Comments on: The Problems Facing Baseball’s Economic Structure https://thepointofpittsburgh.com/the-problems-facing-baseballs-economic-structure/ Ideas Involving Pittsburgh Sat, 19 Jan 2019 01:54:20 +0000 hourly 1 https://wordpress.org/?v=5.0.3 By: Joe W https://thepointofpittsburgh.com/the-problems-facing-baseballs-economic-structure/#comment-14655 Mon, 14 Jan 2019 19:07:09 +0000 https://thepointofpittsburgh.com/?p=13151#comment-14655 They did have the AP leak what about 10 years ago now.. gave quite a bit of insight and the ex-minority owner’s interview about how owner ship wasn’t taking profit rather throwing the majority of it back in the team. BUT that was all those years ago. ( wrote a Fan post about it on Bucs Dugout about a month ago titled Ownership pocketing profits myth, fact or possibility? its crap quality I’m not a writer but might get you started if you are looking to do another )

Basically my point of it was that the ownership isn’t running out of PNC with money bags, dumping the money back into the franchise… presumably to increase the value of their product in some way… at least around that time anywho.. don’t know about now.

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By: Joe W https://thepointofpittsburgh.com/the-problems-facing-baseballs-economic-structure/#comment-14654 Mon, 14 Jan 2019 13:56:39 +0000 https://thepointofpittsburgh.com/?p=13151#comment-14654 yeah probably right about problematic.

I just find it crazy that people are talking 30-40M for Harper, who has had a mostly decent playing career but really isn’t one of the top 10 players in baseball (maybe soon though) And then you got players like Bergman making near league minimum on a rookie deal. Or jed lowrie who had a better season last year making 25% of that.

When trout hits the market we looking at 80M/year for him at this rate.. and yeah he’s probably the best in baseball, hall of fame for sure if he stays healthy but that much for a single player…

IMO these top ends need to come down to earth some and we should be focusing on those that are actually under paid like you said the MiLB players and many of the rookie contracts, maybe rather than arbitration for rookie deals have the commission based? I duno something for people with more of the information to talk about I suppose.

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By: Ethan Hullihen https://thepointofpittsburgh.com/the-problems-facing-baseballs-economic-structure/#comment-14653 Mon, 14 Jan 2019 01:54:50 +0000 https://thepointofpittsburgh.com/?p=13151#comment-14653 Thanks for reading and the kind words.

I’ve read commission based ideas before, and the NBA even has something *roughly* similar, but I also do think it’s extremely problematic and not at all realistic, even if the idea behind it is reasonable.

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By: Ethan Hullihen https://thepointofpittsburgh.com/the-problems-facing-baseballs-economic-structure/#comment-14652 Mon, 14 Jan 2019 01:52:12 +0000 https://thepointofpittsburgh.com/?p=13151#comment-14652 Thanks for reading.

This is the argument I always make; do I think there’s more money? Probably. Do I know? I do not. So, what right do I have to yell and scream about how “cheap” my teams. In lieu of no facts, I don’t. There’s no real point in speculating.

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By: Aaron https://thepointofpittsburgh.com/the-problems-facing-baseballs-economic-structure/#comment-14651 Mon, 14 Jan 2019 01:44:52 +0000 https://thepointofpittsburgh.com/?p=13151#comment-14651 Fun read. Thanks!

I wish we could see some PROFIT figures for teams. A company can have billions in revenue and still operate at a loss (hello fellow GE stockholders!)

I suppose this is why we see the “payroll as a percentage of revenue” figures, but this may not compensate for the sake of this argument: are new analytics departments taking up a percent of this revenue, adding another “piece to the revenue pie”? Are insurance payments increasing in percent of revenue spent? Are teams increasing spending on international scouting, development and facilities?

This is not meant as a defense of ownership. If anything, it is a call for some transparency from ownership to clear up all the murkiness.

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By: Joe W https://thepointofpittsburgh.com/the-problems-facing-baseballs-economic-structure/#comment-14650 Mon, 14 Jan 2019 01:42:36 +0000 https://thepointofpittsburgh.com/?p=13151#comment-14650 FINALLY SOMEONE WITH SOME COMMON SENSE! lol.

I agree with you probably 100% with everything you just said in this story. Rookie deals need reconsidered and MiLB players pay should be given a large(ish) raise.

I like the idea of largely performance based salaries with smaller guarantees. So say Marte next season pulls a trout and has a 10 fWAR season he would get paid much more. set a cap on max salary/player and while raising the league minimum.

so say the cap is 10M and the and the measurement for performance is fWAR. and the rate is 2M/fWAR Harper gets signed at 10M/year and has 2 WAR season then he gets paid 14M

Say the minimum is 1M and that player has a 2WAR season he gets paid 5M. yes there is still a large difference there.. but it isn’t as large as Harrison getting and extension and then crapping the bed. having a barely any fWAR last season and Frazier having about 2 fWAR.

set a hard cap for guaranteed salaries at 9 times the player salary (so you can have 9 players at max guaranteed) and then 16 times the league minimum. so in the crappy example above the cap would be 106m (9*10m and 16*1m). have a hard floor at 25% off of the cap, so in this case ~80m. Not including performance.

clearly not a fully thought out idea.. its more of a fooly thought out idea. but something to think about for us armchair CBA negotiators 🙂

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By: Pat https://thepointofpittsburgh.com/the-problems-facing-baseballs-economic-structure/#comment-14649 Mon, 14 Jan 2019 00:22:02 +0000 https://thepointofpittsburgh.com/?p=13151#comment-14649 There is some very pertinent information left out of this puzzle:
1: baseball is a legal monopoly: not everyone can join. That mean the Owners can and have fixed the market:

2: Owners are not making money off their investment: they are making money off the public investment in Stadiums: Since i know the Twins the best: They came to the public and asked for public financing. They Testified before the MN State Senate that the money was to be used to keep star players and invest in other more highly talented players so they would have winning teams. They never once said it was about increasing their profit margin; it was money for players to win. ( I went to several of those hearings.). They got their stadium and have instead let there top players go so they could make higher profits. They have not invested the money in trying to Win. As far as I’m concerned that is a fraud upon the public.

3: The current CBA was reached under the understanding that nothing had or would change in the way the MLB was doing Business: The Mutually agreed upon understanding has been and was supposed to be that , the teams pay the slaves ( those who belong to the team) by rules that we agree to and then they get their paydays when they reach free agency. This is going to be and is a point of contention: all contracts have a ” good faith ” clause: the terms agreed upon are based upon the conditions they agreed upon. The conditions agreed upon was nothing changed: Very clearly history shows, the young contract slaves got less. The guys who produced the numbers got contracts when they became free agents. That Condition has been broken: the MLB owners have violated the conditions under which the contract was agreed upon. They have broken “good faith”. Proof: look at all the past contracts for veterans based upon past performance. There wasn’t a single owner who didn’t know that veterans might only produce for the 1st part of the long contracts. In fact if we look at the record in the collusion cases of the 1980 we find “long contracts’ was the very term that the owners got found guilty on. They made an agreement not to extend long contracts in violation of the Collusion clause: “Players shall not act in concert with other Players and Clubs shall not act in concert with other Clubs.” Ueberroth told the general managers of each team to stop handing out long-term contracts. . The Judge found this to be in violation of the collusion clause. I find it also to be in violation of the MLB’s own Rule 21A: “Rule
21
MISCONDUCT
(a) MISCONDUCT IN PLAYING BASEBALL.
Any player or person connected with a Club who shall promise
or agree to lose, or
to attempt to lose, or to fail to give his best efforts towards the winning of any
baseball game with which he is or may be in any way concerned, or who shall intentionally lose or
attempt to lose, or intentionally fail to give his best efforts towards th
e winning of any such baseball
game, or who shall solicit or attempt to induce any player or person connected with a Club to lose or
attempt to lose, or to fail to give his best efforts towards the winning of any baseball game with which
such other player
or person is or may be in any way concerned,….”

Tanking is illegal. not only that. Not spending money that is generated is doing less than the MLB teams can . The owners ” fail to give his best efforts towards the winning of any baseball game”.

“Any” in this clause is the same as “every” under legal construction. They must try to win every game.

Putting a 2nd rate product on the field to make money is killing baseball. The Public pay for the stadiums and expect the best teams THEIR money can buy.

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By: Tony https://thepointofpittsburgh.com/the-problems-facing-baseballs-economic-structure/#comment-14643 Fri, 11 Jan 2019 12:26:46 +0000 https://thepointofpittsburgh.com/?p=13151#comment-14643 Ethan’s article is about a slow offseason, the shift in free agency spending, the games reliance on younger players, and how this may affect labor negotiations moving forward. I’m not sure what your point is David. Your attempt to apply various economic theories and principles only works in a vacuum, and there is no evidence that supports this is the method or basis from which baseball teams operate. In addition, there are numerous behavioral components at play that cannot be explained or reconciled via an economic principle, equation, or theory.

Also, NPV is used to analyze the profitability of an investment; it is the difference between expected cash flows (in today’s dollars) and cost (also in today’s dollars). If NPV is positive, the investment is profitable. If you are simply discounting, it is just a PV function.

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By: Ethan Hullihen https://thepointofpittsburgh.com/the-problems-facing-baseballs-economic-structure/#comment-14642 Fri, 11 Jan 2019 04:52:27 +0000 https://thepointofpittsburgh.com/?p=13151#comment-14642 Yes, the union can’t seem to get out of their own way. Sure, more days off are nice, but to effectively negotiate ways to suppress spending? (draft pools, international pools, Luxury Tax, etc.) It certainly shows no foresight.

Not sure you’re aware, but the NBA instituted something similar to what you’re suggesting. In an effort to keep stars in small markets, players have the opportunity to make more money with their original teams if they hit certain benchmarks. It hasn’t been super successful, but it’s at least trying to address a practice the league deemed a problem. I’ve read suggestions on “commission” like systems before, and while I see it as the least likely route, it’s a novel idea.

Thanks for reading and the compliments!

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By: Phillip C-137 https://thepointofpittsburgh.com/the-problems-facing-baseballs-economic-structure/#comment-14641 Fri, 11 Jan 2019 04:28:05 +0000 https://thepointofpittsburgh.com/?p=13151#comment-14641 Ethan, kudos on a really good recap of the current situation.

In my view this is just another of those pendulum swings between ownership and the players. Normally the owners have the upper hand and while none of us remember the player’s salary gains because of the Federal League, the players do from time to time gain almost a minority shareholders sized power position.

The Players side gained a lot of power during the Marvin Miller years and has been slowly losing ground ever since Miller retired, but, I believe, has really lost ground since Tony Clark starting running the MLBPA. (The Players need new effective leadership.)

One of the problems you’ve so aptly pointed out is that players like Betts, Bryant and Judge aren’t being paid anywhere close to their level of production (comparatively speaking). I believe finding a solution to this issue would not only help them individually but also have a ripple effect for the union. I’d suggest some sort of Restricted Free Agent Point System (RFAP), whereby a guy like Betts (with an MVP, a 2nd Place MVP, batting title plus multiple top 3 finishes in several meaningful categories) would be eligle for RFA at the end of 2019 instead of having to wait another few years. This would get a player people would be excited about to his payday quicker while (substitute Frazier for Betts) giving his team an opportunity to trade him and get some return for him like the Pirates did with Cutch or Cole.

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