MLB Begins Lockout

[Schad]

Welp, that offseason thing? That was fun for a couple weeks. Now, no baseball anything. Now we talk labour law and economics.

Yay!

[Brinbe]

Love baseball but absolutely hate the commish and ownership. All power and support to the players

Read on Twitter

[rarefind]

Pretty silly that team websites have stripped all player likeness and videos.

[SharoneWright]

Pretty silly that team websites have stripped all player likeness and videos.

Pretty sure it's not out of spite. Guessing it's to cover their own backsides, otherwise they could be sued for profiting off of a player's likeness? I wonder if the same rule applies to MLB TV? That's going to be a pretty dry channel if they can't show highlights. While I like the guy, there's only so much of Harold Reynolds droning on and on that passes for interesting TV....

[Schad]

I get the sense that most here are largely on the side of the plaers, but an illustration below of why MLBPA is so insistent on changing the pay structure for younger players.

CJ McCollum and Kris Bryant are roughly the same age, and both were drafted in 2013. Bryant was a very high draft pick; McCollum was a late-lotto guy. Here are their approximate cumulative career earnings, including draft bonuses and a rough estimate of minor league salaries (age in parenthesis):


Bryant:

2013 (21) - $6.7m.
2014 (22) - $6.75m.
2015 (23) - $7.2m.
2016 (24) - $7.9m.
2017 (25) - $9.0m.
2018 (26) - $19.9m.
2019 (27) - $32.8m.
2020 (28) - $51.4m.
2021 (29) - $70.9m.

McCollum:

2013 - $2.3m.
2014 - $4.7m.
2015 - $7.3m.
2016 - $10.4m.
2017 - $34.4m.
2018 - $60.2m.
2019 - $87.8m.
2020 - $117.1m.
2021 - $148.0m.


Now, I'm not expecting anyone to weep about Kris Bryant's financial situation, but there's a serious disparity there. Despite Bryant receiving a very large bonus, while McCollum got the (relatively cheap) rookie scale of the 10th overall pick, McCollum's earnings exceeded Bryant's by draft year + 3, and a year later he had more than 3x the career earnings. And Bryant's an unusual case in that he got to the majors very quickly as a college draftee, and was a Super 2 player, and consequently reached arbitration earlier. Also, he's been a better baseball player than McCollum has a basketball player, to be totally frank.


It gets even sillier with high school draftees. Here are two 2011 draftees: Trevor Story, who is an elite baseball player drafted at 18, and Tobias Harris, who is a good-but-not-elite basketball player drafted at 19 (he's exactly four months older than Story):

Story:

2011 (18) - $0.93m.
2012 (19) - $1.0m.
2013 (20) - $1.05m.
2014 (21) - $1.1m.
2015 (22) - $1.15m.
2016 (23) - $1.65m.
2017 (24) - $2.2m.
2018 (25) - $2.8m.
2019 (26) - $7.8m.
2020 (27) - $16.8m.
2021 (28) - $35.3m.

Harris:

2011 - $1.4m.
2012 - $2.9m.
2013 - $4.5m.
2014 - $6.9m.
2015 - $22.9m.
2016 - $40.1m.
2017 - $56.1m.
2018 - $70.9m.
2019 - $103.6m.
2020 - $138.0m.
2021 - $174.0m.

In 2018, Story was in his 8th year as a professional baseball player. He was an All-Star, finished 8th in the NL MVP race, and was one of the most coveted assets in baseball. He had $2.8m in career earnings. Harris was a solid-enough starter in the NBA. He had $70.9m in earnings.

And Story will get paid...now. After over a decade in professional baseball. But there are a lot of guys who will have 10-year professional careers and never really get paid. Ryne Stanek was a 2013 college draftee who didn't have a significant major league role until 26 (a bit late, but not incredibly so). He's been a valuable reliever when he hasn't been injured, enough so that he was entrusted with five appearances in the World Series this year. His earnings over 9 years as a professional? Averaged out, about $300k/year. He's still two years from free agency. DeAndre Liggins, who bounced between the end of NBA benches, foreign leagues, and the G-League? He has made more than Stanek. He hasn't even been in the NBA for four seasons! He scored 346 career points!


This system ain't right, and even if you don't care that players are underpaid, it creates a slew of really stupid incentives that affect competitive balance and team decision-making. 33 year olds should not be making $30m to be somewhat above-average while MVP candidates get paid 1.6% as much. Baseball players should not need to be professionals for a decade before they literally have any job security (prior to free agency, every player is year-to-year). It's silly.

[Lateral Quicks]

I just read Manfred's statement, and not knowing much about negotiations to date, it makes the players look greedy.

It sure would be nice if we can improve competitive balance in the league. Kind of sucks seeing the Yankees and Red Sox buy their way into the playoffs every year. Yes you can point to the Rays as an example of competing without a payroll, but poor teams shouldn't have to cycle their stars every few years to make it happen. It's not good for the fans.

[Schad]

I just read Manfred's statement, and not knowing much about negotiations to date, it makes the players look greedy.

It sure would be nice if we can improve competitive balance in the league. Kind of sucks seeing the Yankees and Red Sox buy their way into the playoffs every year. Yes you can point to the Rays as an example of competing without a payroll, but poor teams shouldn't have to cycle their stars every few years to make it happen. It's not good for the fans.

Manfred's statement is self-serving nonsense. MLB does not care one whit about competitive balance; competitive balance isn't good financially for the league in the aggregate, so if anything the league would prefer things to be more imbalanced. If it did care, they'd be pushing for aggressive revenue sharing and a salary floor. They aren't doing that, and in fact have strongly resisted both elements, because what they want is to make as much money as possible.

[Lateral Quicks]

I just read Manfred's statement, and not knowing much about negotiations to date, it makes the players look greedy.

It sure would be nice if we can improve competitive balance in the league. Kind of sucks seeing the Yankees and Red Sox buy their way into the playoffs every year. Yes you can point to the Rays as an example of competing without a payroll, but poor teams shouldn't have to cycle their stars every few years to make it happen. It's not good for the fans.

Manfred's statement is self-serving nonsense. MLB does not care one whit about competitive balance; competitive balance isn't good financially for the league in the aggregate, so if anything the league would prefer things to be more imbalanced. If it did care, they'd be pushing for aggressive revenue sharing and a salary floor. They aren't doing that, and in fact have strongly resisted both elements, because what they want is to make as much money as possible.

I'm definitely in favour of young players being paid more and gaining free agency sooner, but there need to be strings attached that incentivize young players staying with their teams. Otherwise two thirds of the league becomes incubators for the big market teams. The NBA does this somewhat well (Bird rights, etc.).

[Schad]

I'm definitely in favour of young players being paid more and gaining free agency sooner, but there need to be strings attached that incentivize young players staying with their teams. Otherwise two thirds of the league becomes incubators for the big market teams. The NBA does this somewhat well (Bird rights, etc.).

I'm okay with that in general, but the easiest way to incentivize players to stay with their teams is to lower the disparity in the resources of the teams. The Yankees, Dodgers etc spend a lot because they have a lot to spend, and the Rays don't spend a lot because they don't have the coin. Reduce that gap and you'll reduce the competitive advantage that comes with having a lot of money (not that spending in FA is a great way to build a team these days, anyway). As of 2019, using Forbes' numbers, the revenue disparity between the richest and poorest teams in MLB is was well over 3:1; in the NBA, it was less than 2:1. Paying players less won't significantly change the competitive balance, it'll just make the owners richer. Which is why they want to do that instead of making changes that would directly affect competitive balance.

Also, here's Rob Manfred touting the league's competitive balance and extremely good revenue situation a few years ago, to lay bare how cynical this "we're doing it for the fans" thing is now:

https://www.cnbc.com/2019/12/22/report-mlb-revenue-for-2019-season-a-record-10point7-billion.html

Describing the league as “thriving,” Manfred also attributed competitive balance as one of the main reasons the MLB has grown over the last few years. In 2017, the league surpassed $10 billion in revenue for the first time.

“The combination of competitiveness on the field and compelling athletes usually put the sport in a pretty good spot,” Manfred told CNBC. “And our revenues reflect that.”

[JTT]

I get the sense that most here are largely on the side of the plaers, but an illustration below of why MLBPA is so insistent on changing the pay structure for younger players.

CJ McCollum and Kris Bryant are roughly the same age, and both were drafted in 2013. Bryant was a very high draft pick; McCollum was a late-lotto guy. Here are their approximate cumulative career earnings, including draft bonuses and a rough estimate of minor league salaries (age in parenthesis):


Bryant:

2013 (21) - $6.7m.
2014 (22) - $6.75m.
2015 (23) - $7.2m.
2016 (24) - $7.9m.
2017 (25) - $9.0m.
2018 (26) - $19.9m.
2019 (27) - $32.8m.
2020 (28) - $51.4m.
2021 (29) - $70.9m.

McCollum:

2013 - $2.3m.
2014 - $4.7m.
2015 - $7.3m.
2016 - $10.4m.
2017 - $34.4m.
2018 - $60.2m.
2019 - $87.8m.
2020 - $117.1m.
2021 - $148.0m.


Now, I'm not expecting anyone to weep about Kris Bryant's financial situation, but there's a serious disparity there. Despite Bryant receiving a very large bonus, while McCollum got the (relatively cheap) rookie scale of the 10th overall pick, McCollum's earnings exceeded Bryant's by draft year + 3, and a year later he had more than 3x the career earnings. And Bryant's an unusual case in that he got to the majors very quickly as a college draftee, and was a Super 2 player, and consequently reached arbitration earlier. Also, he's been a better baseball player than McCollum has a basketball player, to be totally frank.


It gets even sillier with high school draftees. Here are two 2011 draftees: Trevor Story, who is an elite baseball player drafted at 18, and Tobias Harris, who is a good-but-not-elite basketball player drafted at 19 (he's exactly four months older than Story):

Story:

2011 (18) - $0.93m.
2012 (19) - $1.0m.
2013 (20) - $1.05m.
2014 (21) - $1.1m.
2015 (22) - $1.15m.
2016 (23) - $1.65m.
2017 (24) - $2.2m.
2018 (25) - $2.8m.
2019 (26) - $7.8m.
2020 (27) - $16.8m.
2021 (28) - $35.3m.

Harris:

2011 - $1.4m.
2012 - $2.9m.
2013 - $4.5m.
2014 - $6.9m.
2015 - $22.9m.
2016 - $40.1m.
2017 - $56.1m.
2018 - $70.9m.
2019 - $103.6m.
2020 - $138.0m.
2021 - $174.0m.

In 2018, Story was in his 8th year as a professional baseball player. He was an All-Star, finished 8th in the NL MVP race, and was one of the most coveted assets in baseball. He had $2.8m in career earnings. Harris was a solid-enough starter in the NBA. He had $70.9m in earnings.

And Story will get paid...now. After over a decade in professional baseball. But there are a lot of guys who will have 10-year professional careers and never really get paid. Ryne Stanek was a 2013 college draftee who didn't have a significant major league role until 26 (a bit late, but not incredibly so). He's been a valuable reliever when he hasn't been injured, enough so that he was entrusted with five appearances in the World Series this year. His earnings over 9 years as a professional? Averaged out, about $300k/year. He's still two years from free agency. DeAndre Liggins, who bounced between the end of NBA benches, foreign leagues, and the G-League? He has made more than Stanek. He hasn't even been in the NBA for four seasons! He scored 346 career points!


This system ain't right, and even if you don't care that players are underpaid, it creates a slew of really stupid incentives that affect competitive balance and team decision-making. 33 year olds should not be making $30m to be somewhat above-average while MVP candidates get paid 1.6% as much. Baseball players should not need to be professionals for a decade before they literally have any job security (prior to free agency, every player is year-to-year). It's silly.

We'll see, but I don't think that this is a "hill to die on" for the union either. No matter fair or not, right or not, this isn't an issue that would affect the majority of union members. It would affect, what, 20 or 30 guys in a 1200+ person union? All the MLB has to placate is the majority who are making MLB median salary of about $1.5 million.

[Schad]

We'll see, but I don't think that this is a "hill to die on" for the union either. No matter fair or not, right or not, this isn't an issue that would affect the majority of union members. It would affect, what, 20 or 30 guys in a 1200+ person union? All the MLB has to placate is the majority who are making MLB median salary of about $1.5 million.

It affects far more than 20-30 guys. Think about those numbers. The MLB median salary is actually $1.1m. The average MLB salary is $4.2m. The qualifying offer, which is based on the mean salary of the top 125 players, is $18.4m. Almost half of all MLB players are making less than the NBA's league minimum for undrafted rookies!

In practice, what that means is that a very large percentage of the pie goes to a relatively small number of older players. The top 125 players there receive more than half of the salary of the 1200 person union. There was a time when the union was content with that, for a couple reasons. One, those older players hold more sway within the union. Two, overall compensation was good...you just had to wait a few years.

But the incentives have really changed there, because teams have realized that players don't actually peak at 32 and continue producing through age 38. Even in what feels like an orgy of spending, team payrolls haven't increased...average payroll in 2021 was lower than it was in 2015, as even rich teams focus on trying to get younger (because younger is better).

So for the players, this is when they have to act, because otherwise it's only going to get worse, especially if MLB succeeds in getting more cost controls which will further limit players' ability to get paid in free agency.

[vaff87]

We'll see, but I don't think that this is a "hill to die on" for the union either. No matter fair or not, right or not, this isn't an issue that would affect the majority of union members. It would affect, what, 20 or 30 guys in a 1200+ person union? All the MLB has to placate is the majority who are making MLB median salary of about $1.5 million.

It affects far more than 20-30 guys. Think about those numbers. The MLB median salary is actually $1.1m. The average MLB salary is $4.2m. The qualifying offer, which is based on the mean salary of the top 125 players, is $18.4m. Almost half of all MLB players are making less than the NBA's league minimum for undrafted rookies!

In practice, what that means is that a very large percentage of the pie goes to a relatively small number of older players. The top 125 players there receive more than half of the salary of the 1200 person union. There was a time when the union was content with that, for a couple reasons. One, those older players hold more sway within the union. Two, overall compensation was good...you just had to wait a few years.

But the incentives have really changed there, because teams have realized that players don't actually peak at 32 and continue producing through age 38. Even in what feels like an orgy of spending, team payrolls haven't increased...average payroll in 2021 was lower than it was in 2015, as even rich teams focus on trying to get younger (because younger is better).

So for the players, this is when they have to act, because otherwise it's only going to get worse, especially if MLB succeeds in getting more cost controls which will further limit players' ability to get paid in free agency.

In fairness, you’re only comparing them to NBA players. When comparing to NFL and NHL players, I would say that MLB players have it pretty good.

But for sure, the whole system is out of whack. Young players need to make more money sooner. And imo, there needs to be a maximum number of years on a contract. 13 year contracts aren’t helping. Washed up players in their late 30s shouldn’t be making the most money.

I haven’t paid attention to what’s going on, tbh. Just hoping it doesn’t last long.

[Schad]

In fairness, you’re only comparing them to NBA players. When comparing to NFL and NHL players, I would say that MLB players have it pretty good.

The NHL, yes. That's because the NHL is far poorer though. The NHL had gross revenues of $5b in 2018-19 (pre-pandemic); gross revenues in MLB were $10.7b.

The NFL...it depends. The NFL is awful to its players in just about every respect, but the median salary is still higher than MLB. They just have their bodies break down at age 26 and have limited guaranteed money.

[HangTime]

Why doesn't service time start when a draftee gets sign?

why does service time start at only when a player gets to the MLB level?

[SharoneWright]

Obvious factor, but MLB rosters are significantly larger than in the NBA. Teams can't afford to pay the average NBA salary ($8.25M) x 25 rostered players. That's north of $200 MILLION and in Yankees territory and about double the current situation.

If people are concerned about the median vs. average,,, the median in the NBA is $4.02M with is 49% of the average. In the MLB, it's true that the median (as per Schad) is only 26% of the average. MLB teams, roster way more players than the NBA, so of course the median skues down.

If I am to assume it's is only guys on the 40-man, I don't see a big a problem that "young players are getting shafted". Most drafted kids amount to nothing and are playing in the minors, not helping the big club accumulate wins. They don't deserve millions.

Also, if those numbers only include guys on the 40-man,,, then I also don't see a big problem considering you have to stock your team with many many players and lots of them are middling vets, also not worth millions. "Middling vets are getting shafted" is also not a convincing argument to me as pay is always exponentially higher for those who separate themselves with skill. In fact, the existing structure has worked to ensure a median salary of over 1 MILLION dollars which is pretty darn good considering natural law tends to follow the Pareto Distribution with finds 80% of wealth accumulates in 10% of the hands. Some say it's actually 90/10. Credit Suisse says globally its 85/15, so that's good enough for me. The union has already, to an extend, succeeded(?) in forcing things toward the lower end of the MLB pay scale if you go in for this. It's the same principle that LeBron in his heyday was worth way more than any max contract. Necessarily, lower-end guys would then be pushed even lower.

Long point short, the question of median vs. average doesn't bother me, or at least needs to be narrowed very specifically to the service time/arbitration question. (It's too bad for the Jays that just when our best farm system of all time is about to mature, we are going to be dealt tougher parameters). I suppose I'm all for re-visiting service-time manipulation and the number of arb-eligible years. However, delaying the big pay-day does mitigate owners from player flame-outs and injuries. Real risks in the real world. Maybe that's not a sympathetic argument to some ears with many believing owners (generally "evil" owners?) should just assume all the risk. Well that's one way to go, but that can work backwards IF owners decide to NOT offer long-terms deals - reducing player income, OR if owners end up losing too much money/having to sell/devaluing the league.

The vaunted NBA does take some steps to mitigate this risk at the expense of all players - but the young ones specifically. The 1andDone rule delays service time in the NBA by 1 year. Rookie-scale contracts are imposed for 4 years! The best young players are often (more often?) contributing at a super-star level in their rookie year! Older super-stars are subject to maximum contracts, which older MLB superstars are not, etc...

So I'm just saying there are arguments to be had on both sides and that the MLB does not stand alone in it's tyranny/rules/business model. Right now the losers in the deal are not young players or old players or middling vets. It's only the young superstars. Increasingly, teams and young superstars are mutually massaging the system for their mutual benefit bye tearing up some the arb-years and agreeing to long-term big money deals. This seems like an available option that does not force young superstars into years of indentured servitude. If the Jays DON"T do this accommodation, they will LOSE big time with Vlad and Bo!!!! So, the pressure is already intrinsically there to pay these superstars early. Alternatively, waiting for free agency will produce even bigger AAV's. If you're good in this game, you will inevitably get paid one way or the other.

[Schad]

The problem is that, in MLB, "young players" aren't that young. It's very common for someone to be in their seventh year as a professional baseball player and making the league minimum (after having gotten paid less in the minors than they'd make working at a car dealership). The guys making peanuts in the NBA are 20, 21; the guys making peanuts in the majors are often 25-27, in a league where a player's prime is generally in the 24-31 range. Sometimes older...after next season, Santi Espinal will get a raise (up to maybe $1.2-$1.5m) at age 28, assuming that he accrues enough service time to be Super 2.

[SharoneWright]

Sure. And I think reducing the number of arb years is probably fair.

As for a guy like Santi,,,1. He's not driving gate or TV revenue (not a superstar) so the Pareto thing covers that. He's not THAT hard to replace (sorry Espi),,, and 2. Patience. He'll get his if he just keeps grinding away at his current pace and providing value. Non-superstars like Grichuk, Yimi Garcia, Kevin Pillar etc., end up doing very well if they hang in there and contribute. Even a guy like John MacDonald made 14+MILLION in his career by hanging in there with league replacement skills. Personally, I don't think the market owed a guy like Johnny Mac more than that for his career....

[SharoneWright]

Edit:

With so many young stars agreeing to early extensions, all you are doing is taking away a small bargaining chip the owner has (1 extra year of team-control?). So, those deals will still get done, and a little sooner, and the numbers will tilt slightly more toward the young star player. Term probably goes down slightly on average though if there are less years available to buy out. So problem(?) solved I guess...
The regular young guys would also hit free agency a little sooner I suppose... but does that automatically translate into big increases if they all hit a little earlier together? I'm guessing not really. Could be wrong.

[Schad]

The Pareto distribution doesn't really apply here, because in the context of baseball economics, players are goods to be bought and sold, not individuals to accumulate wealth. And what we have here is a market which has been skewed such that the price of the most valuable goods are artificially deflated, while the price of less-valuable goods has increased simply because teams have a bunch of money that they can't use to pay market price for the most-valuable goods.

[SharoneWright]

Pareto works for goods or products as well. 90% of the classical music you hear on your local classical channel is composed by the top (most famous?) 10% of composers. Same for Top 40 stations. Same for the volume of cheddar and mozzarella that flies off the shelves relative to Limburger and all the rest...
Anyway, that's interesting. Are you saying rank and file players are already getting inflated contracts relative to their value because of an abundance of revenue coupled with a shortage of premium players to spend the money on? That actually does explain the respectable median salary data. Or at least the slightly flattened distribution.