Collusion?

[Gurgi]

Do you think the Owners are intentionally keeping the price of free agents down? And is that collusion?

[DrungoHazewood]

It's hard to tell. The difference between collusion and 30 guys semi-independently coming up with the idea that a recession is a great excuse for not paying going rates for free agents is slight.

We know credit is tight, but the owners still have lots of guaranteed revenues, and they have big incentives to limit payroll if they know many of their fellow owners are going to do the same and it won't kill their competitiveness. So your guess is as good as mine.

[Baltimoron]

I'm with Drungo, but I'm a bit more forceful in my take.

Its basically a sham, MLB is awash money, much of it in fixed payment contracts that aren't likely to see a huge decline in revenues.

Its unlikely to be open collusion, but its obvious what is in the team's collective interests to do, and the fact most people are clueless about economic matters gives the team's a great opportunity to leverage.

But MLB as a whole is driven by the flagship clubs, so there is also a growing divide issue. Much of 09 revenues are going to be driven by the new parks for the NY clubs and revenues of big clubs while weaker teams may continue to plummet (i.e the Os).

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From the business of baseball article by Maury Brown on Dec 19, 2008:

Show Me the Money – This one is going to be tight, but look for MLB to see revenues at, or very close to what they had in 2008 – a record high.

....

Opening Down – Opening Day player payroll for 2009 will hover around 2006’s figures.

link

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More from Biz of baseball (life is not fair or equitable):

Still, MLB has always focused on revenues, and next year should be no exception. While attendance dropped sllightly this year, revenues were up from $6.075 billion to $6.5 billion this year. Even with the expected 2009 decrease in attendance, and concerns about the economy prevailing into next year, expect revenues to remain flat or slightly above this year’s figure.

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The National League established a new record for single-season average attendance and seven teams in the sport – the Boston Red Sox, Chicago Cubs, Detroit Tigers, Milwaukee Brewers, New York Mets, New York Yankees and Philadelphia Phillies – each set all-time franchise records for home attendance during the 2008 regular season.

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At the other end of the spectrum, the Marlins recorded the worst paid attendance in the league for the third consecutive year, drawing an anemic 1,335,076 despite being in the Wild Card hunt for much of the season. The low figure comes in 2.59 percent below last year’s average attendance with the 2008 Marlins avweaging just 16,688 over 80 games this season.

The Marlins were followed by the Royals (1,578,922 over 79 games), Pirates (1,609,076 over 80 games), and A’s (1,665,256 over 81 games, including two games in Japan against the Red Sox that posted attendance of 44,628 and 44,735 respectively).

The other notable attendance swoon came by from the Baltimore Orioles. Attendance for the Birds came in at 1,950,075, or 9.92 percent below last season. The total attendance figure is the lowest for the Orioles since 1988 when they still played in Memorial Stadium

link

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MLB revenues have nearly doubles from 3.5 billion in 03 to 6.5 billion in 08, but the percentage of revenue to players has not held as strong:

Major League Baseball players received about 52 percent of leaguewide revenue last season, said MLB’s Rob Manfred, which would appear to leave baseball players with the lowest percentage of revenue among the Big Four team sports.

Under their respective collective-bargaining agreements, NHL players received 56.7 percent last season, NBA players about 57 percent and NFL players about 59 percent.

It is impossible to make an apples-to-apples comparison among the sports. Manfred, MLB executive vice president in charge of labor, and other industry experts have said one reason it is not fair to compare the percentage of MLB revenue paid to players to other leagues is that MLB clubs collectively spend hundreds of millions of dollars on player development for players in the minor leagues.

Still, MLB players in the early part of this decade received a much higher percentage of league revenue, in the high 50s to low 60s. In recent history, the number peaked in 2003 at 63 percent.

In 2002, MLB and the MLB Players Association agreed on a new collective-bargaining agreement that included a luxury tax provision, which Manfred has said affected the number. Manfred has told SportsBusiness Journal that the percentage of leaguewide revenue paid to players in the 2004 though 2007 MLB seasons ranged from 51 percent to 55 percent, although he would not say what percentage players received in each year.

The MLBPA declined to comment on the issue.

link

[Mad Mark]

It's hard to tell. The difference between collusion and 30 guys semi-independently coming up with the idea that a recession is a great excuse for not paying going rates for free agents is slight.

We know credit is tight, but the owners still have lots of guaranteed revenues, and they have big incentives to limit payroll if they know many of their fellow owners are going to do the same and it won't kill their competitiveness. So your guess is as good as mine.

I voted "no" on the collusion question. However, small minds do tend to think alike, and MLB's history of labor relations (bad) and the owners' history of screwing the players whenever they can (lengthy) could easily point to 29 owners reaching the same conclusion at the same time.

Right now, I'm looking at MLB like this:

1 - Yankee$: "screw you, we're buying!"

6 - Red $ox, Mets, Angels, Dodgers, White Sox, Cubs: "we're shopping, but on a budget."

23 - everybody else: "have the blue-light specials started yet?"

[RShack]

I voted "No" but I really don't know.

What I do know is that:

• The list of big-money players who haven't earned their paydays (except before the fact) is non-trivial.
  
• It had gotten beyond insane, to the point where it was just another bubble.
  (Gil Meche getting $55M is kinda like a little 900 sq ft ranch house being worth $1.3M.)
  
• The entire economy is not only in the toilet, but is still swirling around in there to see how much goes down with the first flush.
  
• The team with payroll #29 out of 30 just went to the WS.

If you take these things together, it's not surprising to me that teams, like everybody else, are rethinking how much $$$ they spend on what.

Which doesn't prove that there's no collusion. If there is, they're probably being smarter about it than last time.

None of which means Dunn wants to come here.

[Migrant Redbird]

It's hard to tell. The difference between collusion and 30 guys semi-independently coming up with the idea that a recession is a great excuse for not paying going rates for free agents is slight.

There's quite a bit of difference between the two, but there may be little difference in the results. However, the issue is whether or not collusion exists, not the outcome. Of course, if an arbitrator did determine that collusion occurred, he'd have to evaluate the outcome as part of deciding what penalties were appropriate.

I don't think that collusion occurred because I'm skeptical that 29 owners (leaving out the Yankees) could work it out among themselves and their general managers and their front office staffs without the existence of collusion getting leaked, and I think the owners are smart enough -- having been bitten once before -- not to get themselves caught in that particular trap again.

In addition, besides the evidence that the Yankees aren't colluding with anyone to hold free agent contracts down, we have several examples of teams giving out contracts which are arguably over valued: Renteria for $18.5M/2 years; Kyle Lohse for $41M/4 years; Jerry Hairston Jr. for $2M/1 year guaranteed; Milton Bradley for $30M/3 years; and Aaron Miles for $4.9M/2 years are all contracts which I think are probably higher than the player in question is worth.

There are the "bargains", e.g., Pat Burrell for $16M/2 years, and there are several unsigned free agents who probably feel the market is aligned against them, but that doesn't prove there has been any collusion. It will take some hard evidence that the owners have been stupid again before I'll accept that premise.

We know credit is tight, but the owners still have lots of guaranteed revenues, and they have big incentives to limit payroll if they know many of their fellow owners are going to do the same and it won't kill their competitiveness. So your guess is as good as mine.

Each owner is probably in a little bit different situation. Some teams have already lost lucrative advertising contracts they were counting on, and other teams may be anticipating a heavy hit on attendance revenue. We really don't know, and won't know very much until we see the Forbes estimates of team revenues and operating expenses for 2009, which probably won't be available before the spring of 2010.

[Gurgi]

There's quite a bit of difference between the two, but there may be little difference in the results. However, the issue is whether or not collusion exists, not the outcome. Of course, if an arbitrator did determine that collusion occurred, he'd have to evaluate the outcome as part of deciding what penalties were appropriate.

I don't think that collusion occurred because I'm skeptical that 29 owners (leaving out the Yankees) could work it out among themselves and their general managers and their front office staffs without the existence of collusion getting leaked, and I think the owners are smart enough -- having been bitten once before -- not to get themselves caught in that particular trap again.

In addition, besides the evidence that the Yankees aren't colluding with anyone to hold free agent contracts down, we have several examples of teams giving out contracts which are arguably over valued: Renteria for $18.5M/2 years; Kyle Lohse for $41M/4 years; Jerry Hairston Jr. for $2M/1 year guaranteed; Milton Bradley for $30M/3 years; and Aaron Miles for $4.9M/2 years are all contracts which I think are probably higher than the player in question is worth.

There are the "bargains", e.g., Pat Burrell for $16M/2 years, and there are several unsigned free agents who probably feel the market is aligned against them, but that doesn't prove there has been any collusion. It will take some hard evidence that the owners have been stupid again before I'll accept that premise.

Each owner is probably in a little bit different situation. Some teams have already lost lucrative advertising contracts they were counting on, and other teams may be anticipating a heavy hit on attendance revenue. We really don't know, and won't know very much until we see the Forbes estimates of team revenues and operating expenses for 2009, which probably won't be available before the spring of 2010.

I think GM's probally carefully watch season ticket sales. If there has been a substancial weakening of demand across the board that stuff gets passed around front offices. This could be a large part of their reticence to open up their pocketbooks.

Not saying there has been a weakening.

[scOtt]

I saw JTrea post that he thought it was collusion, and my gut reaction was BS. But he made the case that even with the economy in shambles, the owners are still on pretty darn solid ground. And it would be just like them to use the opportunity to cry poor and artificially keep salaries down.

That being said, they got burned real bad in 1985 (?) and you'd think they'd still be wary to attempt it again. It may not be collusion... it may be most of the owners, seeing the chance, to arrive at the idea independently... that's a little hard to believe tho too.

I'd lean collusion, but only about a 60-40 chance.

[Mark Carver]

I saw JTrea post that he thought it was collusion, and my gut reaction was BS. But he made the case that even with the economy in shambles, the owners are still on pretty darn solid ground. And it would be just like them to use the opportunity to cry poor and artificially keep salaries down.

That being said, they got burned real bad in 1985 (?) and you'd think they'd still be wary to attempt it again. It may not be collusion... it may be most of the owners, seeing the chance, to arrive at the idea independently... that's a little hard to believe tho too.

I'd lean collusion, but only about a 60-40 chance.

In 2009, I'd say that overall spending (tickets/advertisement) by corporate/business spending on MLB will be at low levels not seen in years. I'll also bet that overall tickets sales and expenditures at the the ballpark will be lower than has been in years.

In 2009, business and families will not have that much discretionary spending, thus MLB will suffer.

[Richmond Bird 9]

I have no inside info, however I would say no collusion.

IF the Players Union had anything, it would be in the press.

Also, I think Scott Boras has something like 15 players this year not signed, I think on some he has just over played his hand. he may start using the press against the owners and teams vs teams to get some of them signed.

Explain why Darren Oliver is the only player to accept arbitration (from LAA). What did he and his agent see in the market and or Darren's value vs a 1st and or 2nd pick lost. Is varitek and or Cruz worth a 1st/2nd round pick plus the money. They both should have accepted team arbitration.