Nationals Baseball: Nothing in a vacuum

Wednesday, February 13, 2019

Nothing in a vacuum

The Nats should pounce.

I mean some team should and the Nats are as good as any.

The ownerships are playing a long con on the fanbase. The way the payment in the game for a while now was kind of unfair, but tacitly agreed upon. Players would give up value at the beginning of their career, providing potential production for minimal cost, for the chance at a bigger pay day down the line. It was clear that FA contracts were often not going to pay for themselves, but that was part of the point. The "survivors" - those that proved they could produce with some consistency and remained healthy - would reap the benefits from age 26-35 of the value everyone lost from 18-26. In place of production we talked about leadership and presence and nonsense. It was a little bit delusional but everyone bought in.

But now the ownerships are pointing to the back end with analytic numbers and saying "See you aren't worth it. We want to pay you what you are worth!" and trying to sell that to the public. The obvious problem is they aren't pointing at the front end as well and saying the same thing. They are looking to continue to underpay to start, but no longer make up for that later. They are trying to squeeze more cash from the players, plain and simple.

And people are buying it.

Not everyone. Maybe not even most. But a good percentage of fans fall back on the "greedy players" who can't be happy even making millions. I've talked about this before but I think a big big big part of this is how athletes are perceived in general. "Baseball player" isn't seen as a real job.  "Owner of business" is.  Owner makes billions - that's just the way the world works. Baseball player makes millions - I can't believe it! For a kids game! I'd do it for free!.  But I digress, the point isn't the why, just the fact that it is working for some, and if it works for enough they can keep pushing it.

We already give the owners a lot of leeway. Another thing we've talked about is how I don't see this as a business but a hobby. You don't make money on hobbies - you spend money on them. Owners should. And if it IS a business - it's a lucrative one that makes money not so much on the day to day, but in the eventual sale. The team end up being worth far more than what you paid for it. Do owners lose money each year knowing you'll make it up in the end? Rarely ever. See we give the owners leeway on these things. We pretend it's a regular business that has to match annual revenue to expenditures and assume that's what teams are doing. We accept small-market designations (even for teams that are clearly not small-market) and allow for rebuilding periods where we accept low spending. All in all we give ownership more than enough chances to make money. We don't have to provide them with another.

Bringing this back around, ultimately you can only effect your team. For me it's the Yankees, and honestly I'm pissed they aren't just giving Machado 250 million for 8 years or whatever. Being a fan is a hard thing to walk away from but at the very least my feet are on a path of "what's the point of rooting if you aren't really trying" For you it's the Nats. And while the Nats have made a good faith effort in the old ways, or at least their "minimum of what the best teams" effort that they have settled on over the last few years, I see no harm in taking them up to spend more. Sign Bryce, extend Rendon and build a core that's Bryce, Rendon, Corbin, Soto, Robles - that's a core that's still under the cap with room to fix SP as Max and Stras do what they do. (because that money frees up). Or look at this market and think - "the overpays we have to make for a Kuechel or a Kimbrel are less than normal. Let's get in there" so the Nats aren't essentially running with the same back end of the rotation and question mark pen that failed last year.

I don't know. To me this has always been pretty clear. Yeah, it's spending other people's money but it's telling them to spend your money if you want me to spend mine.

53 comments:

Josh Higham said...

I've been giving baseball 2-5 hours a day year round for years and I love it but I'm sort of bracing myself to back off and look for another hobby. If Bryce leaves DC and gets under $300m (and maybe if he leaves for less than $350m), I'm going to care a lot less about the Nats next year, for exactly the reason Harper gives here. Why would I spend my money for ownership if they won't spend it to win? Same if the next CBA doesn't implement restricted free agency, earlier arbitration, or something that incentivizes putting the best talent on the field and paying them for their production, even if the best talent is in its early 30s and is going to decline soon.

I'm getting really angry about owners not trying to win games and I'm starting to open up to the idea that another hobby would treat me better even though I've never loved a hobby like I love baseball.

sirc said...

It is possible that Bryce doesn't want to play in Washington anymore. I don't know if that's true, only that it's possible. And if it is true it explains everything.

blovy8 said...

I would say it's still more complicated than that, because the game is far too variable to rely on projections for a particular year. The opportunity cost in taking Harper back, affects the other MUCH cheaper outfielders you now have. It would really screw Eaton to make him your 4th outfielder knowing that he won't be able to play full seasons, which in turn will affect his value as a free agent. Rizzo is not the type of GM who buries a player he likes (which he clearly does with all four OF set on the team, regardless of Taylor going to arbitration). There's still a human side to this thing, it's no fun to me to root for a bunch of talented miscreants and jackasses regardless of their record.

DezoPenguin said...

Harper, you say that (some) fans take sides with the owners and nobody takes sides with the players over salaries, but I really think that these kind of articles exhorting teams to just say screw it and spend whatever are completely ignoring the basic facts of the business structure of the baseball industry.

I'm not sympathetic to owners, but I'm not sympathetic to players either (except minor league players. THOSE guys are getting screwed over; at least the MLB players can sit down at the table and collectively bargain with the owners to set up a structure to build up revenue, but the minor leaguers have no voice at that table). I expect some kind of labor stoppage or at least some heavy bargaining, since the current structure is "we're underpaid when we're young and good, then overpaid when we're old in free agency" and the owners have realized that the second part of that is both (a) stupid for their business and (b) the players have no recourse to force them to do otherwise.

But the plain fact is that, no matter how much people say "baseball doesn't have a salary cap," it does have a salary cap. The luxury tax is a soft cap, not just because of its actual consequences in terms of money, but because it's a firm representation by 30 rich and powerful men sitting at a table that "hey, you know what, Steinbrenner? You're not going back to the days when because you've got the big TV contracts and the gate revenues that you can spend more on your starting infield than three NL Central teams do on their entire teams combined." It's not capital-C collusion, but it's definitely a statement of intention baked right into the bargaining.

*I kid. The Yankees infield made more than entire single teams did, though.

Sure, it's a soft cap. That means some teams are going to push the limits. The Red Sox pushed it hard last year. The Nationals also pushed it. Many other teams didn't push the limits. The Marlins didn't even try. As always, teams like the Twins and Pirates and As pinched pennies until their fingers had impressions of Lincoln ground into the tips.

But the bottom line is, nobody's going to spend "stupid money." Nobody's going to put up a $300M payroll. This is as much an agreed-upon fact as if there was an NBA-style hard cap. The owners know it, the players know it, and the agents know it (even if the agents posture for the press).

Is that a bad structure? Maybe it is. Personally, I think that the salary problems in MLB need to deal with paying younger players more when they're good rather than old players more when they're bad. The next CBA needs to get rid of incentives to LOSE (maybe by making the draft an unweighted lottery among non-playoff teams?) to get rid of the tanking problem--because when a third of the league isn't even trying, it hurts the players by destroying their market and it REALLY hurts the fans by killing the product on the field. You're a Yankees fan, Harper, and we're Nationals fans among your readers. At least we can all say that our teams are trying and have been trying to win baseball games and are running some of the highest payrolls in all of baseball. And rather than raising the cap to make top-end teams spend more, how about raising the floor to make low-end teams spend AT ALL, putting a higher total percentage of revenues back into the hands of the players who make it possible. There's lots of bargaining to do.

But honestly, given the existence of the salary cap--and let's call it what it is--I don't think we as Nationals fans have any room to complain. We actually did offer Harper $300M. We spent more in free agency than ANY OTHER TEAM has as of the beginning of spring training.

Harper said...

I think there are certainly decent reasons not to bring Bryce back (his potential wishes among them) but then why not another starter and closer? The Nats aren't exactly drowning in pitching depth. or a starter and commit to Rendon? The point is more the money on the table than to who exactly the money goes to.

Harper said...

Dzeo - you aren't wrong but I'm tired of "Well that's just the way it is bc the owners can do anything they want" and going along. Maybe you aren't. I already was in the SPEND MORE camp and this latest attempt toward spending less is turning me more and more off the game.

Anonymous said...

I'm no baseball economics expert, but it's hard for me to fault any owner for not wanting to spend $300M over 10 years on any player.

Also, how can you pay players that are young but haven't performed more? How do you make the determination of their worth? A 23 year old marginal major league player shouldn't be worth $10M a year...should he?

Anonymous said...

Perhaps you just pay all major leaguers a flat salary based on a certain percentage of revenue (50% owners, 50% players) and base everything else off of performance incentives from year to year?

Seems like folks are advocating for a flatter salary structure we they say pay younger players more. I'm just not sure how that would work.

Mr. T said...

@Anon: You pay young players what they're worth by letting free agency start earlier.

"A 23 year old marginal major league player shouldn't be worth 10M a year...should he?"

Maybe not, but if you let him be a free agent, the market will determine that. Of course you'd also need to keep the owners from colluding to limit salaries like they are now.

Anonymous said...

@Mr. T - I wouldn't mind letting younger players test free agency earlier. It will probably result in them making more money in general over the course of their careers. I don't think it will raise the salaries of the stars though...maybe even the opposite effect.

Harper said...

Anon - it'll flatten salaries across the board. You won't see the 10/300 but you also will see very few 24 yo All-Stars making less than 5 million. I think ideally you shorten the control window to something minimal (2 years?) and you make the payments for the following season up for performance adjustments.

So in this scenario Soto is getting paid... let's say 15 million next year (instead of like 500K) and will be up for FA in 2020. Or something like that. If you don't like the turnoever potential (necessary for a true free market) you could have teams have "first right of refusal" to sign one year deals for a small number of years. QOs basically. So maybe the Nats could pay Soto 1 yr at market value if they wish for a couple more years. Something like this.

You are going to have that first year underpay of ROY types. That's unavoidable because you can't scale pay to performance (unless you do it for ALL players and no one is going to want that uncertainty). You'll have a lot more of what you see now - short term deals at cost. Long term deals will be more "team friendly".

Anonymous said...

@Harper - thanks for the reply. I think most players would be in favor of an earlier free agency because it allows them a chance to make more money over their careers. The trade off would be at the higher end as you said.

Two things come to mind that would be interesting to watch in that scenario:
1. What trades offs would you have to give to owners in order to pass this
2. What the players reaction would be after a few years when it becomes obvious that the days of $300M contracts are over for a while. Would you see the Verlanders of the league tweeting about that being unfair?

Tanking Buster said...

Since relegation isn't an option, I do think tanking should be disincentivized.

The best idea I've seen is a radical change of the draft. Sorry, I can't remember where it came to properly attribute. The idea is that the best team to miss the playoffs would get the overall number 1 pick. The next best, number 2. Playoff teams would still have the last 10 slots based on finish and regular season records. The worst record in the league will be given the last slot before the playoff teams.

Ditto for shorter control windows. I hate the notion of a good player that is cheap and under control. Teams shop the contracts of these players more so than the players themselves. The contract is the commodity. Good players in the now should get good contracts in the now. Maybe the solution lies in more incentive-based contracts for players under team control.

I also like ideas like a salary floor or maybe a "poor tax" that would be an inversion of the luxury tax.

Or maybe the solution is to simply make bad teams pay a certain per game dollar amount for every loss beyond 81 that is transferred to other teams for every win above 81. If I had to choose between subsidizing the Yankees or paying a proven 31 y/o free agent that might just put more butts in seats and sell merch, I think the choice is to go with the free agent.

Harper said...

Anon - the hard part is SOME veteran class is going to have to bite the bullet for the good of the game. Implement this tomorrow and the FAs for next year take a big hit. However, they are probably taking 2/3rds of that already so it might make it easier for them to swallow.

1. They wouldn't HAVE to give the owners everything but probably DH and pitch clock, which I hate but whatever.

2. Not sure. They could still exist but it would be grabbing Soto's 22-31 years. (because once you start seriously looking at value some players are worth far MORE than 30 mill a year)

TwoGloves said...

Excellent topic today!! I fall into the camp of I am sick and tired of billionaires(owners) and millionaires(players) arguing over pay. The most popular sport in the US(football) doesn't have this problem. I think the major reason for this is the horrible guaranteed contracts in baseball. I think if teams were allowed to cut players, like in football, without the albatross of a paying a guaranteed contract, I think it would better define the market for the true stars. Unfortunately this will NEVER happen in baseball because of the MLB players union and agents like Boras. Why do you think he doesn't have nearly the clientele in football as he does in baseball? Because there is no gravy train for him there.

Anonymous said...

@harper -

I agree, some veteran class would have to take the hit. You'd need strong player's association leadership to make them understand the potential long term benefit.

I do think you'd have to give the owners something because they are giving up cheap labor, no management will do that without a fight. I don't think the DH (which I think benefits the players more) or the pitch clock would do it. You'd have to sell it to the owners that it's good for them long-term in some way. No sure what this is though. Perhaps increasing or eliminating the international pool allotment or something?

Anonymous said...

I do know this, I used to enjoy the hot stove and the off season, now it's just a protracted pain in the butt. Anything that helps fix that, I'm all for lol

Zimmerman11 said...

I had an hour-long twitter beef with Eireann Dolan in DMs and was pointing out that 50pct of 10 BILLION dollars is a lot of money going to players... a lot more than a few years ago... and that the fans are the losers here..revenue driven by

cable deals that drive up TV prices,

expensive tickets and concessions and parking (teams aren't TRYING to sell out their ballparks because they make more money at 75% attendance)

and expensive streaming options because that's still a lot cheaper than bringing the family to the park (but is marred by blackouts and requires expensive high speed internet).

DezoPenguin said...

@Harper:

I mean, on one level I see your point. I want to see the teams I like compete. (In football, I'm a Dolphins fan, and watching them wallow in mediocrity for a literal generation has been miserable.) And spending top dollar to keep the good players a team has as well as to bring in new good players is definitely a way to maximize that chance.

But...that's never been baseball. It isn't baseball. We knew that it wasn't. And honestly, the only time that it HAS ever been how baseball was conducted was if you were a Yankees fan in the Steinbrenner years, or maybe if you were a Dodgers fan during the front half of this decade.

I mean, I came to Nationals fandom because I was an Expos fan. Trust me, the very idea of "SPEND ALL THE MONEY!" was never part of my fan experience. You would have had to be completely delusional to believe that Expos management was EVER going to do that, even in the 80s (and don't get me started on the Loria years, or the MLB ownership years). For the fans of anywhere from 20-25 MLB franchises, that's the way it is and the way it has always been. The very idea that your team's ownership was ever going to say "hell with it" and open the checkbook as wide as it would go was no more than a fantasy to dream about. At least here on this site we as Nats fans can actually speculate that MAYBE Ted Lerner would be willing to spend a lot for the 1-2 win marginal increase that Bryce Harper will give the Nats over Adam Eaton. Whereas if you're a Brewers fan and you note that Harper would give their team a 2-4 win marginal increase over Ryan Braun, you also know that there's a 0% chance of that happening even though their payroll is nowhere near the luxury tax.

Honestly, I think that as a Yankees fan, Harper, you've been privileged. You've been a fan of the ONLY team that's year after year actually been willing to just spend infinite money to crush their opposition. You've had the experience that ONLY Yankees fans can have, that "spend all the money, even if it gives only a tiny return on investment, so long as it improves the team somehow" is actually something that is a plausible scenario. It's a luxury that you've had. As for the rest of us...well, I'm not getting tired of the current market or getting turned off baseball because the present reality is no different than the reality that I've been living with as a baseball fan ever since I was a kid in the late 70s.

blovy8 said...

Ok, just spitballing, and this might be science fiction - the big stars can probably live through any changes, just like the big market teams can, but I doubt the current minor league development system can survive less years of team control. Without even more revenue sharing, I bet it would be more like hockey. Without other adjustments, wouldn't smaller market teams not see enough of a return on their investment to field several minor league teams, and want to keep only what's necessary to see their top prospects play? Carrying 100 players that won't play much if at all for your team would make even less sense if the ones that make it cost a lot more. Once a prospect establishes himself, only the big market teams will be able to afford to keep a roster full of good, established players on their local income and current share. I think it would do more than flatten out salaries, free agent veterans would get less than guys under team control, we're already seeing that now with second or third arbitration awards. Small and mid-market teams would be using the free agent market more, bottom feeding on flawed or under-used, cheaper players and scouting players outside their own smaller system. Low-level minor league jobs would be eliminated, and some talent would go undrafted, as the risk/reward would be too much. They'd have to change player acquisition/draft in that case, as the big teams would stockpile players, and a larger percentage of prospective, less-heralded players would just get other jobs or play other sports. If there's less advantage in signing a player and developing him, there will be even less time spent learning the craft, therefore even less professional-level data available to evaluate players, to the point where worse decisions will be made, where players come up before they're ready and are churned out the game even faster.

It would really be weird for the collective of teams to spend money to keep other minor league teams around for their team to play, it took them decades to do it for the big leagues, but I suppose it's possible. If not, college baseball, independent leagues, winter leagues, and showcases would become more important. I suspect it would look like the 50s and 60s where you'd have Kansas City becoming essentially a AAA farm team for the big market clubs. They wouldn't be able to hold onto their good players long enough to compete, would have to make decisions sooner, and a third to half of the league would have to be like Tampa Bay. Enough poor teams selling, and those teams will get even less value for good players, and they're stuck in cycle where they always stink and those franchises are worthless except as a baseball version of the Washington Generals.

Zimmerman11 said...

Thing is I was OUT after the strike... like didn't watch any baseball... then McGwire/Sosa happened. Bwahahaha what a rube I am.

Ficta said...

Imagine relegation
It's easy if you try...

Anonymous said...

Damn blovy8, talk about an apocalyptic scenario lol.

Thing is...I could see that happening though.

Jay said...

I don't think you need less team control. If players are worried about more money over the course of their career then just start arbitration earlier. Team gets to keep talent the same amount of time but said player makes more sooner.

Jimmy said...

Sure I take that, but I think a lot of people that take this argument are severely overestimating the margins in owning a sports team. The Nats are probably currently operating at pretty close to their break-even point.
https://www.statista.com/statistics/193645/revenue-of-major-league-baseball-teams-in-2010/

They had 311 million in revenue year 2017. They spent 200 million in payroll, they have have movverhead in concessions, stadium payments and employee spending. It costs money to travel, medical and insurance for your players. They are currently embroiled in a costly multimillion arbitration case over their cable money. the Lerners are probably making less than 40 million a year from the team right now.

Jimmy said...

I'm with you Zim

Treaples69 said...

Owners are not focused on their investment as a cash business revenue-expenses=income
They are focused on the long term equity increase as Harper referenced in their article that would come from a sale. They bought the team for 450 mil in 2006. The team is now worth 1.67 Billion... thats what matters. They built their fortune on real estate and think of the team as that type of investment

Anonymous said...

This should be about value for performance, like most everyone else in the job market. I understand the entertainment aspect but really, how many Washington Nationals played up to their contracts last year? Harper? Zimmerman? Gonzalez? Weiters? Murphy? Strasburg? I don't think so. Who performed above their contract? Turner? Soto? Scherzer? Not many more. The same story plays true throughout the league. Washington is no exception. Where are we as an industry when a player (Harper), clearly not the best player in the league, is looking for the biggest contract in history? You can ask for the moon and that's fair. But to complain when owner's balk is insane. You can spin Harper's performance any way you like but he has had one season for the immortals. The rest of the time he is not even Roy Sievers. Different time maybe but his performance is not consistent or great. Jeff Samardzija, $19.8 million last season complaining about the process. Get real. No veteran player would ever agree to a flat salary with incentives based on industry standards to reward great play. And what about the fans, who pay for most of the stadiums? At what point do ticket prices deter us from going. I had a 82 game season ticket package 2005. Was glad to pay it, a fair deal to watch baseball. I couldn't dream of the same package today and my salary had doubled. The entire industry is going to eat it's young and end up like the "50's when 800,000 attendance per season was the norm.

Anonymous said...

"has doubled"

blovy8 said...

You need an outlier of an owner for the team to work as "a public trust", Harper. Mike Ilitch didn't win any championships that way, but he did at least get to the World Series. I do see parallels between Ted and Bryce and Mike and Miggy though. Hell, Scherzer was on both teams!

Jimmy said...

@gaberoark-

I see your point.

blovy8 said...

Nola just gave the Phillies a pretty good deal. I guess he's factoring in a year and half off for TJ surgery.

Harper said...

All - the fans are being soaked in all this - in part for the same market forces some of you are all for in regards to the players. If you can charge 5K a year for tickets and get 15K fans, or 10K for 10K the latter is more money. There is a balance needed to maintain a fanbase but not as much as you think. I mean if a fanbase is several million - they only have to find the price point where most will go once. As long as they don't break from the team bc of that - it works.

Tanking Buster - interesting ideas but you have to be careful about setting up a permanent underclass. Eventually, in your plan, it WILL be simply the richest team who does the best or near it and will limit competition leagues need to thrive. (I like salary floors and caps based on a fair estimate of revenue to force evaluation to maintain a level of importance) The odd thing is the lack of definite return from a baseball draft pick should be enough of a deterrent. One thing to consider is the idea that the 1-2 picks are randomly asssigned but 3 beyond are by record. Only the top couple are significantly better bets to produce than other first round picks.

Two Gloves - true it'll never happen but I imagine a future with fewer long term deals, which is what we are seeing now. A lot more 1-2-3 year deals.

Anon @ 8:47 - perhaps agreeing to leave minors relatively alone would be enough?

Dezo - I still think it's ok to ask the scorpion to remove it's stinger before getting on your back for crossing the river this time. Things change.

blovy8 - Sharing of television revenue would be the ultimate goal, allowing for some revenue differences to play out but not the biggest one. I'm also not sure I buy what you are selling. With unlimited spending that makes sense, market will dominate, but there tends to be informal, if not formal, caps on spending, even in the heydeys of spending only a handful did which left room for all non-AL East teams to have a shot. With those caps in place the question is - can a team afford that truncated level. In my opinion - where it is set now - it's most teams. Like I think 24-26-28 teams can afford to spend 150 million plus.

Jay - yeah but he's saying a team underpaying the players in the majors is how they get a return on investment, not just control. So arb earlier wouldn't help. Personally I don't buy this as I don't see the outlay to minor league as that onerous. I would imagine that perhaps 1 year of underpay for major league talent might not be enough but 2-3 probably is. Certainly less than than the 4 year crazy underpay, 4 year arb underpay we have going now. I mean arguably they'll save 50+ Million on Soto ALONE over two years vs market value.

Jimmy/Gabe - along with what Gabe said the Lerners are also making money on nearby parking / businesses (often these are shifted out of baseball's revenues to things like "Oh that's just my parking business") and on the value of real estate they had and purchased before the team went in. They are probably making far more than that in annual revenue connected to the team and gobs more if you factor in ROI type figures. Now not all team owners have the same situation or as savvy, but most are in one way or another.

Anon - The owner's balk in itself isn't the complaint. It's the owners balk, in the name of righting the cost of contracts, without addressing the way contracts are wrong on the other end.

Chas R said...

Totally agree with this Harper. Very well articulated opinion. Spend more. Put the best product possible on the field for the fans. The game belongs to the fans, not the owners and not even the players. The commercial aspect of this game would not exist except for the fans. Pay the $$$ !

Anonymous said...

Interesting topic...MLB funds minor leagues that develop players (most of whom don't make it) at great cost and time. What is that nurturing worth in terms of return on investment? Few players, unlike the NFL and NBA, come to the major leagues ready to play. One year's control? Two, three? Maybe the long-term fully-guaranteed contract needs to go the way of the dodo bird with some shared risk

Anonymous said...

30 teams, about 200 minor leaguers per team at an average salary of $30k each year is a total expense of less than $200 million dollars. So, like 2% of MLB's official revenues last year. And that doesn't include the $2+ billion for MLBAM (which should count*) or the capital gains on the teams themselves or the parking et al "synergies" that Harper is talking about.

Add in another $400 million for the aggregate draft bonuses and J2 pools, and then some additional cost for scouting and medical treatment and a coaching staff and maybe a kickback to the affiliates' owners etc, and the whole cost of developing all the controlled talent is less than 10% of the bottom line. It's just not that expensive.

Trust me, there's no change being discussed that's going to get make any team consider folding their affiliates.

* While it's obviously a one time payment that can't just be lumped in with other recurring revenue, one of the more ridiculous things I've seen on the internet is the claim that MLBAM profits are from a separate business that the owner's built that has nothing to do with the players. Imagine that it wasn't the owners' capital, and instead some tech start up came to MLB ten years ago and said "Streaming video is going to be huge. We have some great ideas of how to build the tech in ways that will corner the market. You guys have a ton of great content - thousands of games a year and decent audience levels so we can monetize early and really stress test our tech build out. Can we use your content to build our company?" To believe that the players aren't owed a share of MLBAM profits is to believe that MLB would have said "Sure, that sounds like fun.. Good luck." AND NOT DEMANDED ANY MONEY FOR THEIR CONTENT. The fact that the owners are the source of capital here doesn't actually change anything. The players create the content and they deserve their 50% cut of any revenue that comes from it, including using that content as a market-leading way to build streaming technology.

Jon Quimby said...

Great topic!

Maybe this is the result of being in DC for so long, but I don't consider winning a World Series the responsibility of ownership. When the Nats make the playoffs I feel that ownership has done their job (unless they forbid trade deadline moves, but that's another post). Unlike other pro sports, there is rarely a situation where a MLB team isn't very good and sneaks into the playoffs. The Nats have gone roaring into the playoffs a bunch of time and then blew up each time. This is players choosing a bad time to under-perform or managers being stupid. If you make the playoffs you're as good as anyone (within margin of error and 9th inning self destruction).

For this reason I don't care if the Dodgers and Yankees outspend us. I just want our ownership to consistently spend enough money that we can reasonably expect to make the playoffs. From there, I'm just hoping for a run. The more times we get there the more times we can spin the roulette wheel. Try being a Pirates fan... ugh

I recognize this is completely different perspective than Harper and his pin-striped glasses. Maybe it means I have a loser perspective. I refuse to throw up my hands and quit because we haven't won it all. I'm still a Caps fan.

Anonymous said...

Unlike the Nats, @Jon Quimby, the Caps have won it all. And in their Stanley Cup-winning year (last season), the Caps were over the salary cap.

ssln said...

Guys discussing economics who don't understand economics. So why are franchises going up in price? Free cash flow and revenue growth. Let's take it one at a time. Baseball has seen massive revenue growth due to the ESPN contract and cable growth where every subscriber to MASN pays the Nats a set fee whether they watch baseball or not. The problem for baseball and the NFL is that ESPN overpaid and will be looking to cut the rights fee at renegotiation time. ESPN has been cutting on air staff just to keep up its profit margins. Each quarter ESPN reports a drop in subscribers which will translate into smaller ad numbers. As far as local cable, viewers are cutting the cord and you are seeing things unbundled. People only want to pay for what they watch so MASN revenue will be negatively impacted. Less revenue for owners means the value of franchises will rise at a slower pace and may even stagnate in comong years.
To make up for the slowing revenue increase, owners are trying to increase their current free cash flow. That means not signing guys like Harper to ten year contracts because they will go beyond the current ESPN contract and no one knows what the new contract numbers will be.
The problem that you don't seem to comprehend is that the current owners are in the golden age of ownership. Networks overpaid for all sports broadcast rights. We may see cutbacks when the new contracts are negotiated or maybe just small raises. This means that the days of 400% increases in the value of a franchise are also over. If you understood this, Harper, which you obviously don't maybe you would have a slightly different take on what is happening in the off season and why management is doing what it is doing.

ssln said...

The Yankees have YES, Boston has NESN, the Dodgers and Cubs have local networks with millions of subscribers and all four teams have done pretty well recently. Their franchise values keep going up to the sky. How does KC or Pittsburgh compete on a yearly basis with those team'S FCF. They can't even with revenue sharing. You want to change the system, pool all revenue--good luck with that scenario.

BxJaycobb said...

@Harper. I’ve never really understood why fans side with ownership in these situations, but I often think of the whole “one death is a tragedy...a thousand deaths is a statistic” angle of wrapping one’s head around gigantic things vs small things. Part of me thinks that owners are so rich that it’s almost impossible for a fan to even wrap their head around the differences in money, whereas with players you can think about the difference and the salaries are close enough to real life that they understand it. Whereas nobody can actually imagine having billions of dollars.

BxJaycobb said...

Something else to consider. The owners (with media’s help) are very good at shifting the attention to the biggest free agents, like Machado and Harper. That’s who we are all talking about. And when fans hear they a player isn’t getting 300 million dollars they’re turned off by claims of owners screwing the players. The conversation in reality should be about what teams are spending total, compared to how wealthy owners are and how much the make. Here’s my view, and maybe others disagree. You don’t HAVE TO buy a baseball team. There are plenty of wealthy people who want to own a sports franchise. It’s a vanity project in some ways so the line goes down the block....and it’s sort of like buying a newspaper....but if you DO make that choice, you should be willing to spend whatever you need to spend to try to win every year. So for that reason I resent the way that the owners use the luxury tax as a soft cap. Like. I’m sorry but these owners wouldn’t even NOTICE a tax from going over that limit. It’s smart though because the owners and baseball use the that luxury tax number as an excuse...a sort of red herring for the masses....fans know the number and hear about going over the tax. But that tax is utterly meanigless to these people. To them being taxed on over-spending the limit by 40 million would be like the price of signing up for Netflix for us. It’s nothing. But they use it as an excuse. It’s so absurd. The idea that the Lerners actually care a lot about a tax bill of 5-10 million? Like. Are you kidding? That’s absurd. But people buy in.

BxJaycobb said...

Just wanted to point one thing out bc there’s been some discussion of the Phillies trade and comparing Sanchez to Nats prospects. fangraphs has Kieboom and Sanchez back to back in their top 100, numbers 17 and 18. So Kieboom has become an almost blue chipper. At least in the opinion of these guys.

BxJaycobb said...

https://blogs.fangraphs.com/2019-top-100-prospects/

The Ghost of Ole Cole Henry (JDBrew) said...

The biggest thing in the current Harper drama that bothers me is the folks that are siding with the ownership talks about Harper and Machado “complaining” or “whining” about the offers they’re getting. I haven’t heard one word from Harper in months. Certainly no complaining. It seems more like irrational and bitter fans mad that these 2 haven’t taken less money to play for whatever team that fan thinks they should. If you are looking for a job, and 4-5 people want to go work for them. Aren’t you going to first see who will pay you the most? That’s pretty common sense.

blovy8 said...

In fairness, Harper had that "don't sell me short" stuff which fuels some of this greedy idea.

blovy8 said...

It was easy to side with the players in 1994, because there was the recent collusion. Even in 1981, it was easy, and I doubt anyone would notice if they chucked the whole thing and created a player's league. Most of the multi-millionaire players are already incorporated

How hard is it to flip the script? Depict players as people. Manfred had no problem throwing Trout under the bus for acting like a human and not marketing himself like a brand. Owners talk like fans, but act like CEOs of big corporations getting huge bonuses for mediocrity and failure. Players are statistical units to them.

"Owners want you to pay more every years for tickets, concessions, merchandise, parking, cable, etc. to watch a team that didn't win (unless you were lucky enough to root for Boston). Who is making most of that money? Not the players. Wages are stagnant. We are not going to negotiate until owners cut prices 20 percent and help YOU, the fan see us play. We're not even asking to make more than the owners, from what we can tell, even a 50/50 split in MLB revenues would be a big improvement. If they would only open the books. If only there wasn't an anti-trust exemption for the league. But they lie about profits while franchises sell for more and more. They have made their profits off of you, who paid taxes for the ballpark and infrastructure, without paying the people who play that game you enjoy their fair share."

Mr. T said...

I love this stuff.

@ssln, "guys discussing economics who don't understand economics"

So the owners are facing the horror of the value of their franchises not rising as fast as they had anticipated. And they are obligated to pass along the hit from their anticipated slightly lower payday in the form of smaller contracts to players today. The owners would just love to give the players--the creators of the product that the fans are buying--their "fair share" of the pie, but they're constrained by the immutable laws of "economics." That's bull$hit. As Bx says, no one forced these guys to buy a baseball team; they're not scraping by running mom and pop stores, they are billionaires who are limited only by their desire not to spend the money they amassed through tax breaks and publicly funded stadiums.

Why should owners be earning any revenue in the first place? I don't go to Nats park to watch Ted and Mark play catch, so why should they get my money? "Because that's the way it is" isn't an argument; it's a of limiting the debate on terms that help shape the players' demands as "greed" and the owners' as "economics."

Anonymous said...

"Why should owners be earning any revenue in the first place? I don't go to Nats park to watch Ted and Mark play catch, so why should they get my money? "Because that's the way it is" isn't an argument; it's a of limiting the debate on terms that help shape the players' demands as "greed" and the owners' as "economics."

I just don't get the argument that owners shouldn't be making money on their product until they sell the team. I understand that they got their stadiums financed with public money, but that doesn't mean this is a completely public venture. It's not a government program. They spent substantial amounts of money and continue to do so on a yearly basis to own a team. Now, we can argue that they should be putting a certain percentage back into the team, players etc. but they are definitely entitled to make a buck every year.

Anonymous said...

@anon at 7:14: The reason is that it's not - or at least isn't always and shouldn't have to be - a business. It's - at least sometimes and ideally - a vanity project, like Harper says. A hobby. Analogous to yacht racing or polo or space tourism or art or wine collecting. A way for a very very rich person to inject fun and excitement and emotional stakes into their lives.

Which is actually rather parallell to the way most fans think about sports. It's not the same as movies and books and plays and concerts and video games and other forms of entertainment - where I consume the ones I like and make a decision for each one about my time and my money and how I want to spend them. Fans follow and root for a team through highs and lows, and it's not rational. It's investing time and attention and emotional stakes in a thing that has no intrinsic value (which is also why sports are so great - it's a rich vein to experience human excellence and pathos in an arena where the stakes are ultimately bloodless).

The reasons that it's not a business despite being a private , though subsidized, enterprise should be obvious. No one makes a fortune building or inventing a baseball team. Every owner was already extremely rich. There's a very limited supply of teams so if even a small percentage of billionaires have an irrational love of baseball they will self sort into ownership. Unless you collapse them into homo economicus and require the profit motive to rule their every decision. Which just isn't true for most people.

Now, I will admit that this ideal is not and never has been perfectly realized. Some owners (eg Loria) use the teams to transparently enrich themselves. The Braves are publicly traded right now, so they're obviously being managed to to maximize the returns of anonymous capital. And even most owners, as much as they like their hobby, also like money and will be happy to do the one in a way that lets them make the other.

But that's what we should be demanding as fans. Or why even be fans?

DezoPenguin said...

The one thing I hate about professional sports is the idea that the public, through their tax dollars, should finance a stadium or other elements of a stadium, let alone the classic extortion scenario of "well, if we can't get public funding for the new arena, we'll just have to move to Vegas." If owners are going to treat sports franchises like any other sort of business, then they should bear the expenses of that business.

Harper said...

ssln - help me ssln! I have a dollar and I'm trying to make change and I just don't understand money!

TO be serious though - I do get why it's happening (in part). The current model, which highly depends on cable rights fees both for networks paying for content, and baseball teams own networks, feels precarious. It has felt that way for a while now and nothing much has happened, but the money guys have to look out for the worst case scenario. It can't stay this way forever. The shoe will drop. It may be 25 years from now instead of 5. The league might find other ways to get the same (or more) money but it will drop and there is no assurance that they will find new revenue streams. So yes, there is some sound fiscal thought behind this BUT

It seems like you ignore the basic economic history of the game that says regardless of the time period and circumstance, owners tend to attempt to drive down salaries. This is cyclical and constant. This, more than current rights fees negotiations, is the baseline ownership take where the current market issues stem from. If it wasn't potentially decreasing cables fees it would be something else. Maybe not as wholescale and dramatic but it would happen.

I also don't follow from "golden age" (which I agree with) to your endpoint. The owners are earning record amounts. Where I go from there is - "Hey spend it and yes, you may earn less in the future" Where you go from there seems to be - "Look they are going to try to keep it up at record amounts and if the game suffers, well suck it up, they are the owners" Just because something is the way it is doesn't mean I have to be happy about it or accept it. I can be angry, I can try to change it, and ultimately, if I remain unhappy about it, I can walk away. We can be fine with them making money, but push back on them trying to make so much money that it seems to be hurting the product on the field, which is ultimately what we care about.

It's unrealistic to expect owners to suck up losses year after year (even though - like I said it's generally a hobby for them - most are ownership groups now so it's not one guys decision and get a group of like 5 people or add even a single company SOMEONE will need to make money) but it's not unrealistic to expect them to balance the health of their MLB-based portfolio with the health of the game.

blovy8 said...

I suspect the ownership comeback it that they negotiated the deals, not the players, so they created the money where there was none by adding new revenue streams. The talent is just that and has a short expiration date in the assembly line. It's like the players are actors getting TV/cable residuals and the owners are the studios.