Per the latest report from Ronald Blum of the Associated Press, payrolls across MLB fell from $4.22 billion in 2019 to $1.75 billion during the pandemic-shortened 2020 season. The Dodgers’ $98.6MM payroll, Blum notes, clocked in as the highest mark among the game’s 30 teams. The Yankees finished second with a payroll of $86.3MM.
Of course, the 60-game season meant prorating pay, dropping player salaries by approximately 63% from the full-scale amount. The totals given here mark a roughly 59% year-over-year decrease, suggesting payrolls would have increased had there been a full season. 2018 brought the first year-over-year decrease in payroll since 2010, as Blum reported at the time.
One complicating factor was a rise in buyout options. As Blum writes, “Buyouts of unexercised 2021 options came to $58.2 million, more than double the $26.9 million for buyouts of unexercised 2020 options, a sign of expense-cutting amid the revenue loss.” That’s not a surprise, given the sudden change in expected revenues without fans present, but it is noteworthy.
Parsing owners’ financial positions after this season’s revenue losses will continue to be a topic of discussion as free agency moves forward at its glacial pace. Without transparency from owners, the exact losses are difficult to ascertain. These numbers – presuming their accuracy – do serve as a significant data point, however.
The question of finances has been and will continue to be one of the sticking points between MLB and the MLBPA as the two sides near the expiration of the collective bargaining agreement. Transparency has been at the center of the debate, as owners have resisted the call from players to make their finances public. The Braves, as a publicly traded company, are the only team whose finances are made public in the form of quarterly reports, as Fangraphs’ Craig Edwards reviewed in early December. Of course, only so much can be gleaned from a single team’s financial numbers.
People need to realize this: Teams didn’t lose roughly 100 million dollars of what they already had, no, instead they didn’t make 100 million dollars that they *could’ve* in a full season with fans. There is a distinction.
The owners are almost fully unreasonable given the facts.
The facts haven’t really effected the discourse much
Only the owners have the facts. Therein lies the dispute. Don’t pretend the facts are available to us. They could have reduced profits. They could have severe losses. No one knows. That’s the fact!
^this
Amazing the amount of comments on the financial status of the owners, when only the owners know what’s in the books.
I wonder why they don’t show their books….
Because it’s a slippery slope and they know it
I wish we knew what the true losses were. Whatever anyone posts here (unless they are an owner with an anonymous screen name) is a pure guess as to the finances of the game.
Goz – what difference does it make whether you know how much owners made it lost. Will it effect whether you are a fan or attend games?
Where did I infer any of that? All I did was respond to @Ranger29’s assertion that no team actually lost any money in 2020. All I said is without seeing the books, all is speculation and opinion.
Buy a team and then tell us!
They lost a projection that’s it!!
Capitalism 101 – I’ll label it a “loss”, when it is actually just less revenue than I would’ve liked to have made. Now where’s my tax break and bail out, I have yachts to pay for!?!
Yes, and the money back on my cable bill!
I don’t believe this is true, or at least not an accurate reflection of what the owners are claiming. The claim is that actual operating losses in 2020 (i.e,, 2020 revenues – 2020 operating expenses) were around $3B for the league as whole, which works out to an average operating loss in 2020 of $100M per team.
Where owners lost is that every cost wasn’t scalable like player salaries. Loan payments on stadiums, front office staffs, etc were still due in full. Their revenue per game was down without fans. That’s why there will be less to spend this year. No, owners didn’t have to reach into their savings to keep the lights on but that doesn’t mean they weren’t negatively impacted.
No way? You mean they have bills other than player salaries? Thou shalt not bring such facts onto these boards wherein most people cannot think beyond what the whiney MLBPA claims every year. The MLBPA relies on small minds to stand behind their ‘victim’ mentality.
If all these teams were so ridiculously profitable every year, then they would NEVER be sold folks. NEVER. As in not going to happen because we are making big profitsses on our ‘precious’, yes we are’.
FACT – 17 teams have changed ownership in the last 20 years.
ASSUMPTION – A smart person would give away everything else before they would sell something turning a big profit.
Given the two things above, team ownership changes should be the anomaly, probably bound more by death of the principle owner than anything else. Yet, they are sold over and over again. You really do not have to see the numbers to get an idea of how most of these teams really don’t turn the profit these players think they do (players who can’t see the numbers either by the way).
@rangers29 – I enjoy many of your takes, often because they’ve got hard data to back things up.
This is one where I think you’ve at least lost some objectivity, if not strayed over to being flat wrong.
I think it IS possible, and even likely, that some (not all) clubs either lost cash reserves, or, had to take out loans to cover real losses in 2020.
Data point 1: revenue sharing was suspended.
Data point 2: game day revenue from ticket sales, parking, concessions, stadium merchandise, also dropped to zero.
Data point 3: in 2019 4billion of mlb’s 10billion in revenue was from the game day spending in point 2.
Data point 4: as I understand it, local media took a big hit, and media contracts in general may have been prorated.
Data point 5: covid protocols cost teams more money on expenses that previously never existed, increasing operating costs per game played – travel costs, hotel costs, masks and deep cleaning, funding the bubble, postseason expenses for rooms and such, etc
Data point 6: we can tell from the braves disclosures that they spend significantly more on general operations than personnel payroll, and most of those fixed costs do not prorate like player salaries simply by cancelling games.
What’s the take away? Your statement is more truthful for a Yankees or Dodgers Red Sox ball club than it is for a Miami/KC/PIT/Tampa club.
Small market clubs losing revenue sharing, losing gameday sales? Even their reduced payroll I can’t fathom how they stay in the black or close to it.
What about the Nationals? The Angelos withhold their rightful MASN money (which is already less than it ought to be) and then they get no gameday income? I dunno, but common sense tells me they ‘lost’ money either on hand or that they borrowed, I doubt it was purely loss of potential earnings.
Like any business some clubs operate at higher margin than others. But to quote the incoming c-in-c c’mon man, you know better than that.
I understand what you’re saying, and thank you for saying that I’m wrong without being demeaning about it. That may sound sarcastic since it’s just the typed word, but I don’t mean it that way. Most people know just yell or demean, but you didn’t, so thank you.
And yes, there are waaayyy more factors that go into it rather than the black and white comment I said. (Btw, I said that teams lost roughly 100 mil each though bigger markets probably lost more than smaller markets, just keep that in mind)
Back to what I was saying though, the team owners missed out on 100 million dollars this season that they failed to make. That’s not losses in that instance, it’s just failing to make that. The owners DID have to spend more money because of Covid though. Because of the testing, the travel, the different on field measures, more money was spent there.
As for prorated contracts with the media, I couldn’t speak on the behalf of that because I haven’t red about that so I’d be uneducated. Though I will say that if the contract was signed pre-covid, then the teams should still get the full money they were offered because it is a signed contract.
In the end, all I threw out in the beginning was a black and white statement (the situation on the other hand is not black and white) about how people get those terms wrong. It goes deeper than that, and while they did have to spend more money, I wasn’t talking about that. Thanks for being respectful though, I appreciate it.
@Rangers29
When you state “the team owners missed out on 100 million dollars this season that they failed to make. That’s not losses in that instance, it’s just failing to make that”, do you have any evidence for that statement or is it just your conjecture?
Everything I’m reading suggests that teams actually had operating losses in 2020. There are disputes as to the amount of the losses (e.g., Craig Edwards’ Fangraphs post suggests that the Braves only lost $65M). And some argue that the generally increasing value of the teams as an asset offsets any operating losses. Or that the teams’ operating profits in past years would more than cover their losses in 2020 — so looked at over a 2-3 year period, teams wouldn’t have net losses. And I understand that we don’t need to feel sorry for billionaires who lost some money one time. But I don’t see people presenting any evidence that the teams had profits in 2020, which seems to be what you are saying.
I was referring to this article saying that teams didn’t make a collective 2.5 bil. They have been saying for a while that the teams didn’t make 3 bil collectively which divided by 30 teams is 100 mil. Yes, since it is actually 2.5 bil, it is now around 83 mil (average). Some teams didn’t make as much as others, but that’s the reason I gave that number.
Got it. But this article just says that one component of team’s expenses (MLB payroll) decreased by $2.47B. That’s money the teams saved, not money they “didn’t make”. They are not remotely the same thing.
Yeah, you’re right. I saw “payroll” and thought revenue. I thought they were talking about annual profit, but that’s their payroll. Dang. That seems like so little, yet teams are still going out and making moves…
Thanks for pointing that out.
Saw your post below about confusing payroll and revenue… mental lapses happen to the best of us, I guess the more so each decade we’re here too – at least for me.
Still, the debate you raised IS valid even if the reason for the comment was a mistake on the topic of the article. There ARE two viewpoints as to if or how much clubs are likely to have ‘lost’ verses just failed to earn in profits.
The two numbers I think everyone needs to focus on are public record without completely open books…
4billion in gameday revenue going to zero. That comes from publicly available MLB data for 2019 involving average ticket price, total attendance, and reported fan spending.
10billion, total gross revenue before expenses for combined MLB and club operations in 2019.
For teams, in aggregate, to not have ‘lost’ actual money, you have to believe in a normal non-covid season that the gross profits AFTER expenses but BEFORE depreciation of assets exceeded 40% of the team’s gross revenue.
To simplify, for every 100m in gross revenue, on average, clubs must have 40m or more in profits before depreciation is accounted for in order not to wind up in the red without attendance.
I for one think no more than 3 or 4 teams *might* in their best year approach that operating margin, and most are probably a sliver of that.
Now, teams did collectively cut payroll by virtue of the 60 game season. But they also added new expenses. So it cuts both ways. It all comes down to what you believe operating margin on a ball club to be.
The problem is that for the most part they are 100% private companies, and do not need to give accurate financial statements to non-shareholders. While teams are saying they lost X amount of dollars due to Covid-restrictions, we’ve never heard them say how much they profited in non-Covid seasons.
Do we know how much they profit? How much they lose? How much debt (and debt payments) they have? No. We know basically zero information about a private company’s finances. And you know what? Who cares? Whether a team made or lost money has no impact on us a fans. Ticket prices will NEVER go down in cost; cable/TV subscriptions with NEVER decrease. Teams will charge what fans will pay…and that will determine what they spend on expenses.
Why blast Rangers29 for a very astute observation about what profits weren’t made this past year. Let’s talk in financial terms. In the past the net profits of organizations have been published. They have shown that some organization have made 1/4 of billion to 2/3 of a billion in profits. Rangers29 is simply stating the obvious.
Even if the losses were greater than the previous years astronomical profits, this was a one time hit for the big market teams that got shared with the players who make no less than 1/2 million. The people really hurt are not the owners, execs, managers, players or agents, the people really hurt were the workers who lost their jobs, the vendors who lost their normal earnings, the fans who lost their past time and the kids who didn’t grow to love the sport this past year.
The real question should be “Is that any different than any other industry?” The answer is no. The country and world took a hit. Some folks have the wherewithal to handle the hit but most do not. That’s the tragedy caused by COVID.
Does it really matter if Rangers29 is right that profits dropped by less than the previous years profits so the teams made less rather than lost money or teams lost far more than their profits from the previous year? The way I see it, baseball mimics society. The pandemic devastated the poor (small market clubs), severely hurt the middle class (mid market teams) and forced the wealthy to cut back on their extravagances (the big market teams).
Next, the report by Blum is pure bullshit. Take Zencka’s first statement. The Dodgers were NOT the highest payroll at $98.6M. The Yankees had a pre-COVID payroll over $250M thus $30M in luxury tax payments while the Dodgers barely exceeded the $208M first threshold (Yankees exceeded the THIRD threshold). So the whole premise of this story was a bunch of crap by Blum.
Think of it this way. We all recognize NET PROFIT to be inclusive of all the many debt side and credit side entries for each organization. Last year there was very little relief on the cost side of the ledger and very little contribution on the revenue side of the ledger. For the big organizations the drop off was handled by reserves, creative financing or tax write-offs. For the small clubs, if the owners don’t have deep pockets they could be scrambling and desperate going into 2021.
How do you present the owner’s side? By pretending the big owners took a massive hit without mentioning the war chest of reserves from previous year profits. Then by talking about the devastation of the small market clubs, which probably is far closer to the truth.
How do you present the player’s side? You generalize that all the owners have corporate resources that allow them to bring forward profits from the past and cover the inconvenience of 2020 and you never discuss the small clubs. You put the onus of making owners whole on the owners and the lack of revenue sharing to help the small teams.
Lets face it, everyone took a hit last year. Some took unnoticeable hits and others were devastated. Organizations and individuals suffered in 2020.
2021 creates some significant issues for the industry. Is it fair to expect fans to pay full price for watching players who under performed in 2020? Baseball is made up of 3 key components but only two get consideration in the end. The Owners have representation and own the commissioner when it comes to defining the game of baseball. The players are the product that is necessary for the owners to make profits. The key component left out of all industry planning is the FAN. They finance the industry yet have no say in the rules, the prices, the structure, the physical locations or the quality of play. Yet, every day those fans are bombarded by the marketing teams to buy more product whether it’s tickets, parking, merchandise or tours of the facilities. Isn’t it time for a change that helps the public have a say in how things work? If the industry gets a free pass by Congress doesn’t it make sense that we stop pretending the game is a sport not a business? What if the industry becomes a single entity like it should be to qualify for it’s status? What if the board of the industry is configured to have representatives in equal number from owners, players and fans? No more hidden books. No more agents (aka player leeches). No more cheating. No more politics that allow commissioners to hurt the players because they support the owners. No more media bias based on the size of the city. Just 30 teams competing to win a ring with competitive balance allowing each team a chance at winning. No more tanking. Full funding for the minor leagues with better salaries to allow the middle class player to compete once again. (wealthy kids are funded by parents in the minors, poor kids are used to the way of life, middle class college educated kids seldom can choose baseball as a career thus we have become a sport filled with wealth based participation not talent based participation)
COVID clearly impacted the baseball industry in 2020 and it is critical that baseball have leaders who can recognize the long term issues and address them. Unfortunately, it’s not like to happen because as I mentioned baseball reflects society and our society just spent 4 years focusing on the personality of a president rather than issues that were far more significant. Baseball appears to be heading in a similar direction in that both sides of what should be a three sided table hate each other, don’t trust each other and don’t compromise for the good of the game.
Congress was fooled over 20 years ago and told that their complaining constituents needed them to clean up baseball by removing steroids so their heroes records could stand. The threatened the status of baseball for the wrong reasons but their clout is big enough that an entire generation of players was banned from the HOF because NOBODY bothered to observe that the baseball being juiced conclusively impacted the HRs more than the player’s juicing. With that type of clout, I hope some one can present to Congress a need for baseball to restructure to maintain it’s status. It’s the only way to make re-building baseball possible. The adversarial roles of owners and players needs to disappear by removing the competition for profits by both sides. A one time division of industry not franchise profits needs to be established. All franchises are EXACTLY that. They no longer are independent financial entities. They are franchises owned by baseball and must open their books to the industry accountants. The players all have base salaries based on skills/accomplishments and they receive bonus pay based on performance within their team, bonus based on team performance and bonus based on post season performance. The industry sets up the pools of money for the many different personal and team achievements that can be achieved in a season. Golden gloves, silver sluggers etc on the personal side and total wins, division wins, league wins and playoff series wins including the World Series. All per-determined bonus pools based on industry total profits the previous year.
So Rangers29 great comment that started a very interesting discussion on the finances of the industry. With books not available for precise evaluation of your comment, it makes perfect sense that baseball reflected society in 2020 and the wealthy took a setback, the middle class got hurt badly and the poor needed a way to survive.
For me, I’m not spending any time worrying about the Yankees, Dodgers or Red Sox. I worry about KC, Milwaukee and Pittsburgh. I also worry about the vendors, the laid off baseball employees and the kids who had to learn a tough life lesson at an early age.
GASOXFAN – I understand how you are trying to educate people on how profits and loses are reflected on the books but you never mention another very key component of the picture – CASH FLOW. I team A has old facilities and other capital items that have low depreciation then their profits will look better but will be misleading due to the need for huge capital expenses in the future to replace depreciated assets. Thus, I don’t consider your discussion as relevant as a cash flow discussion which should significantly impact the smaller market teams more than the big market teams. Without access to books, it is difficult to determine the cash flow status of each organization prior to COVID.
How well does MLB understand the specific financials of each organization to know if they are in critical cash flow situations or not is unclear. Obviously, there are many sources for additional cash flow to cover short term costs like payroll but knowing each owner’s ability to access those cash reserves is not possible without see their books.
So there are very few conclusions we can make without seeing the books except that greater wealth provides greater avenues for handling cash flow issues and lesser wealth might make 2021 a make it or break it year for some small franchise owners. But even that assumes a lot about the individual wealth of owners that might be unfair. A small market owner with great personal wealth might be better off than a mid sized organization without owners with as deep of pockets.
Nice description of how the books work, please add your perspective on cash flow to help folks fully understand how assumptions about each team come with more caveats than you can count thanks to no full disclosure by the owners.
@KD17 – remember that players were only paid 37% of their salaries last year, so the payroll numbers listed in the article seem spot on to me. $86M for the Yankees equates to a full season payroll of about $232M. I don’t understand why you have such as issue with the payroll numbers listed in the article. Same goes for TV revenues. They were only paid out at 37% of their total to the league.
Show me how you know how much media revenue was paid out to teams this year.
If it came across that I was making “such an issue” I’m surprised. I simply pointed out that the numbers were wrong. At a time when books aren’t being opened to validate things all we have are AAVs and if the reporters can’t report those numbers correctly, they might want to find something they are good at. Whether the reporter is misinformed or just needed to write something, I thought it was worth pointing out that 60/162 was the proration as I mentioned and that the original AAVs are on record and show the Yankees spending $42M more than the Dodgers before applying the proration. That amount should have put the Yankees in deep trouble going into 2021 because they are now going to be at the 50% tax rate on all spending over $210M and their draft pick should be pushed back by 10 spots based on their 2020 spending.
Cashman talked big last year and said with the new CBA on the horizon they weren’t worried about the luxury tax. They expect the new CBA to significantly raise the levels. It’s a year later, their 2020 payroll was $250M plus $30M in penalties and they got a break by only paying 60/162nds of the AAV. They earned no ring with the huge payroll but now have a star number 1 pitcher and a very questionable roster. The good news is that the virus impact was negligible, nothing more than a bump in the road, The money machine is still prepared to spit out bills in hopes of buying a championship. COVID changed many things but not the Yankee approach to buying rings.
As an FYI…. If you want to look up the AAVs yourself check out the Spotrac website. They are fairly accurate in showing the AAV and many of the components of the overall costs by team. Data that any decent reporter would have accessed prior to writing an article with bad information in it.
I agree with what rangers29 has stated. The owners didn’t lose anything. The didn’t make profit and still had to pay players pro rated salaries… If I had to guess I would think they still got money from the advertisements inside of the park, money from tv endorsements, money for making and playing in the playoffs… Which is why we had more teams make it this year with the expanded playoffs. I’m not buying that these teams not excersising 12 million player options are hurting that bad for money when the team they own is valued at over a billion dollars…
Look, it’s impossible to really say whether or not the owners lost money because they have not released any data to prove it. However, given the fact that fan attendance makes up roughly 40% of revenue for teams, it is unreasonable to claim that no teams lost money this year.
Also, to the best of my knowledge, regional sports networks pay for the baseball they get. If MLB decides to have a 162 game season, then the RSNs will pay for a 162 game season. The RSNs will not, however, pay for a 162 game season if they only get to broadcast 60 games, regardless of when the contract was signed.
That’s like impossible. If the Braves are estimated to have lost $65M, and they have public numbers, then most team lost money.
Or, from another perspective, if the stadium revenue went down by $4B, and players payroll went down by $2.47B, then net operating income just decreased by $1.53B. Then calculate how much TV & Radio revenue was lost when 63% of the games disappeared.
Hard to imagine any teams even broke even this year. Stadiums still had to be opened, lights on, grounds crew and many employees paid with zero revenue. Not sure how tv revenues factored in with only 60 games. I just think about the cubs with 3 million fans going through the stadium with a minimum 50 dollars per fan is 150 million dollars. It’s honestly probably double or triple that per fan but who knows. That’s a lot of money.
I get what your saying Ranger, but I think your are overlooking fixed costs. Even with all the funding the Rangers received for their new stadium they still had to make their ‘mortgage payment’ on the new park. They still had to pay the salaries of hundreds of employees. They still had to pay the electric bill. They still had to pay health insurance. The list goes on and on.
Do I feel bad for the owners, *bleep* no. But you can’t ignore the fact that they had massive bills to pay with one of their major sources of revenue (fans) taken away.
Yes, Tampa actually made money, and does this count the playoffs!
I’ll say this. If teams merely broke even last year, you wouldn’t see so many teams trying to slash payroll. This leads me to believe they lost significant money last year. No owner would purposely blow up their team (especially a team like the Reds who had playoff talent) as the playoffs bring in $10’s of millions of dollars to the team. So while we’ll never know the real answer, it sure seems like some clubs lost a lot of money last year…not just lost revenue but severe negative income.
and every team owners wealth went up….
No transparency ever on their end, because they are making disgustingly massive amounts, but they own the media too, so they get fans to be mad at $10M to a certain player, but not the owner making $10M in an hour in shady deals….
Stop watching if you’re that upset
Here’s the thing Bob, people have every right to continue to watch as well as criticize and express their opinions and they’re absolutely going to continue to do both of those things because people always have and always will
Here’s the thing Carolina, people have every right to give advice as well as recommend and express their perspective and they’re absolutely going to continue to do both of those things because people always have and always will
Well you see these types of discord between players and owners cause things like the 94-95 strike and then nobody is watching… The owners are making money… If we forced them to release there tax forms everyone would see that. Maybe there not making as much “as they would like to” but owners of a baseball team have more than one source of revenue, I’m willing to bet my life on that.
Bob, Carolina didn’t use the imperative voice with you and it’s rather unscrupulous for you to suggest that she did.
It’s okay for some, and not for others.. noted. Thank you, Spinach; condolences, Carolina.
Bob you have a point. If zero people watched, many changes would be made and made quick.
Why is this a headline? Clearly less games = less payroll
I sort of agree. The actual public release of the payroll reduction is noteworthy.
These comment boards have me thinks my that the original article title changed? So many comments about revenue losses when thebarticlenia about expected reduced payrolls.
*thinking* that
It’s a freaking business, if crying poor helps then so be it.
Who is crying exactly?
“Crying poor” has become the (incorrectly used, btw) rallying cry of the, “storm the owner’s castles! fight the power, brother!”, fellas.
My advice is whenever you read it just roll your eyes & move to the next comment.
[Insert angry, politically charged comment about how I know more than everyone else here]
Ya gotta start the comment with either “The CNN crowd thinks:” or “The FOX news people think:” to make it complete. Can’t have a politically charged comment without a complete bias from the get go lol.
When DoritosLocosTaco enters the party, expect the heat!
Can’t we all get along and eat some Taco Bell?
make tacos, not war
Man, now I am craving some Taco Bell and I have to drive like 20 miles to the nearest on.e……..and it’s snowing…….
I’ll get along and eat tacos, but not from Taco Bell. There’s a sweet taco truck down the road a ways that will suffice.
its prorated. no duh Sherlock.
Couldn’t the increase in active roster sizes (25 in 2019 up to effectively 28 for 2020 — 30 for the first half and 26 for the second) also be a reason why payroll expenses only dropped 59% instead of the ful prorated 63%?
Except then you need to also factor in they didn’t have to pay all those minor leaguers except for their covid pools.
It’s an interesting idea, but clubs spend a lot on payroll for coaches and talent at the lower levels by the time you add hundreds of guys together
The payroll amounts discussed are almost always exclusively player payroll.
I was just responding to the facts re MLB payrolls stated in the original post, that the MLB payrolls actually dropped 59% rather than the “expected” prorated decrease of 63%, which the author says “suggest[s] payrolls would have increased had there been a full season”.
Minor league payrolls are not part of this equation. I checked the referenced article, and they are only talking about base salaries for players on the 40-man rosters, signing bonuses, earned bonuses, and buyouts of 2021 options.
Since salaries for those on the 40-man roster are being counted, I’m honestly not sure how the larger active roster would play into. I thought players would earn more for being on the active roster than just on the 40-man, but that might be limited to pre-arb and maybe arbitration-eligible players on non-guaranteed contracts, if at all. I honestly don’t know. So I asked.
Oddvark you need to remember guys like Gerrit Cole did get payroll increases before the prorated payouts. So yes, if the season had been 162 games the payrolls would have gone up just like every other year.
The numbers in this article are poorly researched and even more poorly presented by the author. Payroll, profits, revenues, AAVs, retained payroll, luxury tax, benefits not to mention concessions, parking, tickets, depreciation and property tax all factor into the bottom line of how much things were impacted. Payroll changes by themselves are meaningless. Players opted out, retained salaries were owed to guys like Manny Ramirez and David Wright. Generalizations fuel anger in fans because fans perceive one side or the other is lying about the size of their loss.
Writers use vague talking points to get reactions not clarity issues. This article was nothing more than a talking point article with no content. It got everyone fired up to argue. Activity on the website achieved. Congrats. Maybe next time, we can get a legit story rather than a writer tossing gasoline on a fire.
Braves have public and audited books and they actually did lose around $100 mil IIRC. I don’t know why there’s so much difficulty believing the league lost money this year.
According to the linked Fangraph article, the Braves probably lost $65 mil over the course of the year (but made $8 mil during the season) much of the loss in Q1 and Q4 were normal business as usual. But the team has made $83 mil since the beginning of 2018, and I’d be hard pressed to assume that next season won’t be a full season with at least some fans in the stands. Their set backs will be temporary but come back strong. Though it provides the owners with enough coverage to claim poverty and not pay players.
Yeah the fact that this is a headline only highlights the lack of action on the free agent market
This is about the most useless article that I have seen on here.
Temps outside are averaging much colder this month than the July average high temps, here in the northern hemisphere. What the hell is going on?
Ranger, do you have a life besides posting on this site? Comment on every damn post..
Taix20 a life without MLBTR is not a life worth living
Bruh, you need to stop hating.
Thanks for the plug man, I appreciate it!
@taix20
Rangers29 is a really active poster here who is respectful, insightful, & enthusiastic. Always.
He has an absolute love for all that is baseball & it’s fantastic.
What I’m getting at here, is that he provides a kind of litmus test for us all at MLBTR. Which you have failed. Spectacularly so, sir.
If you are a d-nozzle to Rangers29, well, we can all go ahead and just assume that you’re simply a d-nozzle.
Uh?
Ducky is correct.
Concur – Rangers29 is one of the best this site has. Been following MLBTR for eons. Does he post a bunch – sure. But his posts are insightful, relevant, and respectful. There have been frequent commentators in the past that were obnoxious. Rangers29 is anything but. I rarely post, but I always read the comments. Rangers29 adds a ton of value to this forum.
obsessed much?
I hope you posted this in-front of a mirror Darkside. Otherwise we have no idea why or whom you’re saying this to.
Does the MLBPA really want to make the finances of MLB public, or do they really want the finances to be available to them? It’s really the latter, and it’s really a huge difference.
Also, the reason it’s possible to accurately determine how much player salaries were dinged last season is because their salaries are fully disclosed to public, when team finances aren’t even disclosed to the players. Why is that, I wonder? How is that equitable?
This just in: Babe Ruth has tested positive for being dead!
The solution would be to not shut down the idea of expansion and bring in Nashville and another city not named Montreal. Inject some new money to offset the losses. It’s as if baseball wants to use these losses at the negotiating table to plan out the next CBA. Players should bring that point up.
Revenues minus Expenses.
The revenues (I’m guessing here) came from televised games and merchandising.
The expenses came from salaries of players and other employees plus upkeep of facilities (again I’m guessing and simplifying).
If revenues were greater than expenses, profit. otherwise loss.
If owners want anyone to understand their predicament, they need to stop talking about what revenue they MIGHT have made We’re all in that boat! The pandemic has hurt income, profoundly for some. Opportunities lost, lives lost. It will pass World War 2 in January of 2021. The fact that if affects certain people more than others is meaningless.
Everyone who gripes and lies about the pandemic (lots of you) sounds like an owner or a politician who has no clue about the reality of the situation. It’s a pathetic rant. Move on.
You’re guessing.
I’m not convinced that any let alone all teams were not getting their full revenue from their media contracts this past year. These contracts are going to be somewhat different but we have never heard that any team was shorted based on the numbers of games played. All of this is secret so we can’t really know. All I know is I kept paying for my local live sports channel and for most of the year got no live sports. The cable company did not offer me a refund and that money went somewhere.
All media contracts have a # of games to broadcast stipulation in them. If the league does not put on those games, the media company does not have to pay. It’s simple business contract 101. When you are paying fees to broadcast something, the contract is written that if the ‘performance’ is cancelled, the provider does not get paid. I don’t know why people keep thinking the networks paid the full freight for a full season. That is ludicrous! You can read about in their financials if you still don’t believe me.
The local stations that carry MLB also have a lot more programming on them besides baseball. Here in Boston the Red Sox are aired by NESN. I kept paying for NESN but that wasn’t for MLB it was for NESN. But I can assure you that NESN did not pay the Red Sox for their full 130+ game schedule (excluding national games).
I keep thinking I don’t know, and I keep thinking that anyone who keeps thinking they know, really doesn’t know.
Nobody can read their financials, and that’s the point of this discussion. That’s why nobody knows. Lots assume they know, but without actually knowing. You can assure me all you want, but you still don’t actually know. Because unless you are secretly a team owner, you can’t know.
BTW, before you make any more assumptions, you might want to look up “force majeure.” It’s in almost every contract.
The story of how this virus was unleashed on the world must be told,China must be held accountable the world has changed forever the damage is irreversible..
Geographic origins. To an overwhelming degree, the 25 major human pathogens analysed here originated in the Old World. That proved to be of great historical importance, because it facilitated the European conquest of the New World (the Americas). Far more Native Americans resisting European colonists died of newly introduced Old World diseases than of sword and bullet wounds. Those invisible agents of New World conquest were Old World microbes to which Europeans had both some acquired immunity based on individual exposure and some genetic resistance based on population exposure over time, but to which previously unexposed Native American populations had no immunity or resistance (Crosby, 1986; Diamond, 1997; McNeill, 1976; Ramenofsky, 1987). In contrast, no comparably devastating diseases awaited Europeans in the New World, which proved to be a relatively healthy environment for Europeans until yellow fever and malaria of Old World origins arrived (McNeill, 2006).
Everyone is still a millionaire
Of course players salaries were down with a prorated season. That isn’t all that shocking. And we can argue all we want about the games losses, whether or not they were true losses or just unrealized gains. We likely will never know the truth as the owners are not going to share that information. But whatever it is, what is clear is that it is going to affect the game this year and beyond. Buyouts are up. This year’s free agent market is off like a herd of turtles. Already talking about backing up this year’s season by a month. And luring around the corner are next year’s CBA negotiations. Buckle up, it is going to be a bumpy ride.
ROI
As my boss, who was a VP of Finance for a Fortune 500 company told me 40 years ago, ROI is king. (ROI = (profit + capital gains) divided by investment)
I wish I could post the Joe Kelly cry face meme here for the owners. As was noted, they didn’t lose a dime. They lost out on PROJECTED GAIN. No one will have to visit the soup kitchen this holiday season.
You’re pretty likely to be wrong, but if you want to post some numbers showing they were profitable, I’d be glad to look at them.
Your commitment to being a footstool for the owners is consistent.
As I said below, if you took the time and effort to read it, I have no sympathy for the owners. When you make money, I don’t begrudge you your earnings. When you lose money, I am not sympathetic.
Now that we got the reading comprehension part out of the way, there is nothing wrong with asking a poster how they came about their opinion. When I voice an opinion, I back it up with facts. If you want to present a different set of facts, or a different interpretation of those facts, feel free to do so.
But just whining about them is a loser’s game.
This is a little disingenuous… the shortened season “dropping player salaries by approximately 63% from the full-scale amount”… already has the $4.22B down to $1.56B.
Which means salaries INCREASED by $190,000,000 to make it to the $1.75B.
In a COVID-shortened season. With no fans in the stands.
If we want to have fun with math: if the 2020 campaign was a full season, it would have gone from $4.22B to $4.9B – a 14% increase. In a COVID-shorted season. With no fans in the stands. And people out of work.
They’re doing fine.
Yes, most teams will still probably make a profit. But that profit will likely be FAR smaller than they usually make.
Using the numbers from the Forbes valuations, MLB teams had combined revenues of $10.374 Billion and a combined operating income of roughly $1.5 B in 2019. An average of a little over $50 MM per team. Expenses would be $8.8719 Billion.
We do have the actual number for the Atlanta Braves, at least through the third quarter of 2020. Through the third quarter of 2020, revenue was down 68% from 2019.
So let’s apply that 68% revenue decrease and apply it across all of MLB.. Although the Braves numbers show only a 39% reduction in total expenses, we’ll also reduce all expenses by the 63% player’s salary reduction..
Combined revenue drops from $10.374 B to $3,319 B. Expenses drop from $8.871 B to $3.282 B. Putting combined operating income at $37 M. That’s less than the average team made the year before. Average per team is $1.235 MM.
Average of $50 MM to an average of $1.235 MM. And if we use the 39% reduction of expenses from the Braves numbers? Teams average a LOSS (the opposite of profit) of $69 MM.
Nice analysis. I’m not sure why the average poster in here cannot add up a few numbers in their heads.
Real simple math for them. If the teams made $1.5B (Forbes), lost $4B in stadium revenue, and saved $2.5B in salaries, the $1.5-4.0+2.5=$0.00.
After that, they lost 63% of TV and Radio rvenue, offset to a small degree by an expanded playoff format. It is pretty easy to see them losing money.
I have no sympathy for them. When you choose to own, you have the benefit and the cost of ownership. But even if posters don;t sympathize with them, that doesn’t mean they didn’t lose money.
How do you know that teams lost 63% of their media revenue? How do you know they lost any of it at all?
How do you know that teams lost 63% of their media revenue? How do you know they lost any of it at all?
———————————————————-
The assumption is that the networks aren’t paying for games they don’t televise, and that advertisers are not paying for ads in a non-existent game.
If you have something that suggests otherwide, I’d be glad to hear it. But I’d be shocked if ESPN signed a contract with MLB saying they’d pay them for 162 games, even if only 60 were played.
That’s the assumption all right. How do you know the assumption is correct?
Again I suggest you read up on the legal concept of force majeure. Every media contract is going to differ in the particulars, but every one of them will contain a force majeure clause. It protects the parties to the contract from the consequences of being unable to deliver on the terms of the contract due to circumstances beyond their control, and that was certainly the case here. I don’t pretend to know how this was resolved with the 30 teams and the media companies who contracted for their broadcasting rights, but I do know force majeure gives their lawyers plenty to argue about, and with all that money on the table, it makes for a big ticket argument. I also wouldn’t make any assumptions about how that argument was resolved. I don’t even assume that it has been resolved. All I know is we don’t know, and probably never will.
sportsbusinessdaily.com/SB-Blogs/Breaking-News/202…
Midway down the article:
“Regional sports networks are only contractually obligated to pay rights fees for each game that is delivered after clubs fail to deliver the minimum number of games (between 140 and 150).”
If the RSNs don’t have 140+ games to air, they only have to pay for the few they do.
That’s interesting, but do they really have access to these contracts?
force majeure
————–
I’ve seen that in contracts before, but it is usually (in my experience) used to protect the supplier from damages due to their inability to supply their product.
For example, you are building a $500M cruise ship. You contract with me to build $1M worth of propellers. Just before they are supposed to deliver the propellers, the factory experiences an earthquake, destroying the propellers, and my ability to produce any more in a timely fashion. That in turn causes a delay in having the ship ready to sail, and that cost the you $10M in revenue.
I am not liable for your loss of $10M in anticipated revenue, because I am not responsible for the loss of the propellers.
But you are not responsible to pay me my $1M, since I did not deliver them.
It is used to distinguish between non-delivery because I changed my mind and want $1.2M, and I know you are desperate, and non-delivery because of impossible circumstances.
Applying that to the TV, the way I read it is that the JB network is going to pay BSLA $10M to televise your games (it is low, but you ran your team into the ground). You, in turn, are charging advertisers $15M. If I cannot give you the games, for reasons outside my control, you owe me nothing, but I am also not responsible for the money your advertisers would’ve paid you.
FWIW, these issues are usually covered by business interruption insurance.
At least a couple big flaw in your analysis. First, you are using one quarter for one team as a means of projecting for all teams over a full year. No can do, especially since you’ve used a quarter when revenue would normally probably be near at its highest. Baseball’s revenue picture is seasonal, obviously. Second, on the expense side you are only counting the reductions in player salaries, and not including the thousands of others normally employed by the franchises who were laid off. We could easily think of a number of other expenses the teams did not incur this season due to the ballparks being closed. The reality is at best we can only estimate, and not very well at that.
I’m actually using the entire year for the Braves, not one quarter. THROUGH the third quarter. And the fourth quarter, which isn’t over yet, would be October through December. So basically the playoffs. Now TV revenue for the playoffs was more this year. And the Braves going further in 2020 means they probably increased revenue for that quarter. The question becomes how much more. We’ll know in February.
As far as the expenses go, as I mentioned, the Braves showed a 39% reduction in overall expenses. That would include player salaries and all the things you mentioned. So applying the 63% probably puts far too much money into the owner’s pockets. Meaning they were more likely to post losses.
Yes, all we can do is estimate. But these are about the firmest numbers that I can come up with. Everybody loves to cite the Forbes numbers when trying to prove how much more the owners make than they claim. And the Braves numbers come right from their SEC filings. If you can come up with better, I’m more than welcome to look at and incorporate them.
Until them, I’m concluding that a good number of teams likely did lose money, meaning not turning a profit.
No, I can’t come up with better, and I’m not one of those people who cites the Forbes numbers, because they are really just guessing too. Among the many financial pieces in motion is revenue sharing. Some teams are on the receiving side, others on the paying side. Just way too many variables in play that we know next to nothing about to say one way or another who made a profit this year and who did not. MLB could shed some light on this but they don’t, and very deliberately. To me this says they are probably making more than we can figured by estimating. Apparently the MLBPA thinks so too and they are closer at least to knowing the real numbers.
Revenue sharing isn’t that difficult to figure out. 48% of local revenue goes into a pool. That pool is split among the 30 teams.
Getting a pretty good estimate on revenue is doable. Terms of local media contracts usually end up public. Ticket prices and number sold are known numbers. A little research would probably turn up stadium advertising revenue. One unknown is a team’s share of concessions, but there was a recent lawsuit involving the Orioles in which testimony put it at $1 out of every $5.40 spent at the game for them.
Yes, all we can do is estimate. But there IS enough information to make a somewhat educated estimate. One with at least a few numbers behind it. Not just “I feel the owners make lots of money, and even though I don’t have any proof, because it’s how I feel, it’s true.”
If I’d said that you might have me. But since I did not say that, you don’t.
What I did say is the teams are probably making more than we on the outside looking in can calculate on the backs of envelopes. The MLBPA obviously believes that to be the case or they would not have been so adamant about having a look at the books this past year to verify ownerships claims, and ownership would not have been so adamantly opposed to it. Expect that issue to come up again, and again, and again. Not for nothing, I think.
And what lead to your conclusion, that teams are probably making more? Proof? Actual numbers? Or just this FEELING that they are because we can’t see the actual numbers?
I don’t know why I need to say this over and over again, but I don’t have any more proof or actual numbers than you do, the real difference is, I admit it. The only parties with those numbers are the owners, and they publicize only selective information that makes their case, and none that doesn’t. All any of us can have is feelings. Mine includes the information coming from the position taken by the MLBPA. They are a lot closer to the money part of the game than you or I, and they are saying the owners are doing exactly what I said. Is that clear… yet?
What’s clear is that you think unless you have every piece of information from every team, you are going to ignore any figures that go against what you FEEL is true. All why denying you are only going by your feelings.
I find it quite interesting that you will ignore the owners claims because they won’t give exact numbers, yet you completely believe the players, even though they don’t have the exact numbers either.
Because that’s what you want to be true, that’s how you FEEL.
Nope, not even close. I’ve made my point perfectly clearly. You don’t have to read a single thing into it and you certainly don’t have to invent any opinions for me. Thank you in advance for not doing that again.
The only point you’ve made is you FEEL what the players are saying is true and you FEEL what the owners are saying is false. And that makes it fact in your mind.
No, and again, not even close. My point for probably the fifth time is nobody can honestly do more than say how they feel because they don’t have the actual numbers. Some admit they really don’t know, other insist they know even when they don’t know. I’m in the former group.
No, some can look for any evidence there IS out there (and there IS some) and form their opinion based on that evidence. Others have a preconceived opinion based on their feelings and reject any evidence that doesn’t match up with that opinion, and hide behind “we don’t have ALL the evidence.”
Fact-based opinion. Feeling-based opinion. I’m in the former group. You aren’t.
The NHL, a sport with half the revenues and much smaller TV deals, just agreed to pay their players their FULL salaries for their upcoming shortened season.
If you think that MLB owners can’t do the same, I have so many wonderful things I can sell you at an unbelievable price.
NHL had nearly finished their regular season and had an extended playoff. The players also have less than half the MLB salaries. They didn’t have their regular season cut by nearly one-third like MLB.
Hardly a strong comparison on your part. Not surprising and quite consistent coming from you.
I have read where the NHL and the NHLPA agreed to salary deferrals and the NHL was seeking additional deferrals a couple of weeks ago. Where did you see full salary for shortened season? Curious to read but can’t find such a source searching online.