MLB revenue disparity and its impact on competition

[Jim French Stepstool]

My view of this, admittedly simplified, is that I believe in the current structure it's possible for a team like Milwaukee to reach, or even win, the WS in a given year. But with regards to drafting/development, trades, FA signings & all the other decisions regarding distribution of finances, they need to be damn close to mistake-free, while many other organizations can simply eat their mistakes.

[Oxy]

There are WAY too many differences between sports to compare each League's financial structure and revenue distribution system and credit those systems and structures for either the popularity or financial success of any of those Leagues. Comparing fruit baskets to vegetable gardens to grain markets is silly.

Baseball is doing incredibly well.  It doesn't get national ratings for it's Championships, but whatever.  Total revenue is high and keeps getting higher, even for small market teams.

[BrewerFan]

2 hours ago, Frisbee Slider said:

All sports franchises seem to be greatly appreciating in value. Baseball, even more than football.

To that end, I am skeptical anything will or should be done by owners to adjust ‘revenue disparity.’

No, not more than Football.

Again, all this is ignoring that MLB was king, they generated the most revenue. Then you had them collectively bargain their TV contracts. Now, every team has more than enough to cover the salary cap from one check on one day at the start of the league year before selling a ticket, a beer, a hot dog, anything else. 

https://www.forbes.com/sites/mikeozanian/2023/09/08/the-worlds-50-most-valuable-sports-teams-2023/?sh=1e034f9f2b44

https://www.wusa9.com/article/sports/washington-commanders-value-goes-up-in-2022-forbes-says/65-fc37925c-8014-4946-812b-c3ff590444f4#:~:text=The magazine just released its NFL team valuation,a 33% increase in value from last year.

 

3 hours ago, Frisbee Slider said:

I agree the NFL is more popular than MLB. Popular products are not necessarily excellent products, though.

If we're talking about generating revenue, popularity absolutely equates to the quality of the product.

And the NFL wasn't more popular than MLB. That's the point. It's become more popular.

3 hours ago, Frisbee Slider said:

Are there any great teams in the NFL in 2023? Would you rather own an investment that increased 7-fold (MLB) or 5-fold (NFL)?

I'd rather own a team that's guaranteed to make money, be competitive, and is worth ~3X more than NFL teams are as compared to MLB teams. The average NFL team is worth ~4.5B. As the article above shows, even aggressive evaluations are below market value. 

An 111 BILLION dollar TV deal...not including the other 2-3 billion they earn for the red zone package. Give me the team that gets that divided up. 

3 hours ago, Frisbee Slider said:

Football games on Sunday afternoons when many people are off work lend themselves better to live television than baseball games at lunch time on Wednesday.

Dude...MLB teams play on Saturday's, Sunday's, they play all the time when people are off work.

They play roughly 10X the games. 

3 hours ago, Frisbee Slider said:

My point was that MLB owners and probably players are plenty happy with their economic positions. There isn’t a lot of incentive for owners or players to make radical changes.

Ok...happy with their investment is vague. I thought this was about if it was 1-Good for the sport and 2-If MLB was maximizing it's revenue.

We see all the Bally Sports going bankrupt and many teams have no idea what they're going to do in the future. Contrast that with the NFL and the large market owners who sacrificed a little and ended up with a MUCH bigger product(again, blowing past MLB, the National Pastime as a result).

 

This is really simple. From which list would you rather own a team?

https://en.wikipedia.org/wiki/Forbes_list_of_the_most_valuable_NFL_teams

https://en.wikipedia.org/wiki/Forbes_list_of_the_most_valuable_MLB_clubs

[BrewerFan]

14 minutes ago, Oxy said:

There are WAY too many differences between sports to compare each League's financial structure and revenue distribution system and credit those systems and structures for either the popularity or financial success of any of those Leagues. Comparing fruit baskets to vegetable gardens to grain markets is silly.

Strongly disagree as the NFL's revenue sharing in the 1960's is one of the MAIN reasons cited for why the NFL become such a popular product. 

It's not comparing "fruit baskets to vegetable gardens," it's comparing two professional sports leagues that each have a monopoly. 

One went with revenue sharing and its popularity exploded. The other did not and its popularity has waned.

There are...dozens of articles that attribute MLB's revenue sharing directly to its popularity. 

https://www.espn.com/nfl/news/story?id=2781759

https://bleacherreport.com/articles/1574285-how-the-nfl-became-the-most-competitive-league-in-all-of-sports

 

It's not comparing two totally unique entities, it's as close to a 1 for 1 comparison as you can get. 

[jerichoholicninja]

Fantasy sports and gambling are the reason the NFL is king. Plus the stuff that happens on the field is entertaining - big hits, big plays, surprising upsets, etc. Sorry, but what happens on an MLB field is boring 90% of the time. There are dozens of "great" defensive plays every night so none of them seem special. Upsets are never surprising. The #1 team can have their ace on the mound and lose to the worst team who throws a garbage journeyman and no one will bat an eye.

There are over 2500 MLB games in a season compared to 285 in the NFL. Th vast majority of the MLB season is forgettable but because of how few games there are and that most of them are played on the same day of the week every week it's easy to make a big deal about them. And the reason for NFL parity is because there are only a few teams that have great QB's that practically guarantee a playoff berth and for the rest of the league, outside of the 2 or 3 worst teams, it comes down to which players and how many get hurt as to how their season will go.

Making changes so that Ohtani could sign with Milwaukee is going to do nothing to increase fan interest or bring in more revenue to MLB.

[jjgott]

On 1/3/2024 at 10:55 AM, Playing Catch said:

I think that if the situation isn't resolved in the next CBA, the Brewers, and other small-revenue teams that have had recent success, will begin to struggle to convince fans that they can compete for championships.

There are a number of factors that have allowed fans of small-revenue teams to feel hopeful each spring. But will that continue?

If the Brewers played in the same division as the Dodgers, Braves, or Mets, would we feel as optimistic about competing for a playoff birth?

 

People still go to Purdue football games even though there's a 0.0% chance they'll play in the CFP, let alone the Big 10 Championship.  Maybe owners should take a page from the minor leagues and make gameday an enjoyable experience for families so it doesn't matter if the team is in contention or not?

What any small market team needs is an owner who is aligned with the fans more than their own desire to get rich; who understands that owning a team is a public trust.  Obviously owners all want to make money, but ideally it shouldn't be their first priority.  Mark A. seemed to be that type of owner the first decade or so of ownership.  However his investments the last few years in soccer and soon the PGA Tour shows that he views the Brewers as merely one of his many sports investments as opposed to his #1 priority.  

As for baseball finances at large, I really don't have a problem with it because at the end of the day, the league revenue is going to one of two places, the owners or the players.  There's absolutely no evidence that instituting a salary cap will mean lower prices for fans.  Instead of demanding labor accept less money for the same amount of work, why not pressure Mark A. to spend more of his money to compensate his employees?

[BrewerFan]

2 hours ago, jerichoholicninja said:

Fantasy sports and gambling are the reason the NFL is king. Plus the stuff that happens on the field is entertaining - big hits, big plays, surprising upsets, etc. Sorry, but what happens on an MLB field is boring 90% of the time. There are dozens of "great" defensive plays every night so none of them seem special. Upsets are never surprising. The #1 team can have their ace on the mound and lose to the worst team who throws a garbage journeyman and no one will bat an eye.

There are over 2500 MLB games in a season compared to 285 in the NFL. Th vast majority of the MLB season is forgettable but because of how few games there are and that most of them are played on the same day of the week every week it's easy to make a big deal about them. 

There was Fantasy Baseball well before Fantasy Football, same with Gambling. 

The sports being "boring," is subjective. It WAS objectively the most popular sport. 

Soccer is "boring" by these standards. It's the most popular sport in the world.  I'm not sure why having your ace or the #1 seed losing(which happens in Football as well) would in any way be a knock against the sport, but ok.

2 hours ago, jerichoholicninja said:

And the reason for NFL parity is because there are only a few teams that have great QB's that practically guarantee a playoff berth and for the rest of the league, outside of the 2 or 3 worst teams, it comes down to which players and how many get hurt as to how their season will go.

Well, I don't think that's true at all, but tell me how "balanced," it'd be if Dallas, New York and the large markets didn't share revenue? They'd just wait 4 or 5 years JUST like MLB and Aaron Rodgers would end up in Dallas or New York(in their prime, not as a FA). Same with every other team.

The parity is a byproduct of revenue sharing, not who currently has a good QB. No revenue sharing, the QBs would all be in 4-5 markets. GB likely wouldn't have a team.

2 hours ago, jerichoholicninja said:

Making changes so that Ohtani could sign with Milwaukee is going to do nothing to increase fan interest or bring in more revenue to MLB.

That's a bizarre take. Like the issue of revenue sharing hadn't been broached until Ohtani signed? This is all about getting Ohtani to Milwaukee?

It was an enormous part of Bud Selig's tenure as Commish...though there was only so much he could do. 

[BrewerFan]

46 minutes ago, jjgott said:

People still go to Purdue football games even though there's a 0.0% chance they'll play in the CFP, let alone the Big 10 Championship.  Maybe owners should take a page from the minor leagues and make gameday an enjoyable experience for families so it doesn't matter if the team is in contention or not?

What any small market team needs is an owner who is aligned with the fans more than their own desire to get rich; who understands that owning a team is a public trust.  Obviously owners all want to make money, but ideally it shouldn't be their first priority.  Mark A. seemed to be that type of owner the first decade or so of ownership.  However his investments the last few years in soccer and soon the PGA Tour shows that he views the Brewers as merely one of his many sports investments as opposed to his #1 priority.  

As for baseball finances at large, I really don't have a problem with it because at the end of the day, the league revenue is going to one of two places, the owners or the players.  There's absolutely no evidence that instituting a salary cap will mean lower prices for fans.  Instead of demanding labor accept less money for the same amount of work, why not pressure Mark A. to spend more of his money to compensate his employees?

You're right, salary cap or not, they won't charge less for tickets. The issue is the Brewers do not and cannot generate NEARLY the same revenue as teams like the Yankees, Dodgers, Mets, etc...just as the Packers can't generate as much as the same markets in the NFL.

Nothing WILL change, but it's hard for me to understand the argument that revenue sharing hasn't helped the NFL when...we saw it implemented, Baseball was the most popular sport(by a large margin) and the NFL has caught and then surged well past Baseball. And it's allowed the small market teams to be competitive and prohibited the large market teams from just buying the best players.

[MVP2110]

17 hours ago, Frisbee Slider said:

Are there great teams in the NFL in 2023? 
 

Yes there are. The Ravens & 49ers this year are both historically great per most advanced metrics. There are absolutely great teams in the NFL

[Jim French Stepstool]

8 hours ago, Frisbee Slider said:

All sports franchises seem to be greatly appreciating in value. Baseball, even more than football.

To that end, I am skeptical anything will or should be done by owners to adjust ‘revenue disparity.’

Millions of Ohtani fans do not care about luxury tax thresholds.

Sentences #1 & 3, yeah.

But the thread is about disparity & its' effects on being competitive. The Brewers appreciating in value while everyone else does too does nothing to address that disparity, if one believes something should be done.

[Jim French Stepstool]

On 1/3/2024 at 2:18 PM, yourout said:

I would like to see some form of increased draft compensation for teams that cant compete revenue wise.

Maybe more picks or higher picks depending on the FA losses.

As Sveum said, they DO already have this. But as I touched on in a different thread, I'd love to see a penalty for the team signing a FA or three if spending above a certain amount, such as losing pick(s). That's even more appealing to me than the team losing the FA receiving the comp picks. 

And no, that'll never happen.

[Oxy]

Football is a television friendly, high adrenaline sport.  Baseball is a summer-time-be-gone relaxing game of skill. Baseball is high volume and low consequence.  Football is low volume and high consequence.  George Carlin does this better than I do (and this SEEMS to disparage baseball...but not really)

 

[Frisbee Slider]

1 hour ago, Jim French Stepstool said:

The Brewers appreciating in value while everyone else does too does nothing to address that disparity, if one believes something should be done.

The point is, if baseball owners are doing well, there is minimal incentive to make radical changes.

[DHonks]

The Brewers are victims of limitations on market size and local media rights.  MLB needs to find a better way of sharing media revenues.  Big market teams will always get ahead in other areas (can charge more for tickets, sell more apparel, etc), but the media rights crush us and the Rays, despite good ratings

[Frisbee Slider]

2 hours ago, MVP2110 said:

Yes there are. The Ravens & 49ers this year are both historically great per most advanced metrics. There are absolutely great teams in the NFL

I am ignorant of advanced football metrics. Could these 49er/Ravens metrics be inflated if the rest of the league is historically mediocre?

I struggle to associate the Brock Purdy-led Niners with historically great teams, even compared with previous Niner teams.

[Playing Catch]

I think the competitive balance in baseball has been pretty good in my lifetime. I happen to believe it is better for the sport if the Yankees and the Dodgers are perennially contenders. But I'm also of the opinion that this level of competitive balance is not assured to continue. As Oxy mentioned, comparing two sports can lead to false equivalencies, but ONE of the reasons the NASL failed was due to the little teams going bankrupt trying to keep up with the New York Cosmos. One could say that was simply bad management, but if you aren't competitive, it is far more difficult to sell tickets. And in baseball, the turnstiles drive revenue more than TV contracts, at least in smaller markets.

There's lots of good articles about the demise of the NASL, if you are interested, just Google them.

[Playing Catch]

If MLB can't sell hope to fans, the small-revenue teams have to move to a larger revenue-generating situation. It behooves Brewer fans to be concerned about competitive balance, because without it, they would ultimately leave because the Brewers wouldn't sell enough tickets.

[MVP2110]

6 hours ago, Frisbee Slider said:

I am ignorant of advanced football metrics. Could these 49er/Ravens metrics be inflated if the rest of the league is historically mediocre?

I struggle to associate the Brock Purdy-led Niners with historically great teams, even compared with previous Niner teams.

Sure in theory that could be the case but I'm not aware of any evidence that would say NFL teams are worse this year than in years past

[Underachiever]

12 hours ago, jjgott said:

What any small market team needs is an owner who is aligned with the fans more than their own desire to get rich; who understands that owning a team is a public trust.  Obviously owners all want to make money, but ideally it shouldn't be their first priority.  Mark A. seemed to be that type of owner the first decade or so of ownership.  However his investments the last few years in soccer and soon the PGA Tour shows that he views the Brewers as merely one of his many sports investments as opposed to his #1 priority.  

I think you fell victim to the same line of thinking that people had about Counsell. He's "our guy", he's different, a family guy, he loves Milwaukee, he has probably invested well and doesn't need the money. People used that thinking to imagine Greinke would take a hometown discount because he loved Milwaukee. Nope. The main reason that Attanasio bought into the Brewers is because it was one of the franchises that he could afford. I imagine he would have rather bought the Dodgers. He did it to help grow his net worth so he could do more things, such as invest in soccer and the PGA tour. 

The point is, none of them are really different. Selig's investment of $10 million was rewarded handsomely with a $223 million sale. Don't underestimate the primary desire of rich people to get richer. 

[jjgott]

2 hours ago, Underachiever said:

I think you fell victim to the same line of thinking that people had about Counsell....Don't underestimate the primary desire of rich people to get richer. 

Yes and no.  I was describing what I thought the attributes a competitive small market owner needed to possess.  I wasn't necessarily thinking that Mark A. owed us in any way to act like that.  But his statements and actions the first few years, specifically the investments he made in player salaries (basically doubling payroll in two years), seemed to indicate he was willing to sacrifice short-term profits for long-term on field success. 

Primarily because the cost of acquiring teams was so cheap, there actually were quite a few local owners in the 60s-80s like the type I described.  Guys like Selig, Kohl, etc. owned teams not principally for the annual returns, but in order to provide their local community with major league level sports teams.  As you say, really rich guys now just buy whatever team they can afford, without regard for how the team fits into the fabric of the community.  I think that certainly has contributed to the disparity as the pursuit of off-field revenue has dwarfed the commitment to the on-field product.

Alternatively, maybe Mark A. can talk to his fellow soccer team and golf league-owner Yasir Al-Rumayyan and sell the Brewers to the Saudis?

 

[sveumrules]

1 hour ago, jjgott said:

as the pursuit of off-field revenue has dwarfed the commitment to the on-field product.

Has it though?

In each of the last two seasons and three of the last four full seasons the Brewers have set new payroll records.

Despite ranking 30th in market size, their spending is typically around ten spots higher with OD payroll ranks of 17th, 19th, 19th and 20th the last four full seasons.

The last seven years (2017-23) they have a .555 W% compared to a .469 W% from 2012-16 and a .526 W% during the Braun/Fielder years from 2007-11.

Mark A's Brewers peaked in OD payroll rank at 13th in 2012 at $89M, a season they finished 83-79.

If the Brewers wanted to open 2023 at 13th in payroll they would have had needed to spend $182M, or about $63M than they did.

[stalton]

The question asked was if .super teams, like the Dodgers, were good for the sport.

I'm sure tons of revenue will come in, even to cities like Milwaukee when the Dodgers come into town because of Matsumoto and Ohtani. From a financial perspective, that is.

My concern is if the league is fair. I'm curious if anyone thinks that a team like the Guardians or the Twins have just as likely opportunity as a team like the Mets or Dodgers, given the current revenue sharing and luxury tax situation.

 

[Jopal78]

9 hours ago, stalton said:

The question asked was if .super teams, like the Dodgers, were good for the sport.

I'm sure tons of revenue will come in, even to cities like Milwaukee when the Dodgers come into town because of Matsumoto and Ohtani. From a financial perspective, that is.

My concern is if the league is fair. I'm curious if anyone thinks that a team like the Guardians or the Twins have just as likely opportunity as a team like the Mets or Dodgers, given the current revenue sharing and luxury tax situation.

 

Of course it’s not fair; the owners of the large market clubs could always offer to split their local broadcast revenue, but if you’re the Chairman of the Board of the New York Yankees it is probably viewed as a good thing that a third of the teams you’re competing against for the pennant do not have a realistic shot at winning it because you keep all that broadcast revenue for yourself. 

Then again that’s also one of the beautiful things about  baseball, the teams with a roster of players collectively being paid 275 million dollars or more do not always finish ahead of the team with the 100 million dollar payroll which in turn makes those clubs (outside of NYY and LAD) volatile and constantly hitting the reset button. 

[stalton]

5 hours ago, Jopal78 said:

Of course it’s not fair; the owners of the large market clubs could always offer to split their local broadcast revenue, but if you’re the Chairman of the Board of the New York Yankees it is probably viewed as a good thing that a third of the teams you’re competing against for the pennant do not have a realistic shot at winning it because you keep all that broadcast revenue for yourself. 

Then again that’s also one of the beautiful things about  baseball, the teams with a roster of players collectively being paid 275 million dollars or more do not always finish ahead of the team with the 100 million dollar payroll which in turn makes those clubs (outside of NYY and LAD) volatile and constantly hitting the reset button. 

I'm pulling numbers out of thin air here, but you'd rather have a 1 in 100 chance of winning the WS in an unfair system rather than the straight 1 in 32 if it were even odds just because the win would be sweeter?

[Playing Catch]

1 hour ago, stalton said:

I'm pulling numbers out of thin air here, but you'd rather have a 1 in 100 chance of winning the WS in an unfair system rather than the straight 1 in 32 if it were even odds just because the win would be sweeter?

This might be the key question in this thread.

I might say... "yes?"

(Of course, 1/100 is probably a 'no,' but maybe 1/50? 1/75?).

Miracles are fun. Miracles are forever. The game is about glory.