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Sunday, December 22, 2019

MLB Sees Record $10.7 Billion In Revenues For 2019

Best to read the original article.

Jim Furtado Posted: December 22, 2019 at 09:53 AM | 26 comment(s) Login to Bookmark
  Tags: economics

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   1. Starring RMc as Bradley Scotchman Posted: December 22, 2019 at 10:23 AM (#5910407)
But they have to save 35 cents by gutting the minors! Mo money, mo money...!
   2. RoyalsRetro (AG#1F) Posted: December 22, 2019 at 11:01 AM (#5910416)
Baseball is dying.
   3. Starring RMc as Bradley Scotchman Posted: December 22, 2019 at 11:35 AM (#5910419)
It's over. It's always been over.
   4. I am going to be Frank Posted: December 22, 2019 at 11:40 AM (#5910421)
Do these numbers include local broadcast deals?
   5. Pat Rapper's Delight (as quoted on MLB Network) Posted: December 22, 2019 at 11:48 AM (#5910424)
Nobody has enough pitching and nobody is making money.
   6. John DiFool2 Posted: December 22, 2019 at 12:44 PM (#5910437)
I'm confused by these two utterly contradictory headlines:

Average MLB salary drops for 2nd straight year

MLB Sees Record $10.7 Billion In Revenues For 2019

Certainly they must be from different universes/timelines, right?
   7. Barry`s_Lazy_Boy Posted: December 22, 2019 at 12:49 PM (#5910439)
How has executive compensation tracked over the last decade?
   8. Rennie's Tenet Posted: December 22, 2019 at 01:37 PM (#5910452)
I'm confused by these two utterly contradictory headlines:


I think the salaries get negotiated by a union or something, and it doesn't always end up with the same proportions.
   9. Los Angeles El Hombre of Anaheim Posted: December 22, 2019 at 02:01 PM (#5910460)
All that money's great, but it's still not enough to pay for their own stadiums.
   10. snapper (history's 42nd greatest monster) Posted: December 22, 2019 at 02:55 PM (#5910465)
Do these numbers include local broadcast deals?

Yes, everything. Sports is really not that big a business. If you combine all 30 franchise and MLB they'd be around 300 on the Fortune 500. NFL a little higher.
   11. bobm Posted: December 22, 2019 at 04:16 PM (#5910478)
[10] To some extent, where the RSNs are owned by the teams, I would suspect favorable transfer pricing (to avoid revenue sharing, e.g.) lowers what is counted as MLB revenue.
   12. JRVJ Posted: December 22, 2019 at 05:26 PM (#5910490)
I want to really thank Maury Brown for all the work he's being doing on these figures.

He has gone deep into what they really mean, and it's been great reading his articles.
   13. Walt Davis Posted: December 22, 2019 at 06:08 PM (#5910494)
#11 ... that sort of thing was rampant back in the 80s and 90s (e.g. when Trib/WGN owned the Cubs). But with the introduction of revenue sharing, the MLBPA gets to see the books so that sort of thing should be at a minimum.
   14. . Posted: December 22, 2019 at 06:53 PM (#5910506)
Absent an explicit agreement setting it, there's no necessary relationship between revenues and wages in any industry. There's no reason to think there would or should be one in baseball. If the employees want to try to negotiate a set percentage, they certainly could, but that would put a ceiling on any upside, too.
   15. BrianBrianson Posted: December 23, 2019 at 08:44 AM (#5910538)
Certainly they must be from different universes/timelines, right?


Revenue is up 3.8%, average salary is down 1.1%. Obviously not sustainable in the long run, but the other article notes since 1967, there have only been five years where the average salary decreased.
   16. snapper (history's 42nd greatest monster) Posted: December 23, 2019 at 09:02 AM (#5910540)
Absent an explicit agreement setting it, there's no necessary relationship between revenues and wages in any industry. There's no reason to think there would or should be one in baseball. If the employees want to try to negotiate a set percentage, they certainly could, but that would put a ceiling on any upside, too.

Sure, but when the entire product is highly skilled labor (there is virtually no capital involved in the production of MLB; the get their capital (stadiums) free) something near 50% is very common. The Investment Banking industry (which is far more capital intensive) has hovered around 50% of revenue as comp for generations. I would guess consulting is even higher.
   17. McCoy Posted: December 23, 2019 at 09:43 AM (#5910547)
The difference between where they are now and 50% is about 650 million and roughly 22 million per team. The article only mentions MLB players so I would guess you need to their in at least 10 to 20 million for minor league players and draft slot bonuses.

Then throw in the cost of mangers, coaches, front office, trainers, scouts, and so forth and baseball easily spends over 50% on salaries and benefits.
   18. snapper (history's 42nd greatest monster) Posted: December 23, 2019 at 09:54 AM (#5910550)
Then throw in the cost of mangers, coaches, front office, trainers, scouts, and so forth and baseball easily spends over 50% on salaries and benefits.

The point is not the absolute level, the point is that players' share is declining at a time of industry health.
   19. McCoy Posted: December 23, 2019 at 10:41 AM (#5910570)
Is other personnel growing?
   20. Never Give an Inge (Dave) Posted: December 23, 2019 at 10:44 AM (#5910574)
Average MLB salary drops for 2nd straight year

MLB Sees Record $10.7 Billion In Revenues For 2019

Certainly they must be from different universes/timelines, right?


These statistics are somewhat misleading. In recent years, the number of players being used by MLB teams has slightly increased as more players get shuttled back and forth to AAA and more players are on the DL/IL. So the average is being driven down by new guys presumably making close to the minimum, but the total player salaries actually increased.

The 2018 average salary of $4,095,686 was based on 968 players who were on active rosters or the IL on August 31. The 2019 average salary of $4,051,490 was based on 988 players. So total player salaries went up 1.0%, from $3.96 billion to $4.00 billion. That doesn't match the 3.8% increase in revenues, but it's not a decline.

Likewise, 2018 was a 0.5% increase over 2017 even though the average salary declined slightly. And 2017 was a 3.2% over 2016.
   21. Never Give an Inge (Dave) Posted: December 23, 2019 at 11:21 AM (#5910601)
Cross-posting from the other thread:

These statistics are somewhat misleading. In recent years, the number of players being used by MLB teams has slightly increased as more players get shuttled back and forth to AAA and more players are on the DL/IL. So the average is being driven down by new guys presumably making close to the minimum, but the total player salaries actually increased.

The 2018 average salary of $4,095,686 was based on 968 players who were on active rosters or the IL on August 31. The 2019 average salary of $4,051,490 was based on 988 players. So total player salaries went up 1.0%, from $3.96 billion to $4.00 billion. That doesn't match the 3.8% increase in revenues, but it's not a decline.

Likewise, 2018 was a 0.5% increase over 2017 even though the average salary declined slightly. And 2017 was a 3.2% over 2016.
   22. Never Give an Inge (Dave) Posted: December 23, 2019 at 12:03 PM (#5910620)

Sorry, double-post / cross-posted in the wrong thread.
   23. Barry`s_Lazy_Boy Posted: December 23, 2019 at 01:05 PM (#5910645)
Dave, thanks for pointing out that total salary went up while average salary declined. That is a key point that most people won't realize.
   24. Benji Gil Gamesh VII - The Opt-Out Awakens Posted: December 23, 2019 at 01:52 PM (#5910655)
But with the introduction of revenue sharing, the MLBPA gets to see the books so that sort of thing should be at a minimum.
I can't stress how strongly I doubt that the MLBPA actually sees true revenue figures without shell games of one kind or another.
   25. McCoy Posted: December 23, 2019 at 04:24 PM (#5910698)
To what advantage does the owners gain by violating the contract and why wouldn't the MLBPA be motivated to find them violating the contract?
   26. Never Give an Inge (Dave) Posted: December 23, 2019 at 05:09 PM (#5910705)
Not saying it doesn’t happen ever, but offering a below-market TV rights deal might have made sense when the same entity owned 100% of the TV station and the team. Now that such an arrangement is very rare (nonexistent?), I don’t see how that makes sense. The team owner would basically be giving value away.

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