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A Bad Precedent Is Being Set?


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Those of us who are baby boomers vividly remember Popeye’s friend and lover of hamburgers, J. Wellington Wimpy, commonly referred to as Wimpy saying “I’ll gladly pay you Tuesday for a hamburger today”. It has been reported that Wimpy would never come around on Tuesdays.

The LA Dodgers, in this offseason, have started negotiating with available free agents by offering larger contracts with a decent amount of the money deferred. By deferred we mean that when a player's career is over, large payments will become due.

For Shohei Ohtani it makes perfect sense. The money he is currently making in doing promotional work, endorsements and commercials is substantial. Forbes has estimated that he made about $40 million in 2024. It’s easy to see how he would allow the Dodgers to defer about $680 of his $700 million contract to 2034 through 2044.

While it looks like his 10 year $700 million contract would require the Dodgers to make a $70 million dollar payment in 2025, they will, in fact pay him about $2 million.

This allows the Dodgers to spend that $68 million on other players and still experience the same cash flow. This off-season in addition to Ohtani they signed Blake Snell (5 yrs./$182 million), Teoscar Hernandez (3 yrs./$66 million), Blake Treinan (2 yrs./$22 million), Michael Conforto (1 yr./$17 million), Hyeseong Kim (3 yrs./12.5 million), Tanner Scott (4 yrs./$72 million) and extended Tommy Edman (4 yrs./$64.5 million). In total that comes out to 32 years of contract for $1.136 billion, an average of $35.5 million a year for these 8 players. But instead of paying $284 million for these players in 2025, they will “only” have to pay out $216 million because of Ohtani’s deferral. It’s possible that number could be lowered further if there are other players with deferrals in their contracts.

From a player’s perspective, it makes complete sense for tax purposes to spread their payments over additional years. However, $68 million today will have far greater value than $68 million in 2044. 

However, in spite of all this information, my concern is the Wimpy impact. What will the Dodgers be like in 2034? Will the $68 million they are paying Ohtani (and maybe others), have an impact on the team’s ability to compete against teams in the 2034 season without continuing with deferrals?

Unless Major League Baseball requires teams to place the deferred money in escrow or in an annuity, there should be concern about the financial stability of teams who defer such large sums of money.

Many of us knew about the Bobby Bonilla's contract with the Mets and its deferrals, but how many other deferrals are already in progress?

To remind those of the Bonilla deferral, here is the background. In 2000 the Mets agreed to buy out the remainder of his $5.9 million contract. At that time the Mets were investing with Bernie Medoff with the promise of a double-digit return (how’d that work out?). So instead of making a one-time payment in 2000 they negotiated a payment schedule of nearly $1.2 million a year for 25 years starting in 2011 with a negotiated 8% interest rate. Bonilla will be paid $1.2 million until 2035 when he is 72 years old.

For those without a calculator handy, Bonilla will receive a total of approximately $30 million for that $5.9 million deferral.

There are other deferrals known but they are nowhere near the size and magnitude of the Ohtani deal. We know that Bret Saberhagen receives $250,000 a year from the Mets from 2004 to 2029 (this was the inspiration for the Bonilla deal!). Max Scherzer will receive $105 million from the Nationals that will be paid out through 2028. Manny Ramirez is collecting $26.2 million from the Red Sox through 2026. Ken Griffey is receiving $3.59 million from the Reds every year through 2024 as the deferral from his 9 year $116 million deal signed in 2000. And Todd Helton received $1.3 million annually from the Rockies through 2023 as the result of a $13 million deferral when he signed a two-year extension in 2010. – Thank you to ESPN Stats & Information’s Ryan Milowicki for the information.

 

What do you think? Is this a compensation method that you are comfortable with for MLB? Would you be okay with the Twins using this payment option to sign current players?

28 Comments


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ashbury

Posted

You've raised an excellent question, and no, I would not be happy with the Twins mortgaging their future in this way.  I can't believe the league is being short-sighted in not requiring ironclad financial guarantees from the deeper-pocketed teams who do it, but I don't really know for sure that it's being done.

tony&rodney

Posted

I responded today on another post that the Dodgers are using the system and squeezing MLB on future CBA negotiations. 

I don't know what the MLB rule is for deferrals but I believe it requires setting some amount aside that cannot be accessed. If teams could defer salaries without specific rules in place there is nothing to prevent someone from going crazy which results in bankruptcy. MLB contracts are guaranteed by the league not the team. So there must be fairly significant rules.

The Dodgers are making it very difficult for MLB to engage in future revenue sharing negotiations because their future responsibilities are tired to the current rules. It is rather absurd to think that the league can continue long with the present disparity in revenue for clubs. As many as 20 teams may have less revenue in total coming to their organizations than the payroll alone of the Dodgers. We should expect the Mets and Yankees to follow suit as well. The solution is pretty simple. All revenues from games gets split. Teams can make additional money through stadium ads and ballpark development which is separate from contests. Even then a few teams will have much more revenue but not to the degree as the current setup.

tony&rodney

Posted

47 minutes ago, ashbury said:

Oooo, that's a great tidbit.  Do you have a source for that?  When something affects my thinking by that much, I'd like to be sure.

Let me correct my wording ... The players have contracts with individual clubs under the agreement between MLB and MLBPA in force at any given time. I believe MLB has something in place to guarantee salaries. I'm not sure where to find it. Four teams in the last three decades have declared bankruptcy including the Dodgers (2011 if I remember) but no player lost a penny from those procedures. It is complicated and frankly beyond my interest. Like all legalese ... tough to decipher exactly, which is almost always the point.

It does feel like the Dodgers are gaming the current agreements in a manner that will make it quite difficult for MLB to gain balance in the next agreement. The Dodgers among a few other teams have outsized revenues where their payrolls eclipses the revenues for nearly 20 teams. While I don't care much for this facet of baseball it does seem like the future of baseball becomes more of one 10-12 league setup with another league of 20-24+. I actually would not have a problem with that. Of course Congress would need to remove the insane anti-trust exemption and that would be more difficult to accomplish than a revised revenue system. So back to square one, it is easiest to just ignore all of the financial stuff. It is all insane and I'll stick to what trades, blah blah blah. Sorry for upsetting you.

Hosken Bombo Disco

Posted

38 minutes ago, tony&rodney said:

Let me correct my wording ... The players have contracts with individual clubs under the agreement between MLB and MLBPA in force at any given time. I believe MLB has something in place to guarantee salaries. I'm not sure where to find it. Four teams in the last three decades have declared bankruptcy including the Dodgers (2011 if I remember) but no player lost a penny from those procedures. It is complicated and frankly beyond my interest. Like all legalese ... tough to decipher exactly, which is almost always the point.

It does feel like the Dodgers are gaming the current agreements in a manner that will make it quite difficult for MLB to gain balance in the next agreement. The Dodgers among a few other teams have outsized revenues where their payrolls eclipses the revenues for nearly 20 teams. While I don't care much for this facet of baseball it does seem like the future of baseball becomes more of one 10-12 league setup with another league of 20-24+. I actually would not have a problem with that. Of course Congress would need to remove the insane anti-trust exemption and that would be more difficult to accomplish than a revised revenue system. So back to square one, it is easiest to just ignore all of the financial stuff. It is all insane and I'll stick to what trades, blah blah blah. Sorry for upsetting you.

I think that is an interesting point. If hypothetically the Pohlads came out tomorrow and declared bankruptcy (for real, not the Michael Scott way) and refused to sell or pay their people, what would MLB do. 

A side benefit to adding more revenue generating post-season games is that more of the middle of the pack teams have more chances at a postseason berth and therefore World Series appearance. So, narrowly speaking in terms of competition on the baseball field itself, the high payrolls of the Dodgers or Yankees and disparity compared to the Twins and other lower payroll teams does not bother me as much as it bothers the next person. 

ashbury

Posted

58 minutes ago, Hosken Bombo Disco said:

I think that is an interesting point. If hypothetically the Pohlads came out tomorrow and declared bankruptcy (for real, not the Michael Scott way) and refused to sell or pay their people, what would MLB do.

Ohtani's contract caused some people to ask exactly this question concerning the Dodgers.  Here's a couple of examples (that I think come from a common source but seem to have different angles):

  https://www.louisianalawblog.com/bankruptcy-and-business-reorganization/bankruptcy-and-baseball-ii-what-happens-to-shohei-ohtanis-record-contract-if-the-los-angeles-dodgers-file-for-bankruptcy-again/

  https://www.texaslawblog.law/2023/12/bankruptcy-and-baseball-what-happens-to-shohei-ohtanis-record-contract-if-the-los-angeles-dodgers-file-for-bankruptcy-again/ 

Their take, for what it's worth, didn't seem to involve MLB already having guaranteed anything, nor even stepping in, in such a circumstance.  Who knows, really.  Well, they know, but they aren't likely to tell us.

tony&rodney

Posted

17 hours ago, ashbury said:

Ohtani's contract caused some people to ask exactly this question concerning the Dodgers.  Here's a couple of examples (that I think come from a common source but seem to have different angles):

  https://www.louisianalawblog.com/bankruptcy-and-business-reorganization/bankruptcy-and-baseball-ii-what-happens-to-shohei-ohtanis-record-contract-if-the-los-angeles-dodgers-file-for-bankruptcy-again/

  https://www.texaslawblog.law/2023/12/bankruptcy-and-baseball-what-happens-to-shohei-ohtanis-record-contract-if-the-los-angeles-dodgers-file-for-bankruptcy-again/ 

Their take, for what it's worth, didn't seem to involve MLB already having guaranteed anything, nor even stepping in, in such a circumstance.  Who knows, really.  Well, they know, but they aren't likely to tell us.

Yes, we don't know. To be fair and factual this is true. I had posited that MLB guaranteed all salaries but found nothing in writing. I was going off what I was told from someone who should know, but that is different than factual evidence.

The part that is setting up a debacle for the next CBA negotiations is how effectively and blatantly the Dodgers are using the obvious weaknesses or holes in the current agreement to a point where there it is going to be difficult to claw back on a number of items. 

Purely from a personal point of view it seems like MLB could have, at the least, not allowed deferred money or signing bonuses to be discounted on present CBT counting. As a counter, that also may have not had much of an effect. In the final analysis the revenue gaps have just become too  humongous. Despite the public not having all the numbers to make clean comparisons, it is generally accepted that there are teams whose complete revenue sources are less than the payrolls of a few teams. I'm not sure where MLB goes from here.

Interesting to remember that Bowie Kuhn stepped in and voided transactions which threatened the landscape of competition when Finley tried selling all of his players. 

All of this makes one wonder where baseball is going as a business.

ashbury

Posted

1 hour ago, tony&rodney said:

Yes, we don't know. To be fair and factual this is true. I had posited that MLB guaranteed all salaries but found nothing in writing. I was going off what I was told from someone who should know, but that is different than factual evidence.

I looked further and the source of the confusion is that yes, MLB player contracts are guaranteed - in the sense of "all money will be paid under all the conditions mentioned in the contract."  This is in contrast to the NFL, for example, which often publicizes long-term contracts that actually are guaranteed for only one year along with signing bonuses that are paid right away, with no buyouts for the years in the future.  In baseball there are some escape clauses (unprofessional behavior and so forth) and there can be option years with buyouts, but basically when you see that a ballplayer has a $60M contract across some number of years, he'll get $60M.  MLB requires this.

But MLB contracts are guaranteed by the individual team signing it, not by the larger body of MLB itself.  A team declaring bankruptcy would matter a lot.

Here's a source, among many to choose from:
  https://littleballparks.com/are-mlb-contracts-guaranteed/

Sorry to go off on this tangent but your statement really took me by surprise.

tony&rodney

Posted

14 minutes ago, ashbury said:

But MLB contracts are guaranteed by the individual team signing it, not by the larger body of MLB itself.  A team declaring bankruptcy would matter a lot.

A few teams have declared bankruptcy in the last 40 years (I think 4), but MLB has more or less controlled how each filing played out via a forced sale. There is a "constitution" that somehow rules MLB ownership and therein may lie an answer to payments of salaries. Thus far MLB has avoided the question by forcing a sale of teams via something where three fourths of the total owners vote in favor of "kicking out" an owner. This most recently happened to Frank McCourt in a messy dissolution/sale of the Dodgers.

As long as there are people willing to pay the price for an MLB franchise I don't see how bankruptcy will affect lost salaries. Like most of the corporate world there are layers. 

The questions/surveys on mlbtraderumors of whether people support a salary cap/floor and subsequently are people ok with missing an entire season of baseball are interesting to some extent but MLB is unlikely to respond to public concern. Only the owners' concerns about their individual pockets is going to affect change.

ashbury

Posted

15 minutes ago, tony&rodney said:

Like most of the corporate world there are layers.

Apart from the rest of your post which I mainly agree with, I misread this line to say "lawyers", which ironically turns out also to be a correct reading.  😀

IndianaTwin

Posted

I don't like the notion of players deferring money. I wonder, however, if we'd read them differently if we heard that Team XYZ took out an operating loan as part of its business plan. I'm not sure I'd lend money to my employer, but that's essentially what Ohtani is doing. 

And a nitpick from the article -- deferring money isn't going to make a difference in taxes for Shohei under current tax code. The beginning of the top marginal tax bracket in 2025 is at $626,351 for single and $751,601 for married filing jointly. Even if he maxes out the 401(k) (which he'll want to do to get the company match 😀), Shohei is already well into the top bracket. Of course, I don't want to make this a political statement, but tax rates can and do change; it's unlikely tax brackets will be structured the same 19 years from now. 

tony&rodney

Posted

7 hours ago, IndianaTwin said:

I don't like the notion of players deferring money. I wonder, however, if we'd read them differently if we heard that Team XYZ took out an operating loan as part of its business plan. I'm not sure I'd lend money to my employer, but that's essentially what Ohtani is doing. 

And a nitpick from the article -- deferring money isn't going to make a difference in taxes for Shohei under current tax code. The beginning of the top marginal tax bracket in 2025 is at $626,351 for single and $751,601 for married filing jointly. Even if he maxes out the 401(k) (which he'll want to do to get the company match 😀), Shohei is already well into the top bracket. Of course, I don't want to make this a political statement, but tax rates can and do change; it's unlikely tax brackets will be structured the same 19 years from now. 

Deferred money is hard ink in the CBA. It seems the players are for it because it takes away from the average roster cost towards the CBT. I'm not too sure why the players are keen on anything deferred past a half decade. Tax rates are at historic lows for upper income earners. The rates can only go up, so I don't get that tactic. Perhaps those are take it or leave negotiations.

Seems like bonuses should go on year one if paid in that year and all contracts should be averaged over the length of the contract. Using Blake Snell as an example the CBT should read $76M plus the fair market monetary value of his perks for 2025 because he received $52M today (1/20/25) plus he is due a salary of $26M for this season. Snell has a CBT figure of less than $32M. I understand that the CBA governs these details but it is a clear example of where those owners who argue for some type of means to check the few teams at the top are asleep at the wheel or DWI. If a realistic / sensible system was used the Dodgers might have to think twice because all of these salaries would need to be paid times two to account for the CBT penalties. Of course, the Dodgers can likely afford a $500+ M roster. 

What am I missing?

mluebker

Posted

Here's what ChatGPT has to say about players and players' guaranteed contracts if a team were to go bankrupt:
------------

If a Major League Baseball (MLB) team were to declare bankruptcy, the players and their contracts would be significantly impacted, though MLB and the legal system would work to minimize disruption to the league and its players. Here's an overview of what might happen:

1. Bankruptcy Filing and Team Operations

  • Chapter 11 Bankruptcy: Most teams would file under Chapter 11 of the U.S. Bankruptcy Code, which allows them to reorganize their finances while continuing operations. During this period, the team would still play games and honor contracts unless otherwise ruled by the court.
  • Chapter 7 Bankruptcy: If the financial situation is beyond repair, the team could face Chapter 7 bankruptcy, which involves liquidation of assets. In this scenario, the team's operations would likely cease, and the league would step in.

2. League Intervention

  • MLB has a vested interest in maintaining the stability of its teams and overall league. If a team goes bankrupt, MLB would likely step in to manage operations, as it has done in the past (e.g., with the Montreal Expos in 2002, when MLB took control before the team's relocation and rebranding as the Washington Nationals).
  • The league could provide financial support, search for new ownership, or take temporary control of the team.

3. Players' Contracts

  • Guaranteed Contracts: MLB players' contracts are typically guaranteed, meaning that players are entitled to receive the agreed-upon salary regardless of the team's financial state. However, a bankruptcy court could potentially modify or reject some contracts as part of the restructuring process.
  • Team Payroll: If the team cannot pay players due to cash flow issues, MLB or the league's emergency funds might cover payroll temporarily to ensure contracts are honored.
  • Potential Sale: If the team is sold as part of the bankruptcy process, the new owner would inherit the players' contracts, unless specific terms are renegotiated during the sale.

4. Player Movement

  • Free Agency or Waivers: In extreme cases, a bankruptcy court could allow the team to release players or restructure contracts to reduce liabilities. This could make some players free agents or subject to waivers.
  • Trades or Transfers: To manage financial obligations, the team might trade high-salary players to other teams for financial relief.

5. Impact on Players

  • Uncertainty: Players might face uncertainty about their future, including whether they will be traded, their contracts restructured, or their payments delayed.
  • Legal Protections: The MLB Players Association (MLBPA) would likely intervene to ensure players' rights and salaries are protected throughout the bankruptcy process.

6. Historical Precedents

  • Texas Rangers (2010): The Rangers filed for bankruptcy due to ownership debt but continued operations. MLB helped manage the team, and a sale was arranged to resolve the situation. Players' contracts were largely unaffected.
  • Los Angeles Dodgers (2011): The Dodgers filed for bankruptcy during a dispute between ownership and MLB. The team continued to operate, and players' contracts were honored, with a sale eventually resolving the issues.

In summary, while bankruptcy would create significant uncertainty and potential legal disputes, the league and MLBPA would work to protect players and their contracts. Ultimately, the goal would be to stabilize the team, maintain competitive balance, and ensure contractual obligations are met as much as possible.

JD-TWINS

Posted

On 1/19/2025 at 1:14 PM, tony&rodney said:

I responded today on another post that the Dodgers are using the system and squeezing MLB on future CBA negotiations. 

I don't know what the MLB rule is for deferrals but I believe it requires setting some amount aside that cannot be accessed. If teams could defer salaries without specific rules in place there is nothing to prevent someone from going crazy which results in bankruptcy. MLB contracts are guaranteed by the league not the team. So there must be fairly significant rules.

The Dodgers are making it very difficult for MLB to engage in future revenue sharing negotiations because their future responsibilities are tired to the current rules. It is rather absurd to think that the league can continue long with the present disparity in revenue for clubs. As many as 20 teams may have less revenue in total coming to their organizations than the payroll alone of the Dodgers. We should expect the Mets and Yankees to follow suit as well. The solution is pretty simple. All revenues from games gets split. Teams can make additional money through stadium ads and ballpark development which is separate from contests. Even then a few teams will have much more revenue but not to the degree as the current setup.

Not being obnoxious here but have real question about your statement……..how does LA squeeze MLB in CBA discussions? What leverage do the Dodgers hold that allows them to push around the other 29 teams (26 teams) that do not have same leverage? I don’t get it. It seems if owners that make up MLB want the rules changed to make the playing field more level they can…….seems putting a ceiling on quantity of contracts that can be deferred would be a fairly simple topic to vote upon……or some other parallel solution.

JADBP

Posted

I have two comments:  

1.  This deferred compensation scheme will continue to work … until a player gets stiffed.  Through bankruptcy, through a morals clause, through a cheap owner who just wants to reneg for whatever reason/excuse, a team could CHOOSE not to pay.  At this point, you might never get another player to accept deferred compensation.  
 

Now if players choose to accept that risk in the hope of getting ever more money, then OK.   I am pretty sure that sooner or later some team is going to go belly up and stiff a player—if for no other reason than teams will accelerate this trick and it will get out of control (if not already).

2.  This brings up the question of how can other owners accept such salary disparity?  Certainly other owners want to win some games/championships sooner or later.  Even in the case of the seemingly disinterested Twins, the Pohlads still want to put buts in seats and winning does that.  So how can they allow a just a few teams to put forward such egregious payrolls?  How does this not hurt other owners?  Certainly the Twins franchise is devalued by their inability to compete at this level.  
 

The only way that it cannot is if the rich owners PAY the poor teams.  Not through revenue sharing. Nope.  But a secret deal where owners pay owners to go along with the disparity.  Let’s say the Twins are running a loss of $15 million in 2024.  The rich teams could pool their massive bucks to cover the loss to keep Pohlad happy.  But here’s the trick—it goes to ownership, not players or other salaries.  
 

Rich teams could come up with all sorts of ways to disguise this.  But there has to be a way to keep teams like MN or Denver or AZ happy because the Dodgers and the Mets are out of control.  
 

Soooo … Why aren’t fellow owners complaining?

tony&rodney

Posted

1 minute ago, JD-TWINS said:

Not being obnoxious here but have real question about your statement……..how does LA squeeze MLB in CBA discussions? What leverage do the Dodgers hold that allows them to push around the other 29 teams (26 teams) that do not have same leverage? I don’t get it. It seems if owners that make up MLB want the rules changed to make the playing field more level they can…….seems putting a ceiling on quantity of contracts that can be deferred would be a fairly simple topic to vote upon……or some other parallel solution.

It is complicated and as I stated in a comment previously I'm not that interested in going full research into the CBA to produce a full article/answer. I hope my admittedly weak response below makes some sense.

My initial thought that birthed the "squeeze" statement regards the current $1 billion+ that the Dodgers have in deferred payments. While the Dodgers have seen their franchise value more than double since the current ownership group purchased the team, those deferments alone are near the worth in value of several clubs.

How do the owners negotiate a new set of agreements given the realities of the Dodgers process. Can Milwaukee defer $1 billion in salaries? How does MLB maintain the stability of franchises. More or less, this is what I meant. The start of any conversations cannot repeal contracts made under a previously approved system which puts the Dodgers in the driver's seat in any discussions.

I'm not sure where this is headed and I do believe the Dodgers and Yankees could run $500 million payrolls for their players and still turn a profit. Does this bring in Saudi, Qatar, UAE, or other investment groups? It seems MLB is headed for some type of confrontation. FWIW, I don't believe previous commissioners would have been as absent, but I do also recognize that Manfred is an employee too who may have restrictions not held by previous holders of his position. 

Does any of this make sense? I'm still wondering myself where this goes.

tony&rodney

Posted

13 minutes ago, JADBP said:

I have two comments:  

1.  This deferred compensation scheme will continue to work … until a player gets stiffed.  Through bankruptcy, through a morals clause, through a cheap owner who just wants to reneg for whatever reason/excuse, a team could CHOOSE not to pay.  At this point, you might never get another player to accept deferred compensation.  
 

Now if players choose to accept that risk in the hope of getting ever more money, then OK.   I am pretty sure that sooner or later some team is going to go belly up and stiff a player—if for no other reason than teams will accelerate this trick and it will get out of control (if not already).

2.  This brings up the question of how can other owners accept such salary disparity?  Certainly other owners want to win some games/championships sooner or later.  Even in the case of the seemingly disinterested Twins, the Pohlads still want to put buts in seats and winning does that.  So how can they allow a just a few teams to put forward such egregious payrolls?  How does this not hurt other owners?  Certainly the Twins franchise is devalued by their inability to compete at this level.  
 

The only way that it cannot is if the rich owners PAY the poor teams.  Not through revenue sharing. Nope.  But a secret deal where owners pay owners to go along with the disparity.  Let’s say the Twins are running a loss of $15 million in 2024.  The rich teams could pool their massive bucks to cover the loss to keep Pohlad happy.  But here’s the trick—it goes to ownership, not players or other salaries.  
 

Rich teams could come up with all sorts of ways to disguise this.  But there has to be a way to keep teams like MN or Denver or AZ happy because the Dodgers and the Mets are out of control.  
 

Soooo … Why aren’t fellow owners complaining?

This idea is suggesting collusion of a fairly deep level. While I tend to doubt this, collusion is not uncommon in business. Remember it was major collusion that allowed the Twins to some extent to win in 1987 and 1991. 

We just don't know what is going on. I'm not sure you are wrong, meaning you could be correct, when you state that the current situation holds down valuation of some franchises. I just don't know though.

ashbury

Posted

8 hours ago, mluebker said:

Here's what ChatGPT has to say about players and players' guaranteed contracts if a team were to go bankrupt:

Here's what ChatGPT has to say about who won the American League pennant in 1899:

Quote

ChatGPT said:
The American League pennant in 1899 was won by the Boston Americans. This team would later become known as the Boston Red Sox. They finished first in the league that season, marking a significant achievement for the team. The 1899 season was the final year before the American League became a more competitive force in Major League Baseball, particularly with the advent of the 20th century.

(Whatever was going on in Boston in 1899, it wasn't the franchise that joined the American League in 1901, and the predecessor to the American League known as the Western League had no Boston franchise.)

I ran across this mistake a year or two ago, and it continues to crop up when I try it again now and then.  Sure it's a trick question; I expect software to deal with fuzzy input.

So, personally, I would double check anything ChatGPT tells me.  I trust ChatGPT less than I trust Wikipedia, which is really saying something.

chpettit19

Posted

FYI for everyone, teams are required to put deferred payment money in escrow. Although, they don't have to start setting it aside until the 2nd year of the deal. So the Dodgers aren't risking future season payrolls on the current roster. That money will all already be sitting there ready to be paid out as required by the player's contract. In fact, there's a couple different investment account options the teams can put the money in so the Dodgers are likely going to be making money on all these deferments before they have to pay out.

It's been a while since I read the CBA so I don't remember all the details, but the money has to be set aside so they're not going to get 10 years down the road and have to be diving into their 2035 revenue to pay Shohei his 68 mil. It'll be gift wrapped and waiting for him when he gets there.

mluebker

Posted

ChatGPT can be terrible with facts and has a tendency to hallucinate. But I figured that’s not much different than a lot of us who post here, so it might be interesting to see what it had to say.

 

tony&rodney

Posted

17 hours ago, chpettit19 said:

FYI for everyone, teams are required to put deferred payment money in escrow. Although, they don't have to start setting it aside until the 2nd year of the deal. So the Dodgers aren't risking future season payrolls on the current roster. That money will all already be sitting there ready to be paid out as required by the player's contract. In fact, there's a couple different investment account options the teams can put the money in so the Dodgers are likely going to be making money on all these deferments before they have to pay out.

I get this more or less but am also aware that there are years where the economy goes backwards. Real estate was a no brainer with low interest rates but was not too hot an item when interest rates went into the teens. 

No doubt the Dodgers will have the money. When the Dodgers last sold the franchise was worth somewhere around $2B and is likely more than $6B today and growing. 

For some reason ownership groups have been  narrow in their thinking, or at least it seems that way. When people say revenues from gates and media are evenly split, I'm not sure if this is correct. If the Dodgers bring in $350M on a media deal and they keep half while the Twins bring in $80M and keep half plus get additional funds from a pot (revenue sharing), it doesn't seem to come remotely close to any sort of parity. While stadium ads and site development (Atlanta for example) would be local investment returns that enrich a team, I'm at a loss why any media deals and ticket revenues would not be split given that it takes two teams to play any game. That type of monetary sharing in a business that totally requires others (one team playing another) seems pretty simple. How has that bypassed generations of owners? 

My shortcoming is a general disinterest in this part of baseball. I'm commenting because it is looking like MLB has a challenge on its hands that is adversely affecting both competition and a wider interest in baseball. However, I also can accept if this is seen by clearer thinking people than me as no big deal.

chpettit19

Posted

2 minutes ago, tony&rodney said:

I get this more or less but am also aware that there are years where the economy goes backwards. Real estate was a no brainer with low interest rates but was not too hot an item when interest rates went into the teens. 

No doubt the Dodgers will have the money. When the Dodgers last sold the franchise was worth somewhere around $2B and is likely more than $6B today and growing. 

For some reason ownership groups have been  narrow in their thinking, or at least it seems that way. When people say revenues from gates and media are evenly split, I'm not sure if this is correct. If the Dodgers bring in $350M on a media deal and they keep half while the Twins bring in $80M and keep half plus get additional funds from a pot (revenue sharing), it doesn't seem to come remotely close to any sort of parity. While stadium ads and site development (Atlanta for example) would be local investment returns that enrich a team, I'm at a loss why any media deals and ticket revenues would not be split given that it takes two teams to play any game. That type of monetary sharing in a business that totally requires others (one team playing another) seems pretty simple. How has that bypassed generations of owners? 

My shortcoming is a general disinterest in this part of baseball. I'm commenting because it is looking like MLB has a challenge on its hands that is adversely affecting both competition and a wider interest in baseball. However, I also can accept if this is seen by clearer thinking people than me as no big deal.

There are a lot of rules on who pays what and who gets what from revenue sharing. The As have their own set of rules even. It's actually lead to them spending some this offseason so they can hit their needed numbers to receive their chunk of revenue sharing. But then there's also loose enough language that some teams just pocket their revenue sharing, or at least aren't spending it on the MLB roster. 

The problem, in my eyes, is the different goals of ownerships. The Yankees want to win, but not like they did under George. They're a good example of new generations of ownership changing things. I feel pretty strongly that George wouldn't have lost out on both Shohei and Soto in back to back offseasons. Budgets would've been tossed out the window and he would've signed one of them. Hal isn't the super fan his dad was (this is all my outside opinion, obviously). He cares more about balancing budgets and the numbers. George just wanted to win. The Dodgers want to win. They hired a top 3 FO exec from a small market team to improve their processes and then threw crazy money behind Friedman that the Rays never could. I think every owner wants to win, but some just want to win because they know more fans show up then and they make more money. Others (Cohen or the late Peter Siedler, for example) want to win because they want to win. Mike Ilitch is a bit like Siedler in that they threw budgets out the window when they were running out of time and wanted to see a championship before they passed.

So, in my opinion, many of the owners don't care that the Dodgers are doing what they're doing. They still get their checks. And the more the Dodgers spend the more they have to pay the other teams. The concern many of us have had for a while is the shortsightedness of this. I don't know if Manfred sees things clearer and simply can't convince owners and the PA of the problems or if he's just happy collecting his checks, too. The MLBPA also doesn't care. They weirdly (to me) keep voting for CBAs that pay a select few crazy amounts of money while the vast majority of them get left behind, or even pushed out earlier because the star contracts force teams to go to league minimum guys more and more which pushes out the mid-level vets. 

That was a whole lot of typing when really it's a very simple situation: The fans don't have a voice in the room and both the MLBPA and the owners just want as much money as they can get right now. Future be damned.

tony&rodney

Posted

2 minutes ago, chpettit19 said:

There are a lot of rules on who pays what and who gets what from revenue sharing. The As have their own set of rules even. It's actually lead to them spending some this offseason so they can hit their needed numbers to receive their chunk of revenue sharing. But then there's also loose enough language that some teams just pocket their revenue sharing, or at least aren't spending it on the MLB roster. 

The problem, in my eyes, is the different goals of ownerships. The Yankees want to win, but not like they did under George. They're a good example of new generations of ownership changing things. I feel pretty strongly that George wouldn't have lost out on both Shohei and Soto in back to back offseasons. Budgets would've been tossed out the window and he would've signed one of them. Hal isn't the super fan his dad was (this is all my outside opinion, obviously). He cares more about balancing budgets and the numbers. George just wanted to win. The Dodgers want to win. They hired a top 3 FO exec from a small market team to improve their processes and then threw crazy money behind Friedman that the Rays never could. I think every owner wants to win, but some just want to win because they know more fans show up then and they make more money. Others (Cohen or the late Peter Siedler, for example) want to win because they want to win. Mike Ilitch is a bit like Siedler in that they threw budgets out the window when they were running out of time and wanted to see a championship before they passed.

So, in my opinion, many of the owners don't care that the Dodgers are doing what they're doing. They still get their checks. And the more the Dodgers spend the more they have to pay the other teams. The concern many of us have had for a while is the shortsightedness of this. I don't know if Manfred sees things clearer and simply can't convince owners and the PA of the problems or if he's just happy collecting his checks, too. The MLBPA also doesn't care. They weirdly (to me) keep voting for CBAs that pay a select few crazy amounts of money while the vast majority of them get left behind, or even pushed out earlier because the star contracts force teams to go to league minimum guys more and more which pushes out the mid-level vets. 

That was a whole lot of typing when really it's a very simple situation: The fans don't have a voice in the room and both the MLBPA and the owners just want as much money as they can get right now. Future be damned.

Instead of a simple like/ thumbs or in addition to ....

This is exactly what I see. Yet I don't understand it. The point of a draft and a few other changes in the 1960s was to create more more ability for competition. Clearly there are a number of franchises stuck with owners who are content with the staus quo. Fans are nearly irrelevant.

 

chpettit19

Posted

3 minutes ago, tony&rodney said:

Instead of a simple like/ thumbs or in addition to ....

This is exactly what I see. Yet I don't understand it. The point of a draft and a few other changes in the 1960s was to create more more ability for competition. Clearly there are a number of franchises stuck with owners who are content with the staus quo. Fans are nearly irrelevant.

 

I'll say that the new distribution situation may be a wild card that shakes things up. Manfred has says he wants to get as many teams as possible under the MLB umbrella like the Twins now are. But the large market teams are never going to do that if they don't have to. And the league shouldn't want them to unless they can replace the massive revenues those teams drive with their media deals. If the league can't find a way to replace the 50ish mil the Twins used to bring in from TV and they're instead happy to bring in 5 mil the smaller market teams may actually come together and try to force some change as their pocketbooks would start taking a hit at that point. And that'll actually get their attention. Even though it should've years ago when anyone paying attention saw this coming.

Sometimes the uber rich get too much credit for their intelligence. Making loads of money in one business doesn't automatically make you good at owning a team or good at making money in a different business field.


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