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Wednesday, February 21, 2018

Baseball’s Economics Aren’t As Skewed As They Seem - The Ringer

Don’t have time to read right now but it looks interesting.

What Explains Labor’s Declining Share of Revenue in Major League Baseball? by J.C. Bradbury.

Jim Furtado Posted: February 21, 2018 at 03:21 PM | 7 comment(s) Login to Bookmark
  Tags: cba, economics

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   1. snapper (history's 42nd greatest monster) Posted: February 21, 2018 at 06:39 PM (#5628344)
Seems like the revenue split is close to 50:50, and has been since at least 2010.
   2. . Posted: February 21, 2018 at 07:52 PM (#5628364)
Don't care how much the actors get in feature films, don't care how much the players get in baseball.

Why on Earth would I?
   3. McCoy Posted: February 21, 2018 at 08:56 PM (#5628390)
What's that? The pay issue wasn't a big deal? No way.
   4. ptodd Posted: February 21, 2018 at 10:19 PM (#5628426)
First of all, benefits account for 10% of all MLBPA salaries . So 40% based on Cotts is 44% with benefits. Not 50%.

Second, the revenue figures used by MLB are 10% lower than revenue from other sources. MLB obviously deducting revenue from the calculations. Whether thats legitimate or not remains to be seen since we don't see the breakdown

Third, the 50% number is a red herring. Nobody has agreed to it. In the economy as a whole at the turn of the century labor has got 60%. This has declined in the 21st century due to the destruction of unions and labor arbitrage due to outsourcing and globalization. MLb has no such excuse for any decline.

The main issue is the declining share of revenues players have received since the turn of the century. There is no doubt there has been a significant decline since 2000. Even the article accepts that. Limiting the look back to 2010 when revenue growth rates took a hit due to the great recession masks that as much of the decline occured starting in 2002-2003 when MLBPA also alleged collusion and came away with a minor settlement. Subsequent CBA's all gave owners excuses for lower payroll growth rates

Also, the data obviously does not address FA players share of the pie, nor the 2018 crash. It takes awhile before depressed FA prices impact the totals noticeably

At the moment, with 30% of SPers and position players in the top 50 unsigned, those who have signed have seen prices drop 20% from Dave Camerons conservative predictions. RPers which account for 25%!of all spending have come in as predicted.

NL is outspending AL 2-1.

MLBPA has a lot of work to do. Getting players to FA earlier is essential. I say let anyone after their age 28 season be a free agent regardless of service time (players can still become eligible earlier). Teams will call players up earlier but thats not a bad thing.



   5. Walt Davis Posted: February 21, 2018 at 11:52 PM (#5628452)
The main issue is the declining share of revenues players have received since the turn of the century.

Yep. I think it was this article or another I just checked that said studies suggest it was over 60% in the early 2000s.

Also, by MLB's official numbers, revenues were $9 B in 2014, $9.5 in 2016 and a bit over $10 in 2017. That's not massive growth but about 2.5% for 14-15 and 15-16 then 5% last year. Payroll meanwhile, per a USA Today article, went up 3.3% 16-17 after rising only 0.35% the year before. Possibly there have been substantial increases in benefits, etc.

So first question is why does MLB have a press release saying revenues topped $10 B for the first time in 2017 and this table shows revenues of $9 B. Now the article says a Union guy looked at these and said they were close so ... there's $1 B in revenue that doesn't count. That's potentially fine if that was revenue from the sale of BAM Tech or other MLB revenue that isn't baseball-generated. But for too lazy to do the math, 50% of 9 is 45% of 10 so whether that billion counts matters a lot.

Then this table does have total player salary + benefit increase 4.3% for 2015-16 while the USA Today article puts (end of year) payroll increases at 0.35%. Similarly 4.2% vs 3.5% for 2016-17. One thing is that I don't think the USA Today includes postseason pay -- has that increased substantially? Other than that, was there a big boost in pension contributions? The latter difference is not such a big deal but 4.3% and 0.35% are very different numbers. Maybe USA Today was a typo for 3.5%?

USA Today article on player salaries
USA Today article on MLB revenues
   6. dlf Posted: February 22, 2018 at 10:26 AM (#5628587)
First of all, benefits account for 10% of all MLBPA salaries .


Where do you get this figure?
   7. snapper (history's 42nd greatest monster) Posted: February 22, 2018 at 10:31 AM (#5628596)
MLB obviously deducting revenue from the calculations. Whether thats legitimate or not remains to be seen since we don't see the breakdown

The estimates that showed the lowest player share were using gross MLBAM revenues, instead of the net income MLB teams receive from MLBAM. There is no reason to use total MLBAM revenues, since they have many lines of business that are not related to MLB content.

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