It was just over a year ago that RedBird Capital put down $750MM for shares in Fenway Sports Group, the parent company of the Boston Red Sox, as well as the Liverpool Football Club and NESN. MLBTR’s TC Zencka wrote about the investment offer at the time.
Michael Silverman of the Boston Globe profiles RedBird CEO Gerry Cardinale, noting that the group has made some big moves since that time, purchasing the Pittsburgh Penguins and investing in LeBron James’ SpringHill entertainment company. There are still plenty of other big moves being considered as well, with Cardinale saying that buying an NBA franchise is “a real top priority”, with other options on the to-do list including a cricket team, another soccer team, a WNBA team and an NFL team.
As noted by Silverman, FSG is now valued around $10 billion by Forbes. That’s a big jump from the time of RedBird’s investment a year ago, when the value was around $7.35 billion.
Elsewhere, Tim Stebbins of NBC Sports Chicago reports that the Ricketts family, who own the Chicago Cubs, are considering a purchase of Chelsea FC of the English Premier League. As Stebbins reports, “Chelsea owner and Russian oligarch Roman Abramovich announced this week the club is up for sale amid Russia’s invasion of Ukraine.” He then points out that estimates of the value of the club are between $2-4 billion and highlights that the Ricketts purchased the Cubs in 2009 for $846MM, with the value of the franchise since ballooning up to $3.36 billion, according to Forbes.
Of course, it’s worth pointing out that all of this is happening amid MLB’s lockout, which has seen transactions frozen and players cut off from team facilities and personnel for over three months now, leading to the cancellation of the beginning of the season. It was one month ago, as part of this ongoing dispute, that MLB Commissioner Rob Manfred was asked if he thought owning an MLB club was a good investment, responding in the contrary and saying that the “return on those investments is below what you’d expect to get in the stock market” and that there was greater risk in owning a team.
During the course of the lockout, it has often been described as a “billionaires versus millionaires” fight. While the details above clearly illustrate that billion of dollars are involved in owning a team, the players have pushed back against this framing of the situation. Giants’ pitcher Alex Wood recently spoke on this exact topic to Susan Slusser of the San Francisco Chronicle. “That’s definitely one of the more frustrating stigmas that surrounds what we’re going through,” Wood said. “To make a blanket statement like that, it’s just false. Lots of people work for companies, but not everyone is in a union — we just happen to have a pretty strong union to fight for us and do what we morally think is right, and that’s all we’re asking for.”
As laid out by Slusser in that piece, “a 2019 study determined that 40% of players earned less than $1 million in their careers, and the median earnings in that group was $357,718, and that’s before being taxed in every state in which the teams play, union fees or agents’ percentages.”
MLB and MLBPA met again today in another attempt to make progress towards resolving the lockout. The MLB responded unfavorably to the union’s proposals, attempting to frame today’s proposal as a step backwards and saying that the sides are now deadlocked. However, Bob Nightengale of USA Today reports that the sides could meet again as soon as Monday.
Per the article,
“As laid out by Slusser in that piece, “a 2019 study determined that 40% of players earned less than $1 million in their careers, and the median earnings in that group was $357,718, and that’s before being taxed in every state in which the teams play, union fees or agents’ percentages.”
Darn… must be so rough to be an MLB player. The median career earnings for the bottom 40% of players is ONLY 350k, minus fees, taxes, blah blah blah… I will still choose to not feel sorry for players or owners.
That 40% number is very skewed. Those numbers include AAA relievers who come up for a few games to cover for an injured player or to provide a fresh arm to a pen that has been heavily used. Since they had to be added to the 40-man roster, they officially become MLB players but they may only pitch a total of 8-10 innings in their entire career. The same goes for 5th outfielders or utility guys who get called up for a weekend series. If you’re not good enough to regularly play in the majors, there should be no expectations of being paid like a full time player. There are well over 100 players who fall into this category every year.
If they re-did this study, only including players who’ve had a full year of MLB service or more, you’d see an entirely different result (financially).
If you look at it from the otherside, I think you’d also be very surprised to find how skewed it is up. If you equally pulled out the top earners, like all the guys making over 20mil, which is a significantly smaller group than what your suggesting, you’d probably be shocked to see how far down this number goes. Most MLB players do not make enough money to retire. the “average” MLB player doesn’t sign a free agent contract. They wash out before then. They made absolutely nothing until they got to MLB, then only only make “good” money for a few years. As you pointed out, they don’t always stick in the major all the way through. In then end, they might just barely come out ahead than Joe Blow who worked in a factory starting at 20. They then have to enter the workforce with the rest of us, having no truly marketable skills in their late 20s. That is the majority of the union.
Bob99 – everyone makes life choices! Do grocery workers have MLBTraderumors fans whining and crying they do not make enough money. If minor league players do not like their changes of making it to the MLB then take the scholarship instead of the signing bonus and graduate from college and get a real job!!!
That isn’t the point. Any one can be a grocery store worker. No special talent is needed. Not everyone can be a major league baseball player. Not everyone even CAN make yhat choice. Why shouldn’t the demand more money. If the grocery workers go on strike, the stores can just hire anyone and reasonably get by. You and I can’t walk onto a major league field and expect to be able to entertain people enough to pay to see us play. And there is no competition, no other league. Congress had to make a special carve out in the monopoly laws to even allow MLB. Because with no competition, they can force them to work for any wages. That’s why the union exists in the first place.
But if you train a worker to do a job, they fail, the employer loses a great deal of money training that person, on what planet does it make sense to pay those trainees more,
Every single one of those players are have failed to do there job. And if you include bonus, that’s a fortune to spend on failed trainees.
Call me when a grocery story is making $10 billion a year by selling tickets to watch their employees bag groceries and we can compare what is or isn’t fair.
Bob you are clueless
If they do not like what they are being paid then go do something else! Their roster spot WILL be taken by someone else. That is how the job market works. Go taken an economics class if you can not understand the concept.
taejonguy and you need to understand that unions are created to help protect workers from employers making unfair demands or unfair working conditions. The players are involved in a revolutionary change in employment practices. No longer do teams pay for past performance with contracts to aging stars, they are reluctant to pay for future performance with younger players. As a result we see playing time manipulations, increased call-ups/send downs to minimize playing time and a huge collapse of the middle class of players as salaries work towards the extremes of either of the pay spectrum.
these are the 1% of their field and should have the same respect and treatment as other groups in this high level of achievement
It sounds like one of them is related to you, lol! I consulted at a company with 25,000 employees and only 4 people with the company made over the MLB league MINIMUM! Why do you give a $hit what other people make.
And Dorothy, the club has likely invested a lot of money in these players and got very little in return. Virtually all those players are costing the team money and the players union wants the clubs to pay more.
On what planet does that make sense?
Dorothy is absolutely correct. MLB players are called up and their salary is based on merit. Unions always look for parity, not merit. Everyone makes the same. MLB players or at least most of the players want to be paid on parity when they first start out but quickly realize, if they are a cut above, they need to be paid on merit.
So how do the owners make that work? Overpay everyone regardless of talent; then, magically cull out the top stars and pay them what the market will bear. No business works that way in a capitalist society.
BYE BYE MLB BYE BYE
Great now I have to youtube the video to get it out of my head….
These guys buying teams from other sports because they losing all that money on baseball?
dude read the article…
I did. I’m just being sarcastic.
I thought at the time that Red Bird would eventually buy John Henry et al out, and just take over complete control of FSG. JH (who never really liked baseball anyway and detests large crowds if they’re around him) at this point may just want to get out. He’s done a tremendous job, but the fact is that park is REALLY started to fall apart, the Golden Age of franchise value increase is over, networks like NESN aren’t as profitable as they used to be, and he’s probably taken the team to its zenith; it won’t go down but won’t go up much.
Expanded playoffs will bring in more money. Some other things must be in the works. World market. How do you get India or China to like baseball?
That park ain’t falling apart it’s home man. It’s a f ing dump lol, it’s small tiniest seats and walkways I’ve been to. But dammit it’s home. I’ve been robbed right under my seat and I’ll still go back. Just something about it.
There’s no doubt Henry/Warner have done an amazing job putting lipstick on the pig, but at the end of the day, it’s a pig. And while like you I have tons of great memories of the place, it’s just gotta go. And the taxpayers are tough to convince these days to support new stadiums, so ownership is going to bear the brunt of the cost.
No complaint about their ownership; they told Theo to be BOLD, and they’ve continued that until the Bloom complacency (another reason why I think Henry’s getting out; Chaim may be effective, but the team is a giant yawn). And FSG is worth what, 4 billion now? Quite the step up from the 700M Henry paid.
He can go back to his soybeans or whatever he trades for a living.
Henry, like King George, taught MLB owners that you can use a team as a profit center, not just a tax shelter The Sox have made a LOT of money over the years; in many ways, despite all the missteps, it’s been incredible run. But I think it’s heading to the sunset.
I have started so many posts that I wind up deleting……
Both sides have legit stances and issues…….I go back and forth each day……so frustrating…..
Owners own because they have the money…lots of it from other streams of income….players are in the 99th% in the world in their profession and deserve to be compensated accordingly….
I read the comments for different and sometimes educated perspectives…..
Just saying to keep up commenting…
You aren’t alone, brother.
To add, I’d just say to look at it from your own personal perspective. if you worked in a industry that only you were qualified to work in and there was no where else to leverage your employment, would you just take what your boss gives you and be happy? When your boss is making 3x as much that he was just a few years ago off of your production. You are special, your boss isn’t. And he can just go grab anyone and teach them to be as good as you. Why wouldn’t you demand more of the earnings. America is still capitalist isn’t it?
“And he *can’t* just go grab anyone and teach them to be as good as you.”
Where are you getting that it’s tripled in a few years? I found a Yahoo article that mentions that it’s tripled, but that was from 1999…
How is it that the boss isn’t special? I think owning an MLB team definitely puts people in a special class
There is little that makes billionaire “special”. Mostly just smart/learned and lucky. No matter how much time and effort and intelligence, you cannot just will yourself to throw 100mph or hit a 100mph fast ball 400+ ft. That’s special.
And don’t get hung up on the number. 3x, 2x, 1%, your boss is making more off of you than before and is demanding he gets to keep it and not share it with you. You just have to go back to work making him money. You can go to a rival company, so your only recourse is to quit.
“You *can’t* go to a competitor”
Freakin auto-correct.
I disagree. Because he could still go to a competitor, which would be the kbo/npb/independent American leagues in this case.
But KBO is an international league. Those leagues have more rules about who can play. I think it IS the KBO that doesn’t allow more than 2 foreign born players on their roster. If MLB want to create an inferior product to the Asian leagues, then I, and a lot of others will watch their league instead. MLB will be no more than a AAAA league for the KBO and Nippon Leagues. MLB won’t do that.
I guess what I am saying is, if these players truly feel cheated, they would be seeking other employment avenues or other leagues. But, complaining is not going to bode well (clearly, look at these mlbtr chats lol) w/ fans and current ownership. As unfortunate as it may be.
The reason players aren’t leaving, is because the MLB is still vastly superior to those leagues and any other employment (that most of these players would be qualified for).
They know they have it made, and so do the owners. It’s not integrative negotiation/collective bargaining, it’s pure distributive get as much of the pie as I can. They both are too stubborn that they’re ok with missing out on the pie; so long as the other is missing out too. Extremely toxic on both sides.
Innacurate. Theres even government intervention that all but assures there cant be domestic competition via anti trust.
So current or former MLB players can’t join the American Association of Professional Baseball League or the Frontier League? I am asking sincerely, because it does not make sense to me. How are these leagues not considered competitors of the mlb?
I guess don’t go into.. baseball?
Don’t go into baseball unless you have a chance to make a living at it. The same reason you don’t go into acting.
There should be fewer minor league teams because the vast majority of minor leaguers have no chance.
MLBPA should fight for tuition assistance. But then again, is that best for the mlbpa/mlb or the prospect. Hmm
Halo11fan – 100 percent correct! MLBused to have 40 rounds in the draft. It was stupid. I have looked numerous times at the drafts of the last 50 years, and it is startling how few players ever play even one MLB games! The players in rounds 20-40 should have taken the college scholarships in most cases as the value of the education and subsequent job would have made them way, way more money. Also, the signing bonus for the majority is the only real money they will ever make as most never get past AA let alone AAA or MLB.
Some fans on this site say “pay minor leaguers more”….from what! If the AAA game averages 7000 per game x the ticket price is still not enough to pay players, Coaches, stadium contracts, grounds keepers, and all the travel expenses….. It is no wonder minor league players make so little, and it is not like minor leagues have big TV money…..
The minor league players want to make a lot of money go get a professional license: doctor, lawyer, CPA,… and they can earn big money for more than the short period of time most players play.
Tomorrow, the MLB owners and the players union will meet again in New York in hopes of finally reaching an agreement on a new CBA in a day or two, put an end to the work stoppage once and for all and start the 152-game 2022 regular season on April 11, so both sides will shake hands and get together again. No more lockout! We want baseball!
As part of the new CBA, divisions will be done away with. Instead, there will now be “pairings.” Each “pairing” will play a best-of-99 with the winner advancing to the 16-team tournament. With two expansion teams added, the pairings will look like this…
Yankees/Mets
Red Sox/Blue Jays
Phillies/Pirates
Nationals/Orioles
White Sox/Cubs
SPIDERS/Reds
Cardinals/Royals
Tigers/Brewers
Braves/Charlotte
Marlins/Rays
Astros/Rangers
Rockies/Twins
Giants/Athletics
Dodgers/Angels
Padres/Diamondbacks
Mariners/Portland
Not happening, so mind your own business.
I could say the same to you. The CBA is none of your business.
Dumb
Timothy – “owners and the players union …in hopes of reaching an agreement”….
I feel more confident about Putin withdrawing his troops from Ukraine.
Cardinale can’t be that great of an investor if he thinks a WNBA team is a good use of his money
Alex Wood is confused.
In what way?
Arguing that holding out for higher six-, seven-, and eight- figure salaries is a “moral” issue? No, it is a business dispute on how much of customers’ money goes to “labor” vs. ownership. The Dickensian plea, “May I please have more?” porridge, does not apply here.
Franchise values skyrocketing for the billionaire set, Fox TV contracts up 40% beginning this year, Turner up 65%, additional $100M pending with expanded postseason, new deals with Apple and NBC set to kick off once there’s a new CBA, advertising patches on the uniform to bring in brand new revenue, just as gambling revenue about to take off. Meanwhile, the owners somehow can’t bridge an $18MM gap on the CBT. Incredible.
I remain positive on a deal because owners are not walking away from all that money above, but you’re not seeing Spring Training games now, and your regular season games are being canceled due to ownership and their lockout.
Ricketts gonna get fleeced.
The funny thing about the silly millionaires versus billionaires argument is that billionaires are a thousand times wealthier than millionaires. It’s the same multiplicative difference between having a dollar versus having a thousand dollars or between having a thousand dollars and having a million dollars. In other words, it’s an absurd comparison.
No, it is still a valid comparison. $1M is not worth the same to everyone. If Bill Gates just made $1M, he wouldn’t even notice. If one of my kids just made $1M, their life is completely changed.
And it is not really millionaire v billionaire. The richest owner has maybe $15B. The richest player has maybe $300M-400M. It isn’t a 1000-1 comparison.
Do you now how many of those sub million dollar players the owners are making a profit on? Close to zero.
If a player can only million bucks, the team has probably spent a small fortune developing him (they are probably not including the bonus) and the players has been of very little help winning games.
“As laid out by Slusser in that piece, “a 2019 study determined that 40% of players earned less than $1 million in their careers, and the median earnings in that group was $357,718”
=======================================
Just so I understand, even though the minimum amount you can kame is $570,500, the median earnings is $357,718?
Here is my math lesson for MLB-R. The median earnings will always be higher than the minimum earnings, and always less than the maximum earnings.
If players were called up for a cup of coffee and didn’t produce. The club likely invested heavily in those players and got almost no return.
Only in the land of the bizarre is that a reason to pay these players more, thus throwing away more money and getting very little return on investment.
It’s good to own a baseball team. No matter who you favor in the current CBA argument, it’s still really good to own a baseball team.
Yes, it means you are already a billionaire. Life is good!
And it is still really good to be a MLB player. It makes no difference to me if I was a billionaire, or if I was a lowly millionaire being paid to hit the gym every day for a few hours.
Interesting that the median salary is less than MLB minimum. Shows a lot of folks come up for a cup of coffee but never really make the jump. To be fair the article needs to give median of players that actually are 25 man roster the entire year. I venture to guess it is a good deal higher.
That’s what makes the statement so utterly ridiculous, and 100% propaganda.
Kaleb Ort pitched 1/3 of an inning last year. Of course he isn’t going to make a half-million for that 1/3 of an inning. I know MLB-R feels compelled to shill for the union, but no one in their right mind is going to believe this.
Joe, people are not in their right mind, it’s about feelings.
Players should get paid what they are worth, bet here is a great example of teams investing hundreds of millions of dollars on assets that return next to nothing.
And yet this makes owners look bad? Go figure.
I don’t like it when people intersperse feelings with facts. If one wants to root for the players, fine. But to print crap like this, like it was a real article, is pure propaganda. I’m hoping that 100% of the people reading this would realize that treating someone coming up for one game, as the equivalent of someone like Mike Trout, is beyond absurd.
Halo and Joe – agree 100 percent! MLB a number of years ago dropped the draft from 40 rounds to 20. It was good, because rounds 21-40 almost never produced players good enough to move from rookie ball, to A-, to High A, to AA. Rarely did these players even make AAA let alone MLB. These players were a waste of money for the teams, and would have been better served by taking their scholarships and getting a good job that they can work for more than 3 or 4 years before being release.
All the “fans” posting think higher player salaries will come from the owners. Lol, lol, lol !!!!! It will come from even higher ticket prices and higher TV contract money.
Higher TV money will be passed down to consumers of the products advertised, so if you want players to make more then it is really you the fan that are willing to pay more to watch them.
Cubs owner Tommy Hypocrickettes has been telling Cub fans the last few years that times are hard and the team is broke. To Tommy the word broke means no money to spend on his baseball team but plenty of money to buy a soccer club from a Russian. That’s some more great thinking from you Tommy
If the Ricketts had invested that same amount of $ in an inexpensive S&P500 ETF ( and even the smallest of investors can do this exact same thing with their money, BTW) their return would have been approximately $6 billion (with dividends continuously reinvested) over that same time period. That’s would have amounted to a 6X+ appreciation in value, vs the 4X+ appreciation in the value of the Cubs.
Investing in such a fund requires zero expertise and zero brokerage fees. Savvy investors (which I’m guessing includes many of the billionaires who own sports franchises) who aim to beat to the S&P’s results by investing in so-called “growth” stocks have achieved many multiples higher returns than that. The primary requirement for that kind of success is time and patience – buying and holding innovative companies through thick and thin for periods of 10 – 20 – 30 years or longer.
This is what Manfred had to be referring to about the stock market, and I’ve been surprised at the dismissiveness and/or skepticism that his comment received.
I’m not very sympathetic to either side in this impasse, but I don’t know that scoffing at factual info does any meaningful good here.
I think the players should get more of the pie, and that most of that increase should go to 0 thru 5 yr players. I think their are several owners who, like me, do actually care a lot about competitive balance. I don’t know why neither side is proposing something akin to the 50/50 arrangements that appear to work in other major sports leagues.
I just have to conclude that, so far, both sides are firmly stuck in a zero-sum mindset. That is, they think the only way they can win is if the other side also loses or vice-verse. There’s no win-win type of philosophy is in play here, from most everything I’ve seen or heard thus far.
We have US oligarchs paying off Russian oligarchs to get control over UK soccer. Do we really need this? Do we really need a bunch of oligarchs running our national sport when fans/cities/regions could own the teams (and not give oligarchs millions for no control over stadiums, etc) just like the Packers?
No sympathy for billionaire owners or multi millionaire players, only the fans get screwed. Cancel the entire damn season make sure none of them makes any money.
“STAY STRONG OWNERS!!!!! IT’S A SHAME YOUR FRANCHISE VALUES ONLY WENT UP 500%!!!! I’LL START A COLLECTION PLATE FOR YOU!!!! I HAVE $8 TOTAL BUT IT’S ALL YOURS!!!!”