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Wednesday, December 22, 2021

Report: MLB payrolls drop 4% to 2015 levels

Major League Baseball payrolls dropped 4% in 2021 compared to the league’s last full season, and the $4.05 billion total was the lowest in a fully completed year since 2015.

Falling payrolls have sparked the labor unrest that led to the sport’s first work stoppage in more than a quarter-century this month, when the collective bargaining agreement expired and owners locked out the players Dec. 2.

Payrolls are down 4.6% from their record high of just under $4.25 billion in 2017, the first year of the just-expired CBA, according to information sent to clubs by the commissioner’s office and obtained by The Associated Press on Monday. Spending on big league players has not been this low since a $3.9 billion total in 2015.

RoyalsRetro (AG#1F) Posted: December 22, 2021 at 11:45 PM | 10 comment(s) Login to Bookmark
  Tags: labor issues

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   1. Walt Davis Posted: December 24, 2021 at 07:29 PM (#6058608)
This is what has the players worked up. It's one thing to see a 4% drop vs 2019, especially given covid ... but that a 4% drop from 2019 takes it back to 2015 levels means it was only growing about 1% a year over the last 5 years.

Of course we also need to see revenue growth alongside that. According to numbers at Statista, revenues were up nearly 25% between 2015 and 2019 ($8.4 B to $10.4 B). So 25% rise in revenue, 4% rise in payroll -- obviously players should be concerned. Of course that's pretty much what's been going on for decades across most industries (and across most countries). And that's just growth in revenues, growth in franchise values might be even more (cuz insanely wealthy people are weird).

Now the MLBPA negotiated this system and its earlier similar variations and really should have seen this coming. They may have but just decided (probably correctly IMO) that they weren't in a position to win that battle. If they don't win some major concessions this time -- and I don't see any particularly good reasons to expect them to -- they may be stuck here for a very long time.

It is possible I suppose that most of that revenue growth is in non-baseball-generated revenue. Certainly selling off the tech part of MLBAM provided a big chunk of revenue. I don't know where stadium deals, real estate development, non-baseball content on team-owned RSNs, etc. fits into those revenue numbers either.
   2. Adam Starblind Posted: December 25, 2021 at 08:23 PM (#6058655)
That’s not what the word “revenue” means.
   3. John Northey Posted: December 26, 2021 at 10:30 PM (#6058718)
I suspect this will be a lockout that needs to cost owners money as players might be a bit more united depending on their leadership.

My gut says the players will fold fast again like last time, and maybe then get a solid union leader (not an ex-player) and then be able to win these battles again.

The smart thing for players to chase this time are a higher minimum salary and expansion (2 more teams = 52 more players getting ML jobs, plus 4 more minor league teams producing 100 more jobs for players). Maybe also looking at age and experience based free agency - 6 years or age 27 whichever comes first (owners counter with age 29, meet in the middle at age 28 for now and work on pushing it down in the future). Try not to give in to pure age based unless getting significant concessions (massive boost to minimum salary - at least double current levels - plus expansion and a 27 man roster, 30 in September).
   4. Stevey Posted: December 27, 2021 at 09:46 AM (#6058724)
   5. You can keep your massive haul Posted: December 28, 2021 at 11:50 AM (#6058825)
Free agent at age 28? That would suck for cheap teams like the A's. If you draft a guy out of college you only get a few seasons before they get expensive or traded.
   6. Stevey Posted: December 28, 2021 at 12:31 PM (#6058828)
That would suck for cheap teams

The A's could always, I dunno, be less cheap?
   7. DL from MN Posted: December 29, 2021 at 10:27 AM (#6058908)
Free agent at age 28? That would suck for cheap teams like the A's. If you draft a guy out of college you only get a few seasons before they get expensive or traded.

Then draft more high school players or sign more international free agents instead.
   8. Adam Starblind Posted: December 29, 2021 at 10:37 AM (#6058911)
College players would presumably drop in the draft.
   9. DL from MN Posted: December 29, 2021 at 11:01 AM (#6058913)
The other option is to give the player a long-term deal earlier in his career. You're rarely going to make a mistake locking up a 26 year-old player until age 30.
   10. RoyalsRetro (AG#1F) Posted: December 29, 2021 at 11:45 AM (#6058915)

College players would presumably drop in the draft.

Creating a market inefficiency a savvy cheap team like the A's could exploit!

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