Labor Discussion - Salary Cap, Local TV Sharing

[Austin Tatious]

Interesting interview from Foul Territory on an Athletic piece by Evan Drellich. 

Manfred apparently wants to push for revenue sharing on local TV rights with a salary cap.  Union will fight to the death on it.  

The question is convincing the players it’s a win for them too.  For example, could someone like Bregman make more if more teams get in there.  
 

 

[wiguy94]

If the owners really truly wanted a salary cap league, I think they could get it done. Moving to an NHL style cap league getting rid of arbitration and replacing it with restricted free agency would honestly help the middle and lower class of MLB players. The current league format really only benefits the great players of the league. Solid 2 WAR player hitting FA at 30 years old isn't getting the security that the 4 WAR player hitting FA at 30 years old is getting. So many players have a good 3-4 years in the league but then fall off before they hit FA. A cap system that gets them to FA even if it is restricted FA would likely benefit them. Basically the only way I see the MLB moving to a salary cap would be if the union had a fracture between the stars and the regular joes which I could eventually see happening. Maybe not yet but eventually I think players will get fed up about not reaching FA and getting a chance for that payday while the stars of the league are making the vast majority of the league's salary.

[Samurai Bucky]

You know, this is something I simply can't relate to.  Todd Frazier made the statement that he knows the owners have the money -- they just refuse to spend it.  This is because he played in Pittsburgh and has experience not getting paid.  What was one of the funny comments made after Soto was signed?  He is worth more than the primary owner of the Brewers.

The fact that there isn't a salary cap (hard, soft, or otherwise), doesn't mean that there isn't disparity.  From a economics standpoint, I don't see how it is possible for Milwaukee to have a 300M or 400M combined salary among the MLB players.  They will be in the red every year.  My understanding is the players are saying, "Too bad!  You can pay, so pay up!"  Would Milwaukee be able to survive on a 150M floor?  I think it would be tough.

I also thought it was interesting that, according to Evan Drellich, the players union already has a lot of transparency with the Owners' books.  As an owner, would I want my labor force to see every bit of information about my company?  Of course not.  Also, what difference does it make if I build some hotels next to the stadium (which was probably paid for by the local taxpayers)?  The players simply want a bigger part of the pot... > 50%.

Oh, and how about profit sharing for the taxpayers.  Hey Todd and Erik Kratz -- wouldn't it be cool if the tax payers, who paid for the facilities where you could work and make millions of dollars, would get some kickback?  That won't happen because it will take a portion out of their pie.

Sorry for the rant.  If a player wants to get paid more, then be better.  Get yourself to the point where a bigger market team will pay 760M for you instead of complaining about making "only $750,000" a year (Source).

[Thurston Fluff]

I'm all for revenue sharing but the devil is in the details. 20 years ago it would have been much more straight forward. Everyone either had a local station or cable contracts. With cable dying out and live streaming still developing as a sports market it's hard to predict what the future of local revenue is going to look like in five or ten years. For example, streaming makes it possible for teams to develop their own service and sell directly to the customer. If a team starts it's own service and has two years in the red but starts making a profit in year three when should they be expected to kick in? Seems unfair to make them take all the risk then have to share the profits before being compensated for the previous losses. If they never turn a profit because they tried something innovative how long should the rest of the league share their profits? We're at a point where innovative thinking can make the sport as a whole pore profitable. Would sharing revenue help or harm innovation?

Maybe it's time baseball did all games in house and do away with local contracts altogether.

[BrewerFan]

2 hours ago, Samurai Bucky said:

The fact that there isn't a salary cap (hard, soft, or otherwise), doesn't mean that there isn't disparity.  From a economics standpoint, I don't see how it is possible for Milwaukee to have a 300M or 400M combined salary among the MLB players.  They will be in the red every year.  My understanding is the players are saying, "Too bad!  You can pay, so pay up!"  Would Milwaukee be able to survive on a 150M floor?  I think it would be tough.

Right...of course there are economic disparities. That's why they're talking about it.

The solution is sharing the media rights. That's where much of the disparity comes from. What they're explaining is basically the NFL(though even ticket sales are in revenue sharing).

In that scenario, of course Milwaukee would be able to survive on a 150M floor. I don't think they'd be setting the cap at 400M a year or even 300. Where the luxury tax is seems like a more reasonable starting point.

My guess is that's what they're trying to work towards and Bally and that whole situation may have helped expedite that.

[Jopal78]

If I recall the strike in 1994 was over a salary cap. At that time the players would have agreed to a cap as long as the owners also agreed to a floor. 
Now, I don’t think the players will agree to a cap of any sort.
 

Plus, there’s no reason for the Yankees, Dodgers, Mets etc. to share their local revenue. It’s their competitive advantage. Heck, the Dodgers probably cannot share their local revenue because of all the deferred money they’ve agreed to pay to Ohtani and others.
 

If the Big Market Teams’ goal is to win a championship, sharing local revenue only makes that goal more difficult to attain, so it won’t ever happen. 

[Soupy]

But what if the 20 smallest market teams vote to do it. Is their vote less than the big market teams?

[nate82]

I think the only way there will be a salary cap is if the local TV revenue dries up.  Which is possible and I think the only team that is not impacted by this would be the Yankees as they own their TV broadcasting and channel. 

If for example the Dodgers next TV deal is less than what they are getting now then I could see a salary cap happening.  You would have one of the biggest TV markets losing revenue it would basically force the large market teams to put in a salary cap. 

This isn't even the biggest hurdle for MLB to get over.  The revenue sharing that the MLBPA will want in exchange for a salary cap is what will kill the salary cap talks again.  The MLBPA wanted revenue sharing last time the salary cap was brought up in 1994.  The owners didn't want to share any of the revenue with the players and the talks basically died. 

A salary floor has been brought up by the owners in the previous CBA but the owners never defined what the floor would be or if there would be any consequences for a team being below the floor.  Will MLB come up with an actual defined floor for the next CBA?  I don't believe they will. 

[jay87shot]

LBetter revenue sharing would be huge. Maybe instead of just fully equal sharing you say like 50% any money over $45 million from a local deal gets split to the lower markets (or what ever amount makes most sense.. If you went full equal sharing I think what they could do is almost swap the competitive balance rules and the bigger teams get an extra pick for giving up money. I like the idea of putting in a salary floor in, I can't imagine how frustrating it is to be a Pirates, A's, or Ray's fan (among others) who refuse to spend money even when it would seem like they could spend more.

I don't care as much about a salary cap if the smaller markets can spend a bit more. If Cohen or the Dodgers want to spend $400 million a year that is fine as long as teams like us can afford to keep more than 1 superstar at a time. Just keep in the extra taxs for going over a soft cap and distribute it out. 

Change the path to free agency is a good idea. I like 2 years pre-arby (expand perfermance awards), 2 years arby, then a restricted FA with like a 3 year max and nba style max salary (say like 30 million) and then unrestricted free agency, length and money after that. It gets good players more monet quickly but always the smaller teams ways to keep stars

[Jopal78]

16 hours ago, nate82 said:

I think the only way there will be a salary cap is if the local TV revenue dries up.  Which is possible and I think the only team that is not impacted by this would be the Yankees as they own their TV broadcasting and channel. 

If for example the Dodgers next TV deal is less than what they are getting now then I could see a salary cap happening.  You would have one of the biggest TV markets losing revenue it would basically force the large market teams to put in a salary cap. 

This isn't even the biggest hurdle for MLB to get over.  The revenue sharing that the MLBPA will want in exchange for a salary cap is what will kill the salary cap talks again.  The MLBPA wanted revenue sharing last time the salary cap was brought up in 1994.  The owners didn't want to share any of the revenue with the players and the talks basically died. 

A salary floor has been brought up by the owners in the previous CBA but the owners never defined what the floor would be or if there would be any consequences for a team being below the floor.  Will MLB come up with an actual defined floor for the next CBA?  I don't believe they will. 

There are way more rams than the Yankees who own their own TV Network which broadcasts their games: Astros, Blue Jays, Cubs, Dodgers, Mariners, Mets and Red Sox. Some others teams have partial ownership interest in the network that carries their games. 
 

The Brewers are in the worst media market, hemmed in to the northwest by the Twins, the South west by the Cardinals, the East by the Tigers and the South by the Cubs and Sox. When video broadcast revenue is king, they have nowhere to really expand their local audience and can only try to turn out more viewers in a tiny geographic area 

[JosephC]

Following the Teoscar Hernandez signing, Cot's has the Dodger's 2025 luxury tax payment at $105,242,098.  They current project the Brewer's opening day payroll to be $101,250,727, and currently there are 8 other teams that have an opening day payroll projection lower than the Brewers.

MLB completely broken at this point.

[SF70]

The Dodgers franchise value rose by over a billion dollars from ‘23 to ‘24 and now with their WS victory it’s anybody’s guess how much it will rise again.

The team’s revenues are likely to skyrocket after the title and full year of Ohtani, so the $100M+ tax penalty will easily be absorbed with another revenue boost in addition to their franchise value increase.

It wouldn’t surprise me if the Dodgers overtake the NYY in both yearly revenue and franchise value fairly soon.

[LouisEly]

Let's keep the general salary cap discussion to this thread.

Was just spitballing a few things.  What if... the winner of the World Series had a hard salary cap for the next three years.  Only the winner.  Go over the hard cap and you lose your entire draft bonus pool and all picks in the first 10 rounds.

In theory, only at most three teams would have a hard salary cap.  They don't have to get rid of players if they don't want to, they could just forfeit the draft picks.  Salaries are guaranteed, so the players won't take a pay cut even if they get traded to another team. 

Kind of like the opposite of the draft lottery and how teams that receive revenue-sharing payouts can't receive a lottery pick for more than two years in a row and those that don't can't get a top-six choice in consecutive drafts.

[Playing Catch]

11 hours ago, LouisEly said:

Let's keep the general salary cap discussion to this thread.

Was just spitballing a few things.  What if... the winner of the World Series had a hard salary cap for the next three years.  Only the winner.  Go over the hard cap and you lose your entire draft bonus pool and all picks in the first 10 rounds.

In theory, only at most three teams would have a hard salary cap.  They don't have to get rid of players if they don't want to, they could just forfeit the draft picks.  Salaries are guaranteed, so the players won't take a pay cut even if they get traded to another team. 

Kind of like the opposite of the draft lottery and how teams that receive revenue-sharing payouts can't receive a lottery pick for more than two years in a row and those that don't can't get a top-six choice in consecutive drafts.

Firstly, thank you for using a thread dedicated to this type of discussion rather than the Miscellaneous thread, or something.

Secondly, I like the concept. I think something like this would make fans feel a little better about the current situation. I think there would be a lot of ways the league could go about this, too, beyond your clear-headed, feasible idea.

If the league really wanted to get wild, how about some kind of expansion-draft style for the non-playoff participants. The ten worst teams could have a draft of prospects from the playoff teams' farm systems (some prospects would be protected, of course).

[nate82]

I really don't want to see MLB become the NFL.  The parity in the NFL is just disgusting and makes it overly watered down.  I can't really tell you the difference between the middle teams in NFL and the best teams in the NFL.  To me it is just team A vs team B now.

 

[Frisbee Slider]

13 hours ago, nate82 said:

I can't really tell you the difference between the middle teams in NFL and the best teams in the NFL.

But don’t you think the Cleveland Browns or Jacksonville Jaguars deserve to regularly appear in the Super Bowl? 

[Samurai Bucky]

On 1/20/2025 at 4:27 PM, nate82 said:

I really don't want to see MLB become the NFL.  The parity in the NFL is just disgusting and makes it overly watered down.  I can't really tell you the difference between the middle teams in NFL and the best teams in the NFL.  To me it is just team A vs team B now.

 

MLB should implement a relegation system.  That would solve a lot of things.  I know it would be tough for teams to be relegated and lose out on money, but that would pretty much guarantee the teams that have the most money stay at the top.

[owbc]

On 12/23/2024 at 4:51 AM, Jopal78 said:

There are way more rams than the Yankees who own their own TV Network which broadcasts their games: Astros, Blue Jays, Cubs, Dodgers, Mariners, Mets and Red Sox. Some others teams have partial ownership interest in the network that carries their games. 
 

The Brewers are in the worst media market, hemmed in to the northwest by the Twins, the South west by the Cardinals, the East by the Tigers and the South by the Cubs and Sox. When video broadcast revenue is king, they have nowhere to really expand their local audience and can only try to turn out more viewers in a tiny geographic area 

The current situation is of great benefit to the Brewers. The mid-markets are feeling the declining TV revenue the worst, especially the ones that own or have majority stakes in their network — because they are directly losing revenue vs. being locked into a contract where a third party is losing money or going bankrupt. The Brewers have closed the payroll gap with many of those teams. 
 

Mid-market fans are fed up. They could play with the big boys during the luxury tax + RSN era and now those days are over and it’s back to a handful of teams that have a huge revenue advantage. 
 

I think the rule changes and expanded playoffs delayed things a bit but if revenue and salaries decline then there will be pressure from both sides for change at the next CBA. Keep an eye on attendance and TV ratings in markets like Minnesota, Seattle, St. Louis, and Baltimore. 
 

I think there will be appetite for change soon like there was when the Yankees dominated in the aughts, it’s just a matter of how far the pendulum swings before both sides have motivation to change the rules. 

[Brock Beauchamp]

I'm not really in favor of a hard cap. I think the sport would be better off with two things:

1. Increased revenue sharing. Like, A LOT more revenue sharing. The sport cannot have the Dodgers making $250m from TV alone while their biggest division rival makes about $20m.

2. A salary floor that's reasonably high, like $130m in today's dollars.

At that point if you want to tax the absolute **** out of higher-payroll teams, have at it. But I don't see the need for a hard cap at that point. If Steve Cohen wants to pay 150% tax on something, have at it bro.

[CheeseheadInQC]

40 minutes ago, Brock Beauchamp said:

I'm not really in favor of a hard cap. I think the sport would be better off with two things:

1. Increased revenue sharing. Like, A LOT more revenue sharing. The sport cannot have the Dodgers making $250m from TV alone while their biggest division rival makes about $20m.

2. A salary floor that's reasonably high, like $130m in today's dollars.

At that point if you want to tax the absolute **** out of higher-payroll teams, have at it. But I don't see the need for a hard cap at that point. If Steve Cohen wants to pay 150% tax on something, have at it bro.

This is where I am at, too. A cap wouldn’t be accepted by the players, especially if it doesn’t come with a ton more revenue sharing, because otherwise all it will mean is the players earn less and the large market owners earn more. Share all non-stadium generated revenue. This incentivizes teams to have a good fan experience because that is the money they get to keep. I would also add an extra year of arbitration at the front end so the younger players start earning more faster.

[Brock Beauchamp]

3 hours ago, CheeseheadInQC said:

This is where I am at, too. A cap wouldn’t be accepted by the players, especially if it doesn’t come with a ton more revenue sharing, because otherwise all it will mean is the players earn less and the large market owners earn more. Share all non-stadium generated revenue. This incentivizes teams to have a good fan experience because that is the money they get to keep. I would also add an extra year of arbitration at the front end so the younger players start earning more faster.

This is basically exactly how I feel. Teams get to keep more gate revenue, say 75% home team, 25% road team.

But stuff like television revenue is split 50/50. That promotes owners building a product fans want to watch while also closing the gap between teams like the Dodgers and Brewers while not making it NFL-style equitable.

[brewmann04]

You need to have a high or low cap 

[Playing Catch]

Maybe take taxed revenue dollars and use them to fund automatic $5M signing bonuses for all free agents? I'm making up the five million arbitrarily, but it would be an easy way to redistribute the wealth to the middle, and lower-income free agents.

Although, I suppose, in theory, that is what is already happening when the Brewers sign Hoskins, is that a lot of those dollars come directly from revenue sharing.

[Jopal78]

On 1/25/2025 at 10:05 AM, Brock Beauchamp said:

I'm not really in favor of a hard cap. I think the sport would be better off with two things:

1. Increased revenue sharing. Like, A LOT more revenue sharing. The sport cannot have the Dodgers making $250m from TV alone while their biggest division rival makes about $20m.

2. A salary floor that's reasonably high, like $130m in today's dollars.

At that point if you want to tax the absolute **** out of higher-payroll teams, have at it. But I don't see the need for a hard cap at that point. If Steve Cohen wants to pay 150% tax on something, have at it bro.

The ship has sailed on increased revenue sharing. The big boys already have their own networks which they co-own with private equity firms and other investors.
 

Even if the vote to share all broadcast revenue was unanimous there would still be no practical way to unentangle the clubs from their business partners.

This disadvantage is why they’ve expanded the playoffs to 12 teams. Only 3-4 teams have a legit chance to win it all, but if teams play .500 ball for the first 100 games they have a shot at the playoffs and who knows they could always get lucky. 

[Brock Beauchamp]

2 minutes ago, Jopal78 said:

The ship has sailed on increased revenue sharing. The big boys already have their own networks which they co-own with private equity firms and other investors.

Even if the vote to share all broadcast revenue was unanimous there would still be no practical way to unentangle the clubs from their business partners.

This disadvantage is why they’ve expanded the playoffs to 12 teams. Only 3-4 teams have a legit chance to win it all, but if teams play .500 ball for the first 100 games they have a shot at the playoffs and who knows they could always get lucky. 

I agree that it's difficult to untangle but disagree that the ship has sailed. The more stratified the TV situation becomes, the more likely it becomes we will see increased revenue sharing.

If 24 owners agree on something, they can do damned near anything they want. And the smaller the high-TV-revenue pool becomes, the more likely it is 24 out of 30 will agree on change.