The Table Setter, Dec 12, 2023: Dodger Deferrals and Royal Paydays

[Steve Lein]

1 hour ago, Nine of twelve said:

Innovative? Yeah, I suppose it's innovative to game the system in order to circumvent the intent of the rules, especially when you are one of the few teams that can afford to do it.

EXACTLY.

[Woof Bronzer]

1 hour ago, Nine of twelve said:

Innovative? Yeah, I suppose it's innovative to game the system in order to circumvent the intent of the rules, especially when you are one of the few teams that can afford to do it.

Correct, yes, doing new things within the rules is the definition of innovative.  This has nothing to do with "afford" though.  Every team in the league could do it.  The Pohlads are one of the richest owners in MLB, they can afford it, and in fact, they can SAVE money by doing it.  

[Steve Lein]

1 hour ago, tony&rodney said:

You do remember that deferrals have been used dozens of times going back a couple of decades, right?

Not like this, they haven't.

I'm pretty certain the most money that has ever been deferred is $105 MIL to Max Scherzer (of $210 MIL total). 

That's a whole lot different than $680 MIL (of $700 MIL total).

[Steve Lein]

1 hour ago, chpettit19 said:

By all reports I've seen it was Ohtani's idea to do it this way, not the Dodgers. Ohtani wants to win so he wanted them to be able to have the extra cash to be able to put as many good pieces around him as possible. He's doing what many fans have begged players to do and sacrificed some cash in the name of winning. 

If he really wanted to do this he would have signed 10-year $300 MIL contract.

[Woof Bronzer]

1 hour ago, chpettit19 said:

Why are we mad that a player and team are actually trying to win?

Absolutely mind boggling.  If the Twins did something like this people nobody here - literally nobody - would complain.  Quite the opposite, in fact, we'd hear about Falvey's genius and the Pohlad's spending non stop.  

Many Twins fans seem to expect other franchises to operate under the same self-imposed constraints the Twins do, just out of fairness or something.  Not how capitalism works.  

[Woof Bronzer]

1 minute ago, Steve Lein said:

If he really wanted to do this he would have signed 10-year $300 MIL contract.

If he really wanted to do this he would have signed a 10-year $700m contract with $680m deferred.  

You're saying someone forced him to do this?

[Major League Ready]

1 hour ago, chpettit19 said:

By all reports I've seen it was Ohtani's idea to do it this way, not the Dodgers. Ohtani wants to win so he wanted them to be able to have the extra cash to be able to put as many good pieces around him as possible. He's doing what many fans have begged players to do and sacrificed some cash in the name of winning. Why are we mad at the Dodgers for listening to what Ohtani and his representatives proposed? Why don't other teams just try to do the same thing? NFL teams take advantage of their CBA rules about contracts all the time. Why are we mad at teams for trying their hardest to win within the rules, especially when the player is the one suggesting the strategy? I wish the Twins would actually put in this kind of creative effort towards winning instead of just throwing up their hands and saying "we need to cut payroll."

I agree we should applaud the team and the player.  However, how many players do you suppose would be willing to accept this type of "creative approach".  Ohtani makes $45M/ year in endorsements.  Plus, the Twins also are never going to be against the luxury tax threshold so it seems unrealistic to ask why the Twins are not getting deals like this done.

We will have to wait and see what they do this year but they did quite well in modest costs deals like MAT, Solano, Pagan, and Stewart.  The big deals most people here were adamant about being needed (Correa & Mahle) have not been so good.  They also got criticized for Pagan and Paddack and that deal is looking pretty good.  

[nicksaviking]

I'm not mad at the Dodgers, I'm just jealous. Makes me like Ohtani a whole lot more too, clearly his time wasted in Anaheim caused him to do everything he can to get a ring.

Good for the Royals too. For about 30 years, they've almost always been a bottom feeder in terms of signing free agents. Still, ain't a pitcher listed that they're interested in that I want.

[tony&rodney]

Why do all of the comments that oppose Ohtani signing a contract of his own choosing that adheres to all of  the rules of the CBA sound like forms of jealousy. 

Is this the end of MLB? I do not understand the objections. How many World Series crowns do the Yankees and Dodgers hold in the 21st century? How is this any different than Texas signing Seager and Semien?

Deferrals is just a corporate thing. Numbers have always been a thing - they change. The Twins carry debt despite paying $5 million down, $5 million per year for 5 years with a $3 million ballon payment to close out Calvin. Later they paid another $10 million for the minority shares. It's all business and the Twins do exactly what they do and the Dodgers do exactly what they do because they have different markets and they follow their models. They do exactly what they want to do without restrictions. It's just different. Who cares about the money? We have been hearing this trope since Curt Flood won his lawsuit. I'm not seeing the dynasties that we saw in the 1950s and 1960s. Corporate will be corporate.

I just want to watch the games and can't care about the money.

[tony&rodney]

11 minutes ago, Woof Bronzer said:

Not how capitalism works.  

Too close to politics .... because capitalism doesn't work. 

Back to baseball, let each team make their own team. 

[nicksaviking]

2 hours ago, USAFChief said:

This is ridiculous.

MLB needs to bust the union, and institute a hard salary cap.

It did wonders for the NFL. It would do wonders for MLB as well.

And MLB better do it quickly, while it still properly claims to be a "major" sport.

Agree that there needs to be a hard salary cap along with a hard salary floor.

But the owners need to step up and make it in the players best interest too, I'm in no mood for them to bust a union. I'm sure the players would at least come to the table if the offer was a 200-220M floor. The billionaires should be making a far greater sacrifice than the millionaires; that being across the board revenue sharing.

And if the big shot owners are not willing, there are way more 'have-nots' than 'haves'. The have-nots can go right ahead and kick the Yankees and Dodgers out of the league if they're not willing to make the game equitable.

[DJL44]

1 hour ago, chpettit19 said:

Why are we mad that a player and team are actually trying to win?

Envy

[Doctor Gast]

All this Ohtani thing leads to the Dodger is able to whoo Yamamoto. If they are able to sign Yamamoto, it's extremely unfair even if it's legal. Maybe this could create enough uproar for enough owners get together to completely change how MLB does business. Even not, like NYM tried to monopolize the market last off-season & didn't make the post season I hope the same for LAD unfortunately for Ohtani.

LAA, even though they had the players with high WAR to perennially make it to the WS, never made a run.

[Dortmunder]

I'm kind of disgusted with baseball right now, and how certain teams with endless resources are able to game the system.  I find this deal with Ohtani grating--if the Dodgers are paying a player $700 million, then all $700 million should count toward the luxury tax over the years that the player is active.  The gap between the teams with near-infinite resources and the rest of the league is growing wider all the time. Sneaky little work-arounds like this are only making the disparity worse.

[Steve Lein]

46 minutes ago, Woof Bronzer said:

If he really wanted to do this he would have signed a 10-year $700m contract with $680m deferred.  

You're saying someone forced him to do this?

If he really wanted the team to remain competitive in spite of his own earning power, he wouldn't need to utilize a loophole to accomplish it.

My main issue here, is it's an obvious abuse of the rules. I would expect MLB to do something about it eventually. Then again, it's MLB so who knows...

It's something exactly like this why the Minnesota Wild are and have been hamstrung with their payroll. The NHL punished them severely for the contracts they handed out to Parise and Suter, which were perfectly legal at the time they were signed, but then was deemed, correctly, that they were not in the best interest of the sport.

There can not be a thing where the few large revenue teams are the only ones that can even hand contracts like this out.

It's why the contract is $700 MIL, $275 (!!!) MIL more than any other player has ever received, and not $500 and simply the largest contract ever.

[chpettit19]

2 hours ago, Rod Carews Birthday said:

I understand that the idea came from Ohtani and that it's within the rules.  However, that set of rules is severely skewed toward teams that have a ready (nearly) unending stream of cash coming in.  For the Dodgers to commit to that kind of money in the future at worst may make it a little uncomfortable for them, but I doubt it.  In essence, they're getting their player, paying him a pittance now in order to artificially deflate their payroll, add more, and avoid some luxury tax hit, while deferring costs to later, when there may be no luxury tax to pay.  For a mid or lower market team to do this requires a scary leap of faith that the money will be there in the future, which as we've seen this year, it may not.  It's why Bill Gates buying a new Mercedes (or the company) isn't a big deal, but if I buy one, I am concerned about the payments and that may make me buy a car that sells for less money.  In my case, it doesn't hurt me, because I'm not competing with Bill Gates in anything, but in the Dodgers/Twins case, it interferes with fair competition and makes an even more uneven playing field.

If the Twins showed a larger investment in winning maybe they'd have players like Ohtani wanting to come to their team on creative deals within the rules which would also raise their revenue they could produce through advertising and thus be able to afford more good players and continue the cycle.

Of course the Twins are never going to be able to spend like the Dodgers, but I'm told nearly everyday on TD that "payroll doesn't matter" and "you can't buy championships" so why do we care? The Dodgers have a big advantage in their market, but they also run their business significantly better than the Twins. I just don't understand why people are upset with players and teams trying to win. Is it a bummer for us that we're in a smaller market than LA and we have owners who don't really care to invest in winning? Absolutely. But I don't know why that makes people upset with the teams that are actually trying invest in winning within the rules that the players and owners both agree to. But to each their own.

[chpettit19]

1 hour ago, Steve Lein said:

If he really wanted to do this he would have signed 10-year $300 MIL contract.

Why? Would that make a significant difference? The only way to truly show he wants to win is to take less than half of what he could get? Seems dramatic. There's also the push from the MLBPA to maximize your value so the guys who come after you can maximize theirs. He's getting paid, helping future players, and still setting himself to be on the best team in baseball while allowing them more flexibility to improve their team.

[chpettit19]

1 hour ago, Major League Ready said:

I agree we should applaud the team and the player.  However, how many players do you suppose would be willing to accept this type of "creative approach".  Ohtani makes $45M/ year in endorsements.  Plus, the Twins also are never going to be against the luxury tax threshold so it seems unrealistic to ask why the Twins are not getting deals like this done.

We will have to wait and see what they do this year but they did quite well in modest costs deals like MAT, Solano, Pagan, and Stewart.  The big deals most people here were adamant about being needed (Correa & Mahle) have not been so good.  They also got criticized for Pagan and Paddack and that deal is looking pretty good.  

Almost 0 players would do that, but isn't that all the more reason to praise Ohtani instead of being mad that him and the Dodgers are doing this? The CBT break is definitely nice, but taking only 2 mil in actual payments while providing your team with reportedly 50-100 mil in extra revenue makes it much easier for that team to manage their finances, no? It wouldn't be helpful for the Twins to be able to pay Correa 2 mil now while putting aside extra revenue he produces that they can earn interest on or invest or whatever they do to increase that stash to be able to then pay him 30 mil down the road when their revenue would be expected to have grown anyways? They couldn't use that extra 30 mil this season because they aren't in the luxury tax? I'd think saving the literal cash is just as important as the CBT implications. Not sure why not being in the luxury tax makes it unrealistic for the Twins to do creative contracts that manipulate their spending.

If the modest cost moves are just as good why do we care about the Dodgers spending or not spending on Ohtani? If you don't need to make big deals why do we care that other teams do? Shouldn't we be happy they are if the big deals aren't really helpful?

[Rod Carews Birthday]

5 minutes ago, chpettit19 said:

If the Twins showed a larger investment in winning maybe they'd have players like Ohtani wanting to come to their team on creative deals within the rules which would also raise their revenue they could produce through advertising and thus be able to afford more good players and continue the cycle.

Of course the Twins are never going to be able to spend like the Dodgers, but I'm told nearly everyday on TD that "payroll doesn't matter" and "you can't buy championships" so why do we care? The Dodgers have a big advantage in their market, but they also run their business significantly better than the Twins. I just don't understand why people are upset with players and teams trying to win. Is it a bummer for us that we're in a smaller market than LA and we have owners who don't really care to invest in winning? Absolutely. But I don't know why that makes people upset with the teams that are actually trying invest in winning within the rules that the players and owners both agree to. But to each their own.

Oh, payroll most certainly does matter.  The way it matters most is the ability to make mistakes and then recover from them.  If Ohtani tanks or gets hurt, the Dodgers have the kind of cash flow that enables them to pay him off, ignore it, and move on.  If Correa tanks (for a lot less money), it’s a much greater drag on the Twins ability to continue to invest and compete.  A contract like the Dodgers/Ohtani contract, which would still be too risky for a smaller market team, just exacerbates an already apparent issue.  

I am also a fan of spending other people’s money, so I wish that the Twins would support a higher payroll, but I don’t think it’s entirely fair to say that ownership doesn’t care to invest in winning.  The inherent combination of much greater population base and nationalization of the fan base gives a team like the Dodgers a huge built in advantage.  It essentially makes their cash flow bulletproof — so much so that they would have to try to screw it up, no matter how much money they defer into the future.  The players and owners have agreed to the current system, but that doesn’t make it right or fair for everyone, as there is less interest in competitiveness than in just maximizing the league’s dollars to reinvest.  Unfortunately, this makes those dollars even more concentrated in a few areas.  

[chpettit19]

14 minutes ago, Rod Carews Birthday said:

Oh, payroll most certainly does matter.  The way it matters most is the ability to make mistakes and then recover from them.  If Ohtani tanks or gets hurt, the Dodgers have the kind of cash flow that enables them to pay him off, ignore it, and move on.  If Correa tanks (for a lot less money), it’s a much greater drag on the Twins ability to continue to invest and compete.  A contract like the Dodgers/Ohtani contract, which would still be too risky for a smaller market team, just exacerbates an already apparent issue.  

I am also a fan of spending other people’s money, so I wish that the Twins would support a higher payroll, but I don’t think it’s entirely fair to say that ownership doesn’t care to invest in winning.  The inherent combination of much greater population base and nationalization of the fan base gives a team like the Dodgers a huge built in advantage.  It essentially makes their cash flow bulletproof — so much so that they would have to try to screw it up, no matter how much money they defer into the future.  The players and owners have agreed to the current system, but that doesn’t make it right or fair for everyone, as there is less interest in competitiveness than in just maximizing the league’s dollars to reinvest.  Unfortunately, this makes those dollars even more concentrated in a few areas.  

I agree payroll matters. But, honestly, I'm not sure why I should care about "right or fair" when some owners are clearly not interested in winning, but instead are just happy to take their revenue sharing dollars, put it in their pockets, and watch their franchise appreciate year over year. If every owner were actually interested in winning I'd have a different stance. But they aren't.

So at that point I'm all for the big guys going out and flexing their muscle in an attempt to win. I hate the Yankees. Always have, always will. But Steinbrenner wanted to win, played within the rules, and did everything he could to achieve that goal. I'll never be mad at that. Jealous? Absolutely. But not mad. Owners who take their fan's money, their publicly subsidized stadiums, and their revenue sharing and make no attempt to actually invest in winning are what make me mad. The Dodgers are the ones showing an interest in competitiveness. Cohen showed an interest in competitiveness. The Padres have shown an interest in competitiveness. I'll never be mad at them. I want them to lose because they aren't the Twins, not because they're actually trying to win and are using every tool at their disposal to do it. The reason the rules are how they are despite there being more have nots than haves is because the teams are just businesses to most of the have nots. I don't know why I'd want them to have a fair playing field when they're not even really trying to compete in the field in the first place.

[DJL44]

36 minutes ago, chpettit19 said:

If the Twins showed a larger investment in winning maybe they'd have players like Ohtani wanting to come to their team on creative deals within the rules which would also raise their revenue they could produce through advertising and thus be able to afford more good players and continue the cycle.

Of course the Twins are never going to be able to spend like the Dodgers, but I'm told nearly everyday on TD that "payroll doesn't matter" and "you can't buy championships" so why do we care? The Dodgers have a big advantage in their market, but they also run their business significantly better than the Twins. I just don't understand why people are upset with players and teams trying to win. Is it a bummer for us that we're in a smaller market than LA and we have owners who don't really care to invest in winning? Absolutely. But I don't know why that makes people upset with the teams that are actually trying invest in winning within the rules that the players and owners both agree to. But to each their own.

The Dodgers also have to compete against the Giants, Diamondbacks and Padres who are trying to win. The Twins get the gift (curse?) of being placed in the "nobody's trying to win" AL Central division.

[tony&rodney]

The suggestion of a salary cap with a salary floor is a non starter from the owner's side ..... and the the players', with the owners being much more adamant and vocal that a floor will never happen. Well, unless the team floor is about $50 million for a team.

Comparisons with other sports doesn't work. Hockey is small potatoes due to limited media contracts. The NBA has players make huge money because basketball is a global sport drawing huge media deals. Football is the king of media in U.S. sports and their shared revenue and total control of the games means (mol) relative equality of monies. Baseball still has room for expansion, both in terms of teams and through media exposure. The leadership of baseball seems woefully behind other team pro sports.

The reason the Twins and other teams could not sign Shohei Ohtani is actually really simple. Ohtani wants to play for the Dodgers. This has been known, discussed, and is now verified through the contract. I, for one, am happy for him. Sure, he would be a good fit for the Twins and they could have easily signed him .... if Ohtani wanted to play for the Twins. So it goes.

[DJL44]

Both MLB and the union want the established star players in the largest markets. It's good for everyone, including the revenue sharing recipients, because it maximizes overall revenue. Everyone wants the Yankees and Dodgers in the playoffs as much as possible.

Fortunately, the randomness in baseball makes their playoffs much more like the NCAA basketball tournament than the NBA postseason. Any team that makes the playoffs has a chance to win the World Series.

[Johnny Ringo]

LA got Shohei Ohtani and Minnesota got Steve Miller (and fake Journey and a band TBNL). 

Such is life as a Twins fan. 

See you at the yard, Meat. 

[Major League Ready]

2 hours ago, nicksaviking said:

Agree that there needs to be a hard salary cap along with a hard salary floor.

But the owners need to step up and make it in the players best interest too, I'm in no mood for them to bust a union. I'm sure the players would at least come to the table if the offer was a 200-220M floor. The billionaires should be making a far greater sacrifice than the millionaires; that being across the board revenue sharing.

And if the big shot owners are not willing, there are way more 'have-nots' than 'haves'. The have-nots can go right ahead and kick the Yankees and Dodgers out of the league if they're not willing to make the game equitable.

Let's use your mid-point of $210M in Payroll.  Benefits and taxes are at least another $20M so $230M.  Plus, $15M in draft bonuses (Domestic & International)  That's $245M and the bottom teams generate around $240M.  Of course, they also have to pay for hundreds of employees and all the operating costs associated with a MLB team.  Therefore, a $210M floor is not even remotely feasible.  

I hate the disparity but it's simply not financially to set the floor high enough to offset the ceiling in terms of overall dollars paid to players.  The top revenue teams produce 250% of the revenue of top teams.  You can't raise the floor enough to reduce that gap.  That's why the players were focused on increasing the luxury tax threshold.  Had the owners insisted on the modest increase in the tax threshold they originally proposed, the players likely would have gone on strike and the owners would have been crucified by MLB fans.

The disparity is not on the owners.  They would gladly reduce the Luxury tax threshold and increase penalties.  However, that would take a lot of money out of players pockets,  That's why it won't happen without a work stoppage.

[nicksaviking]

14 minutes ago, Major League Ready said:

Let's use your mid-point of $210M in Payroll.  Benefits and taxes are at least another $20M so $230M.  Plus, $15M in draft bonuses (Domestic & International)  That's $245M and the bottom teams generate around $240M.  Of course, they also have to pay for hundreds of employees and all the operating costs associated with a MLB team.  Therefore, a $210M floor is not even remotely feasible.  

I hate the disparity but it's simply not financially to set the floor high enough to offset the ceiling in terms of overall dollars paid to players.  The top revenue teams produce 250% of the revenue of top teams.  You can't raise the floor enough to reduce that gap.  That's why the players were focused on increasing the luxury tax threshold.  Had the owners insisted on the modest increase in the tax threshold, the players likely would have gone on strike and the owners would have been crucified by MLB fans.

The disparity is not on the owners.  They would gladly reduce the Luxury tax threshold and increase penalties.  However, that would take a lot of money out of players pockets,  That's why it won't happen without a work stoppage.

We have next to no idea how much the top revenue teams are making, but based on their willingness for the big contracts and their willingness to build their own stadiums, we can be assured it is exponentially higher than the bottom clubs. 

You can reduce the gap if you average the revenue of all the clubs, legitimately, not what they claim, find the mid point and set the floor and ceiling 10-15M or so on each side. Or to make it more fair to the players, set the floor at the midpoint and allow teams to spend 30-40M more. I have no idea if that's 210M, It's probably much, much higher.

If the Dallas Cowboys and Buffalo Bills can do it, and the LA Lakers and OK City Thunder can do it, the Yankees and Pirates can do it too.

[chpettit19]

29 minutes ago, Major League Ready said:

Let's use your mid-point of $210M in Payroll.  Benefits and taxes are at least another $20M so $230M.  Plus, $15M in draft bonuses (Domestic & International)  That's $245M and the bottom teams generate around $240M.  Of course, they also have to pay for hundreds of employees and all the operating costs associated with a MLB team.  Therefore, a $210M floor is not even remotely feasible.  

I hate the disparity but it's simply not financially to set the floor high enough to offset the ceiling in terms of overall dollars paid to players.  The top revenue teams produce 250% of the revenue of top teams.  You can't raise the floor enough to reduce that gap.  That's why the players were focused on increasing the luxury tax threshold.  Had the owners insisted on the modest increase in the tax threshold they originally proposed, the players likely would have gone on strike and the owners would have been crucified by MLB fans.

The disparity is not on the owners.  They would gladly reduce the Luxury tax threshold and increase penalties.  However, that would take a lot of money out of players pockets,  That's why it won't happen without a work stoppage.

In a "salary floor/salary cap" world the revenues are all (mostly) shared. That's how the NFL does it. It's not about what each individual team can make in revenue, it's about what the entire league makes. The NFL rule (I believe still after the new CBA) is that 51% of total football revenue has to go to the players. That sets the floor for the salary cap. The Jags and Cowboys don't make the same revenue, but because the league shares revenue they're both able to, and forced to, spend to at least the floor. A floor wouldn't come in without a drastic change to revenue sharing.

[chpettit19]

20 minutes ago, nicksaviking said:

We have next to no idea how much the top revenue teams are making, but based on their willingness for the big contracts and their willingness to build their own stadiums, we can be assured it is exponentially higher than the bottom clubs. 

You can reduce the gap if you average the revenue of all the clubs, legitimately, not what they claim, find the mid point and set the floor and ceiling 10-15M or so on each side. Or to make it more fair to the players, set the floor at the midpoint and allow teams to spend 30-40M more. I have no idea if that's 210M, It's probably much, much higher.

If the Dallas Cowboys and Buffalo Bills can do it, and the LA Lakers and OK City Thunder can do it, the Yankees and Pirates can do it too.

I believe the league does between 10 and 11 billion in revenue each year. If the MLB were to follow the NFL situation it'd be about 51% that has to go to players, which sets the floor. Let's call it 10.5 bil in revenue. 51% of that is 5.355 bil. Divided amongst 30 teams the floor would be 178.5 mil.

[TwinsDr2021]

Interesting nobody has mentioned the amount he is going to save in Taxes by doing this. He will not be living in California when his contract is done thus reducing his state tax by 13%. He will either be in Japan or a state that doesn't pay income tax. Not sure what Japan will tax him, but if he moved to Florida that would save him around 100 million.

 

[Major League Ready]

16 hours ago, nicksaviking said:

We have next to no idea how much the top revenue teams are making, but based on their willingness for the big contracts and their willingness to build their own stadiums, we can be assured it is exponentially higher than the bottom clubs. 

You can reduce the gap if you average the revenue of all the clubs, legitimately, not what they claim, find the mid point and set the floor and ceiling 10-15M or so on each side. Or to make it more fair to the players, set the floor at the midpoint and allow teams to spend 30-40M more. I have no idea if that's 210M, It's probably much, much higher.

If the Dallas Cowboys and Buffalo Bills can do it, and the LA Lakers and OK City Thunder can do it, the Yankees and Pirates can do it too.

Sounds good in theory.  Now convince the owners of the top teams to lose a billion or two billion in valuation by going to this model.  We are just too far down the given path in MLB to make this sort of remarkable change. Frankly, someone else replied that revenue is maximized by the top markets having star players.  He/she was right.  Neither the owners or players want to make a change that will likely hurt revenue generation.  Disparity is a problem for equitable competition.  It's not an economic/business problem.  That's why we have what we have.  The owners and players are making a fortune.  Giving small market fans equity is not a priority.