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Plenty of money

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#41 USAFChief

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Posted 30 November 2018 - 09:39 PM

The teams will recoup that money somehow, remember the teams don't pay the salaries the fans do. Adding 8 million in payroll would raise the tickets of the major league games by about a dollar give or take.


Ticket sales don’t work that way. Teams already charge what they think maximizes revenue. If they thought they would increase revenue by charging $1 more, they would already be doing so, but their internal sales and marketing staff tells them not to, because decreased sales at the higher price would actually result in less revenue, not more.

You’re correct that the teams would get the money from somewhere though...most likely by reducing major league payroll. Which is probably highly correlated to why the MLBPA doesn’t fight the issue.
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#42 TKGuy

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Posted 30 November 2018 - 10:41 PM

Oh good. I hadn’t read a “Pohlads are cheap thread” in a while. Let’s go sign someone for let’s say $23 million a season and then listen to fans bitch that he takes too much payroll and doesn’t hit 35 HRs.
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#43 Hosken Bombo Disco

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Posted 30 November 2018 - 11:58 PM

 

Oh good. I hadn’t read a “Pohlads are cheap thread” in a while. Let’s go sign someone for let’s say $23 million a season and then listen to fans bitch that he takes too much payroll and doesn’t hit 35 HRs.

not relevant to the discussion, actually

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#44 kab21

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Posted 01 December 2018 - 04:52 AM

 

It's ADDITIONAL $8 million, not $8 million total.

the math doesn't even come close to adding up. Milb ballplayers make 10-20K/yr. 8 Million dollars only gives 100 minor leaguers the raise that you are talking about. There aren't nearly enough players on the 40 man roster to reduce the total number of minor leaguers needing a raise to 100. 8M/yr/team is a much closer estimate.

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#45 Vanimal46

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Posted 10 December 2018 - 11:16 AM



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#46 biggentleben

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Posted 11 December 2018 - 11:39 PM

So far, every player that has signed has received more AAV than projected.

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#47 Vanimal46

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Posted 20 December 2018 - 08:23 PM

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#48 darin617

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Posted 20 December 2018 - 08:35 PM

Are the Twins setting up to tank for the next couple of years or what? I don't want them to make dumb signings just to spend money though.

 

My opinion their 2 newest players CJ Cron & Jonathan Schoop seem wrong to me.

 

Cron played in AL East with all those hitters parks to pad his stats. Tyler Austin may have got better stats with a full year of AB's.

 

Schoop could be a nice bounce back player this year but they could have fixed 2 holes if they would have signed a good shortstop and move Polanco to 2B.We may have more potential power but the defense will suffer because of it.


#49 old nurse

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Posted 20 December 2018 - 09:02 PM

 

payroll is set by the revenue, not value of the business


#50 Rosterman

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Posted 20 December 2018 - 09:43 PM

Money still has to come from somewhere to pay expenses each season. But the value of a franchise, somehow, keeps growing. It behooves a franchise to carry some debt (write-offs and such each season) and we seem to remember that Carl Pohlad borrowed up to the max against the value of the team from banks other than his own, for some reason...like people borrowed against their houses because of the supposed increase in value and pocketing the money.

 

 

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#51 Mike Sixel

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Posted 20 December 2018 - 09:51 PM

Putting aside the value of the teams rising faster than payrolls (yay for capital if you like them more than labor).....the Twins need to increase payroll 50% to reach 90% of the average payroll.....

 

but, this post was started because there is clearly plenty of money in the league to pay players more.....

Edited by Mike Sixel, 20 December 2018 - 09:51 PM.

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#52 old nurse

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Posted 21 December 2018 - 06:32 AM

 

Money still has to come from somewhere to pay expenses each season. But the value of a franchise, somehow, keeps growing. It behooves a franchise to carry some debt (write-offs and such each season) and we seem to remember that Carl Pohlad borrowed up to the max against the value of the team from banks other than his own, for some reason...like people borrowed against their houses because of the supposed increase in value and pocketing the money.

You can depreciate the players on the team when you bought it. There is no write off after that. Writing of interest paymentssaves tax money but does not pay for the interest.That is not good business.

Edited by old nurse, 21 December 2018 - 07:15 AM.


#53 Vanimal46

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Posted 21 December 2018 - 07:57 AM

I posted Gleeman's thread because of this first chart I saw... The narrative to build Target Field was to increase spending to stay competitive. Well, that's been a lie other than the 1st year Target Field opened.

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#54 Sconnie

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Posted 21 December 2018 - 08:20 AM

 

payroll is set by the revenue, not value of the business

Inferred from the Braves article: This is what the team claims, but I don't think we have enough information to assume that payroll is relative to revenue. Teams held by privately held organizations don't have to share their books.

 

The value of the business is based on many factors, one of which is potential profitability. 600% value growth compared to 120% payroll growth means a perceived significant chunk of margin goes in the Pohlad's pockets.

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#55 old nurse

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Posted 21 December 2018 - 11:12 AM

 

Inferred from the Braves article: This is what the team claims, but I don't think we have enough information to assume that payroll is relative to revenue. Teams held by privately held organizations don't have to share their books.

 

The value of the business is based on many factors, one of which is potential profitability. 600% value growth compared to 120% payroll growth means a perceived significant chunk of margin goes in the Pohlad's pockets.

The NHL, NBA, NFL by collective bargaining all set the salary cap by revenue, not value of the teams. In articles about salaries Tony Clark talks about the percentage spent on salariesbased on revenue.Perhaps you would be so kind as to find a business that bases what they spend on the worker's payroll as a percentage of the value of the business.There are businesses that pay management on the basis of their stock.

There have been a quote or two in the past about


#56 Sconnie

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Posted 21 December 2018 - 11:40 AM

The NHL, NBA, NFL by collective bargaining all set the salary cap by revenue, not value of the teams. In articles about salaries Tony Clark talks about the percentage spent on salaries based on revenue. Perhaps you would be so kind as to find a business that bases what they spend on the worker's payroll as a percentage of the value of the business. There are businesses that pay management on the basis of their stock.
There have been a quote or two in the past about

the point is, we don’t know the revenue to know if the pegged rate of salary to revenue is actually what they say it is.

The valuation of the team is an indication of profitability. Profit is the difference between revenue and cost.... 5X value growth over cost growth indicates high profitability. If value rose at the same rate as cost, it’s probably not as profitable.

#57 old nurse

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Posted 21 December 2018 - 02:35 PM

 

the point is, we don’t know the revenue to know if the pegged rate of salary to revenue is actually what they say it is.

The valuation of the team is an indication of profitability. Profit is the difference between revenue and cost.... 5X value growth over cost growth indicates high profitability. If value rose at the same rate as cost, it’s probably not as profitable.

The valuation is a guess, not take it to the bank actual.. So you really don't know the value, either. The percentages bandied about really have no meaning. The Forbes guess at valuations are as good as their revenue guess. 

Warren Buffet was reported to think the value of a business is profit dived by the rate for long term T Bills.Forbes guessed profit at 24 million. TBill rate and math would put the Twins value at 850 million with the best coupon rate I could find.Clearly different than the Forbes fin valuation. The Miami Marlins as reported by statistica over the last 5 years has averaged 3 million a year in profit. Clearly valuations are not tied to profitability

 

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#58 Mr. Brooks

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Posted 21 December 2018 - 08:05 PM

It's fair to ask then, how Dave St. Peter still has a job if he can't even manage to outpace league revenue growth with Target Field, compared to the monstrosity that was the Metrodome.
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#59 Vanimal46

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Posted 08 January 2019 - 03:05 PM

I've been thinking about this lately as I fully believe there is plenty of money in baseball. Free agency is broken and needs a severe overhaul by the next CBA. If Machado and Harper, 2 of the most coveted/star-studded free agents since A-Rod can't sign a contract in a quick fashion it's over.

Some potential fixes for free agency and re-allocating the money:

- Implement a negotiating window from Jan 1 to Feb 28. The most painful part of the Offseason is the seemingly endless window where teams can negotiate and sign with players. Teams clearly have no incentive to sign players early, so let's create some urgency. Only allow players to sign with new teams for 2 months.

- Implement a salary floor/cap system. The luxury tax is already a fabricated salary cap that teams don't want to cross anymore. Make that the cap. Every team in baseball should be able to maintain a $100 million payroll floor. If they are financially not able to do it, move that team to a city that can generate better revenues.

- Start a pay for current performance program. In this risk-averse sport, no one wants to play for any decline years. Yet everyone blissfully ignores the amazing value players provide while under pre-arbitration contracts. Since the owners are no longer holding up their end of the bargain, the good players should get paid when they're currently doing well.

#60 Mike Sixel

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Posted 08 January 2019 - 04:19 PM

If you don't spend to the floor, left over money goes to the minor league rosters.... Or, less good, left over money goes to any player that made the 25 man during the year.
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It's IL now, btw, not DL.....