Who is to blame if there is not MLB baseball in 2020?

[eddie83]

I think the owners are filthy rich. Doesn’t mean they lack a point about this season and revenue.

I firmly believe that this is all about the upcoming CBA and not this year. If they had 4 years left on the CBA this would have been long over.  

[MongoBoy]

Owners/players...

 

[atomic]

2 hours ago, SteveA said:

I'll admit to being not very smart when it comes to economics.

Is it possible for this statement to be true even though the value of most franchises has gone up at a pretty good rate for many, many years?   Can a business that is barely eking out a process still grow in value that fast?

Tesla?  

[atomic]

On 6/8/2020 at 12:00 PM, DrungoHazewood said:

I think the owners could win public opinion, or the optics of the situation, by offering up a CBA proposal that restructures how money is divided up in baseball.  Today we have situations where one or two players a team often get close to 10% of the revenues of the entire organization, while rookies make 0.2%.  Even though in a lot of cases the rookies contribute as much to the winning as the guy with the giant contract.  The owners should propose a system that's more like a lot of companies where the veteran big performers make more, but only two or three times as much.  Have a setup where the salary floor is $2M (per player), but nobody can make more than $10M a season.  And minor leaguers with more than a year's experience get at least $40k.

Sell it on equity and fairness and the fact that it's no longer tenable to have the MLBPA use laws designed to keep miners and factory workers from making 25 cents an hour to make sure David Price gets $30M a year.

If you had max salary with no salary cap all the good players would play on one team.

[Frobby]

5 hours ago, SteveA said:

I'll admit to being not very smart when it comes to economics.

Is it possible for this statement to be true even though the value of most franchises has gone up at a pretty good rate for many, many years?   Can a business that is barely eking out a process still grow in value that fast?

 

5 hours ago, weams said:

I think you can build value of a brand without having a strong cash flow. 

It depends what phase a business is in.   In the early years, a business can go way up in value even if it is losing money, if buyers perceive that the business has long term potential and is building out its infrastructure.     Think of all the high tech companies that were rocketing up in value while they were losing money — and now they’re making a ton of money.   

But baseball isn’t a start up business.   There’s no reason for teams to increase in value every year if they’re losing money.    The reason they’re going up in value is because they’re making money, and are expected to continue to be even more profitable in the future.   Don’t let the owners tell you otherwise.    
 

 

[POR]

6 hours ago, weams said:

 

 

[DrungoHazewood]

11 hours ago, atomic said:

If you had max salary with no salary cap all the good players would play on one team.

I'm not sure what you mean.  In any case that can't literally be true.  Not unless there are only 25 good players, and half of the best 25 players in the world don't mind sitting the bench.  The situation we have right now is pretty close to the Yanks having a very good player at every starting position.  Red Sox and Dodgers, too.

[Mr. Chewbacca Jr.]

14 hours ago, DrungoHazewood said:

I think that DeWitt is talking in the language of a large business owner, parsing his words very carefully to improve his position. 

I'm guessing that, for example, the Royals make very little reportable, taxable profit in any given year.  So their owners would be correct in saying that the industry isn't very profitable, in that sense.  But 20 years ago the Royals franchise value was something like $100M.  The team was recently sold for $1B.  If you bought an asset at $100 and sold it 20 years later for $1000 that's 12.2% a year, which beats the long-term average returns of the S&P 500.  To me that's pretty profitable.

Exactly. DeWitt isn't "wrong" - baseball isn't a very profitable business when compared to other big companies in terms of their revenue for the year against their expenses. But, like you mentioned, an owner can make a lot of money when they eventually sell that asset.

I think a lot of people get confused by net worth. It's not like when Jeff Bezos checks his bank account he has $153 billion dollars just sitting in his checking account. I'd assume that the owners are currently having major cash flow issues at the moment, like most companies are right now in the middle of a pandemic and terrible recession. There's also a ton of uncertainty for next season, too.

That being said, baseball teams have to make money. No one in their right mind would spend a billion dollars for the privilege of losing more money. But, these are unique times - and losing ticket sales, food/drink sales, and possible money from television deals would obviously effect the finances of any company.

[Mr. Chewbacca Jr.]

17 hours ago, atomic said:

The players are definitely worse in this situation because they haven’t once agreed to take less than full prorated salary.  I mean take a 25 percent reduction and play ball. Seems fair to both sides. 
 

The fact that they keep coming out like they have been wronged somehow by the owners. The owners didn’t make the pandemic. They didn’t say no fans are allowed at games.  

I agree. The players are in a bad position from a negotiating standpoint and also a public relations standpoint.

[eddie83]

1 hour ago, DrungoHazewood said:

I'm not sure what you mean.  In any case that can't literally be true.  Not unless there are only 25 good players, and half of the best 25 players in the world don't mind sitting the bench.  The situation we have right now is pretty close to the Yanks having a very good player at every starting position.  Red Sox and Dodgers, too.

I don’t think economics play as important of a roll in baseball as far as position players as it did say 20 years ago. We know all the data that shows how players age now. I think to their credit the big market teams you mentioned above have all drafted, sign International, or traded for high end talents. 

NYY - Judge(D),  Sanchez (I),Torres  (T)

LAD - Bellinger(D), Seager (D), Pederson (D),  Smith (D), Lux (D)

Boston - Bogaerts (I), Devers (I), Benintendi (D), Bradley (D),  previously Betts (D) 

They also have found hidden gems like the Dodgers did with Muncy and Turner. The Yankees got a ton of production last year from guys like Urshela, Tauchman and Voit. 

Now all that said clearly money matters. Boston added JD Martinez, extended Bogaerts, NYY added LeMahieu, extended Gardner, traded for Stanton and his big deal. LA extended Turner after he worked out.  

One of the reasons I have optimism moving forward with the Orioles is that young talent is the key to quality offense right now. At some point those players will age, become more costly and less productive. I think where finances matter the most now is more based on starting pitching, deeper bullpens and depth in lineups. 

I get to the idea of your plan but I think the union would view it as a cap. They want the big name players making a ton of money. They would not sign up for anything that potentially limits salary. 

[weams]

 

[DrungoHazewood]

31 minutes ago, Mr. Chewbacca Jr. said:

Exactly. DeWitt isn't "wrong" - baseball isn't a very profitable business when compared to other big companies in terms of their revenue for the year against their expenses. But, like you mentioned, an owner can make a lot of money when they eventually sell that asset.

I think a lot of people get confused by net worth. It's not like when Jeff Bezos checks his bank account he has $153 billion dollars just sitting in his checking account. I'd assume that the owners are currently having major cash flow issues at the moment, like most companies are right now in the middle of a pandemic and terrible recession. There's also a ton of uncertainty for next season, too.

That being said, baseball teams have to make money. No one in their right mind would spend a billion dollars for the privilege of losing more money. But, these are unique times - and losing ticket sales, food/drink sales, and possible money from television deals would obviously effect the finances of any company.

Also, talking about short-term profitability of a MLB franchise is kind of irrelevant.  Although this year is a little different, but that's a blip. 

Almost everyone who's a big part of an ownership group got rich doing something else and then bought into a pro sports team mostly because it's cool to own a sports team.  It's not like 120 years ago when Connie Mack bought into the A's when the franchise cost like $20,000, and that was basically his only source of income or wealth.  Nobody buys the Mariners because they're thinking that's going to net them $50M a year.  They buy it because they want to say they own a team.

[Can_of_corn]

4 minutes ago, DrungoHazewood said:

Also, talking about short-term profitability of a MLB franchise is kind of irrelevant.  Although this year is a little different, but that's a blip. 

Almost everyone who's a big part of an ownership group got rich doing something else and then bought into a pro sports team mostly because it's cool to own a sports team.  It's not like 120 years ago when Connie Mack bought into the A's when the franchise cost like $20,000, and that was basically his only source of income or wealth.  Nobody buys the Mariners because they're thinking that's going to net them $50M a year.  They buy it because they want to say they own a team.

I disagree.  I think we are seeing more of groups buying teams as investments.

[eddie83]

The thing is this will not be a one year issue. I hope the economy bounces back quick but who knows how many job losses will be permanent. Some people who have their jobs have had drastic pay cuts. Will businesses that survived be in a position to buy the high end seats around the dugouts, club level and skyboxes? Will the middle class be able to afford season tickets? Everyone needs food and shelter, attending games is a luxury item.  

[Mr. Chewbacca Jr.]

14 minutes ago, DrungoHazewood said:

Also, talking about short-term profitability of a MLB franchise is kind of irrelevant.  Although this year is a little different, but that's a blip. 

Almost everyone who's a big part of an ownership group got rich doing something else and then bought into a pro sports team mostly because it's cool to own a sports team.  It's not like 120 years ago when Connie Mack bought into the A's when the franchise cost like $20,000, and that was basically his only source of income or wealth.  Nobody buys the Mariners because they're thinking that's going to net them $50M a year.  They buy it because they want to say they own a team.

Good point. Baseball teams are so expensive because they are one of thirty. And people want in the club because baseball is fun.