Tuesday, February 02, 2016
Maybe these players misread the market and should have signed for the $15.8 million.
This will be an interesting story to keep an eye on.
Desmond, Fowler, and Gallardo are the last remaining free agents who rejected qualifying offers in November—meaning teams must surrender a draft pick in order to sign them.
It is undeniable that draft-pick compensation has depressed the values for several free agents this offseason. The same has happened before under the current CBA. What’s impossible to know for certain is whether the rules have reduced overall industry spending, compared to a system without punitive measures against teams for signing particular free agents.
Posted: February 02, 2016 at 09:52 AM | 125 comment(s)
Monday, December 21, 2015
This never would have happened if baseball had a salary cap.
The current deal between Major League Baseball and the MLB Players Association expires in 347 days, and there are plenty of issues that must be resolved by the time the current deal runs out next Dec. 1, including the length of the schedule, draft-pick compensation and qualifying offers, and roster size.
The players are making more than ever and so are the owners, apparently, so for now, there is little indication that a work stoppage might be on the horizon. But there is one situation worth watching in particular: The growing discontent of small-market owners over what they perceive to be increasing disparity between themselves and the big-market teams.
This clash has the potential to be cancerous, as history shows. It was the fight between big-market and small-market teams that effectively led to the devastating players’ strike of 1994-1995, and some increased revenue-sharing that followed in subsequent collective bargaining agreements.
Small-market teams are certainly capable of profiting very well under the current system, by drawing revenue from baseball’s central revenue stream as well as handouts from the most well-to-do teams and maintaining a modest budgets. The Marlins are the best example of this.
But for some owners, the frustration over the perceived disparity seems to be shifting from an issue of money to a question of on-field competitiveness. Some leaders of small-market teams feel that not only should they have a chance to contend against teams like the Dodgers, Yankees and Red Sox, but that for the sake of the larger business of baseball, it’s better that they have a legitimate shot—and that their ability to compete is waning because of the cost of retaining stars like David Price.
Friday, December 18, 2015
Maybe Moreno shouldn’t talk to the press.
With players concerned that large-market teams can use the CBT as a self-imposed salary cap, and with baseball’s revenues approaching a record $10 billion per year, the threshold would figure to rise in the new labor deal that would take effect in 2017.
“There’s a possibility it could go down,” Moreno said.
Posted: December 18, 2015 at 06:46 AM | 0 comment(s)
Monday, December 07, 2015
The fact MLB ranks Houston as the league’s 15th market is no small matter. That slotting has actually hurt them.
It’s not a well-publicized segment of the collective bargaining agreement, but half of the 30 major league teams will not receive revenue-sharing money in 2016.
A provision referred to as “market rank disqualification” was put in place in the most recent labor deal, which began with the 2012 season. All clubs in the top 15 markets - and only those clubs - have slowly seen their revenue-sharing intake disappear.
Twenty-five percent of the cut disappeared in 2013, then 50 percent in 2014 and 75 percent in 2015. This upcoming season, it’s all gone.
“It affects our economics,” Astros general manager Jeff Luhnow said at the GM meetings earlier this offseason. “There’s certain teams that are getting a benefit, and there’s certain teams that don’t, and we’re not receiving a benefit.”
Revenue sharing is pooled from two primary streams, one of which is a 34 percent share of every team’s local revenue.
The logic behind market rank disqualification is twofold. First, there’s a belief transferred money should go to clubs that need it, meaning those in markets insufficiently sized to generate enough revenue otherwise. Second, it follows that clubs in larger markets should be able to stand on their own.
Still, no team is ever going to enjoy losing money - particularly not one standing at the cutoff point. Had they been No. 16 - that’s the Seattle Mariners - the Astros would have retained a full 100 percent of revenue sharing throughout this CBA.
But the Astros are No. 15. One notch on the list has ostensibly meant millions. That hurts.
“Yes it does,” Luhnow said. “Because it’s a cliff. Any time you’re at a cliff and you’re on the wrong side of the cliff - you just missed - it hurts you more than it hurts a team that’s all the way at the very bottom or all the way at the very top.”
The money forfeited by teams in the top 15 markets goes back proportionally to clubs paying into the revenue-sharing system.
Posted: December 07, 2015 at 11:02 AM | 17 comment(s)
Friday, November 27, 2015
Jayson Stark runs down some of the issues that owners and players will need to resolve in the next CBA.
Posted: November 27, 2015 at 10:40 AM | 39 comment(s)
Tuesday, November 17, 2015
e major league minimum salary will remain at $507,500 in 2016, the same as in 2015, because of the Consumer Price Index released on Tuesday morning. Major League Baseball has not yet made the announcement.
Next year is the final year of the collective bargaining agreement, which covers the years 2012-2016. The CBA called for minimum salaries of $480,000 in 2012, $490,000 in 2013, $500,000 in 2014, then cost of living increases in both 2015 and 2016. The cost of living adjustment is rounded to the nearest $500, with the caveat that the minimum salary shall not decrease. Per the CBA:
“The applicable minimum salary rate for the 2014 season shall be multiplied by a fraction, the numerator of which is the Consumer Price Index for Urban Wage Earners and Clerical Workers published by the Bureau of Labor Statistics (CPIW) for October 2015 and the denominator of which is the CPIW for October 2014.”
The cost of living adjustment last year called for a 1.5-percent increase, to $507,500 in 2015.
Posted: November 17, 2015 at 11:07 AM | 13 comment(s)
Thursday, November 12, 2015
What the union would need is a guaranteed revenue split put into the next CBA, like the one so fought over in the last NBA lockout (it’s currently settled somewhere around 50/50, a big win for the owners from the previous deal). But what works in other sports isn’t an option in the sui generis economy of baseball. The only way to make absolutely sure MLB owners share a certain percentage of revenues with players would be to install a salary floor, and require them to spend a certain amount on payroll. That won’t fly, because owners would never accept a salary floor without a salary cap. That won’t happen, because baseball players enjoy the biggest and longest guaranteed contracts in sports. A salary cap will never be on the table.
There are more modest and realistic ways to spread the wealth around, involving some of the artificial limits on payouts for younger and mid-tier players, and you can probably expect the MLBPA to push for them over the next year. A raise in the minimum salary, which has risen 365 percent over the two-decade span that saw MLB revenues increase by nearly 550 percent. Changes to Scott Boras’s pet peeves like qualifying offers and service-time rules that delay players from reaching free agency paydays. A reduction of the luxury tax.
All of which sounds good for the players, but there’s no reason the owners would go along with it. They won’t mess with a good thing, not without major concessions from the players. And the second-biggest bargaining chip the players have—a salary cap—is one they’re apparently not prepared to use. (It was a cap, along with revenue sharing, that spurred the 1994 strike.) The union’s biggest bargaining chip? A labor stoppage. No one expects that to happen, but without the players enacting or conceding to something tectonic, they’ll be stuck waiting another few decades for the TV deals to expire. In the meantime, it’s good to own a baseball team.
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