spend that money on salaries. If there's not going to be a hard floor and hard cap, then there needs to be some way to make all teams spend money to get into the market for players.
- the CBT needs to be greatly increased or eliminated entirely. If its retained, then the beneficiaries of the collected funds need to be spent by these other teams on player salaries (see above).
Will any of these things happen? Probably not - the owners benefit too much from the current system, using it to successfully suppress player salaries for all but the truly elite FA players. Some of these players may make "too much," in the sense that they get longer contracts that pay them for years they are not likely to continue to be productive, but this is at the expense of all the other players who are effectively under paid relative to their performance - and the differential between these groups creates a disincentive that suppresses FA salaries (should you pay Jordan Montgomery 25-30 million when you have Tanner Houck at less than 2 million?).
The system is messed up, and lets the owners underpay players and rationalize why they don't sign "expensive" FAs. But not so much different than most industries where workers are underpaid relative to what the bosses make.
Now add what Werner said into the mix:
“In the end, we don’t have a line in terms of our payroll that we look at as much as trusting that Craig (Breslow) is going to deliver on his assurance that we’re going to be competitive.”
I am in know way really trying to put weight into what Tomasi is saying. But I do think there is a parameter in place that is beyond dollars and that is contract length. I don't think Breslow is currently permitted to go beyond 2 years.
Carrabis said months ago they he was told they aren't offering anything beyond two years for a free agent. This was back in December. Now we have direct word from Teo that Boston was a finalist but they wouldn't stretch from 2 years to 3 years.
When you go back and look at the signings since DD was fired it certainly looks like there is something there. You've got 5 off seasons of data. Every contract has been either 2 years or less other than: Trevor Story at 6 years (which they obviously regret) and Yoshida at 5 years (which they obviously regret).
That's it. I think Breslow would have to get a variance approval to sign someone beyond 2 years.
I don't know if this checks out. That would be a lot of exceptions to the rule. They also reportedly offered Eflin the same 3-year, $40 million deal he signed with the Rays, and that they were "very close" to signing Jose Abreu before he signed a 3/$58.5M deal with Houston (not sure if the difference there was money or years). Of course their pursuit of YY, too, was long-term.
I think they're just choosy. The Carrabis thing seems like it could have been about Teoscar specifically, especially as it was on the heels of YY.
Personally, I think that the obstacle isn't about money as much as it is blocking opportunity lanes for prospects and pre-arb types to develop at the major-league level. I would have been psyched for a Teoscar or Soler deal, but those are two kinda clunky OF/DH types to add to a mix that also includes Yoshida. There could be Soto to consider next year, but otherwise the team is flush with promising young outfielders. Blocking the development of one in 2024 could foreclose the possibility of trading him for a more useful piece, like a starting pitcher, in 2025-6.
It’s not a terrible idea but signing JD puts Yoshida back in the field, which is a negative. And they would still be without a backup 1b (although I guess Dalbec could fill that role).
Shit. I’ll correct it. The fact that both start with B trip me up. Completely unintentional.
Explanations:
1. The Red Sox are being hurt by other projects FSG is engaged in (I doubt it).
2. The Red Sox believe current salaries are not supportable given changes to cable revenue (possible).
3. The Red Sox are simply to trying to maximize revenue. (Ding, Ding)
1. The Red Sox are being hurt by other projects FSG is engaged in (I doubt it).
2. The Red Sox believe current salaries are not supportable given changes to cable revenue (possible).
3. The Red Sox are simply to trying to maximize revenue. (Ding, Ding)
- Status