Have Fans Been Conditioned to Accept Less?

You might remember Rob Mains from the work he contributed to this site’s Community blog. More recently, he’s been doing great things over at Baseball Prospectus. Just this past month, he was nominated for a SABR award.

Mains wrote a piece over at BP in the middle of January that I found to be of interest. It came shortly after the Pirates shedded Gerrit Cole and Andrew McCutchen, with Pirates owner Bob Nutting claiming he couldn’t afford to keep star players around at market rates.

Mains’ piece is, in part, a meditation on what we ought to expect of a pro sports team’s ownership — and, in particular, if there should be a moral obligation, or civic responsibility, inherent to holding such an asset.

Wrote Mains:

Buying a baseball team isn’t like other investments. The current ownership group (led by Kevin McClatchy; Nutting has since become the principal owner) paid $92 million for the Pirates in 1996. The owners could’ve done other things with that money. They could’ve built a hospital. They could’ve invested in a basket of no-load mutual funds. They could’ve bought shares of Microsoft. But they didn’t. They bought a baseball team. You know why? The people who buy a hospital don’t regularly get interviewed by the Associated Press. Investors in mutual funds don’t get to walk through baseball clubhouses with family members and friends, and have famous athletes call them “Mister.” …

Buying a baseball team and refusing to spend the money to make it competitive is the equivalent of buying a luxury car and complaining because it costs more than an $11.99 bulb to replace a headlight. You knew what you were getting into. If you didn’t want to have cash outflows, you could’ve spent your money differently. If you don’t want to pay up for star players, what’s needed is a re-examination of your motivations, not “a fundamental redesign of the economics of baseball.”

Baseball is a business, of course. And we find the business of baseball quite fascinating at FanGraphs dot com.

Owners of all businesses are naturally interested in running their concerns efficiently and at a profit. Billionaires generally do not become billionaires by operating at a loss. However, Mains strikes on a key point — namely, that baseball is not a typical business. Baseball owners are not selling widgets. They are selling a product that has the city’s name scripted across the chest of road jerseys. They own an institution that represents tribal and emotional interests.

It is a business, in other words, with an uncommon amount of public investment (emotionally and in the form of tax-payer-funded ballparks). A baseball team is a part of civic identity and following a club creates a common experience for thousands upon thousands to share in any particular region. While perhaps naive for doing so, a fan base would like its owner to view him- or herself also as a steward of an institution. And we have seen some owners act in well-meaning fashion.

For example, late Tigers owner Mike Ilitch spent irrationally on his Tigers, even appearing to frustrate other owners with his relative extravagance. There was also that moment, at the peak of the recession — with the automobile industry teetering on the brink of collapse — that Ilitch allowed General Motors to keep its prominent ad displayed over the center-field batter’s eye, even though the company couldn’t afford or justify the payment. For those in Detroit who extract some amount of pride from the city’s historical role in manufacturing, it was inspiring. That symbolic act transcended ownership. It was a display of community support and solidarity.

Nutting’s comments and Mains’ piece are related to something else that this author suspects might be at play.

We have heard small-market teams describe themselves as “small-market teams” so often, have heard about the constraints and the un-level playing field so often, that the general public and media has become conditioned to accept these claims as fundamental realities. We’ve come to accept — well, at least some of us — that certain teams can never afford certain players or even consider significant external help on the market.

It’s difficult to challenge such claims since MLB franchises’ books are not public; a Freedom of Information Act request cannot access them. Moreover, with extreme, tanking-style rebuilds now en vogue — responsible for championships both in Chicago and Houston — fans are perhaps being conditioned to accept longer down periods, as well.

We don’t know how poorly, or well, teams are doing. That said, I suspect the Pirates could cover this year’s payroll without selling a single ticket. In addition to the assets received from revenue-sharing and media/TV contracts, there is also the $50 million MLB Advanced Media payment. Applying the NBA’s soft cap-and-floor model to baseball, I found 11 teams would have been under the salary floor in 2017. (That study does not cover the player-development or minor-league expenses that are unique to baseball.)

To be fair, the Pirates were at the top end of their established spending levels before the McCutchen and Cole trades. Craig Edwards didn’t project the Pirates to have much, if any, payroll room — again, based on their established levels. But the club has since shed more than $20 million in 2018 salary commitments. They’re not currently connected to any significant major-league free agent. There are more than 120 players available as of today, Feb. 1. Even during the Pirates’ 2013-15 peak, they were never willing to climb out from the lower-third of MLB payrolls.

We don’t know what a club’s actual spending power is before an owner would have to consider deficit spending. But, as Mains suggests, perhaps being a good steward of a club should mean occasionally spending beyond ideal comfort levels. To use his analogy, these franchises are sports cars not Subarus.

But even before considering deficit spending, we have a pretty good idea there is money to be spent, that more teams could be trying to improve. This winter’s inactive free-agent market is likely due to a combination of influences. The economic model, from the players’ viewpoint, might very well be broken. This ice-cold offseason is not, however, a result of the owners’ inability to afford ballplayers.

According to Spotrac, teams have spent $746.8 million on free agents as of Jan. 31. Teams spent $1.429 billion on free agents last year, $2.418 billion in 2015-16, and $1.638 billion in 2014-15. While some like Yu Darvish are going to be paid, eventually, the lack of spending to date is astonishing, and much more is required to approach last winter’s spending.

Spending should rise this month, of course, but this offseason might very well represent a kind of recession compared to recent seasons.

The conundrum is that teams are correct to identify free agency, on the whole, as a losing bet — particularly with regard to long-term deals that cover the decline years of a player. Teams are operating logically and rationally within the structure of the game’s rules in treasuring young talent.

Still, while teams have rightly prized young talent, not every need can be filled internally. To put as complete and competitive a team on the field as possible, a club cannot spend efficiently on every 25-man roster spot.

With that backdrop, Peter Gammons gave Brewers owner Mark Attanasio a salute over at The Athletic.

The owner of a team in the game’s second-smallest TV market has signed the top position player to date, to the largest contract to date this offseason, in Lorenzo Cain. The Brewers have also bolstered their bullpen though spending and remain connected to top free-agent starting pitchers.

Wrote Gammons:

Can they get a free agent pitcher’s price down? Will someone be willing to trade a starter to get a Domingo Santana?

“We’ll see,” says [Brewers GM David] Stearns. “We’ll just keep trying every avenue. We know we’re in a very tough division, but we owe every ounce of our creative energies to the fans in this town . . .. We want to bring the postseason back to Milwaukee. We understand what it means. We know what it meant to Kansas City when Dayton Moore and the Royals did everything to win, which they did.”

No one believes the Milwaukee Brewers can afford a Jake Arrieta or tempt Manny Machado or Bryce Harper next offseason. But in a winter in which tanking and collusion and market correction have ruled, the Brewers have been both fiscally wise and aggressive, all while operating in the second smallest market in the game. They’re trying and that’s why their fans support them.

Yes, the fourth and fifth years of the Cain contract could be ugly. The fifth year is perhaps irrational. Yes, the Brewers have only $91 million in 2018 payroll commitments. Yet, the signings — and perhaps more to come — suggest Attanasio is really into this idea of trying to win.

Small-market fans, in some cities, have been conditioned — or at least come to expect — little action. Yet, the Brewers surprised some in the industry as aggressors this winter. It’s a good surprise. The game is at its best when the fans, players, and owners are all invested.

We hoped you liked reading Have Fans Been Conditioned to Accept Less? by Travis Sawchik!

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A Cleveland native, FanGraphs writer Travis Sawchik is the author of the New York Times bestselling book, Big Data Baseball. He also contributes to The Athletic Cleveland, and has written for the Pittsburgh Tribune-Review, among other outlets. Follow him on Twitter @Travis_Sawchik.

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snapper
Member
snapper

The most recent estimates I’ve seen show the Marlins get $50M in central revenue, and $60M in revenue sharing. The Pirates and the Brewers must be similar. Forbes estimated that the Pirates made $50M last year. More than the Yankees or Dodgers or Cardinals or Nationals.

Every team in MLB can run a $125M payroll and still make money. Some ownership groups (like the Pirates and Marlins) would rather spend less, cry poor, and make more money. That sucks for baseball and especially their fans.

MLB should have a rule that if your MLB payroll does not equal your central revenue plus your revenue sharing, revenue sharing is reduced dollar for dollar by the difference.

Tank if you want, but don’t expect the rest of the league to guarantee you outsized profits while you’re tanking.

LHPSU
Member
LHPSU

While it is true that the Brewers have been willing to spend compared to their market size, they also ran the lowest payroll in MLB in both 2016 and 2017. The Marlins’ payroll at the end of 2017 was almost double that of the Brewers’.

Barring further moves such as signing Yu Darvish, even with the Cain and Yelich contracts, the Brewers’ opening payroll for 2018 is just $7M more than the Pirates and $4M more than the Marlins.

snapper
Member
snapper

The Brewers were legitimately bad. They needed to rebuild. They didn’t trade off a bunch of star players for little return, just to dump their contracts.

sadtrombone
Member
sadtrombone

The Brewers made a lot of moves, but the big reason they spent less money in 2016/2017 was because they had a lot of expiring contracts and instead of spending money in FA to replace them, they hunted for high-variance young guys like Broxton and Villar.

Some of the contracts had disappointing prospect returns and mostly saved the organization money (like Lind and K-Rod) but they were trading with orgs with no top-notch prospects (Mariners and Tigers). They were probably just happy to dump the players before they imploded.

It doesn’t seem like the Brewers were terribly interested in shedding salary for the sake of shedding salary, but neither were they interested in adding it.

Chickensoup
Member
Chickensoup

K-Rod brought Manny Pina (2.0 WAR starting catcher before some injuries last year) and Lind brought back a top 10ish Brewers prospect in Freddy Peralta. i cant think of a single Brewer trade that was an actual salary dump. As a matter of fact, the only one that would have potentially been one was if Braun went to the Dodgers as part of a reported Braun for Puig + McCarthy (and others)

sadtrombone
Member
sadtrombone

The Braun trade is actually good evidence that the Brewers were not just engaged in salary dumps. The rumor was the Brewers were insisting on two top-flight prospects in addition to Puig + McCarthy. One, I think, was Jose de Leon…but whoever it was, there wasn’t a sticking point there. But the second one was one the Dodgers were not willing to give up. The rumor was it was Cody Bellinger. (Yeah, if true, not surprising it fell apart)

Let’s not forget the Brewers’ moves too much here. The return for Lind was three guys in rookie ball, one who was an FV40 and two who were nobodies. The headliner in the return for K-Rod was Javier Betancourt, I think was an FV40 too.

Could they have gotten better prospects if they had been willing to take on salary instead of just dumping them? Yes, I think so, but that would have required trading with someone other than the Mariners and Tigers…and that probably wasn’t happening.

All this is to say, I think the Brewers took the best deal for the team’s long-term competitive outlook. But those were still salary dumps. I don’t blame the Brewers for this since they were almost certainly the best offers in terms of total value, but that is what they were.

Shalesh
Member
Shalesh

The Pirates didn’t do that either. The returns for Cole and McCutchen are considered pretty good by prospect watchers.

maguro
Member
maguro

Opinions vary, I guess. The majority of Pirate fans certainly view the Cole and McCutchen deals as close to pure salary dumps.

John Wick
Member
Member
John Wick

And they’re wrong if that’s how they feel.

There’s a valid backwards-looking critique about spending here (the Pirates should have spent more to support their core when they were in a competitive cycle) but that’s very different than criticizing their decision to sell two depreciating assets (Cole and McCutchen) this offseason to bring in players with longer team control.

LHPSU
Member
LHPSU

Would you feel the same about the Pirates’ payroll if Austin Meadows and Tyler Glasnow looked like the studs they were a year or two ago? Or if they were winning 95 games each year?

Payroll is very clearly not the problem; it’s just a convenient scapegoat for a team currently lacking in excitement. I don’t see anybody celebrating the San Francisco Giants’ $203M payroll.

dcweber99
Member
dcweber99

What prospect watcher said that? Off the top of my head, the following were critical of the return: Fangraphs, BP, Keith Law, David Schoenfield, Bucs Dugout, and Pirates Prospects

LHPSU
Member
LHPSU

In this context, none of that matters. The bottom line is that any objective standard you apply would have hit the Brewers harder than anybody else the past two years, and would not have touched the Marlins, and as things currently stand is still almost as likely to hit the Brewers as the Marlins and Pirates.

nathanj
Member
nathanj

The Madison and Green Bay TV markets should be included when referring to the Milwaukee market size. Land-wise, the Milwaukee TV market is tiny relative most mlb teams. Due to amble parking and relatively low rush hour congestion, it’s possible for those people to attend weekday evening games. Much easier than Tacoma residents going to Mariners games, even though that is in the same TV market Or, San Jose fans of either the A’s or Giants, etc.

The Real McNulty
Member
The Real McNulty

exactly. The big market teams are more than happy to allow other teams to cry poor and rake profits; not bidding up their free agent targets and fielding sub-optimal teams benefits the big market teams.

Only when the players and public make a big enough fuss will the big owners put more pressure on the cheap owners, like we’ve seen with the A’s.

maguro
Member
maguro

Well, I’m certain that the big market teams are raking profits, too. Their profiteering is just less obvious than the small market teams, but they probably have even more room to spend if they were willing to take minimal profits. The Red Sox, for instance, had $62M in cash to buy Yoan Moncada, which gives you an idea of what kind of resources they have to work with.

snapper
Member
snapper

The league put in major penalties, not just the tax, but also loss of draft picks and Int’l bonus money, to stop them from spending more. So, it’s hard to blame the big spenders for not wanting to trigger the harshest penalties.

maguro
Member
maguro

But doesn’t “the league” work for the owners? They essentially imposed those penalties on themselves.

snapper
Member
snapper

The league works for 30 owners. They voted to penalize 2 or 3 who would like to spend over $200M. Originally, when the luxury tax first passed, it solely impacted the Yankees. So, 29 owners voted to tax 1.

The Hammerer
Member
Member
The Hammerer

This is why the players have always resisted a hard cap. The big market teams will drive the market. The problem this year is just that 2 of the 3 of the drivers are out of the market (Dodgers & Yanks). The biggest winners from a financial point of view of a harder luxury tax (increased penalties) are the big spenders not the little ones.

FanTards
Member
FanTards

“MLB should have a rule….”

You were doing great until this point of your post.

MLB owners are a crime family, the Thirty Families. They have disputes among one another sometimes but no family ever jumps over to side with the cops against the other families. They may ask permission to wack another made guy who they feel has overstepped his position, but they are still part of the syndicate operating under the oath of Omerta.

The only way to fix what is wrong in MLB is for the players themselves to agree on what is wrong and what must be changed to right those wrongs and then go on strike to achieve it. Criminals do not suddenly agree that what they do to make their money is wrong and swear to follow a righteous path, the criminals must be physically forced to change their behavior.

What is wrong with MLB is how little freedom the players have to move from one organization to another selling their talent for what it is worth. The players are essentially paid backwards, their best years under “control” of MLB teams. Even when traded their control years go with them, increasing their trade value.

Look at the MLB draft in June. Look at the stage. What do you see? Google: Slave Auction and then click “images”. Other then the attire of those being auctioned it is conceptually the same. Every player must start out as a slave for seven seasons. Until his term of slavery is served out he is paid a small fraction of his worth. This applies to almost every player who can stay active on a roster for a full season. Every such player is worth much more than what he is being paid. At its most extreme Mike Trout was worth about sixty times more than what he was being paid by the Angels. If at the conclusion of that season Trout had been crippled in an automobile accident he would have left MLB with a few million dollars earned while having provided over one hundred times that in value to the Angels.

MLB players need to slash service time from seven years to four and increase the minimum salary to $4 million per year. Everything will fall into place from this change. Tanking is no longer mega profitable as the minimum payroll is $100 million no matter how bad you stink on the field. Teams can tank, but their owners will pay for those draft picks. A player will be owned for four years but make at least $16 million over those four years. Free agents will not be clearly on the other side of their careers when they hit the open market. The few will still have their best to sell while many others have solid plateau seasons to sell. The decline years for others will still have value.

Nothing is perfect, but this is a solid base to work from and those who want to own a small market team and drain over $50 million in profit from it every year while crying poor can likely look for something else to own.

Roger McDowell Hot Foot
Member
Roger McDowell Hot Foot

I fear people may downvote this excellent polemic on account of “crime families” seeming hyperbolic, so I just want to point out — you’re FanGraphs readers, maybe you like economic terminology better — that if you substitute “cartel,” nothing much about the argument changes.

Ryan DC
Member
Member
Ryan DC

Really more like indentured servitude than slavery but otherwise amen

Momus
Member
Momus

Honestly I think you could accomplish this just by reducing the years of control: 4 major league seasons or 6/7 total seasons combined between the majors and minors, whichever comes first.

…and get rid of the draft slotting

Man, when you start looking at it the MLBPA has given away the farm in the last few negotiations. Stiffer penalties for going over the luxury tax threshold, hard slotting in the draft… they have been cutting their own throats and seemingly not even noticing. That union needs new leadership – experienced labor lawyer or player agent leadership.

Robert J. Baumann
Member

Marvin Miller rolling in his grave.

kk808
Member
kk808

I wouldn’t mind seeing a salary floor requirement for clubs. I know in hockey, you get penalized hard if you do not meet the floor requirements. I think the PA should try to negotiate that in but of course if teams are forced to spend a minimum, there would be ramifications that we may not want to think about.

I very much understand that owning and running a sports franchise can be a losing effort. However, for me, if you aren’t willing to operate your franchise to win and to grow the brand why even buy it? Winning usually helps instill “growth” for your market and with these business owners, it baffles me to continue to see the same pattern of inaction. It’s a risk to invest in a volatile enterprise but if you weren’t willing to risk why buy the team in the first place?

Momus
Member
Momus

Prestige? Buying a sports franchise is like buying an old Ferrari or a painting for millions of dollars: you derive joy from owning it even though it is just sitting there costing you money – not always with sports franchises, but let’s say just the ones we theoretically think are losing money – but knowing that someday when you want to sell it that item will very likely be worth a lot more money than you paid for it.

Frank McCourt stretched himself so thin by owning the Dodgers that he appears to have been perpetually scrambling to keep up with the debt, and yet after 8 years of very questionable ownership he sold the franchise for over 4 times what he had paid for it. The exact same story could be repeated with Jeffery Loria and the both the Expos and Marlins – despite running both on as little money as it’s probably feasibly possible to run an MLB franchise, he came out of owning those teams a much richer man.

…and in both cases they got to have that rarest of rich person toys – a professional sports franchise. I would imagine that is bragging rights in those circles the same way it is for those of us in the middle class when we buy a Porsche, or a cottage, or a boat.

tb.25
Member
tb.25

“Every team in MLB can run a $125M payroll and still make money.”

Not necessarily. Operations costs combined with a lack of fans and a poor TV deal easily can lead to a team losing money while running a $125 million payroll. Especially considering ownership outstanding debts from stadium costs.

2017 Marlins.

jfree
Member
jfree

MLB should have a rule that if your MLB payroll does not equal your central revenue plus your revenue sharing, revenue sharing is reduced dollar for dollar by the difference…don’t expect the rest of the league to guarantee you outsized profits while you’re tanking

Even better, eliminate the ability for MLB to decide its own rules without the threat of competition. Econ101 – competition works to eliminate ‘monopoly rent’. The only way to bring competition into the business of sports is to separate ‘the sport itself’ (rules of the game) from ‘leagues’ (schedules, media game revs, interteam payments) from ‘teams’ (players, stadium, local revs, etc). The money problem would resolve itself if the league was not merely a subsidiary cartel of the teams but an independent entity.

A team tanks, it gets relegated to a league that has lesser media revs. Champions get promoted to a league with better revs. The relegated teams will get rid of bigger contracts (perfectly ok) – but there will always be a new market each year of new buyers/promoted teams. Over time, teams with cheap/stupid owners will find themselves in cheap leagues (not merely collecting rent from other teams) – and good leagues will tend to have the best owners.

Dave T
Member
Member
Dave T

I agree that most MLB teams can probably make money at around $120 to $125 million of payroll, and the Pirates do look to be in that category.

The Marlins, however, aren’t in that category. They’re a revenue trainwreck that is down around Rays level. Those two teams are down around $20 to $50 million less in revenue than the estimates for “normal” small market teams such as the Brewers, Reds, Twins, etc.