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Thursday, March 28, 2019

2019 MLB salaries: Disparity in payrolls draws concern from players

The disparity in payrolls exemplifies why there may be a push for a salary floor in the next collective bargaining agreement, which players have openly discussed. It’s disturbing to have a team like the Red Sox to have three pitchers (David Price, $31 million; Rick Porcello, $21.1 million; and Chris Sale, $15 million) earn more than the entire Rays’ team.
...
“One of the best things about baseball is the competitive integrity of the game,’’ Cleveland Indians co-ace Trevor Bauer said in February. “For a long time, it’s been because of a lack of a salary cap. But I think we have a pseudo-salary cap now with the luxury tax.

“That needs to change.’’

They now have the numbers to prove it.

Jim Furtado Posted: March 28, 2019 at 02:26 PM | 26 comment(s) Login to Bookmark
  Tags: cba

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   1. The Anthony Kennedy of BBTF (Scott) Posted: March 28, 2019 at 04:30 PM (#5826368)
I agree with Trevor Bauer on something!
   2. Dr. Vaux Posted: March 28, 2019 at 07:13 PM (#5826449)
Well, we've always said that a salary floor would just force teams to overpay mediocre veterans, and so if we want to see that happen for its own sake, then I guess so.
   3. the Hugh Jorgan returns Posted: March 28, 2019 at 08:46 PM (#5826493)
“For a long time, it’s been because of a lack of a salary cap. But I think we have a pseudo-salary cap now with the luxury tax.


Bullsh*t. The big market teams are spending plenty. The Red Sox are over the tax nearly every year. NY, Nationals, LA...these guys have been over the tax regularly also. It's the teardown and cheap teams that refuse to spend. Teams have figured out you can get similar value from a 24 year old rookie as they can from Joe Average declining veteran and save millions per player.
This is not rocket science.

A salary floor is stupid. As Vaux said, you end up paying too much for mediocre veterans or you'll see the salaries of the great players escalate and the balance of the roster will be filled with cheap young guys.

They need to find a way to get younger guys paid better much sooner.
   4. What did Billy Ripken have against ElRoy Face? Posted: March 28, 2019 at 08:55 PM (#5826496)
It’s disturbing to have a team like the Red Sox to have three pitchers (David Price, $31 million; Rick Porcello, $21.1 million; and Chris Sale, $15 million) earn more than the entire Rays’ team.
The Rays won 90 games last year. At least don't pick the absolute dumbest example.
   5. Joyful Calculus Instructor Posted: March 28, 2019 at 09:30 PM (#5826505)
Think of how good the Rays could have been if they added a couple expensive stars to their cheap core.
   6. McCoy Posted: March 28, 2019 at 09:47 PM (#5826510)
Yeah, they'd win like 88 games if they had Heyward.
   7. bookbook Posted: March 28, 2019 at 11:09 PM (#5826540)
If they upped the minimum salary to $2 million, there’d be a $50 million salary floor (which is some of the way to reasonable). Consider the possibility, as well, that getting mediocre veterans paid is a large part of the union’s reason to exist.
   8. What did Billy Ripken have against ElRoy Face? Posted: March 28, 2019 at 11:26 PM (#5826541)
If they upped the minimum salary to $2 million, there’d be a $50 million salary floor (which is some of the way to reasonable).
This would, of course, ripple through arb and early FA salaries as well. A consequence of this would be that a (probably larger) number of teams would just employ that many more minimum-salary players, trade them as soon as they are arb-eligible, and refuse to sign any mediocre veterans. A big premise of this argument is that no team is *really* under any substantial payroll constraints, and that even the smallest-market teams are very profitable at current salary levels. Is there any actual proof of that?
   9. . Posted: March 29, 2019 at 06:56 AM (#5826552)
A big premise of this argument is that no team is *really* under any substantial payroll constraints, and that even the smallest-market teams are very profitable at current salary levels. Is there any actual proof of that?


A lot of sports fans have always rather bizarrely adhered to the conspiracy theory that sports franchises "hide" a bunch of money, as if people who value and buy companies couldn't see through a team getting paid a quarter of FMV by its affiliated cable company or whatnot.

In any event, the Forbes valuations have the Rays generating $219M in 2017 revenue, and $23M in operating income. That's actually a pretty good operating margin, but as we all know, $23M is peanuts on the free agent market -- not even competitive at the higher ends. There's really no basis to insist that the Rays ownership buy a free agent who'd barely move the needle and that would throw the operating income into an operating loss. No business is under any such obligation.
   10. ??'s Biggest Fan! Posted: March 29, 2019 at 08:56 AM (#5826569)
Advocating for top down regulation on payrolls and salaries... Trevor Bauer is a Bernie Sanders supporter? Ironically, team owner and front offices’ efforts to streamline salary allocation on players have actually created a system where fans of the teams actually gets to see homegrown stars get extended and stay in the same uniform for his entire career. Mike Trout or Aaron Judge wearing only one uni feels right to me.
   11. Never Give an Inge (Dave) Posted: March 29, 2019 at 09:24 AM (#5826583)

A lot of sports fans have always rather bizarrely adhered to the conspiracy theory that sports franchises "hide" a bunch of money, as if people who value and buy companies couldn't see through a team getting paid a quarter of FMV by its affiliated cable company or whatnot.

The idea was not that it was to fool the people who value and buy companies, it was to be able to plead poverty during any sort of baseball labor negotiations or Congressional inquiry or what have you.
   12. Never Give an Inge (Dave) Posted: March 29, 2019 at 09:32 AM (#5826589)

Also, it seems insane to me that you could have a division like the NL East, where 4 big-market teams are all projected to win between 85-89 games (or the NL Central, where every team is projected to win between 80 and 87 games), and yet we are starting the season with Dallas Keuchel and Craig Kimbrel unsigned. It's possible that those guys received great offers and are just holding out, but it is still reflective of a market that is not functioning properly.
   13. . Posted: March 29, 2019 at 10:11 AM (#5826613)
The idea was not that it was to fool the people who value and buy companies, it was to be able to plead poverty during any sort of baseball labor negotiations or Congressional inquiry or what have you.


Right, but at the end of the day they don't really do it because it can't really be hidden. The idea that sports owners are "hiding" money is an ideological lurch, not an empirical reality.

In point of fact, the Tampa Bay Rays are a shitty business. $219M in revenues, much of it from a central fund, is barely above mom-and-pop status. They'd turn a loss at anything resembling a competitive payroll (*) and that, again, even with a significant central fund subsidy. Their main asset is probably the scarcity of franchises and the antitrust exemption. Even that isn't really monitizable to any significant degree in Tampa. Maybe -- maybe -- somewhere else and that potential is a real asset.

(*) Their 2019 payroll is $49 million. That plus the 2017 operating income of $23 million is $72 million. That's a non-competitive number. If the Rays ran even a $100 million payroll, they'd lose around $30 million. The idea that they have the money to run a $150 million payroll and still make money is UFO-level conspiratorial drivel.
   14. . Posted: March 29, 2019 at 10:13 AM (#5826614)
It's possible that those guys received great offers and are just holding out, but it is still reflective of a market that is not functioning properly.


Nothing about the baseball market "functions properly." It's a monopoly with special privileges, all of which distorts every market it touches. Not only is it a monopoly, but one of its primary business partners -- the cable TV industry -- is functioning on bubbly, unsustainable voodoo economics.

Given that reality, it's not really in the cards to be whining over a couple grizzly baseball veterans and their agents overpricing themselves.
   15. Jeff Frances the Mute Posted: March 29, 2019 at 10:29 AM (#5826616)
A lot of sports fans have always rather bizarrely adhered to the conspiracy theory that sports franchises "hide" a bunch of money, as if people who value and buy companies couldn't see through a team getting paid a quarter of FMV by its affiliated cable company or whatnot.

Maybe the reason people believe this “conspiracy theory” is because the one time we got a good look at the books was the Frank McCourt/Dodgers bankruptcy. In that case the reality was much worse than the “conspiracy theory”.
   16. . Posted: March 29, 2019 at 10:39 AM (#5826622)
Maybe the reason people believe this “conspiracy theory” is because the one time we got a good look at the books was the Frank McCourt/Dodgers bankruptcy. In that case the reality was much worse than the “conspiracy theory”.


How so? Taking team revenue for yourself isn't hiding money.

Where was the "hidden" money?
   17. Never Give an Inge (Dave) Posted: March 29, 2019 at 10:51 AM (#5826630)

Given that reality, it's not really in the cards to be whining over a couple grizzly baseball veterans and their agents overpricing themselves.

I'm not whining about it, but you know, most people here follow MLB to see the best baseball players play baseball. If the season starts with two of the best players on the sidelines, especially when there are numerous teams who could obviously benefit from their services, something's not working right.
   18. . Posted: March 29, 2019 at 10:55 AM (#5826633)
I'm not whining about it, but you know, most people here follow MLB to see the best baseball players play baseball. If the season starts with two of the best players on the sidelines, especially when there are numerous teams who could obviously benefit from their services, something's not working right.


If I bid a million dollars for an apartment listed at two million, and I don't get the apartment, is something not working right?

Far and away the most likely explanation of why they still haven't found work is that they've asked for far too high a salary, likely for far too long. They'd have a job tomorrow if they aligned their salary requests with the actual market for their services -- is there any serious doubt about that?
   19. Jeff Frances the Mute Posted: March 29, 2019 at 11:00 AM (#5826634)
How so? Taking team revenue for yourself isn't hiding money.

Where was the "hidden" money?

Using the team foundation as a slush fund
Moving ticketing revenue to a third party entity and claiming it wasn’t team revenue
Ditto parking
   20. . Posted: March 29, 2019 at 11:02 AM (#5826635)
Any citations?

The first one doesn't have anything to do with hidden money.

Where was the "claim" that those things weren't team revenue?

Needs more development and testing. If the inclusion of the first one, which has nothing to do with the subject at hand, is any indication the details won't really be there or will be dramatically oversold.
   21. What did Billy Ripken have against ElRoy Face? Posted: March 29, 2019 at 11:04 AM (#5826636)
Far and away the most likely explanation of why they still haven't found work is that they've asked for far too high a salary, likely for far too long. They'd have a job tomorrow if they aligned their salary requests with the actual market for their services -- is there any serious doubt about that?
Indeed. I don't understand the position that a "functioning market" must necessarily give every single player an offer he's willing to quickly accept. Why are people even surprised to see a couple of stubborn outlier holdouts?
   22. TDF, trained monkey Posted: March 29, 2019 at 11:06 AM (#5826637)
Also, it seems insane to me that you could have a division like the NL East, where 4 big-market teams are all projected to win between 85-89 games (or the NL Central, where every team is projected to win between 80 and 87 games), and yet we are starting the season with Dallas Keuchel and Craig Kimbrel unsigned.
Or, because a bunch of teams are all very good, but they play each other 76 out of 182 games (then play a bunch of more very good teams most of the rest of the schedule). EDIT: It would be interesting to see what would happen if you swapped NYY with PHI - would the Yankees now become an 85-90 win team (projection-wise) in a more balanced division and league, instead of a 95-100 win team?

And btw, Bob Nightengale is really mailing it in this week:
Tuesday: 2019 MLB salaries: Disparity in payrolls draws concern from players
Friday: MLB salaries: Middle class is disappearing in baseball
   23. Nasty Nate Posted: March 29, 2019 at 11:10 AM (#5826640)
Far and away the most likely explanation of why they still haven't found work is that they've asked for far too high a salary, likely for far too long. They'd have a job tomorrow if they aligned their salary requests with the actual market for their services -- is there any serious doubt about that?


Indeed. I don't understand the position that a "functioning market" must necessarily give every single player an offer he's willing to quickly accept. Why are people even surprised to see a couple of stubborn outlier holdouts?
Right, it doesn't seem like Kimbrel would accept the free agent deals accepted in the past by Foulke/Wagner/Papelbon even if they were adjusted upwards for inflation.
   24. Never Give an Inge (Dave) Posted: March 29, 2019 at 11:40 AM (#5826661)

If I bid a million dollars for an apartment listed at two million, and I don't get the apartment, is something not working right?

Maybe. If someone has their apartment listed for $2 million and the highest bid is for $1 million, then yes something may very well not be working right. It might just be a seller with an unrealistic view of value, which could be what we have here. i.e., I'm not saying that Keuchel and Kimbrel deserve to get whatever they're asking for -- it might be that they are being unreasonable or getting bad advice from their agents. But the fact that neither one is playing when so many teams could benefit from their services is indeed a failure of the market.
   25. What did Billy Ripken have against ElRoy Face? Posted: March 29, 2019 at 11:52 AM (#5826665)
It might just be a seller with an unrealistic view of value, which could be what we have here. i.e., I'm not saying that Keuchel and Kimbrel deserve to get whatever they're asking for -- it might be that they are being unreasonable or getting bad advice from their agents. But the fact that neither one is playing when so many teams could benefit from their services is indeed a failure of the market.
How does the failure of a few individuals to acknowledge the reality of the market equate to a failure of the market itself?
   26. snapper (history's 42nd greatest monster) Posted: March 29, 2019 at 11:57 AM (#5826668)
People really don't understand the premise of a free market. A market is only going to be efficient at all if there are a large number of buyers and a large number of sellers, and the goods/services being sold are relatively homogeneous.

In a market with few buyers, few sellers, and unique assets (like baseball FA, multi-million dollar artworks, $20M homes, etc.) you should not expect efficiency at all.

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