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Kershaw’s new deal and what it means for small-market clubs and 2016

SOUTH HILLS – Dodgers ace Clayton Kershaw signed the richest per-year deal in baseball history on Wednesday, agreeing to a seven-year, $215 million extension with the Dodgers. Small-market owners cringed.  Scott Boras rejoiced.

The average annual value of  of the deal – $30.7 million - broke Alex Rodriguez’s AAV of $27.5 million. Not only is Kershaw quite happy today, I imagine, but Mike Trout is smiling somewhere as is every young, talented pitcher in baseball. Let’s be real here: Gerrit Cole probably has six remaining years in Pittsburgh if he extrapolates and/or builds on his second-half then he’s off to join Trout or Bryce Harper with the  Yankees.

 

Kershaw’s deal is the byproduct of the dollars the Dodgers are enjoying from their lucrative regional sports deal. And it’s another example of the growing divide between small- and large-market clubs. This is a problem for the sport.

 

Consider the annual average value of Kershaw’s deal is greater than the annual average value of the Pirates’ local cable deal. (It should be noted Pirates president Frank Coonelly disputes the reports valuing Pirates’ local cable deal as being worth $20 million per year but the Pirates have not released any details).

 

Whatever the Pirates are making from their deal with ROOT, it’s a tiny fraction of the $340 million per year the Dodgers are enjoying from their new television package.

 

Wrote Jonah Keri today for Grantland:

 

Yes, the Dodgers pay the standard 34 percent in revenue sharing on their TV money, as mandated by the most recent CBA. And yes, low-revenue teams occasionally rise up and crash the postseason: The Pirates and Indians did so in 2013, and the Rays have somehow managed to make the playoffs four times in the past six years despite going head-to-head with two of the biggest regional sports network beneficiaries in the Yankees and Red Sox.

 

When CBA negotiations resurface, however, the little guys will remember this Kershaw deal and the other mammoth contracts handed out by rich clubs like the Dodgers. They could argue that the rules of the game have changed, and that revenue sharing needs to become far more generous to small-revenue teams. Scott Boras has claimed that teams are playing elaborate shell games with their TV money in order to hide it from revenue-sharing distribution; if that’s accurate, the next round of bargaining could get downright nasty.

 

There’s no doubt one of the biggest changes since the last CBA agreement is the influx of regional television dollars and the new revenue divide it has created. This is going to make the 2016 labor talks interesting. Not only will you have players looking to gain more of baseball’s revenues, not only will you have owners attempting to take advantage of a union they see in a weakened position, but there also figures to be in-fighting between small- and large-market owners.

 

While sharing 34 percent of local media/TV dollars seems rather generous, more and more clubs are seeking equity stakes in regional television networks (See: Phillies), television capital which is not subject to revenue sharing.

 

Some modest, thinking-out-loud proposals for 2016:

 

*Equity stakes are somehow valued and included in the 34 percent revenue sharing structure…. OR the revenue sharing percentage increases. Should the Dodgers really benefit that much from their geography and market size? They didn’t exactly create their geography or market. A healthy Dodgers franchise is good for baseball but so is a leveling of the playing field.

 

*Players fight for a payroll floor. There’s no excuse for a team like the Astros to field a $30 million payroll with the amount of money in the game. I’d guess every owner in baseball would still profit comfortably with an $80 million payroll. The luxury tax should remain but there should also be a poverty tax in the game to compel owners to spend at a minimum level.

 

*One element I do like about the Kershaw signing transcends market size: a homegrown player is staying with the club that drafted and developed him. I think that’s generally good for baseball. But the Kershaw deal will make it more difficult for the Pirates to keep Gerrit Cole, for the Rays to keep David Price, for the Indians to keep Justin Masterson and for the A’s to resign Sonny Gray.

 

So how about replacing qualifying offers with baseball’s version of franchise tag. Instead of clubs being able to make unlimited qualifying offers to free agents, restricting their market places, a club has one franchise tag at its disposal at all times. A player tagged with a franchise offer is guaranteed a one-year deal, worth, say, the average of the top 30 contracts in baseball. If the player signs elsewhere, the club is compensated with the signing club’s next two first-round draft picks. The club also has the right to match any offer. While not perfect, it would keep more faces of the franchise with their original franchise. And there would be fewer QOs than franchise players, removing more restrictions from the market place.

 

- TS

108 Comments

  1. I read Jonah Keri’s piece and he seems to be reasoning from an outlier. Then he asked if the Padres can compete in a division with the Dodgers, and discounts any counter examples. I think we have to be mindful of the other side of large long term deals, mainly the Dodgers paying $77 million to a first basemen and three outfielder (not including Puig) for a ZiPS projected 8.8 WAR.

    These proposals are reasonable on the surface; alleviate the revenue disparity but first several questions need to be asked?
    -Can someone show that there is a vast competitive imbalance in baseball?
    -Then will greater revenue sharing lead to great competitive balance?

    From everything I have read, the answer to both of these question is no. I am open to changing my mind and will read an articles or papers that answer these question affirmatively. Additionally, how do these proposals align with declining share of players revenues. Revenue sharing and free agent compensation have been contributory mechanisms that have depressed players share of revenue. (I may misunderstand the last point.)

    Good post, definitely got me thinking, I would rather discuss player acquisitions… but political economy can be interesting, particularly when not about national politics.

    • Lot of good comments, Andrew. If I may share my thoughts…

      -The fact that the Dodgers are paying that much for those players – while still having plenty to spare – only strengthens Keri’s point, in my opinion. They literally have enough money that they can flat-out cut some of those players, pay them off, and still sign a replacement for more than the Padres or Pirates can afford. Disparity is that crazy. The game is still about wins and losses, not value.

      -”These proposals are reasonable on the surface; alleviate the revenue disparity but first several questions need to be asked?”

      I’ll do you one better…why do we have to prove that a fair, balanced economic playing field is worth it again? Shouldn’t it be the opposite? You clearly know your stuff, but the manner in which you placed the burden of proof seems odd.

      This would be akin to DIII schools in the same conference as DI schools, and yet having to prove that balancing them out would be worth it. Nobody would ever ask that question, as the answer is very obvious.

      • I like your post, NMR. Lots of good points. I just have one minor quibble – at the end.

        D3 schools really don’t have access to the same pool of talent as D1 schools. No stud talent in the two college revenue-producing sports would ever choose a D3 school over a D1 school simply because he won’t have the same competition, therefore hurting his chances at a professional career. At least initially, through the draft, the Pirates have access to the same US talent as the Dodgers.

        But, that’s where the fairness ends. The Pirates have little to no chance of retaining their own star players, nor are they able to sign anyone else’s star players, nor are they able to compete in the sweepstakes’ for big talent Japanese or Cuban stars.

        I pretty much agree with everything Travis wrote. I wish it were as simple as revenue sharing in the NFL, where the teams all play one game a week and the demand is such that they can televise every game in some form on a national broadcast or cable network. That makes it very easy to pool TV revenue, which is their largest source of income, and then equalize payrolls across all the teams from there. But, there are 6 games a week per team in MLB, and a large % of the TV revenue is local in nature. The current revenue sharing system was a start, but with the explosion of TV $$ now, it no longer works. Aside from that, teams like the Yankees, Phillies and others are able to hide a big chunk of their TV revenue in their equity stakes. There are still a lot more small and medium-sized markets than large ones, and the big markets need them. I believe the “have nots” need to dig their heels in and fight for a bigger stake from the “haves” using some of the creative suggestions Travis cited. If they buckle, they will have very little chance to compete down the road.

        • Fair critique, Jim.

          • NMR, I’ll try to be brief. I favor simpler rules because the more rules mean incentives are altered and distortions created, see history of free agent compensation, or revenue sharing.

            The key factor is competitive balance is determined by the size of your talent pool, thus baseball is more balanced now then in Babe Ruth’s era, and the NBA is the least balanced because of the small supply of tall players. Luxury tax, free agent compensation, and revenue sharing can have small effects but given that players’ most productive years are currently cost controlled, this impact will be little. Therefore given the distortions new rules create and the local nature of baseball revenue I feel it is justifiable to ask that harm be shown before adding additional regulations. Demonstrate these rules will have their intended affect. ( I think teams invested in local television networks because the revenue was not factored into revenue sharing.)

            I accept an ideal system will not be created because of the competing interests. And as critiquing is easier than proposing something I favor:

            -Abolish free agent compensation.
            -Remove the new limits on draft spending, allow draft picks to be trade, or abolish the draft with something like this, http://www.fangraphs.com/blogs/abolish-the-draft/
            -Despite my above claims I can support increased revenue sharing or adding the equity in the television stations to the formula, because the MLB is a cartel with restricts the movements of this members. Absent these restriction a rational Pirates’ owner would move the team to LA or NY because there is $490 million in yearly television money, split three ways it is still more than, top of baseball television contract of, $18 million

            I saw NMR and Jims comments on my other post, I really do not have any problems with fans demanding more payroll as long there is some thought behind it, and fully support Jim’s notion that if the revenue is there, an increase in payroll should soon follow. Fangraphs should have Pirates ZiPS which should be more exciting than discussing revenue sharing.

          • Much appreciated, Andrew.

            I’m positive I have found the crux of our difference:

            “…can have small effects but given that players’ most productive years are currently cost controlled, this impact will be little.”

            While you are correct that many SOME or even MOST of a players most productive years are cost controlled, it is still an absolute fact that many top players carry peak production into their free agent years.

            If your goal is to win a championship and you’ve built a good enough team such that you are positioned close to that goal on the win curve, the impact of a star player in his prime is not little. I don’t even think that can be argued.

            You ask me to demonstrate that these rules would have the intended effect. That, of course, is impossible, as I cannot tell GM’s how to spend the money nor predict the outcome.

            But it seems fairly obvious to me when looking back at past World Series Champions that money is unquestionably a factor. The Red Sox were praised for their “thrifty” spending last year when they eschewed massive long term deals. But they still spent more in free agency than the Pirates entire payroll. I don’t think there is any doubt that their economic status – leveraged correctly – won them that title.

          • Is it Spring Training yet?

          • I think you are correct about the Boston, but don’t forget what allowed that so called “thrifty spending” the Dodgers economic ability to absorb those terrible Boston contracts. However, over time the link between payroll and wins is fairly small, everyone cites the Yankess but forgets that the Mets haven’t exactly dominated the NL.

          • Andrew, again, that is where our difference lies.

            You are judging by wins, I’m judging by championships.

            I’m familiar with the argument about the playoffs being a crap shoot, but it seems like more than coincidence that teams that can afford really, really good players always win.

  2. When will teams learn? Not only is it bad for small market teams, look what it can do to there own team. You think Puig might be shaking his head to hear that the highest paid player in sports is only expected to play 6 innings of every 5th game? You think Greinke is happy about that? Everyone worth anything that the Dodgers want to sign from here on in is going to point to that contract.
    The Dude now makes more than Kobe Bryant! More than Labron!

    • What is wrong with that contract, exactly?

      • Do you think all the suitors of Masahiro Tanaka not named “The Los Angeles Dodgers” just said Oh Crap!

        • I do,and it makes me ill. If they really want him, and I believe they do, they can probably outbid anyone. I don’t think we know for sure how deep the Yankees pockets are, though.

        • Not really.

          First off, I definitely get what you’re saying. Crazy money to peons like me.

          But I think this contract is absolutely fair and reasonable.

          Kershaw is the best pitcher in the game right now, and is extremely young as far as soon-to-be free agents go. This seven year contract only takes him to age 33. Pirate fans want to pay 37 yo AJ Burnett over $14m.

          If teams like the Dodgers can afford to spend $33m in order to get the best pitcher in the game, why in the heck shouldn’t they?

          • Young maybe? But he’s been starting for the Dodgers since 2008. And the whole “he’s the best pitcher is surely questionable” . And that changes like the wind. Roy Halladay was the best ever a few years ago. Or was it Lincecum? Maybe that was Verlander I was thinking of. Could it have been Sabathia? Oh no! , It was David Price……No thats not right..Wait……Cliff Lee, thats it!…..Oh wait, I forgot about Felix Hernandez……….

    • Steel:

      He’s the best pitcher in the game. If he and Puig (or any other position player) both get injured and lost for the season on opening day, whose productivity do you think is more easily replaced?

      And Kobe is stealing money at this point. He is being paid for past performance, which is crazy. Kershaw is being paid for what they expect the next 5-7 years.

      • Seriously Jim, You may be right that he is the best pitcher in Baseball right now. But look at it for what it really is.
        Kershaw will start in the neighborhood of 30 games. That’s, uhhh, well, a million dollars a game!

        Lets just say he equals the number if innings he pitched last year…236 innings. Why thats, cough, a mere 131,000 dollars an inning .

        A scene at the mound….
        Don Mattingly: “Hey Kersh, Our pen is a little tired, think you can give us one more?”
        Clayton Kershaw: ” I dont know, I’m kinda tired”
        Don Mattingly: “Here’s a check for 131,000 dollars”
        Clayton Kershaw: “Ah, whats one more?”

        • “And Kobe is stealing money at this point”

          4 years into that 7, Kershaw will be stealing the money!

          • I think Kershaw’s production should be very good for at least 5 more years. Whether he is stealing the money is a function of whether we think he is being paid too much money for elite performance right now.

            But, if the argument is whether he deserves to be the highest paid pitcher in baseball right now, I think that is the case.

          • “”"”"But, if the argument is whether he deserves to be the highest paid pitcher in baseball right now, I think that is the case.”"”"”

            He’s not the highest paid pitcher in baseball right now. He’s the highest paid player in any sport, in sports history. He is being paid a Million dollars a game! 131,000 dollars an inning!

          • I guess I don’t get what we are arguing about, Steel.

            If you are saying Kershaw makes a ridiculous amount of money for entertaining people, then I don’t think anyone would argue that. But, that was happening last year when guys were getting $20+ million, and 10 years ago when they first started getting $10 million.

            The fact is that the LA Dodgers have this sort of money to spend on a pitcher, apparently, and they chose to do it with Kershaw. I am only saying that if they insist on laying out this sort of cash on a guy, Kershaw is as likely as anyone to do it on. He is obviously their best pitcher right now, and has probably been the best pitcher in baseball over the past few years, while just now entering his prime.

            The real issue, to me, is whether MLB can and should do something about the fact that the LA Dodgers can afford a gigantic payroll advantage over every other team – or, maybe every other team except the Yankees – and still have competitive balance in the league. They apparently are able to do this even while possibly having to pay a huge sum of money to the other teams in the form of revenue sharing. There are a lot more “have nots” with the new local TV deals than there are “haves.” The “have nots” need to figure out a way to even the playing field.

          • Why don’t people ever say teams steal money from a player when a players performs very well for relatively little salary? It amazes me that in a nation where the majority of people support socialist ideas that most sports fans get bent out of shape when a business (team) over pays an employee (player).

        • 46,000 dollars an out!

          Kershaw will make more money by April 3rd than Liriano made all of last year!

          • Steelkings apparently loved Frank McCourt. He would seem to rather have the owner pocket all the revenue instead of actually spending it on players.

            Honestly Steelkings, what do you want the Dodgers to do?

          • Not screw the rest of the league.

          • So you’re really arguing for a salary cap, or at least a massive increase in revenue sharing.

          • If you have record revenues the money has to go somewhere, not sure how it screws the rest of the league.

        • I may have misunderstood your post, Steel. I wasn’t arguing that the money was reasonable. It’s only reasonable to the extent the Dodgers have that much money to pay him. I thought you were saying that Puig is more valuable because he plays a lot more innings. I was just trying to make the point that Kershaw is a lot more valuable right now than Puig.

          Didn’t the Lakers just sign Kobe to a ridiculous extension, though? He’s injured and his legs are really old, basketball-wise. I doubt he has much left in the tank, but I guess we’ll see. Kershaw should have a lot left in the tank, at 26. But, anything could happen. It could easily blow up in their faces. I don’t like 7 year old deals for anyone. But, if any pitcher is worth risking a 7 year deal on, I think he is as good a bet as any.

          • No, what I was saying is that when you assemble a team of stars, which the dodgers have done.
            Greinke
            A. Gonzalez
            Puig
            Kemp
            Ramerez
            Uribe
            Carl Crawford
            Ellis

            Let just see how that contract goes over with those superstars.

          • Ok, you may be right about that with the Dodgers. In the early days of free agency, I believe the Yankees had a lot of resentment among the ranks over salaries of certain players – like Reggie Jackson.

        • Note to MLBPA: agree to a pay-by-the-inning contract for pitchers. Fans will love you!

  3. Why does Their, There, They’re have to be more than one?

    • Preach it, brother.

    • I dunno….why are bomb, tomb and comb all pronounced differently?

      George Carlin made a career out of words….

    • Actually ‘They’re’ doesn’t really belong because it is a contraction of ‘They are’. But, I see your point on their/there.

      I grew up being taught that ‘dove’ was the past tense of ‘dive’ and that ‘dived’ was incorrect. Annoys the he!! out of me to see or hear ‘dived’.

      And then there is ‘could of’, as in “He could of been a star’. It should be ‘could’ve’ as a contraction of could have.

      sorry, but I used to write a lot and a lot of this misuse of grammar, spellings, et al, annoys me to know end. I just say to myself “Their, their, it could of been wurse”.

      Or something like that. :) :) :)

    • Actually, each of them is exactly one.

  4. The problem with the salary floor is, at some point you’d be wasting money just to hit the number, if you’re doing a youth movement or you just plain have no talent whatsoever. I’d be for averaging it out over a period of time. Average over five years has to be X. That way, if you’re under one year and over the next four, you don’t get dinged.

    • Not necessarilly true, Juniata.

      The Cubs have proven that spending money on free agents can actually accelerate the rebuilding process. They’ve added several legit prospects by signing and trading free agents on short term deals.

  5. I kinda liked Buster O’s take on it:

    Buster O on the losers in the Kershaw deal:

    Loser: Labor peace

    The Kershaw deal is the latest sign that the financial disparity between big-market and small-market teams is growing, and as salaries climb, the more likely it is that a small-market team holding an elite talent must consider trading the player in his first couple of years of service time.

    For example: Addison Russell of the Athletics is regarded as one of the top prospects in baseball. If Russell becomes a major star right away, he’ll be earning $15 million in his fourth year in the big leagues, much more in subsequent years; Oakland may not be able to afford him if he’s really good, just as Price will eventually have to be moved. With can’t-miss prospects, you could make a case that it’s better to trade a talent like Russell even before he reaches the big leagues. The evolution of this dynamic into a reality is not a good thing.

    All of this is leading to growing unrest among small-market teams, and the uneasy peace between those clubs and big-market teams could be in jeopardy if the small-market clubs demand greater concessions leading up to the next collective bargaining agreement.

    • The dodgers can have a rotation of Kershaw, Greinke, Peavy, Billingsley Beckett and Ryu anytime they want. The Pirates can have a dream rotation of Cole, Taillon, Morton, ……….

      But eventually the Dodgers can have any of those Pirates they want once their ( note proper use) contracts come available.

      • Well said Steel.

        Maybe the smaller market teams will push for longer control of their players once they make it to the bigs.

  6. Based on the contract Kershaw signed, if I were the Pirates, I would be running Cole out there as much as I can & getting my 5-6 yrs worth of him. No way with Boras they ever resign him!

    • You see it all the time from college and high school coaches, but I don’t think it is very practical for professionals. Hitters are just too good. I don’t think you would gain any benefit what so ever by throwing Gerrit Cole every four days or letting him stay out for 150 pitches.

      • I heard on MLB Radio last night that Tanaka threw 160 pitches for a complete game in the Japan WS, then turned around and closed the game the next night. I think 15-20 pitches again the 2nd night.

        Can you imagine a manager in MLB doing that?

          • Sounds like it. But, they are used to heavier work loads from what I understand. I also read that Tanaka has already logged more professional innings at his age than all but a handful of MLB pitchers ever. And, the MLB guys were all from much earlier eras. I believe this kid pretty much came right out of HS and was plucked down on a pro roster very soon after.

  7. LeeFoo…….”the misuse of grammar annoy me (you) to (what) end”. I do not think I “no” what you mean. :)

  8. One point about the salary floor: Adjust it so that teams have the flexibility to put the money into not just salaries but elsewhere. For instance an academy in the Dominican. or better yet, have one unified academy established by mlb with money from the larger markets.

    • Lets not make it seem like the Dominican academy is preventing Nutting from spending cash on payroll. I think the initial investment was in the neighborhood of $5M if I recall. And I imagine the operating budget is a fraction of that.

      Don’t get me wrong, it was a great move to build it and reinforce efforts in Latin America. But it’s just a drop in ocean with minimal impact to the bottom line.

      • Yes yes yes.

        Philly, I would agree that revenue sharing money should be allowed for draft picks and international signings, but only if the caps on spending are removed. And even if this were to happen, I would require teams to explicitely document every dollar. Too easy for owners to pocket money without having some transparency.

        • They already document every dollar spent, if I understand what you are saying.

          • The league does? I don’t believe that is true.

          • The teams keep their own books, obviously. And they are audited and the league and the union receive the audit.

            Again, maybe I don’t understand where you are headed here NMR.

          • I should do a better job of explaining.

            I believe that MLB, MLBPA, and fellow owners should have the right to see exactly where each dollar of revenue sharing is spent. As I understand it, there is currently no system in place.

            Why should the Steinbrenner’s contribute to the Nutting’s yearly profit?

          • That is my understanding as well, 21. But, I would like to know for certain.

        • NMR, think about what you’re asking. A business has revenue from a number of sources. How in the world can you tell where specific dollars from specific sources are spent in this case? In the team’s financials, you can see where all of the dollars are spent and if there are distributions to owners. All of the dollars are spent on baseball.

          • You can tell by not allowing the teams to dump revenue sharing into their general account. Leave the money in an account monitored by the league, and mandate that the team’s 40-man payroll must be a minimum percentage of what is received.

            This essentially creates a salary floor at the same time.

          • “not allowing the teams to dump revenue sharing into their general account. ”

            That by itself does nothing NMR. Okay, so put the revenue sharing funds in it’s own separate account. Then make all of your expenditures out of there until it’s gone, then starting hitting up the general operating account. Six of one, half dozen of the other.

            “payroll must be a minimum percentage of what is received.”

            Now that’s how you do it or better yet set a floor as you said, or set maximum net profit as a percentage of revenues. But they already have an EBITDA requirement.

          • Well said, 21. I appreciate having you as my accounting check!

  9. Someone made the point about not limiting what teams can spend on the draft because employing the strategy of spending heavily on the draft allowed the Pirates to pay over-slot and snag some players (Josh Bell, for example) that they would not be able to get otherwise. While that point was true for the Bucs at that time, it would no longer be the case. The Pirates and a few other teams were out in front of some of the larger market teams with that strategy, but since the Dodgers now may have as much as $300 million in extra revenues per year than the Pirates (and that figure may not even be an exaggeration, btw) do we really think the Pirates would be able to continue to outspend those teams on the draft? The Dodgers, Yankees, Red Sox, Cubs, Phils, Rangers, Angels would totally blow away the small market teams with draft spending if allowed to now.

    I do believe MLB is setting up for not only a fight with the players over share of revenue, but a healthy battle between the clubs themselves. This is a controlled environment in which the teams operate, and each team is dependent on each other team for the overall financial success of the league. Hal Steinbrenner and other big market owners may not believe that, but it is true. If Hank woke up tomorrow to find that the league was back to just 8 really big market teams, it would not be too long before money in the sport declined because huge chunks of the country would lose interest. One owner is not brilliant and another an idiot simply because one of them was fortunate enough to get a team with a huge population base and the other was not. Interest is often just as high among the population in a city like Pittsburgh or Cincinnati as it is in LA or NY, but it just gets outweighed by the sheer # of people in those larger markets. Local TV ratings often bear this out.

    So, I believe greater revenue sharing is inevitable, and it is a good thing. This is not a free market system between teams. The owners are partners, except on the field. It does them no good to have a large % of their partners failing simply because of the size of a local population, and I believe that is likely over time unless big modifications are made to how revenues are shared.

    • “The Pirates and a few other teams were out in front of some of the larger market teams with that strategy…”

      This is a common myth among Pirate fans. Teams, big markets included, were going overslot long before the Pirates.

      Quality scouting and draft order are the equalizers here, Jim. Just isn’t practical for the big markets to make pre-draft deals with every prospect with high demands.

      • Pirates had the largest spending on the draft of any team for a several year stretch, right?

        I’m sure much of that had to do with the fact that the Pirates were picking higher in the first round, and that is where the most money is spent. But, I thought the Pirates were on the leading edge of the paying over-slot strategy. I recall the BoSox bristling when we snagged Bell with that strategy. And, the BoSox were known to employ that strategy as well.

        But, my main point was that I believe it was a good thing that draft spending was addressed. Maybe a better way for me to say it is that when the latest rules were put in place, it kept all of the large market teams (including the ones that were not utilizing the over-slot strategy) from using their huge revenue advantage over small market teams to sign the lion’s share of the best players.

        • …”it kept all of the large market teams (including the ones that were not utilizing the over-slot strategy) from using their huge revenue advantage over small market teams to sign the lion’s share of the best players.”

          You realize it kept the Pirates from signing them too right?

          • Yes, Boston. But, my point was that the Dodgers now have $300 million more per year than the Pirates in local TV revenue alone. I know they give some of that back in revenue sharing, but it is still a huge advantage. And, that is just local TV revenue. Larger market teams also draw more fans, and due to their larger populations creating more demand, they are able to charge more $$ per ticket. Their internet revenue possibilities are also much greater for the same reasons. They have a revenue advantage in every conceivable way due to their market size.

            So, with the disparity in revenue quickly widening with these new TV deals, if allowed to spend freely on the draft, it would not be long before the larger market teams would be spending several times the money the small markets could afford going forward. The Pirates and Reds would have to pass on players the big market teams could afford, much like we have to automatically pass on free agents that they routinely sign. A few $3-5 million mistakes in a season set the Bucs back in a big way. The big guys just wallpaper over mistakes of that size every year.

          • Jim, I don’t think there’s any question that revenue sharing will be adjusted accordingly in the next CBA. And I’m not anticipating much of a fight let alone a work stoppage.

          • I hope you are right, 21. What makes you so optimistic?

            The owners need to agree among themselves how to share their money, then they need to decide how to bargain with the players, who will expect and demand a larger %.

          • First off, the Dodgers have always had boat loads more cash than the Pirates. Nothing has changed in that regard. The gap may be widening, but to NMRs point, no one would have reasonably expected the Pirates to spend on their level… Now, or before the regional TV contracts.

            The draft was about the only place the Pirates could compete with the large market teams before…

            1. The Pirates have a pick in every round. The Dodgers can’t just buy it away.

            2. The teams picking after the Pirates cannot do anything to prevent the Pirates from drafting a player, no matter how much more money they have (say $20M they can offer, instead of the $5M the Pirates can). The Pirates can still draft.

            3. Yes, the player can elect not to sign, but said player is risking walking away from $5M. Not everyone is as fortunate as Appel.

            4. There are enough players, from enough high schools, with enough ‘projection’, that good scouting would always provide opportunities to go above slot.

          • Exactly, Boston.

            The Red Sox, for example, drafted Will Middlebrooks overslot a year before Neal Huntington was even hired. They and other teams have been doing this for a while.

          • I just want to make sure I have this straight. The Dodgers recently signed a TV deal that gives them a whole lot more money than they ever have before. Same with Phils, Rangers, etc. Small market teams are signing deals that increase their money, but exponentially less so of an increase than the larger markets. Are we agreed on that?

            If so, are you telling me if the system had been left as is, the larger market teams would not be using their drastically increased revenue advantage to dominate in the draft? I am not saying the Pirates would not still get good players by drafting properly. But, players are left unsigned every year that the Pirates want for financial reasons. If draft spending was unchecked, the larger market teams would leave very few players they really want unsigned, whereas the small market teams would have no choice but to continue to do that.

            The Dodgers have already said that their strategy going forward is to mainly build from within. I am thankful they are cap’d as to draft spending.

          • Yes, I am telling you that. Because it isn’t logistically possible.

            There are only so many players even worthy of spending, and the amount of money we’re talking about is so relatively low that big market teams have had enough to do it for a while.

            How exactly would you expect the Dodgers to “dominate” the draft simply because they have more money now?

          • Unless the large market teams get more draft picks than the Pirates, or they automatically get to draft in front of the Pirates, there is nothing that can be done to prevent the Pirates from drafting whom ever they want.

            Is there a chance that some of those kids would not sign and risk waiting another year? Sure but, that happens today. Cole was drafted in the first round out of HS and went to UCLA.

            You make it sound like the big market teams were going to immediately buy the players the Pirates just drafted.

        • I think NMR and Jims have good points, the chart in this article shows that while the Pirates and small market teams spent more on average on the draft, Boston was also in the top 5.

          http://www.fangraphs.com/blogs/visualizing-the-cbas-impact-on-draft-spending/

          I view the draft as more of lottery than a solvable problem, scouting is important but given the uncertainly of a lottery like environment, having more draws in the form of more picks or money is an advantage. (Also noted the Athletics weren’t really spending on the draft.)

          Jim is right that nothing stopped teams from using their revenue advantage in the draft. However this what I was posted above, you should have to demonstrate actual harm before creating rules, the signing limits theoretically levels the playing field for lesser revenue teams but this is not what was happening. Revenue sharing helps leveling the playing field but absent some enforcement mechanism what prevents short-term profit-maximizing owners from just cashing the checks, which leads to fans calling the honorable Robert Nutting cheap.

          • Boston:

            I don’t think I made it sound like that at all. What I said is that the revenue gap is increasing between small and large market teams very, very rapidly. The Pirates leave a lot of picks unsigned every year, and often the reason is because they did not have the money, or did not want to commit the money that the player asked for because they felt their precious resources were better spent elsewhere. The larger market teams have always had more money, but they have never had an extra $300 million in TV revenue. I’m saying the Dodgers would never leave players unsigned if they really wanted them over, say, $1,000,000 like they did in the past, while the Pirates would still need to do that.

            We see formerly drafted players by the Pirates getting re-drafted by other teams every year. It seems logical that the Dodgers would absolutely dip into their big bag of money and sprinkle an extra $20 million per year, or whatever it took, to ensure their money afforded them every possible advantage in the draft. I don’t know that they have had the money to completely do that in the past. I just think this TV money will give them advantages in every area possible if more comprehensive revenue sharing is not adopted.

            But, maybe I’m all wet on this one.

          • Jim,
            The Pirates do leave a lot of guys unsigned every year, but I don’t think they intend to sign each draft pick either. Could you imagine if they actually brought in 50+ new players every year? They’d have to add a half dozen new teams to the GCL.

            Not to mention the amount of affiliates the Dodgers would need to add to be able to place their 50+ picks, plus all of the unsigned players from other organizations.

            I just think it’s unrealistic to think that the Dodgers are all of the sudden going to expand and/or dilute their minor league system like that.

            I could see it giving them an advantage in the first round, where if left uncapped, the market price for premium picks would sky rocket. (Similar to the guaranteed contracts that QBs were getting the in the first round of the NFL draft).

          • I didn’t say all of the picks, Boston. I’m talking about the highly rated guys who they don’t end up signing. I believe there are high ceiling guys the Bucs would like to sign every year that they can’t. I believe there are high ceiling guys the Dodgers would like to sign every year that they can’t. I believe it would be a nice advantage for the Dodgers if they could flex their new found extreme payroll muscle and sign more of the high ceiling guys every year. They would gladly release low ceiling guys currently in their system if they had to make room for more talented guys.

            But, we obviously don’t agree on this one, and that’s fine.

          • Which “high ceiling” guys were the Pirates unable to sign during the Huntington era, Jim? (pre-cap, obviously)

  10. This is awesome discussion, everybody. Even if we aren’t in complete agreement on everything, I really enjoy the interaction of ideas. I learn a lot this way.

    • Nice to see that they view Tabata, Snider, Lambo, Decker, and Harrison as at least marginally better than replacement level. However, I’m sure a least one of them would end up on the other side.

    • I assume the Pirates know more about Morton than the projection system, and/or he prefects a changeup, I like Morton especially with the Pirates system, but lefties hitting .302 with a .844 OPS is not good. I find it interesting how close Morton and Locke’s rate stats are given the differing perceptions.

      It appears Cole can substitute for Burnett’s projected performance.

      • Yeah, no doubt ZiPS is pulling data from before 2011 for Morton’s projection. I can’t imagine that provides much value at all given how drastically he has changed, but I can’t expect Dan Z. to tweak each players inputs that precisely. I’m sure the Pirates internal metrics are much different.

        • But I’m also on record as saying Morton is a liability until he improves his splits. I’d rarely let him go more than three times through a lefty-heavy lineup.

          • That’s where the value on his contract will come from. He’s going to be worth $8M as a starter, I have no doubts of that.

            But if he can develop some sort of cutter/change, or something, then his contract could turn into a steal. He just can’t turn every lefty into Griffey.

          • Very much agree.

      • I wonder how Charlie’s splits improved vs lefties as the year wore on – if at all. He pitched very well down the stretch, so he must have been doing at least a better job vs. them than earlier in the year. Maybe the Bucs are relying on that going forward. He had been off for a long time before jumping back into action.

        • Maybe marginally, but they still hit .299 with an insane 26.67% line drive rate against him in September.

          • And we’re talking about ridiculously small samples, regardless. Not much value in that.

          • Wow! He seemed like a pretty good pitcher, overall, for a guy that gets torched vs lefties. What’s odd is that the Reds and Cardinals were vulnerable vs LHP, and they hammered RHP. At least, that is my recollection from last year. I thought that was because they key contributors as LH hitters or switch hitters who were better as lefty hitters. (Choo, Votto, Bruce, Beltran, Carpenter, Adams, Jay). Of course, that’s only 2 opponents.

          • I think you’re right on everything you said there, Jim. It all comes down to sequencing with Chuck.

  11. Of particular interest, I believe Andrew Lambo’s projection is very realistic. You could talk me into a couple more homeruns, as I do believe his power is real, but that batting average is going to struggle to break .240.

    Andrew Lambo 430 6.7% 28.1% .178 .288 .229 .285 .407 .300

    Just for kicks, here are projections for all of the guys mentioned as 1B possibilities this winter:

    Mike Carp 398 7.5% 24.1% .183 .311 .258 .319 .442 .330
    Adam Dunn 543 13.6% 34.4% .216 .267 .205 .317 .421 .322
    Garrett Jones 463 8.2% 23.3% .189 .284 .243 .305 .432 .320
    Justin Morneau 484 8.1% 15.1% .177 .302 .280 .343 .457 .344
    Ike Davis 445 12.8% 26.3% .192 .282 .232 .330 .424 .328
    Justin Smoak 540 11.1% 23.0% .170 .275 .235 .322 .405 .321
    Corey Hart 501 7.0% 24.6% .175 .297 .246 .307 .421 .315
    Logan Morrison 455 10.8% 19.6% .160 .273 .238 .325 .398 .315
    James Loney 569 7.0% 12.5% .113 .294 .270 .320 .382 .302

    • Well, that’s just about impossible to read.

      Here is the header for those stats, if it helps:

      Player PA BB% K% ISO BABIP BA OBP SLG wOBA

    • I read a tweet from Saber Bucs last night (good follow, in my opinion, btw) about Carp. He had an incredibly high BABIP last year. Something like .390, if I recall.

      • I’ll second your kind words. I’ve been enjoying the links JAL provides. He did a great peice on Volquez a few days ago.

        You’re right about Carp’s BABIP last year, and his projection has that dropping drastically down to .311. Might still be a tad high, but much more realistic.

  12. NMR:

    I don’t make a habit of recalling names of guys the Pirates don’t sign, but I know there were several who were drafted by other teams last year very high that the Bucs were unsuccessful in signing after drafting them earlier. I’d probably have to go back to tweets from Tim Williams right after the draft. He mentioned several, just from last year’s draft. And, I believe it happens every year.

    • Sure, but you’re feeding into the argument Boston made. Only a few of those guys were unsigned because of money. The vast majority were unsigned as high schoolers only to greatly improve in college.

      If you want to prevent that from happening, then you find yourself in the situation Boston described where you just have to sign everyone and add minor league affiliates.

      Or get better scouts that can rub their crystal balls and see Trae Turner becoming the best shortstop in the draft after three years in college.

  13. I proposed this to Bud Selig twenty years ago.
    Every team would have a “cost of each home game (stadium labor, expenses, utilities, etc.)
    All monies generated from each game goes into the pot.
    The winner of the game gets “THE POT”.
    and by the way the players on the winning side get their pay out of the pot.’
    and the losing players get “Nada”.
    Bet you wouldn’t have too much Hi ya been ol buddy between opposing team players.
    And the last game of the season between the cubs and brewers would be played “for a win”.
    The possibilities are endless.

  14. Solution to revenue disparity. Any team with a payroll over $130 million/year losses all draft picks in the next draft through round 10.

  15. I tweeted AJ Burnett and got a re-tweet from Karen. It aint over til its over.

    “@wudeydo34 @_karenburnett_ You have a great family and Millions of $. Problem choosing what makes you happy? I like your problems.”

  16. She re-tweeted it. It a sign that she liked the tweet. If she didn’t she would block me.

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