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Thursday, October 03, 2019

Astros’ owner says Houston might ‘make a run at’ re-signing Gerrit Cole, but there’s a catch

The Houston Astros won’t know who they’re playing in the American League Divisional Series until after Wednesday night’s AL Wild Card Game between the Tampa Bay Rays and Oakland Athletics. Still, that didn’t stop Astros owner Jim Crane from looking into the future—as in, to the winter—on Monday by addressing right-handed starter Gerrit Cole’s impending free agency.

Crane even went so far as to concede the Astros might “make a run” at retaining Cole. Here’s more, courtesy of Chandler Rome of the Houston Chronicle:

“We’ll see where we end up after the year. We may make a run at it. We’re not sure yet,” Crane said. “We’re going to wait and see what else unfolds and who else is going to stay on the team.

Now, before Astros fans rush out to buy Cole shirseys, it’s worth noting that Crane’s proclamation came with a caveat: that he’d prefer to remain under the luxury tax threshold—or, to be straightforward, he’d prefer to avoid paying overage penalties.

Another entry to add to this pile- I hope you don’t mind work stoppages, because I have a bad feeling that’s what’s coming when the CBA is up next….

 

QLE Posted: October 03, 2019 at 12:06 AM | 36 comment(s) Login to Bookmark
  Tags: cheap owners, gerrit cole, luxury tax

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   1. bfan Posted: October 03, 2019 at 07:42 AM (#5885795)
Might as well start this here. There has been much angst on this board about lower baseball attendance (although it is pretty clear that this is caused by larger societal trends). Once cause proposed for lower attendance is the new world of too many great teams (100+ wins) and terrible teams, with too few teams in-between, in that fun and festive 76 to 86 win area.

In that world, if you accept there is a correlation (not a perfect correlation, but a correlation) between money spent on salaries and wins, isn't the luxury tax a very good thing?

Again, starting here, the first thing we can do to solve the too many great teams and terrible teams, is dissuade the greatest team from signing the best free agent, right?
   2. Never Give an Inge (Dave) Posted: October 03, 2019 at 09:43 AM (#5885810)

#1 - I think the luxury tax should help with competitive balance -- I mean, that was the stated rationale, right? However, as I noted in another thread, as measured by the variance of team wins, competitive balance in 2019 was the worst it's been during the expansion era. Maybe that was just a random blip (the fact that it was mostly an AL problem might indicate that's the case). It's also probably the result of other incentives built into the system that could be fixed without changing the luxury tax.

There's also the possibility that the luxury tax forced the larger market teams to get better at player analysis and development, since they didn't want to just go out and sign all the best free agents anymore. I'm not sure if that's the case--it probably would have happened anyway--but you can't put that genie back in the bottle anymore.
   3. McCoy Posted: October 03, 2019 at 09:43 AM (#5885811)
Who is going to forego a paycheck so that Mike trout can make a few million more?
   4. Never Give an Inge (Dave) Posted: October 03, 2019 at 09:48 AM (#5885815)

I also find the formulation in the article really strange -- "Crane even went so far as to concede the Astros might “make a run” at retaining Cole."

Why is that a "concession" by Crane? Isn't it expected that a team that just won 107 games will at least try to resign their world-class starting pitcher? Wouldn't fans be pissed if they didn't make an effort?
   5. snapper (history's 42nd greatest monster) Posted: October 03, 2019 at 09:49 AM (#5885816)
Might as well start this here. There has been much angst on this board about lower baseball attendance (although it is pretty clear that this is caused by larger societal trends). Once cause proposed for lower attendance is the new world of too many great teams (100+ wins) and terrible teams, with too few teams in-between, in that fun and festive 76 to 86 win area.

In that world, if you accept there is a correlation (not a perfect correlation, but a correlation) between money spent on salaries and wins, isn't the luxury tax a very good thing?

Again, starting here, the first thing we can do to solve the too many great teams and terrible teams, is dissuade the greatest team from signing the best free agent, right?


In theory, but in the real world the poorer teams aren't taking the money from revenue sharing and the luxury tax and spending it on players, they're running a boom/bust cycle with low average payrolls, and pocketing the extra revenue as profit.
   6. JL72 Posted: October 03, 2019 at 09:57 AM (#5885817)
In theory, but in the real world the poorer teams aren't taking the money from revenue sharing and the luxury tax and spending it on players, they're running a boom/bust cycle with low average payrolls, and pocketing the extra revenue as profit.


To be effective, there also needs to be salary floor tax, where teams under a certain payroll threshold are taxed, lose certain payments or drafts picks or some combination.
   7. bfan Posted: October 03, 2019 at 11:26 AM (#5885852)
To be effective, there also needs to be salary floor tax, where teams under a certain payroll threshold are taxed, lose certain payments or drafts picks or some combination.


I think this is the correct answer. Doesn't the NFL have something like this?
   8. snapper (history's 42nd greatest monster) Posted: October 03, 2019 at 11:28 AM (#5885856)

To be effective, there also needs to be salary floor tax, where teams under a certain payroll threshold are taxed, lose certain payments or drafts picks or some combination.


Yes. Agree 100%.
   9. Nasty Nate Posted: October 03, 2019 at 11:38 AM (#5885861)
salary floor tax, where teams under a certain payroll threshold are taxed, lose certain payments or drafts picks or some combination.
The tax or whatever should go directly to the lower paid players. I.E. if a team was $10m below the floor based on existing contracts, they could spread $10m among their players or a portion of their players based on salary, via some mechanism created for this purpose. This would also prevent some warped motivations for player acquisition.
   10. snapper (history's 42nd greatest monster) Posted: October 03, 2019 at 11:43 AM (#5885869)
The tax or whatever should go directly to the lower paid players. I.E. if a team was $10m below the floor based on existing contracts, they could spread $10m among their players or a portion of their players based on salary, via some mechanism created for this purpose. This would also prevent some warped motivations for player acquisition.

Start with a $1M minimum salary for everyone on the 25-man roster, $500K on the 40-man. Then add a salary floor equal to the total amount of non-local revenue a team receives plus $250M. Any team that falls below that floor loses shared revenue dollar for dollar until they reach it.

The money collected that way should be directed to a fund for the players. Maybe the pension fund to give additional benefits for indigent players?
   11. JL72 Posted: October 03, 2019 at 01:05 PM (#5885919)
This would also prevent some warped motivations for player acquisition.


A very good point. The Arizona Coyotes of the NHL acquired the contract of Pavel Datsyuk, even though he quit the NHL to go play in Russia, precisely so that they would be above the agreed upon salary cap floor.

Any solution needs to look at other leagues to figure out how to avoid things like this.
   12. Nasty Nate Posted: October 03, 2019 at 01:10 PM (#5885923)
A very good point. The Arizona Coyotes of the NHL acquired the contract of Pavel Datsyuk, even though he quit the NHL to go play in Russia, precisely so that they would be above the agreed upon salary cap floor.
I know nothing about NHL contractual matters. Why didn't they just increase the salary for players they already had?
   13. It's regretful that PASTE was able to get out Posted: October 03, 2019 at 01:12 PM (#5885925)
Because Detroit paid them a first-round pick to eat his cap hit.

If your salary bill is going to end up the same either way, might as well pick up an asset by taking someone else's dead money/bad contract. In that specific case it's actually even better than that--Datsyuk's salary counted against the cap (and, more pertinently, the floor) but Arizona didn't actually have to pay out a dime. Win-win!
   14. Nasty Nate Posted: October 03, 2019 at 01:13 PM (#5885927)
In the NFL, I think there is a fund that pays out at the end of the year to min-salary guys who ended up playing a lot. So if you are some undrafted guy who ends up being the starting center for the whole season, you get some extra money.
   15. Nasty Nate Posted: October 03, 2019 at 01:17 PM (#5885932)
Because Detroit paid them a first-round pick to eat his cap hit.

If your salary bill is going to end up the same either way, might as well pick up an asset by taking someone else's dead money/bad contract. In that specific case it's actually even better than that--Datsyuk's salary counted against the cap (and, more pertinently, the floor) but Arizona didn't actually have to pay out a dime. Win-win!
Thanks. So the player retired and therefore wasn't getting paid. I can understand the rationale for having this count against the cap, but it seems bizarre to have it count towards the floor. But again I admit ignorance on the NHL system.
   16. bfan Posted: October 03, 2019 at 01:18 PM (#5885933)
Maybe the pension fund to give additional benefits for indigent players?


Just a sideways trip, but I have to say it. This comment above fits with modern sensibilities and thus I would say you are more in touch with today than I am, but it occurs to me, especially in the area of ex-professional athletes (who really do seem to exemplify the worst of this), you will be rewarding players who spent money stupidly in and after their career (many cars; many homes; many nightclubs; many friends who really aren't friends), at the expense of players who lived more modestly, saved more money, and thus avoided being indigent. I am not interested one iota in a system such as that.
   17. Buck Coats Posted: October 03, 2019 at 01:19 PM (#5885935)
MLB needs to directly incentivize winning. The marginal value of a win needs to be increased. Take a large chunk of the shared money, and distribute it based on wins - say teams get 1 million for every win over 60 or 70. Teams would have an extra incentive to try to win as many games as they can, and to spend money to generate more wins.
   18. JRVJ Posted: October 03, 2019 at 01:25 PM (#5885946)
13, don't know anything about the NFL, but I'm reminded of the Touki Toussaint trade, in that the Braves ended up with a very nice looking player by virtue of helping out the Diamondbacks with some payroll issues they were having (purportedly due to Bronson Arroyo's contract).

I certainly don't mind that.
   19. cookiedabookie Posted: October 03, 2019 at 01:39 PM (#5885953)
#1 - Theoretically, a luxury tax would reduce the spread between the best and worst teams. But now big spending teams don't trade prospects as often to smaller market teams to get their expensive players. They need cheap players to stay below the luxury tax. So it drains a source of talent acquisition from small market teams.
   20. The Yankee Clapper Posted: October 03, 2019 at 01:48 PM (#5885957)
Again, starting here, the first thing we can do to solve the too many great teams and terrible teams, is dissuade the greatest team from signing the best free agent, right?
No. In Cole’s case, he already is an Astro, although one with an expiring contract. I don’t favor any restraints on teams retaining the services of their players, or on players obtaining fair market value for their services.
   21. bobm Posted: October 03, 2019 at 02:21 PM (#5885970)
What is a "shirsey"?
   22. Nasty Nate Posted: October 03, 2019 at 02:22 PM (#5885971)
Well, it's not quite a shark and not quite a horsey but man... So to answer your question I don't know.
   23. snapper (history's 42nd greatest monster) Posted: October 03, 2019 at 02:23 PM (#5885972)
Just a sideways trip, but I have to say it. This comment above fits with modern sensibilities and thus I would say you are more in touch with today than I am, but it occurs to me, especially in the area of ex-professional athletes (who really do seem to exemplify the worst of this), you will be rewarding players who spent money stupidly in and after their career (many cars; many homes; many nightclubs; many friends who really aren't friends), at the expense of players who lived more modestly, saved more money, and thus avoided being indigent. I am not interested one iota in a system such as that.

I was thinking more like guys who got 200 total days of service time, spent 10 years in the minors, and never made more than the minimum.

I'd be totally fine with a career earnings max to be eligible for the help. If you earned more than $2M in your career, GTFOH.
   24. JAHV Posted: October 03, 2019 at 02:24 PM (#5885974)
What is a "shirsey"?


It's a t-shirt made to look like a jersey. It has the name and number of a player on the back.
   25. bfan Posted: October 03, 2019 at 03:13 PM (#5886003)
I'd be totally fine with a career earnings max to be eligible for the help. If you earned more than $2M in your career, GTFOH.


This is a solid adjustment I can heartily support.
   26. Walt Davis Posted: October 03, 2019 at 06:10 PM (#5886093)
Back to #1: I don't think there are a large number of great teams, only a large number of terrible teams. Those wins have to go somewhere and not surprisingly they go to the better teams. If some of the AL bottom-feeders had fielded more competitive teams, there wouldn't be this big bunch of "great" teams. Of course that's essentially impossible to prove as it's a zero-sum game. But which is more likely, an outbreak of great teams or a set of teams engaging in an identified and financially lucrative strategy, that might also be beneficial for building success a few years down the road, while being pretty open about what they're doing?

FWIW, I think the Astros and probably Dodgers are "great" teams in some absolute sense but the Yanks, Twins, Braves, A's, Rays are just good teams that (a) played a bit above their heads and (b) added some extra wins thanks to the large number of extra crappy teams.
   27. Walt Davis Posted: October 03, 2019 at 07:03 PM (#5886117)
On payroll = wins and lux tax/cap ... It's what everybody's been trying to figure out since the start of the expansion era. It's why we have the draft, it's one of the (lesser) reasons for 6 years of control prior to FA, one of the (lesser) reasons for compensation to teams losing FAs and of course the lux tax. Something tells me we're not gonna work it out here (we've been at it for 20 years or so :-).

But yes, achieving player freedom of movement and high player salaries while preventing most of the top talent aggregating in the 10 highest-revenue marketes is the golden ring. MLB actually does a pretty good job of that. Now they need to fix this problem of tanking. I know a lot of folks don't really believe it's happening but I'm hoping this year changes some minds. It doesn't do any good to punish crappy teams but you have to find a way to remove/reduce the profit incentive from losing 100 games. The most obvious step is to "force" them to spend all of their common and shared revenue on payroll or give the remainder back. Alas, "obvious" doesn't necessarily equate to "effective."

A "floor" would probably help, a big boost to league minimums and I'd like to see automatic increases based on service time (or the player becomes a FA). Say the current min for a player with less than a year, then a raise to $1 M with one year of service time (even if midseason) then $1.5 for 2, then a min of $2 M for an arb-eligible player (maybe continuing raises for each additional year). If the team doesn't want to pay the guy that, they non-tender and he can sign wherever for whatever.

That would mean the min a player makes before entering FA would be $9 M. Most who survive that long would make much more of course (the arb system is still there). It reduces the incentive to replace solid bench veterans with cheap kids. It would lead to more churn in those with 2-4 years of service time but that results in their freedom. You do have to work out something with regard to how options work -- how about options are burned even if they player stays on the 25-man ... which is the equivalent of saying the number of options is reduced with every year of service time.

I'm also a fan of service time starting when a player is placed on the 40-man, putting them into arb/FA earlier. (You could do something like "40 not 25" counts half or you are FA eligible with 6+ MLB or 7+ MLB/40 ... while maintaining some form of options and minor-league FA that basically caps 40-man only time around 3 years max.)

So those possibly address some issues with player freedom of movement, a bit more security for vet bench types and a slightly better match between value and salary for young players. It doesn't do crap for equalizing revenues across teams.

I'm not sure that's a fixable problem for MLB. They may be declining as a %age but local revenues (attendance, local broadcast rights, stadium ads and sponsorships) are still hugely important for MLB (and NHL and NBA I assume ... NFL is pretty nationalized in revenue terms). The obvious (not necessarily effective much less feasible) way to reduce inequalities in local revenues is to put at least 2 more teams into NY and 1-2 into LA ... with no guarantee on how long that would take to really matter given how far behind those new teams would be in market share at the start. That might have been possible if they'd done it during the 60s or 70s but there's zero chance it will happen in the foreseeable future.

I guess the other obvious option is contraction but that's not happening either, at least not to the extent you'd need to do it to achieve anything remotely close to revenue balance. You could pile all the big markets into two divisions then have 4 divisions for the others, pretend it's all "major league" baseball of equal quality and keep the playoff system the same. That's never happening either.

So I don't really see a solution to that other than revenue sharing. That's one reason I think they need to fix the tanking problem. The big revenue teams must already be annoyed that some of their profits go to Miami but consider it a necessary evil. But if competitive balance is good then tanking teams guaranteeing extreme imbalance (at least within a season) is bad ... and they're doing it on the rich teams' money. How long will the rich teams cooperate?

But maybe competitive balance doesn't matter for the health of the sport. And even if it does, "balance" is the open term there. I don't think it's good for the sport if the top teams win only 90-92 games every year -- randomness is already a big factor in baseball and several years of that will just make the entire regular season look random. Point being, there's presumably some sweet spot for "balance" but nobody knows what it is so it's obviously difficult to figure out what revenue balance needs to be to achieve the right amount of competitive balance.

Anyway, I don't see any realistic way to achieve true local revenue balance in baseball nor do I see a way to reduce the role of local revenue enough such that its imbalance doesn't really matter. So there's probably not much you can do except cap the spending of the richer teams while also sharing revenue. That leads to tanking which, in it sway, leads to cap pressure (the expensive players spread across fewer teams) which leads to salary suppression (cramming the expensive players into fewer teams means less overall revenue to pay good players with). So yeah, the obvious step to achieve more balance that what we've got is to force the cheap teams to spend and, if you can figure out how, push them towards spending in genuinely competitive ways (i.e. not just eating salary to meet a floor).
   28. Sunday silence Posted: October 03, 2019 at 08:52 PM (#5886215)

In the NFL, I think there is a fund that pays out at the end of the year to min-salary guys who ended up playing a lot. So if you are some undrafted guy who ends up being the starting center for the whole season, you get some extra money.


This may be stating the obvious but Im ignorant so I'll ask:

is it reasonable to suggest that the nfl players association has done a far better job of negotiating for players than MLBs? or are the two sports so different that comparisons are weak at best?
   29. snapper (history's 42nd greatest monster) Posted: October 03, 2019 at 08:54 PM (#5886218)
This may be stating the obvious but Im ignorant so I'll ask:

is it reasonable to suggest that the nfl players association has done a far better job of negotiating for players than MLBs? or are the two sports so different that comparisons are weak at best?


Nah, the NFLPA got rolled decades ago. They have non-guaranteed contracts in a sport where career ending injury is virtually inevitable.
   30. It's regretful that PASTE was able to get out Posted: October 03, 2019 at 08:56 PM (#5886220)
So I don't really see a solution to that other than revenue sharing. That's one reason I think they need to fix the tanking problem. The big revenue teams must already be annoyed that some of their profits go to Miami but consider it a necessary evil.


That thought occurs to me, too--but if it were so, shouldn't the big revenue teams be pushing for contraction? Just remove Miami, Pittsburgh, San Diego, KC, Tampa*, and Oakland* if you're tired of writing checks to owners who just pocket them.

But instead MLB is going the other way--they're hankerin' to expand, which can have no other result but to add two more tiny-market teams whose owners are in all probability going to cash in their revenue sharing checks as profit. The wealthy teams' owners must know this. So I can only surmise that they've done the math and believe (I can't see it myself, but they have better information than I do) that adding two more teams will somehow increase global revenue enough to offset the money they have to pay to leech owners to, essentially, provide the wealthy teams with opponents to play.

There is one obvious angle they may be considering: the more teams on the Dodgers' and Red Sox' schedule whose owners don't really give a damn if they win 100 games or lose 100, the easier it is for the Dodgers and Red Sox to be playing in October most years. The more opponents whose upper management isn't really trying to win, the better it is for the big-money teams who need to win to maximize their revenue.

*It's all to the good that these teams have baseball ops management that's extremely good and/or lucky, but it doesn't change the fact their owners don't give a damn whether their team wins or not.
   31. Sunday silence Posted: October 03, 2019 at 08:56 PM (#5886221)
....you will be rewarding players who spent money stupidly in and after their career (many cars; many homes; many nightclubs; many friends who really aren't friends), at the expense of players who lived more modestly, saved more money, and thus avoided being indigent. I am not interested one iota in a system such as that.


You are oversimplifying this to a large extent. For one thing, there could be mandatory programs that ex players would have to enroll to sho they understand or at least are trying to get things better.

For another, there are myriad reasons why people go broke in a capitalist country such as USA. Lots of people get destroyed by medical bills. Also business losses, Curt Schilling might not deserve a bail out by such a fund, but what about guys like johnny Unitas? He went broke in business and didnt want to go the legal rout to cut his losses.

And there are many other people who fall into grey lines. What about drug addiction? this isnt always a good guy bad guy thing. You can get addicted and not be a bad person. Or legal problems, you can easily go broke paying lawyers and no is really sure of what really happened in your case. or medical conditions etc etc...
   32. snapper (history's 42nd greatest monster) Posted: October 03, 2019 at 08:59 PM (#5886223)
Lots of people get destroyed by medical bills.

Everybody who gets even one MLB PA has lifetime access to the union medical plan.
   33. Der-K: at 10% emotional investment Posted: October 03, 2019 at 09:30 PM (#5886262)
double post. Also boring post but I’ll leave one up anyway.
   34. Der-K: at 10% emotional investment Posted: October 03, 2019 at 09:31 PM (#5886263)
I am fine with a luxury tax but also think it should be coupled with other competitive balance instruments like a salary floor (which I’d likely construct as a gameable multi-year threshold but there are good arguments against doing that). We want to incentivize teams to try to win, to make smart decisions, and I want labor to get a “fair” share of revenues (what that means is obviously up for debate and reasonable people can disagree) - but difficult to design systems that do all these things that most parties would sign on to.

   35. Ziggy is done with Dominican discotheques Posted: October 03, 2019 at 10:01 PM (#5886273)
If you want competitive balance, one thing that you could do is put all the big market teams in one league and all the small market teams in the other.

Now, this is a terrible idea because the marginal value of a win is higher for big market teams, and so if ownership wants to maximize profits it should try to funnel wins to big market teams instead of having those teams compete with each other. But it would get you competitive balance: long about November nobody looks at even a good small-market team like the A's and says "no way can we keep up with them, it's time for a rebuild".
   36. Greg Pope Posted: October 03, 2019 at 10:16 PM (#5886276)
they're doing it on the rich teams' money. How long will the rich teams cooperate?

Paste brings up a good point in 30. Don't the Yankees actually want the Orioles to be terrible? Are they, in fact, happy to pay revenue sharing if it means that they have more bad teams to beat up on? Of course, the Red Sox also play the Orioles, so it doesn't help there. But if one third of league isn't trying in a given year, it increases the Yankees odds of making the playoffs. How much is that worth to them?

The issue is that the league should care about this, but the rich teams might not.

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