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Money and MLB #621749
06/01/2022 12:04
06/01/2022 12:04
Joined: Sep 2000
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Near West Side, beautiful Clev...
pogo Offline OP
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I am posting this here as it has to do with all teams and I would hope will not be answered or spoken to with political rhetoric.
It is something to remember when a poor sad owner complains about his/her finances.
It was reprinted today in a baseball newsletter that I recieve. Yesterday's had to do with the Os, so I posted it there in full text, after the my link didn't work.


The Joe Sheehan Newsletter
Vol. 10, No. 122
1/6/ 2022 (reprint of 11/30/2018)


Two weeks ago, MLB announced a new contract with Fox that will keep its games, most notably the World Series, on the Fox network through 2028. The current deal was set to expire in 2021. Per Eric Fisher of the Sports Business Journal, the new Fox deal is worth $5.1 billion, or about $24 million per team per season for most of the next decade. It’s the latest evidence that baseball, and sports properties in general, are critical programming elements for both linear networks and the nascent streaming elements growing up around them.

For baseball fans, however, this growth in national-television money is the key factor in the competitiveness issues facing today’s game. With each new deal, the amount of money that comes into the league before a pitch is thrown grows. This “money for existing” is what subsidizes multi-year rebuilding projects, guaranteeing even the worst teams in the league a minimum revenue stream irrespective of how well it plays, how well it markets, how hard it tries. National revenue from TV deals and MLB Advanced Media are also enormous subsidies from the revenue drivers of the league to the revenue laggards, or to be more direct, from the valuable franchises to the other ones.

Consider the 2018 season, the fifth in the current eight-year deal between Fox and MLB. On that contract, Fox pays the league $500 million a year for a package of Saturday games, the All-Star Game, one LCS and the World Series on the Fox network, as well as some coverage on FS1. That comes to about $16 million a year for each team. Turner Sports chips in $300 million a year for some non-exclusive weekend games and its playoff package. ESPN sends over $700 million a season for Sunday Night Baseball, the Wild Card Round, and weekday non-exclusive games. Throw it all together, and the three contracts put close to $50 million in everyone’s pocket every season, no matter what. Starting next year, something called DAZN is going to top that off with about $3 million per team per year as well.

That’s revenue sharing. That’s the big teams subsidizing the little ones. We don’t talk about it that way, but it is. On ESPN’s flagship summer programming Sunday Night Baseball, MLB’s only true Game of the Week, five teams appeared five times, and two others appeared four times (the Yankees would have made it six, but they had a Sunday night game rained out). Fifteen teams, half the league, didn’t show up on Sunday Night Baseball at all. For their five appearances, the Yankees got $22 million or so from ESPN. For their zero appearances, the Marlins, Padres, Royals and a dozen other teams also got $22 million apiece.

It works the same way with Fox. Their national windows are both sporadic and regionalized -- look, they’re paying for the World Series and the branding, mostly -- but in their Saturday windows, they featured the Dodgers seven times, the Red Sox and Cardinals six times each, the Yankees, Cubs, and Astros five times each. Eleven teams never showed up on the Fox network at all, including playoff teams from Oakland and Milwaukee.

(My source for all this is the MLB At Bat app’s archived games.)

The value of the national television contracts is in the big brands and the playoffs, but the money from those deals is distributed evenly. It wasn’t always this way; in the 1950s, Game of the Week revenue was shared based on how many times a team appeared on TV. That was just another edge for the Yankees in an era when they were great and popular and the game had real competitive-balance problems. There’s no way you’d want to go back to that; sharing national-TV revenues evenly isn’t a problem, but it would be helpful, when we’re talking about revenue disparities within the game, to point out that before we even talk about local revenues, there’s a lot of sharing. Between the regular season and the World Series, the Dodgers and Red Sox were on Fox 12 and 11 times respectively. The bottom 14 teams in frequency were on Fox a grand total of four times, total.

In addition to the television cash, teams are still taking in money each year from MLB Advanced Media. The sale of most of BAMtech, an MLBAM spin-off, produced more than $50 million for each team last season, money that clearly did not make its way into the baseball ecosystem. Even after that sale, ownership of MLBAM produced, by conservative estimates, about $10 million for teams this year. MLBAM happened because Bud Selig, in one of his legitimately good moves, arm-twisted the 30 teams into turning over their Internet rights to the league. You don’t need me to tell you that redsox.com is worth more than diamondbacks.com, but because of Selig’s Pete Rozelle moment, the Diamondbacks and Red Sox share equally in Internet and streaming revenue.

Until we have a Pentagon Papers moment in baseball, we’re guessing a bit. I can say with confidence, however, that before a ticket is sold, a warm beer tapped, a cold hot dog handed over, every MLB team is guaranteed about $60 million. That money comes in whether you win 100 or lose 100, whether you draw four million people or 400,000. It comes in whether you work every day in the offseason to get the fans excited, or whether you announce in November that you’re keeping focus on 2020 with all the kids coming through your farm system. It comes in whether you appear on the networks spending that money, or if they’d rather air color bars than your team colors.

That money, that baseline guaranteed cash that is more about the media and advertising landscape than anything baseball has done itself, is the single biggest driver of competitive imbalance today. Too many teams take that money and lock in a guaranteed profit. For almost all of baseball history, a team’s bottom line was connected to its performance on the field. Slowly, and now more rapidly, that is not the case. Just having a franchise is enough to be in the black. No, $60 million alone doesn’t do that, but that $60 million, which is created unequally and shared equally, is enough that you can do the bare minimum locally and carry no financial risk.

What does the bare minimum look like? Well, every team in baseball sold at least 800,000 tickets last year, and every one outside of Florida sold at least 1.4 million. (Feel free to leave Florida any time, MLB.) Per this Craig Edwards piece from 2016, every MLB team takes in at least $20 million in local-TV money, and all but a handful take in at least $30 million. Make conservative assumptions about the value of a ticket sold in terms of revenue created, and you see that even at the low end of the scale, every major-league team is going to have $100 million coming in, no matter what else it does. That’s before we even get into the sharing of local revenue, which is where the fight has been for more than a generation.

The fight isn’t there any more. The fight is the national money, which is being raised by a handful of high-value, high-success franchises and shared with everyone, no strings attached. Those guaranteed checks have distorted the relationship between on-field success and financial success, creating the conditions in which multi-year non-competitive rebuilding projects are profitable in the short term.

Of the various challenges the league faces heading into the next CBA negotiation, this is the one that may be the most difficult to meet: How do you force teams to compete, when they don’t have to do so to make money?


Elect a clown. Expect a circus.
edit: Elect a fascist, expect Brownshirts.
Re: Money and MLB [Re: pogo] #621751
06/01/2022 12:41
06/01/2022 12:41
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Harrisburg PA.
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Make them sell?


In counties where Donald Trump received at least 70 percent of the vote, the virus has killed about 47 out of every 100,000 people since the end of June. In counties where Trump won less than 32 percent of the vote, the number is about 10 out of 100,000.

Re: Money and MLB [Re: pogo] #621752
06/01/2022 16:46
06/01/2022 16:46
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Macon ,Ga
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Originally Posted by pogo
.

That’s revenue sharing. That’s the big teams subsidizing the little ones. We don’t talk about it that way, but it is. On ESPN’s flagship summer programming Sunday Night Baseball, MLB’s only true Game of the Week, five teams appeared five times, and two others appeared four times (the Yankees would have made it six, but they had a Sunday night game rained out). Fifteen teams, half the league, didn’t show up on Sunday Night Baseball at all. For their five appearances, the Yankees got $22 million or so from ESPN. For their zero appearances, the Marlins, Padres, Royals and a dozen other teams also got $22 million apiece.


That is NOT the big teams subsidizing the little ones. the small market teams don't make the schedule, and without them the big market teams would just be playing other big market teams. THESE big market teams are only featured because they have the better teams because they can spend the most money.... I mean gosh here...




Originally Posted by Pogo
It works the same way with Fox. Their national windows are both sporadic and regionalized -- look, they’re paying for the World Series and the branding, mostly -- but in their Saturday windows, they featured the Dodgers seven times, the Red Sox and Cardinals six times each, the Yankees, Cubs, and Astros five times each. Eleven teams never showed up on the Fox network at all, including playoff teams from Oakland and Milwaukee.


teams never showed up? Uh they played their games , FOX didn't show up because the big teams had outspent them and were winning more games...

.



Originally Posted by pogo
Until we have a Pentagon Papers moment in baseball, we’re guessing a bit. I can say with confidence, however, that before a ticket is sold, a warm beer tapped, a cold hot dog handed over, every MLB team is guaranteed about $60 million.



It was estimated to be about 100 million per team in 2021

Originally Posted by pogo
Too many teams take that money and lock in a guaranteed profit. For almost all of baseball history, a team’s bottom line was connected to its performance on the field. Slowly, and now more rapidly, that is not the case. Just having a franchise is enough to be in the black. No, $60 million alone doesn’t do that, but that $60 million, which is created unequally and shared equally, is enough that you can do the bare minimum locally and carry no financial risk


This guy doesn't begin to get it. he doesn't realize WHAT the problem is. The problem is not that the small markets are spending too little but that the big teams are spending too much. The Dodgers payroll was over $270 million last year. they made over $100 million on parking where the Pirates didn't make a dime in parking. they get over $200 million a year in local tv rights where the Pirates get 44 million. even if the Pirates spent all of their money they could not compete with the Dodgers.





Originally Posted by pogo
The fight is the national money, which is being raised by a handful of high-value, high-success franchises and shared with everyone, no strings attached. Those guaranteed checks have distorted the relationship between on-field success and financial success, creating the conditions in which multi-year non-competitive rebuilding projects are profitable in the short term.

Of the various challenges the league faces heading into the next CBA negotiation, this is the one that may be the most difficult to meet: How do you force teams to compete, when they don’t have to do so to make money?


MLB is the only major USA sports league that doesn't have a salary cap, the only one losing fans, Fans in small market cities know going into the season that their team doesn't have a chance against those with huge local tv money. MLB controls all MLB streaming and they now should put all money both national and local into a pot and split it... then have a cap and a floor.... the guy that wrote this has never been in business, he apparently thinks that the teams just have player salaries and no other expenses.



Re: Money and MLB [Re: pogo] #621770
07/01/2022 15:10
07/01/2022 15:10
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TBP Offline
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The union is strongly opposed to a salary floor, as they believe it paves the way for a cap, but one may be needed. Make it a percentage of the luxury-tax threshold.


Progressives lack compassion and tolerance. Their self-aggrandizement is all that matters.

Decent people cannot fathom the amoral cruelty of the Biden regime.
Re: Money and MLB [Re: pogo] #621771
07/01/2022 16:36
07/01/2022 16:36
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This thread really should probably be on the General Baseball Discussion board, but nobody goes there, so it goes here.


Progressives lack compassion and tolerance. Their self-aggrandizement is all that matters.

Decent people cannot fathom the amoral cruelty of the Biden regime.
Re: Money and MLB [Re: pogo] #621772
07/01/2022 16:39
07/01/2022 16:39
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Here is a good article from MLB Trade Rumors on the issues in the current negotiations:

https://www.mlbtraderumors.com/2022/01/passan-on-cba-negotiations.html

Quote
On Monday, USA Today’s Bob Nightengale wrote that no negotiating sessions were scheduled between MLB and the players’ union. That remains the case, but ESPN’s Jeff Passan writes today that “MLB is working on proposals to bring to the table.” Passan’s sources believe the “earliest negotiations will ramp up this time is late January.”

Passan suggests MLB is hoping to determine what tops the players’ list of priorities: the oft-repeated “competitive integrity” anti-tanking buzzword, getting players paid earlier in their careers, or raising the competitive balance tax thresholds.


Progressives lack compassion and tolerance. Their self-aggrandizement is all that matters.

Decent people cannot fathom the amoral cruelty of the Biden regime.
Re: Money and MLB [Re: pogo] #621855
17/01/2022 18:09
17/01/2022 18:09
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martin Offline
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The owners have caved with their proposal last week.... If the players don't come back with something close to what the owners proposed, the owners should pull it off of the table and demand a salary cap.



Re: Money and MLB [Re: pogo] #621861
Yesterday at 12:05
Yesterday at 12:05
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Near West Side, beautiful Clev...
pogo Offline OP
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But the big buck owners do not want a salary cap. If they did the average offers to top tier players would be lower. And they can veto any offer not in their interest.
While I am sure that the union would yell collusion (and they would be right) if the richest teams lowered their offers as a group. if you don't think that high $$$ salaries are not in some teams interest, then you have little understanding of capatalism.and sports.
Currently The NY Mets, Dodgers and NY Yanks pay the most. Pittsburgh, Baltimore & Cleveland the least.
The concern and attention paid to the game as a national institution by all of the teams was illustrated by the peonage salaries paid minor league players and now the gutting of the sport as a national institution by the dumping of the majority of affiliated teams. The union is also to blame. To expect a union to stand up for non-members is an overreach, but they have done nothing over the years. ARod's salary alone would have paid the salary of several teams minor league players.
Solution? None. Cynicism? Total.
And revenue sharing pretty well guarantees even the low income teams a profit with no requirement that the $$$ be used to improve their teams.


Elect a clown. Expect a circus.
edit: Elect a fascist, expect Brownshirts.

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