Baseball for the Thinking Fan

Login | Register | Feedback

btf_logo
You are here > Home > Baseball Newsstand > Baseball Primer Newsblog > Discussion
Baseball Primer Newsblog
— The Best News Links from the Baseball Newsstand

Sunday, November 04, 2012

Morosi: Recession? Not in Scott Boras’ world

Teams could be wary of nine-figure contracts, because of how investments in Alex Rodriguez, Carl Crawford, and Vernon Wells (among others) have soured.

But if team executives make those points to Boras this week, as I did Sunday, he is ready with a response.

“The good news for them is that every team is going to have another $25 million in revenue through the national TV packages,” Boras said, in reference to the contracts that will increase to roughly $50 million per annum, per team, beginning in 2014. “They’re going to be making between $110 million and $120 million (including other revenue streams) before they sell a ticket. It’s a different financial model. Every team can afford to keep a franchise player now.

“For the same product, major-league teams just got $25 million more. So, for players, the same performance should get you grandly more. The quid pro quo has to continue: If revenues go up, player salaries go up.

“This is recognition for the value of performance. All of this is a byproduct of performance. Cement and grass doesn’t sell. Performance sells.”

~ Memo from Ted Turner ~

“If the Yankees didn’t sign Soriano, they wouldn’t have won the AL East,” Boras said flatly. “This is the value of depth. If the Yankees signed Soriano (after the 2010 season) when Rivera was 40 and healthy, why wouldn’t you sign Soriano when Rivera is 42 and coming off knee surgery?

“The issue for the Yankees is winning. The reason they signed Soriano two years ago is that they are about winning and depth. It proved true. When Mariano Rivera went down, Soriano became one of the top two or three closers in the game.

“When you know Mariano Rivera will be there for only one more year — at his age, coming off an injury — you can’t expect him to be what he was two years ago. There is a need there. You want to secure a great talent for future years. Soriano has proven he can be effective in New York. The team knows more about him. His value has gone higher.”

Repoz Posted: November 04, 2012 at 07:54 PM | 35 comment(s) Login to Bookmark
  Tags: business

Reader Comments and Retorts

Go to end of page

Statements posted here are those of our readers and do not represent the BaseballThinkFactory. Names are provided by the poster and are not verified. We ask that posters follow our submission policy. Please report any inappropriate comments.

   1. Bruce Markusen Posted: November 04, 2012 at 08:16 PM (#4292864)
Oh, I see, we've got more revenue coming in, so let's spend it foolishly on another seven or eight-year contract that is almost guaranteed to become an albatross.
   2. clowns to the left of me; STEAGLES to the right Posted: November 04, 2012 at 09:12 PM (#4292890)
Oh, I see, we've got more revenue coming in, so let's spend it foolishly on another seven or eight-year contract that is almost guaranteed to become an albatross.
if major league baseball was run by gary bettman, they'd lose an entire season trying to break the union to limit the maximum length of contracts.
   3. Ryan Lind Posted: November 04, 2012 at 10:09 PM (#4292928)
I wonder how Boras would play it if he represented Rivera as well.
   4. silhouetted by the sea Posted: November 04, 2012 at 10:12 PM (#4292932)
if major league baseball was run by gary bettman, they'd lose an entire season trying to break the union to limit the maximum length of contracts.

I am not sure, but I think owners can limit the length of contracts by not signing players to long contracts.
   5. Bhaakon Posted: November 04, 2012 at 10:20 PM (#4292937)
I am not sure, but I think owners can limit the length of contracts by not signing players to long contracts.


Nope, they'd get sued for collusion.
   6. The Yankee Clapper Posted: November 04, 2012 at 10:49 PM (#4292959)
Seems like Boras' pitch is aimed at getting the Yankees interested in Soriano, despite the opt-out. Don't see that happening if they are serious about getting under the luxury tax threshold.
   7. snapper (history's 42nd greatest monster) Posted: November 04, 2012 at 11:20 PM (#4292976)
Seems like Boras' pitch is aimed at getting the Yankees interested in Soriano, despite the opt-out. Don't see that happening if they are serious about getting under the luxury tax threshold.

No chance in hell.

With Rivera, Robertson, Chamberlain, Logan, Rapada, and Eppley, plus the 6th and 7th SP, they have zero need for Soriano. Add that to the draft pick they'll gain, and the desire to limit 2014 payroll, it just ain't gonna happen.
   8. The Ghost's Tryin' to Reason with Hurricane Season Posted: November 04, 2012 at 11:21 PM (#4292977)
I like this part:
When he speaks, the industry listens. That includes the owners who pretend they don’t.


He'll do well for his guys, as usual.
   9. silhouetted by the sea Posted: November 05, 2012 at 01:20 AM (#4293038)
Nope, they'd get sued for collusion.

No, they get sued for collusion, or at least lose a lawsuit for collusion, when they collude. In 1985-87, the big time free agents were not getting any offers. It might be possible for owners to collude without being obvious about it, but I doubt that they could pull it off.
   10. Howie Menckel Posted: November 05, 2012 at 01:55 AM (#4293050)

"With Rivera, Robertson, Chamberlain, Logan, Rapada, and Eppley, plus the 6th and 7th SP, they have zero need for Soriano."

That seems foolproof, unless that first guy isn't himself anymore.

   11. Bhaakon Posted: November 05, 2012 at 03:25 AM (#4293066)
No, they get sued for collusion, or at least lose a lawsuit for collusion, when they collude. In 1985-87, the big time free agents were not getting any offers. It might be possible for owners to collude without being obvious about it, but I doubt that they could pull it off.


I'm pretty sure that the owners getting together and deciding not to offer long contracts is textbook collusion.
   12. Swedish Chef Posted: November 05, 2012 at 03:36 AM (#4293068)
I'm pretty sure that the owners getting together and deciding not to offer long contracts is textbook collusion.

There was nothing about getting together up there. If every owner sooner or later realizes "Hey, these eight-year contracts are stuuuuupid", then they will fall from fashion, no collusion needed. There's already a significant subset of teams that are operating on that principle.
   13. Walt Davis Posted: November 05, 2012 at 04:02 AM (#4293073)
That seems foolproof, unless that first guy isn't himself anymore.

Of Joba only throws 20 innings again and Rapada and Eppley throw more than their 84 combined innings and do it as well as they did and Derek Lowe, just cuz it's the f'ing Yankees, throws in 23 IP of 139 ERA+. Rivera and Robertson are about as good as it gets so, sure, the Yanks have bigger needs to fill with that money but Soriano is, without question except by pointlessly annoyed Yankee fans, one of the best and most reliable relievers out there.*

On the money thing Bruce -- all Boras said was that as revenues go up, salaries (should) go up. Hard to argue with the man there. The median payroll last year was about $85 M; the average was probably about $100 M. National TV revenues alone just went up $25 M per team. (The earlier figure I saw was $30 but Boras should know.) That's rather a large jump and presumably some other revenues have also gone up. Now of course half of that is going to go elsewhere but Boras is absolutely right that every team can afford a franchise player.

$110-120 M in revenue before they sell a ticket. A guy could get used to that.

*Hey, he only gets hurt every 3rd year and he pretty much never sucks -- that's reliable by reliever standards.



   14. Bhaakon Posted: November 05, 2012 at 04:23 AM (#4293076)
There was nothing about getting together up there. If every owner sooner or later realizes "Hey, these eight-year contracts are stuuuuupid", then they will fall from fashion, no collusion needed. There's already a significant subset of teams that are operating on that principle.


Collusion or a lockout/strike ending in a radically different labor agreement is the only way this will happen. You can't hold an auction seeded with wealthy fanboys and expect the winner to have a sane valuation.
   15. Dr. Vaux Posted: November 05, 2012 at 05:37 AM (#4293080)
I don't think we'll see a pitcher get 7 years again. I would also be shocked if Hamilton gets more than five years. The money will absolutely be there. Average annual value of contracts will go up and up. But years are a different story. It would be very difficult to argue collusion if there are offers coming in hot and heavy competing in the range of 4 years, $90 million and 5 years, $115 million AAV could go much higher--the Yankees surely wish they'd paid A-Rod $200 million over the past five years and were now done with him. What would Grienke's camp say to 3 years, $80 million if the other offers were all 5 years, $100 million? He might believe he could get another 3 years, $80 million when that one was over, and a team would obviously rather have fewer years, more money per. Several teams are up against the cap now, and paying the luxury tax a couple of times because of huge AAV contracts would dent the giant revenue streams they have coming in less than either having a "bridge year" once every four years because of long contracts to declining players or paying the mega penalty.

Might we see a cycle where small market teams plan to jack up and contend in years when big market teams are projected to get down under the cap, and it just becomes part of the game? Every four years, it's the AL East's turn at a level playing field, so Toronto and Baltimore jack up their payroll and go for it?
   16. Bhaakon Posted: November 05, 2012 at 06:08 AM (#4293082)
t would be very difficult to argue collusion if there are offers coming in hot and heavy competing in the range of 4 years, $90 million and 5 years, $115 million AAV could go much higher--the Yankees surely wish they'd paid A-Rod $200 million over the past five years and were now done with him. What would Grienke's camp say to 3 years, $80 million if the other offers were all 5 years, $100 million?


It would be very easy to argue collusion if suddenly the top offers are 4 and 5 year deals in the same AAV range when elite players were getting twice that as recently as last season. Short of tapes of the owners meeting to collude, that's about as good as the evidence could get.
   17. Crispix reaches boiling point with lackluster play Posted: November 05, 2012 at 08:58 AM (#4293099)
There was nothing about getting together up there. If every owner sooner or later realizes "Hey, these eight-year contracts are stuuuuupid", then they will fall from fashion, no collusion needed. There's already a significant subset of teams that are operating on that principle.


You'd think so, but in the NHL owners have actually been colluding to offer ever more ludicrous eight-year contracts, ten-year contracts, fifteen-year contracts, etc., as a sort of boat-burning strategy to steel their resolve when it comes time to (in the 2012-13 season) eventually change the rules and reneg on all those contracts.
   18. snapper (history's 42nd greatest monster) Posted: November 05, 2012 at 10:57 AM (#4293156)
"With Rivera, Robertson, Chamberlain, Logan, Rapada, and Eppley, plus the 6th and 7th SP, they have zero need for Soriano."

That seems foolproof, unless that first guy isn't himself anymore.


Robertson is plenty good enough to close if Rivera becomes mediocre or is hurt.
   19. snapper (history's 42nd greatest monster) Posted: November 05, 2012 at 10:58 AM (#4293160)
Of Joba only throws 20 innings again and Rapada and Eppley throw more than their 84 combined innings and do it as well as they did and Derek Lowe, just cuz it's the f'ing Yankees, throws in 23 IP of 139 ERA+. Rivera and Robertson are about as good as it gets so, sure, the Yanks have bigger needs to fill with that money but Soriano is, without question except by pointlessly annoyed Yankee fans, one of the best and most reliable relievers out there.*

And you want your team to give Soriano a 3/40 deal to be their 3rd best RP?
   20. RoyalsRetro (AG#1F) Posted: November 05, 2012 at 11:15 AM (#4293175)

There was nothing about getting together up there. If every owner sooner or later realizes "Hey, these eight-year contracts are stuuuuupid", then they will fall from fashion, no collusion needed. There's already a significant subset of teams that are operating on that principle.


It only takes two foolish (or desperate, or both) owners/GMs to drive up bidding for everyone. Sometimes it only takes one. Its hard to get 30 people to agree on anything, I rather doubt 30 owners are going to all suddenly agree that long-term contracts are not worth it for all players all the time. As Boras always argues "this guy is different than the rest!" He's actually worth it!" And someone will believe him.
   21. snapper (history's 42nd greatest monster) Posted: November 05, 2012 at 11:29 AM (#4293206)
It only takes two foolish (or desperate, or both) owners/GMs to drive up bidding for everyone.

I think desperate is the key.

At any given moment the "life-expectancy" for most GMs is less than 5 years. If you're likely to be fired within the next 2-4 years unless your team improves, why do you care if a contract is going to be lousy in years 5-8?
   22. clowns to the left of me; STEAGLES to the right Posted: November 05, 2012 at 01:51 PM (#4293397)
a team would obviously rather have fewer years, more money per.
pujols: 10/254
fielder: 9/214
howard: 5/125


   23. The Ghost's Tryin' to Reason with Hurricane Season Posted: November 05, 2012 at 01:53 PM (#4293403)
Aren't the rules set up that you get hit harder and harder with the lux tax if you do it year after year, but it resets if you get under it one year? that would favor to a strategy to go under for a year, then back up.

If you signed a guy to a long deal with one year's salary that dips lower, then goes back up, do they average the salry over the contract length for lux tax purposes?
   24. snapper (history's 42nd greatest monster) Posted: November 05, 2012 at 02:27 PM (#4293457)
If you signed a guy to a long deal with one year's salary that dips lower, then goes back up, do they average the salry over the contract length for lux tax purposes?

They use AAV, total contract value divided by years. Otherwise, you could really game the system.
   25. Rough Carrigan Posted: November 05, 2012 at 03:39 PM (#4293537)
I thought they signed Soriano two years ago because they didn't realize that Dave Robertson was going to be such a terrific 8th inning guy.
   26. Nasty Nate Posted: November 05, 2012 at 03:45 PM (#4293543)
The owners won't realize that giving out 7-8 year contracts is stupid because IT ISN'T STUPID!
   27. Bhaakon Posted: November 05, 2012 at 05:41 PM (#4293661)
The owners won't realize that giving out 7-8 year contracts is stupid because IT ISN'T STUPID!


Betting on which 20-something will hold a HOF career path into his mid-late thirties has never been a smart man's wager.
   28. Nasty Nate Posted: November 05, 2012 at 06:04 PM (#4293691)
Yes it has.
   29. tshipman Posted: November 05, 2012 at 06:09 PM (#4293696)
Betting on which 20-something will hold a HOF career path into his mid-late thirties has never been a smart man's wager.


In an expansionary market, it absolutely makes sense to sign long term deals. The problem with the early 2000's is that the market didn't expand like it had before. Greg Maddux's deal in 1993 was huge, but it was peanuts by the time 2000 rolled around.
   30. Bhaakon Posted: November 05, 2012 at 07:47 PM (#4293793)
In an expansionary market, it absolutely makes sense to sign long term deals. The problem with the early 2000's is that the market didn't expand like it had before. Greg Maddux's deal in 1993 was huge, but it was peanuts by the time 2000 rolled around.


Just like it made some sense to cash in the 401K and invest in flipping houses while the real estate market was exploding...until the bubble burst. Markets don't expand explosively forever. Now that player salaries are more or less in line with baseball's profitability, they're just not going to grow much faster than league revenue.

Yes it has.


Not with modern free agency, in which teams have to actually play said player like he's going to the HOF, whether he lives up to that promise or not.
   31. Jay Z Posted: November 05, 2012 at 08:19 PM (#4293811)
Not with modern free agency, in which teams have to actually play said player like he's going to the HOF, whether he lives up to that promise or not.


Part of any FA contract is a de facto acquisition bonus. You can get players three ways, through FA, through trades, or through the minor leagues. The later two require investment, and they still require that you pay the players once they become productive. FAs are overpaid because the remaining compensation is cheap (draft choice.)
   32. Walt Davis Posted: November 05, 2012 at 10:46 PM (#4293916)
I don't think we'll see a pitcher get 7 years again.

Cole Hamels signed for 7/$153 just this season. OK, that was a 6-year extension plus this year's contract but close enough. Kershaw is probably the next one who will put this to the test.

Now that player salaries are more or less in line with baseball's profitability, they're just not going to grow much faster than league revenue.

But league revenue just went up by at least $750 M or about 25% of current total payroll (so probably about 12.5% of total revenues).
   33. Nasty Nate Posted: November 05, 2012 at 11:27 PM (#4293956)
I don't think we'll see a pitcher get 7 years again.

Cole Hamels signed for 7/$153 just this season. OK, that was a 6-year extension plus this year's contract but close enough. Kershaw is probably the next one who will put this to the test.


Felix, Verlander, and David Price could possibly sign 7 year deals in the future.
   34. Bhaakon Posted: November 06, 2012 at 05:50 AM (#4294141)
But league revenue just went up by at least $750 M or about 25% of current total payroll (so probably about 12.5% of total revenues).


Where are you getting that number? All I can find is 3.5% revenue growth between 2010 and 2011. The team valuation increased 16%, but that's not operating revenue, and league debt rules make it difficult to leverage equity into payroll.
   35. Walt Davis Posted: November 06, 2012 at 07:23 AM (#4294149)
Where are you getting that number?

FTE:

“The good news for them is that every team is going to have another $25 million in revenue through the national TV packages,” Boras said, in reference to the contracts that will increase to roughly $50 million per annum, per team, beginning in 2014.

OK I guess it doesn't start until 2014 when I assumed it was 2013. But it's $25 M extra per team. 30 teams. $750 M in extra revenue.

I didn't run the numbers, but average team payroll seems to be around $100 M, 30 teams, that's $3 B of which $750 M is 25%. Payroll tends to run about 50% of total revenue, so ...

You must be Registered and Logged In to post comments.

 

 

<< Back to main

BBTF Partner

Support BBTF

donate

Thanks to
robinred
for his generous support.

Bookmarks

You must be logged in to view your Bookmarks.

Hot Topics

NewsblogOT: The Soccer Thread July, 2014
(320 - 3:51am, Jul 23)
Last: Richard

NewsblogRangers' Yu Darvish Pushes for a Six-Man Pitching Rotation - NYTimes.com
(14 - 3:31am, Jul 23)
Last: bobm

NewsblogAs shifts suppress offense, time has come to consider a rule change
(42 - 3:25am, Jul 23)
Last: bjhanke

NewsblogOT: Monthly NBA Thread- July 2014
(824 - 3:21am, Jul 23)
Last: robinred

SABR - BBTF ChapterWho's going to SABR??
(46 - 3:02am, Jul 23)
Last: Mess with the Meat, you get the Wad!

NewsblogCowboy Monkey Rodeo taking the Minors by storm
(9 - 2:27am, Jul 23)
Last: stevegamer

NewsblogOTP - July 2014: Republicans Lose To Democrats For Sixth Straight Year In Congressional Baseball Game
(2719 - 2:08am, Jul 23)
Last: bobm

NewsblogOMNICHATTER 7-22-14
(53 - 2:05am, Jul 23)
Last: AT-AT at bat@AT&T

NewsblogTrading for Price would be right move for Cubs | FOX Sports
(73 - 1:52am, Jul 23)
Last: Mess with the Meat, you get the Wad!

NewsblogChase Headley traded to New York Yankees from San Diego Padres - ESPN New York
(90 - 1:33am, Jul 23)
Last: Walt Davis

NewsblogSports Reference Blog: 1901-02 Orioles Removed from Yankees History
(28 - 1:29am, Jul 23)
Last: SoSHially Unacceptable

NewsblogMLB: Astros telecasts catching on to advanced metrics
(12 - 12:24am, Jul 23)
Last: jwb

NewsblogFSAZ: D-backs cut off McCarthy’s cutter controversy
(26 - 11:08pm, Jul 22)
Last: billyshears

NewsblogThree Moves The Red Sox Should Make - Tony Massarotti - Boston.com
(35 - 10:24pm, Jul 22)
Last: Select Storage Device

NewsblogTony Oliva turns 76; Gardenhire: 'He should be in hall of fame'
(46 - 9:10pm, Jul 22)
Last: DavidFoss

Page rendered in 0.4504 seconds
52 querie(s) executed