Wednesday, December 10, 2014

Money, Money, Money

In case you were wondering about how baseball teams can spend $150-200M on one player, here's a graph:

Source: Forbes

Baseball teams are loaded with money. This article by Maury Brown at Forbes gives a breakdown of the details (h/t Baseball Musings). Even poor teams are rich. Mr. Brown points out that revenues have grown over 300% since 1995. Screw blue chips, I want a piece of that pie in my mutual funds.

The moral of the story, for me, is to stop giving a shit how much players cost. They cost what they cost and the money is there and the owners could spend a lot more and still be richer than God.



Ron said...

The moral of the story for me is to think twice about whether I want to perpetuate this windfall for rich people (mostly the Owners, bur including the Players) by spending hard-earned money on Major League baseball. The earnings gap in this country is shameful enough & getting worse. I work my ass off & get about 1.5% more per year, while some cheesy Relief Pitcher has a couple of good months & gets a 500% raise. I get that the sport is loaded & that the Players deserve to benefit from that. But, what the General Public pays for tickets, Cable TV, etc., is escalating beyond belief, & the Owners are the primary beneficiaries.

Of course, I'm sure that a course-correction in favor of the little guy is imminent, now that the Republicans have even more power.

M.C. O'Connor said...

I used to spend more on baseball, like tickets and such. Lately it has been TV fees (Dish) and some swag (damn them hats are expensive!). Overall though, I'm spending less money but correspondingly more time (the blog). Gonna pull the plug on the TV next year and stick with mlb audio.

Zo said...

One needn't wonder at why the owners have continued to support Mr. Selig as long as they have.

Brother Bob said...

Thursday AM: Big storm gathering outside.
The Dodgers are very active. Kemp, Gordon & Haren are ex-Dodgers. I can't keep up with it all.
New hot-stove rumor r/t our Giants-Atlanta OF Justin Upton is being talked about in a trade which apparently would include a 3rd baseman, Chris Johnson. What we would give up for this remains to be seen.
On the rotation side, current speculation moves toward Scherzer and Price, 2 high-profile righties. I'd still rather hold out for a solid lefty to complement The Sportsperson Of The Year.

M.C. O'Connor said...

MLB is a protected monopoly. That's the issue. If it were run like a normal business there would be rival leagues and options for fans about how to consume the product. But it's a one-stop shop that controls everything. As fans we get the whole package or nothing at all.

I'd like to see the revenues move down the food chain. Minor leaguers should make more and they should be covered by the labor agreement. The draft is ridiculous and antiquated. This is America--you should be able to work wherever you want and for whomever you want. Foreign players should be governed by the same laws as American players in terms of signing contracts. There is a reason the Giants have so many Venezuelan players! Players should be free agents and not the property of a team, and be free to negotiate contracts at any point in their careers.

I know this won't change the the growing chasm between the rich and everyone else, but at least it would make MLB a real business that actually has to exist and prosper in the real world. This "national pastime" nonsense is not good. Baseball is just another product, another thing a consumer can choose, not some special snowflake that has to be guarded by the powers-that-be.

The sad part for me is that so-called amateur sports are now just another piece of the media pie. It's ridiculous how much the NCAA makes off the backs of unpaid athletes. And now we have the Little League World Series on national TV and we make stars out of kids who then get marketed. I think it's disgusting--at least pro sports are honest.

We all pick our poisons. I like the Giants so I put up with the bullshit. Maybe some day I'll get worn out on it all and be a more casual fan. Or maybe not.

nomisnala said...

A rookie baseball player in the major leagues, can make more money than a well researched, and grant obtaining neurobiologist. And, just like baseball, the top 800 or 900 neurobiologists are really really good, and they do not make anywhere near what baseball players make. Yet, the results of their research and science can yield billions of dollars in profits for some companies. Our values strongly go to overpaying entertainers, and or sports entertainers, and business risk takers, and hedgefund managers. But top scientists and Physicians, except for very few, make peanuts in relationship to these entertainers. Yet these scientists also contribute billions to the GNP. I no longer am a season ticket holder. I get the baseball package and can get almost every game on TV, Radio and/or the internet/phone. With the size and the quality of the newer TV's I feel as if I am on the field anyway. Just need to get the smell of freshly cut grass.

Ron said...

Meanwhile, with multiple starting lineup & roster holes to fill, the Giants come up with nothing more than Justin Maxwell? I'm glad that they didn't go for some of the big name huge contracts, but a few less splashy moves (e.g. re-signing Romo) would have been nice. Yes, there are still a few months left until Spring Training, but things need to get sorted out.

Ron said...

There was a time when I thought that we had no hope of putting together a package for Cole Hamels. However, after the other Teams interested in him chose other options, it appears that it might not take top prospects to get him. In which case, we should give it a try.

Our supposed interest in Shields seems like one of these media / agent creations. I suppose that the price tag should be less than Lester, but more than Santana. It may be a possibility.

Scherzer is going to get way too much money, so I think that we should excuse ourselves from that circus. It would have been a nice acquisition, but a very risky one, given the $ & the agent involved.

Zo said...

Nomisnala - add in teachers and nurses. And, for your needs, an occasional cha-cha bowl and beer at 9.25 a pop.

It will be interesting to see if Scherzer gets what his agent wants - or if the waiting game works against them. Liriano is gone, so is Brandon McCarthy, and Santana reportedly is going to be a Twinkie, so it seems either Shields or a trade is the remaining possibility. I think they need to sign Romo, unless there is some physical reason not to. One reason is the personality. With Pablo gone, the goofy factor is dwindling. There is still Pence, but he may not be able to carry the load himself. We need Romo.

Ron said...

Romo + Zito, The Comeback Kid, would bring that goofy factor back up to where it should be.

M.C. O'Connor said...

Certainly reality is skewed. Dollars in the so-called free market go to people who contribute very little 'value' in terms of quality of life, the progress of civilization,and the health and welfare of citizens. CEOs (borderline sociopaths, IMO) are paid, for example, far, far in excess of their true 'worth.' I love that Chris Rock bit where he says "Shaq ain't wealthy, the guy who signs Shaq's checks is wealthy!"

I have to accept the fact that I root for players and teams that exist in the financial stratosphere that is mostly disconnected from 'real' life. My point about the $9B MLB net worth is that it is pointless for fans to sweat over contract dollars. There is enough money in the game to pay everyone. Teams can't cry poor mouth. They should just come out and say "we won't pay this guy cuz we want the money in OUR pockets not his."

But in all entertainment industries, the top 1% make the money and the rest have a second job. Writers, actors, athletes--most make very little and a small minority make a killing. For every Stephen King there are 10,000 guys cranking out unsold manuscripts after work in the wee hours. For every Brad Pitt there are 10,000 guys doing bit parts in local theater and hoping to get paid. And when you think about all the ancillary people that make such industries possible (janitors, food workers, etc.) who get paid shit it is really galling. I could go to bed each night in a furious rage about the inequities in our system but I drink the Kool Aid and root for the Giants. And sleep well.

Speaking of the Giants, I'd like to see Romo back but I like our replacement (Kontos), too. And James Shields would be good. I think Boras may have misread the market on Scherzer. If all the other pitchers sign soon then who will pay $200M for seven years? And do the Giants have the pieces for Hamels? Do you trade Susac and Crick and etc.? I love Hamels, but I'd rather see the team throw money at the problem and not guys I have pencilled in for big parts.

In the end, though, I'm not worried. The Giants missed out on all the marquee guys and everyone is wringing their hands but somehow the team still figures shit out. I have faith in the Brian Trust. Dodgers won 94 games and are remaking their roster. Seems like another "win now" desperation scheme--I'm not sure those work. I guess we'll see!

Ron said...

I think that Philadelphia would take a couple of lower league prospects, plus a marginal ML player (Kontos?) for Hamels. I say this based upon a few trades recently completed.

M.C. O'Connor said...

"There's no way that Ruben's going to just give away a player," Sandberg said. "I mean, we'd have to be wowed to give up a guy like Cole Hamels, which would be a wow that would help us with the process and go in the direction that we want to go." (LINK)

That's three days old but the only thing I could find that had any substance. Like I said, I'd love Hamels. But he's not Jimmy Rollins, he's five years younger and twice as valuable. I think if Hamels could be had for what you suggested then the Giants (or the Dodgers or the Red Sox) would already have him. Amaro probably should have traded Hamels in mid-season, and, like Boras, probably mis-read the market. We'll see. I have a hard time believing he can be had so cheaply but would love to be wrong.

Zo said...

It's rather amazing how the Giants, with their freshly minted (cast?) World Series trophy, their third in five years, are portrayed as the less-attractive, aging spinster at the wedding. And now the buzz is about Asdrubal Cabrera. Sheesz.

carmot said...

Hey y'all. First time commenting here, hope you don't mind. This money stuff is something I try to follow and keep up with a bit. Gosh, it kinda sickens me. Money rules decisions, after all.

M.C. you're right (on the protected monopoly issue). No anti-trust worries. I wish MLB & MLBPA would get away from the "indentured servitude" model of MiLB and the six (most often seven) years to become a free agent. Distribute the wealth more evenly among players.

Then there is the issue of being our "national pastime." Ummm, then why aren't the expensive $275 jerseys and 40,000 bobbleheads, boatloads of foam fingers, massive quantities of New Era caps being produced domestically? Give our country the freakin' jobs. Please!

Nomisnala makes great points. I once worked on an ad campaign where this quote was used... It was a question of "What would you do?" (If you could change the world). I've never forgotten it.

"I'd reverse the economic status of celebrities and educators." Cheers. Go Giants!

Brother Bob said...

Welcome, carmot. You are wise and a good writer.

JC Parsons said...

Yes, hello there new guy! Thanks for joining in.

I must admit that over the years I find that I consider players' salaries less and less often during all this hot stove time. I suppose all those years with the Zito albatross is what did it in for me. After all, He ended up being a beautiful, weird piece to our amazing puzzle. The "value" of a player to their team rarely has much to do with their annual salary. Especially in this age of youngsters having AMAZING impact on our post season success. So, I don't really care HOW MUCH we spend (I'm not sure they care that much anymore) it is all about the WHO and HOW LONG. Or to put it another way it is all about using the very limited roster spots correctly. Sure it is sickening when someone gets paid a fortune for being well below average, but the pay checks are not what is usually killing the team (although they can limit further moves when you are poor). The bad job of the player AND the fact that he is taking up a spot from a young stud (I'm looking at you, Joe Panik) is the real culprit.

You guys can keep worrying about the $, and thanks for that because I do need to know that crap, but don't expect much from me. With that in mind, I have a revised prediction. The Giants won't go all in on Scherzer ( not because of $, but because they hate Boras ) so I guess that leaves Shields. If we don't get him, they might rush into a trade, which is a yucky idea. In the meantime, we need Romo back badly. This should have been done right away. I fear he will jump down south.

M.C. O'Connor said...

We aren't normally this philosophical here at RMC, must be the post-championship comedown mixed with a little holiday buzz.

Romo does concern me a bit. He's still good despite some crappier results this season than we are used to seeing from him. But I get the feeling he wants to go South. We'll see. I hope he stays, but I'm mentally prepared for him to go. I've liked Kontos for a while and I think he can be a key piece in the 'pen.

carmot said...

Thanks everybody, for the welcoming here.

I actually pay close attention to the monies, because I see how it affects rosters. So, it gives strong 'market indications' of what we're doing. If we are staying under the Luxury Tax, we've 28 million to spend, MAX. Opening Day payroll sits at 142.5M right now. Without a 3B, LF, #3, and we have two bullpen spots open.

143M + 28M = 171M. That equates to 189M as it applies towards the CBT; when our other expenses are also included. Allowing for a small 3M cushion (acquisitions, call-ups, performance bonuses, etc), we have only 25M to spend. So...

Would this mean a pricey pitcher: Shields or Hamels + ho-hum players/prospects, trading for youth (Valbuena, Plouffe, Asche, etc), or signing guys like Denorfia and Beckham? Cheaper mid-range solutions like Vogey + Headley + Bonifacio? Or do we bust the CBT?

It's not that I care how much the Giants spend. I care if our options are restricted SOLELY because the Giants' ownership limits budget. As you pointout, the money is there. Cheers.

M.C. O'Connor said...

I think your math is close enough--if the Yankees want to avoid the CBT my guess is the Giants do, too.

I think I'm going to give my brain a rest on what the Giants are going to do. They keep it pretty close to the vest, usually. And striking out on Lester was very public, and added insult to injury after losing Panda right after his great post-season. So, I expect the Brian Trust to circle the wagons a bit and take a new tack. Not sure what, but I'm willing to cut 'em slack and not worry. After all, they just pulled another ring out of the hat, so they must know what they are doing!

M.C. O'Connor said...

Romo is back in the fold for two years, $15M.