What is the end game?

[Nine of twelve]

That's why i like minor league ball and college sports. For the most part you don't have to deal with the political BS being inserted into athletic events as well as owners and players squabbling like whining babies over ludicrous amounts of money.

 

Now that i live in Charlotte i go to many Knights games (AAA white sox affiliate). They have a beautiful brand new stadium downtown. The sight lines are amazing, the food great, ticket prices are cheap and the beer reasonable. Not at all a white sox fan but i love the sport so i go.

It should also be mentioned that the baseball is not as good as MLB.

[AlwaysinModeration]

With Darvish signing a contract at $21million a year, instead of the $26.7 million a year he was predicted by MLB Trade Rumors, it seems like the players are relenting. Frazier signed for 2/17, considerably less than envisioned.

 

The owners are winning at resetting the market prices. How did they manage to reset the prices all at once?

[Twins33]

The owners are winning at resetting the market prices. How did they manage to reset the prices all at once?

Easier to do when the Yankees or Dodgers need to clear space in order to add him. Sounds like the Dodgers did offer him a contract but it was like 20M lower or something like that and contingent on trading Kemp.

[Major League Ready]

 

If the premise is pay equates to human contribution, then yes, of course baseball players are overpaid. Then again, under that premise, so are millions of people who work in "normal" industries. I'm sorry, I didn't realize that is the path you were trying to go down. I previously thought you meant from a % of revenue standpoint.
Of course, if we are using that logic, then the owners also don't "deserve" much of the insane money they are earning.

I've also never suggested that the players are underpaid. I've simply tried to give the viewpoint that if the market is there for these massive profits, then I respect BOTH sides trying to maximize their earning potential.

I will try to answer your questions as best as I can.

1) Sure, if the government declares a monopoly, and cuts revenue potential, then it makes sense for both sides to make less money. That argument has not previously been presented in this thread, unless I missed it. My arguments have been on the premise that the owners would still be making as much revenue as the market would allow. If the players portion were to go down, only to further line the pockets of the owners though, that would not be reasonable, IMO.

2) Would they lose any talent? Tougher to answer, but I'd say yes. Maybe not a lot in the short term, as it would obviously be too late for most of them to successfully transition to another sport.
Over the long term, I think the talent level would drain dramatically. I think you'd see elite young athletes focus more on other sports, if salary were cut that drastically in baseball only.

3) As Mike said, it stops being a game once you are paid to do it. This is a career, just like the majority of other non essential industries. So, I can't say if they'd still find it lucrative or not.
Keep in mind, they don't earn that salary for decades, like most workers do. How long is the average career in MLB?
Some potential mlb players might decide that going to college, and persuing a career in Engineering, or Finance, or Law will be safer, and just as lucrative, if salary is lowered enough.
Is 50% enough to persuade many to take another route? I can't say, probably for some, yes.

4) Not sure that Korea or Japan would be the competition. Perhaps in the short term, some lower to mid level talent guys would go over there. Long term, I think it would be other sports, or other career types.

 

I never once addressed revenue split in any fashion which is why I was so ardent.  You insisted on remaining on revenue split when my questions clearly indicated my argument was from a different perspective.  What’s a fair split does not dictate salaries in a free economy.  What’s fair is also very dependent on who’s perspective is being given.  I have been in literally hundreds, probably thousands of conversation/negotiations in dozens of companies across numerous industries.  There is a strong tendency for individuals or groups to over value their function.  John Kennedy once said “success has a thousand fathers and failure is a orphan? 

 

We all believe analytics are extremely important to winning.  Are the analytics guys get a piece of the pie or are they paid based on alternatives employment options for those involved.  The developmental guys in the minors can have a huge impact, right? I bet they feel they deserve more.  How about the marketing guys that have contributed to annual growth and popularity of the game.   The list goes on.  Who is entitled to what is very difficult to justify or quantify which I why I focused on other forms of valuation.

 

One of the angles I was addressing was could owners pay less and retain talent level and therefore the popularity of the game.  You answered we would lose talent but offer no data or even logic.  Are there even enough 2-sport players to make a difference?   Most are football players, right?  How do NFL salaries compare?  The average NFL salary is 1.9M and MLB is 4.4M  https://www.forbes.com/sites/kurtbadenhausen/2016/12/15/average-player-salaries-in-major-american-sports-leagues/#558d4fb21050   Is it likely players that are football and baseball prospects would opt for MLB even if the salaries were equal because of guaranteed contracts and to protect their bodies. 

 

We have always been able to attract and retain talent in the past.  I think so.  Has baseball not kept pace with inflation?  The average salary in 1995 was $1.1M According to this Forbes article, https://www.forbes.com/sites/kurtbadenhausen/2016/04/07/average-baseball-salary-up-20700-since-first-cba-in-1968/#3ccff70a3e48  the average salary in 1995 was 1,110,766.  Adjusted for inflation suing this online tool  https://inflationdata.com/inflation/inflation_calculators/inflation_rate_calculator.asp that would equate to $1,621,718.  Players earned an average of 4.4M in 2017 which is 270% of the rate paid in 1995 after adjusting for inflation.

 

My opinion is that fans are extremely bias.  For example, your position that players are underpaid but owners are making insane profits.  There were 15 MLB teams that made less than the top players (single player) in 2016.  Four teams lost money.  Compensation levels and models in all other industries include a risk component.  Players bare no risk.  Fans ignore all these things.  I fully expect very biased perspectives and perhaps that’s the real point here.  How many people do you think would characterize executive compensation at 1,000 times the average American income as underpaid?

[DaveW]

There is no way a single team, much less 4 teams actually “lost” money.

 

Your a business guy as am I, you know exactly how accountants can work the numbers to be advantageous for pretty much any scenario.

[Major League Ready]

 

There is no way a single team, much less 4 teams actually “lost” money.

Your a business guy as am I, you know exactly how accountants can work the numbers to be advantageous for pretty much any scenario.

 

Dave,

 

You are sure right in regard to the potential to manipulate numbers. However, these numbers were not supplied by the team. Detailed financials are simply not available so I got that information from Forbes. I am sure they are estimating these numbers. There is no way the teams are giving them even remotely complete information. 

 

https://www.forbes.com/mlb-valuations/list/#tab:overall

 

This is not too tough for me to believe. Revenue suffers when the team does not perform for whatever reason. There is not much you can do to trim costs unless you bail on the bigger contracts.

[Mr. Brooks]

I never once addressed revenue split in any fashion which is why I was so ardent. You insisted on remaining on revenue split when my questions clearly indicated my argument was from a different perspective. What’s a fair split does not dictate salaries in a free economy. What’s fair is also very dependent on who’s perspective is being given. I have been in literally hundreds, probably thousands of conversation/negotiations in dozens of companies across numerous industries. There is a strong tendency for individuals or groups to over value their function. John Kennedy once said “success has a thousand fathers and failure is a orphan?

 

We all believe analytics are extremely important to winning. Are the analytics guys get a piece of the pie or are they paid based on alternatives employment options for those involved. The developmental guys in the minors can have a huge impact, right? I bet they feel they deserve more. How about the marketing guys that have contributed to annual growth and popularity of the game. The list goes on. Who is entitled to what is very difficult to justify or quantify which I why I focused on other forms of valuation.

 

One of the angles I was addressing was could owners pay less and retain talent level and therefore the popularity of the game. You answered we would lose talent but offer no data or even logic. Are there even enough 2-sport players to make a difference? Most are football players, right? How do NFL salaries compare? The average NFL salary is 1.9M and MLB is 4.4M https://www.forbes.com/sites/kurtbadenhausen/2016/12/15/average-player-salaries-in-major-american-sports-leagues/#558d4fb21050 Is it likely players that are football and baseball prospects would opt for MLB even if the salaries were equal because of guaranteed contracts and to protect their bodies.

 

We have always been able to attract and retain talent in the past. I think so. Has baseball not kept pace with inflation? The average salary in 1995 was $1.1M According to this Forbes article, https://www.forbes.com/sites/kurtbadenhausen/2016/04/07/average-baseball-salary-up-20700-since-first-cba-in-1968/#3ccff70a3e48 the average salary in 1995 was 1,110,766. Adjusted for inflation suing this online tool https://inflationdata.com/inflation/inflation_calculators/inflation_rate_calculator.asp that would equate to $1,621,718. Players earned an average of 4.4M in 2017 which is 270% of the rate paid in 1995 after adjusting for inflation.

 

My opinion is that fans are extremely bias. For example, your position that players are underpaid but owners are making insane profits. There were 15 MLB teams that made less than the top players (single player) in 2016. Four teams lost money. Compensation levels and models in all other industries include a risk component. Players bare no risk. Fans ignore all these things. I fully expect very biased perspectives and perhaps that’s the real point here. How many people do you think would characterize executive compensation at 1,000 times the average American income as underpaid?

Well I've never once stated that I think mlb players are underpaid. I've even gone out of my way to remind you of that more than once in this thread.

This has been a fascinating discussion, but I won't continue an argument against words being put in my mouth.

[Richie the Rally Goat]

Because I find the premise baseball players are underpaid ludicrous. A US marine deployed to a combat zone receives "combat pay" at the rate of $225-250 per month. The median pay for a Marine Lance Corporal is $22,800. Annual compensation while in combat = $25,800. Clayton Kershaw get paid roughly $1M per start. That equates to 38.75X the annual salary of a deployed Marine Corporal for one game. That Corporal would need to fight in combat for 1,279 years to receive the same compensation for 1 year of Kershaw’s contract. He would have to fight in combat or 7,093 years to equal Joe Mauers contract or 12,596 years to equal Giancarlo Stanton contract.

 

How about a Homeland Security Agent Special Agent. They would have to work roughly 3,000 years to equal Stanton’s contract or we could say it takes 300 Homeland Security agents to equal one Giancarlo Stanton. The notion baseball players are underpaid is a product of fanaticism.

 

Mostly, I just wanted someone to actually address the question I posed directly. Let’s try again and see if anyone is actually willing to answer a question directly. If the government said the MLB monopoly has pushed ticket prices to a point of being prohibitive to many families paying taxes for these stadiums or the revenue just was not there and MLB paid half of the $4.4M average compensation would we lose any talent? Would an average compensation of $2,2M be considered incredibly lucrative for playing a game? Would players be thrilled to play for that amount of money? Could they go to Japan or Korea and make ½ of what they make in MLB? Let’s see if anyone is actually willing to address these questions.

the government is a monopoly too. It is illegal to build an army additional to the sanctioned, and the government uses its monopoly power to depress wages.

 

As evidenced by the dwindling numbers in the military, rarely does one sign up for the money. They sign up for the sense of duty. Comparing baseball and national defense is a bad comparison.

 

Of course the MLB could impose its will and drive down labor prices but that isn’t an indication of what the market rate “should be” its an indication of a market flaw. There has been competing markets in baseball but the government allowed monopolization and the league flourished, but the players pay didn’t rise at the same rate. That’s why it’s unionized labor. If management was good and good to the players, the players wouldn’t need to unionize.

 

So no, players are not over paid. They are underpaid with a very select minority ever making a major league minimum. The union currently fails 90% of its members because the major league players (who already make 10X and up over the next highest pay scale and 25x the majority of its players) are the decision makers. MLBPA is great for the richest players, and terrible for the minor leaguers, and not near hard enough on the owners.

 

Our nations service members are also badly under paid. 22k is a crime, but entirely unrelated.

[Major League Ready]

 

the government is a monopoly too. It is illegal to build an army additional to the sanctioned, and the government uses its monopoly power to depress wages.

As evidenced by the dwindling numbers in the military, rarely does one sign up for the money. They sign up for the sense of duty. Comparing baseball and national defense is a bad comparison.

Of course the MLB could impose its will and drive down labor prices but that isn’t an indication of what the market rate “should be” its an indication of a market flaw. There has been competing markets in baseball but the government allowed monopolization and the league flourished, but the players pay didn’t rise at the same rate. That’s why it’s unionized labor. If management was good and good to the players, the players wouldn’t need to unionize.

So no, players are not over paid. They are underpaid with a very select minority ever making a major league minimum. The union currently fails 90% of its members because the major league players (who already make 10X and up over the next highest pay scale and 25x the majority of its players) are the decision makers. MLBPA is great for the richest players, and terrible for the minor leaguers, and not near hard enough on the owners.

Our nations service members are also badly under paid. 22k is a crime, but entirely unrelated.

 

Monopoly status is irrelevant in this context as monopolies do not drive down wages and the laws protecting wages have nothing to do with monopolies.  This is a link to the Department of labor Laws.   https://www.dol.gov/general/aboutdol/majorlaws  If there is an effect of monopoly status it would be to create the capacity for excess profits and therefore higher than normal wages.

 

You are also mischaracterizing these statement. The OP suggested players were not treated fairly.  I wanted to know from what perspective.  The comparison to US Military and Homeleand security was a measure of sociological value. So, the comparison is obviously relevant in context. If its not a sociological perspective the other pertinent perspective is that of free market economics which is a perspective most fans look at from an emotional point of view.  For example, a primary disagreement here is that we would lose two sport players.  Fans say sure we would without any real consideration of the economic factors at play. For example, there are not enough two sport players to make a significant difference or that all of the others sports except the NBA pay considerable less.   Fans make this sort of statement don’t stop to consider baseball contracts are guaranteed and NFL contracts are not.

 

You also completely ignored the fact that I posted right after the quote you posted that this was not a debate of what anyone deserves. Anyone who has been part of related negotiation knows eveyone believes their function is where all the value is formed. There were no coaches that helped these players develop and marketing people had nothing to do with the growth of the league, etc.

[Rosterman]

Can you sign a player that is a difference maker, and for how much. That is the question.

 

Or do you continue to develop players to replace players when they walk.

 

Who's available and for what STARTING jobs on each team...but always, at what price. When you start looking at mid-tier free agents, you have to weigh them against inexperienced prospects that DO have an upside.

[Mike Sixel]

8 year deal just signed, after a 6 year deal was. Looks like long term contracts still exist....

[Platoon]

I always wonder why free market types, no one in particular is intended, have problems when the free market causes wages to rise in certain industries. But defend large companies to set prices and wages due to the same free market. The reality is elite athletes in any sport can do things other human beings can't. Fans pay to see this unique ability. Owners, to each of their internal need to win, bid on these services. It is ultimately that desire, their personal greed, their narcissism, and their revenue stream which set the salaries of the FA MLB players. Anyone who says that in that position they would turn down the money is being disingenuous. I also agree I don't think that the talent level would sink if they were paid less, but that is a moot point. Some owner will always drive up the price. It's a free market. One last proof of the market effect on salaries. Minor sports, with lower attendance, and lower advertising revenue don't pay these kind of salaries, nor profits to the owners. Thus fans have some control over owner profits, player salaries, and overall interest in a given league or team. And everyone is free to exercise their personal preferences for those entities. That's the free market in its purest form.

[Richie the Rally Goat]

 

Monopoly status is irrelevant in this context as monopolies do not drive down wages and the laws protecting wages have nothing to do with monopolies.  This is a link to the Department of labor Laws.   https://www.dol.gov/general/aboutdol/majorlaws  If there is an effect of monopoly status it would be to create the capacity for excess profits and therefore higher than normal wages.

 

You are also mischaracterizing these statement. The OP suggested players were not treated fairly.  I wanted to know from what perspective.  The comparison to US Military and Homeleand security was a measure of sociological value. So, the comparison is obviously relevant in context. If its not a sociological perspective the other pertinent perspective is that of free market economics which is a perspective most fans look at from an emotional point of view.  For example, a primary disagreement here is that we would lose two sport players.  Fans say sure we would without any real consideration of the economic factors at play. For example, there are not enough two sport players to make a significant difference or that all of the others sports except the NBA pay considerable less.   Fans make this sort of statement don’t stop to consider baseball contracts are guaranteed and NFL contracts are not.

 

You also completely ignored the fact that I posted right after the quote you posted that this was not a debate of what anyone deserves. Anyone who has been part of related negotiation knows eveyone believes their function is where all the value is formed. There were no coaches that helped these players develop and marketing people had nothing to do with the growth of the league, etc.

I ignored a post that happened after my post, I am I supposed to read all of your posts in a thread and go back to edit my post? How do you know I ignored it and just haven't read it yet? 

 

Now I'm ignoring it.

 

So if this isn't a debate about what anyone thinks they deserve, then how is sociological value relevant? If purely an economic discussion, then what I think doesn't matter and only the free market does. Collectively Bargained markets are not free markets. There are forces at play besides what an individual wants and values.

 

The league deserves the growth n revenue it earned. Management as a part of that growth deserves their cut just like anyone else. I just think the lower paid portions of the stakeholders like trainers, coaches, minor leaguers deserve a bit bigger share than what they've historically gotten.  

[diehardtwinsfan]

 

Because I find the premise baseball players are underpaid ludicrous.  A US marine deployed to a combat zone receives "combat pay" at the rate of $225-250 per month.  The median pay for a Marine Lance Corporal is $22,800.  Annual compensation while in combat = $25,800.  Clayton Kershaw get paid roughly $1M per start.  That equates to 38.75X the annual salary of a deployed Marine Corporal for one game.  That Corporal would need to fight in combat for 1,279 years to receive the same compensation for 1 year of Kershaw’s contract.  He would have to fight in combat or 7,093 years to equal Joe Mauers contract or 12,596 years to equal Giancarlo Stanton contract.

 

How about a Homeland Security Agent Special Agent.   They would have to work roughly 3,000 years to equal Stanton’s contract or we could say it takes 300 Homeland Security agents to equal one Giancarlo Stanton.  The notion baseball players are underpaid is a product of fanaticism.

 

Mostly, I just wanted someone to actually address the question I posed directly.  Let’s try again and see if anyone is actually willing to answer a question directly.  If the government said the MLB monopoly has pushed ticket prices to a point of being prohibitive to many families paying taxes for these stadiums or the revenue just was not there and MLB paid half of the $4.4M average compensation would we lose any talent?  Would an average compensation of $2,2M be considered incredibly lucrative for playing a game?  Would players be thrilled to play for that amount of money?   Could they go to Japan or Korea and make ½ of what they make in MLB?  Let’s see if anyone is actually willing to address these questions.

 

The whole premise to this is economics 101. The reason why a soldier makes so much less is that the supply of people willing and able to be soldiers far exceeds the nation's need for said soldiers. Even though their positions are riskier by trade, it is as simple as that. Add to it that potential employers, AKA the government in this case, don't have the ability to conspire together to decide where you are going to play so to speak. You sign up or you don't and find other options.

 

Your question though, hits on a different issue. If the government capped ticket prices, would MLB lose talent? That answer isn't that difficult. As with any price fixing, that invariably leads to capital fleeing to markets where it can maximize return. This is why prices controls almost always fail. In the short term, players would likely grumble and keep playing. Perhaps they will find creative ways around the price controls, but most likely in the long term, you'll likely find baseball leagues in other countries gaining value as that money will flee somewhere. There's a reason why players right now flock to the US. They pay the most, and it's the toughest stage. That will change over time if ticket prices are capped. Certainly not right away, but it will happen.

 

Look, I don't think ball players are underpaid, but they do take advantage of having a very rare set of skills that millions of people will shell out money to go see. This is true of any entertainer, whether an athlete, singer, etc. If you don't like player salaries. Don't go. Don't watch. Even though I haven't set foot at TF in several years, by simply participating here and visiting sites such as ESPN, mlbtraderumors, etc. I'm contributing to that fact. If their salaries bother you, walk away. It's the ultimate leverage. 

[AlwaysinModeration]

8 year deal just signed, after a 6 year deal was. Looks like long term contracts still exist....

I think you are right. The log jam seems to be broken, and the prices are going down a bit bit but not overly so. Seems like it really was just a confluence of events. But also seems contracts may need to be more creative with opt outs and incentives than they were in the past to make them more palatable than the standard long term deals.

 

Random side note...did Mauer’s chances of winning the gold glove just go up?

[Major League Ready]

 

I ignored a post that happened after my post, I am I supposed to read all of your posts in a thread and go back to edit my post? How do you know I ignored it and just haven't read it yet? 

 

Now I'm ignoring it.

 

So if this isn't a debate about what anyone thinks they deserve, then how is sociological value relevant? If purely an economic discussion, then what I think doesn't matter and only the free market does. Collectively Bargained markets are not free markets. There are forces at play besides what an individual wants and values.

 

The league deserves the growth n revenue it earned. Management as a part of that growth deserves their cut just like anyone else. I just think the lower paid portions of the stakeholders like trainers, coaches, minor leaguers deserve a bit bigger share than what they've historically gotten.  

 

I agree with one of the general constructs of your past couple posts in terms of the money is not getting spread around. The big names are getting paid big-time on guaranteed deals regardless of how they produce going forward. Of course, this too is a value judgment and when they perform their impact on the revenues is worth the salary. At least it would appear the teams have come to this conclusion.

 

Frankly, I have mixed emotions on minor league pay.  It's a business expense just like MLM salaries so owners should not care if they are paying MLB or MiLB salaries. I am guessing the players see this as their slice of the pie. If an X percent increase goes to MiLB players it costs the MLB players. Raise the average MiLB slary by $20K means there is roughly $100K less to go to MLB players.

 

One last note.  Who deserves what when slicing the pie is a different premise than sociological value.  

[ewen21]

 

Random side note...did Mauer’s chances of winning the gold glove just go up?

Do people still care who wins that thing?

[Major League Ready]

 

 

Look, I don't think ball players are underpaid, but they do take advantage of having a very rare set of skills that millions of people will shell out money to go see. This is true of any entertainer, whether an athlete, singer, etc. If you don't like player salaries. Don't go. Don't watch. Even though I haven't set foot at TF in several years, by simply participating here and visiting sites such as ESPN, mlbtraderumors, etc. I'm contributing to that fact. If their salaries bother you, walk away. It's the ultimate leverage. 

 

You are making an assumption that my problem is how much the players are getting paid and that assumption is incorrect. I don’t care.  What bugs me is the fans perspective on financial matters. For example, The Twins should sign Darvish no matter what. In other words, the owners should ignore the fact this is a business but players should not.  My favorite is MLB owners should be willing to make little or no profit but players should get every dime they can. The realty interesting thing about this particular position is that it is usually made in the context that it would help our team get desirable FAs. If the owners followed this practice it would not change the MN Twins position at all.  The players would just get more money. Actually, if all the teams sacrificed their profit the Twins would be in even worse relative financial position because the big market teams would add more to their potential budget then the twins would under such a practice. 

 

Also, positions such as the league would lose talent are formulated with little consideration of the driving factors. For example, you concluded MLB would definitely lose talent in the long run.  To whom?  There is not another league paying even remotely close to MLB. The NFL pays less than half in terms of average salary. Fans support this positions without any realistic consideration of the factors associate with a potential future state.  

 

BTW … MLB attendance has declined for three consecutive seasons. Do you think the rising ticket prices necessary to pay these enormous salaries has anything to do with this fact?

 

https://www.forbes.com/sites/maurybrown/2017/10/02/final-2017-mlb-attendance-dips-below-73-million-for-first-time-since-2002/#6b3e3c61326f

[AlwaysinModeration]

Do people still care who wins that thing?

I cannot speak for “people.” However, to me, insofar as winning it would help solidify his chances of enshrinement in Cooperstown, yes, I care.