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Craig Edwards FanGraphs Chat – 4/2/2020

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Dodgers Finally Get DirecTV Deal in Los Angeles

In 2014, the Dodgers and Time Warner launched Sportsnet LA. Unfortunately, the channel hasn’t been available for a lot of Dodgers fans for the last seven seasons, as the network was never able to strike a deal with DirecTV. Despite often leading the sport in attendance and enjoying incredible popularity in a massive media market, the Dodgers had television ratings among the bottom half of teams, averaging around 100,000 fans per telecast, roughly the same number of fans watching locally in Cleveland.

But if baseball is played this season, nearly all Dodgers fans in Los Angeles will have access to the games for the first time since 2013, when a 25-year-old Clayton Kershaw won his second Cy Young award. Ramona Shelburne was the first to break the news that DirecTV will now include Sportsnet LA in their channel lineup; the network confirmed it a short time later with the following statement:

Spectrum Networks announced a carriage agreement to launch the Los Angeles Dodgers award-winning regional sports network, Spectrum Sportsnet LA, to AT&T Video subscribers beginning today. With the agreement, AT&T DirecTV, UVerse, AT&T TV and AT&T TV Now customers in Southern California, Las Vegas and Hawaii will have access to Sportsnet LA’s live game coverage when the season is cleared to begin.

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COVID-19 Roundup: Stubhub Stops Issuing Refunds

This is the latest installment of a daily series in which the FanGraphs staff rounds up the latest developments regarding the COVID-19 virus’ effect on baseball.

Just a reminder that today is April Fools Day. While any attempt to prank you with false news seems especially cruel in light of the pandemic, be aware. There are tricksters out there. And don’t a doofus. Folks are on edge as it is. The past 24 hours haven’t seen any major news drop, so we’ll keep this list to a bunch of quick hits today.

MLB Aid for Minor Leaguers

Yesterday, Tony Wolfe covered the announcement that minor leaguers would receive $400 per week through the end of May along with medical benefits, with the former commitment amounting to around $400,000 per team. There are some reports that the announcement has come on the heels of many teams releasing minor leaguers. While MLB currently has a freeze on movement, the minors are not covered by the same rules. Read the rest of this entry »

What the 2020 Season Will Look Like Crowdsource Results

Last week, I asked our readers to answer a few questions about what they think this season of baseball might look like. While none of us actually know when or even if the season will be played, your answers provide a window into your expectations and also show how optimistic (or pessimistic) you are about there being more live baseball in 2020 as COVID-19 continues to affect all of our lives.

We received more than 1,000 responses for every question with the first one being the most basic:

A pretty clear majority believes there will be some from of major league baseball this season, though more than a quarter of readers thought the season would simply be wiped out.

Next, I asked how many regular season games would be played this year:

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MLB Isn’t Losing TV Revenues Yet

Underpinning the agreement between the players and owners about how to approach this season is an acknowledgement that revenues are going to be down in 2020, no matter when this season starts. To start, the season itself is in jeopardy as the country and world deals with the COVID-19 pandemic. And even if games are played, there are likely to be fewer than the typical 162; some of those games might not have any fans in physical attendance at all. Baseball teams are bound to take a huge loss at the gate compared to previous years. Whether MLB and its individual teams will take similar losses with their television partners isn’t as clear.

Before getting to the television money, though, let’s do a quick hypothetical on ticket sales. Forbes estimated thatin 2018, MLB teams took in around $2.8 billion at the gate. If teams play a half slate of games this year, and get half as much money at the gate in those games, we end up with $700 million in gate receipts and roughly $2 billion in revenue losses over a typical season. Now, if players receive only half their salaries, those losses basically even out. That isn’t to say that there aren’t a large number of associated revenue losses that will keep MLB teams from turning a profit, but even a massive loss at the gate wouldn’t create huge losses for MLB teams by itself. It’s losing television money that would create those losses.

MLB has three relevant national television contracts that amount to around $1.7 billion in yearly revenues, which are split among the 30 teams. There is roughly another $1 billion that comes from the central offices that is split among teams, per Forbes, but that revenue comes from MLB-owned properties like MLB Network, MLB.TV and The television deals are with FOX, TBS, and ESPN. While FOX and TBS air regular season games, most of the value in those contracts for the networks comes in the postseason, as well as the All-Star Game. FOX puts many games on FS1, but those games are on FS1 to gain the network subscribers rather than for advertising; the network suffers very little in terms of actual losses. In addition, FOX’s contract with MLB has already been extended through 2028, providing both groups incentive to work well together. TBS also airs some regular season games, but the bulk of the contract comes from air playoff games, which have yet to be impacted. Read the rest of this entry »

Craig Edwards FanGraphs Chat – 3/26/2020

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Will MLB Turn to Expansion After Losing Revenues to COVID-19?

Over the last several decades, revenues for Major League Baseball have soared, nearing $11 billion last season. The league’s unprecedented prosperity has turned MLB franchises into cash cows in ways not seen in prior generations. It will likely take some time to gauge the extent of the revenue teams will lose due to COVID-19-related delays, but given that some or perhaps all of the 2020 season will be lost, baseball isn’t likely to be a great moneymaker for owners this year. And while league expansion has been talked about for quite some time, it’s possible the losses suffered this season due might actually be the precipitating factor in MLB moving beyond 30 teams.

For the last few decades, owners haven’t felt compelled to expand because they were making plenty of money without the need for a cash grab. The dirty truth about expansion is that it isn’t about growing the sport. It’s about injecting cash into ownership pockets now, with those same owners willing to share a slice of their pie with a couple more teams in the future. If the owners don’t feel the need for that expansion money, they aren’t going to welcome more teams to take a share of overall MLB revenues. In addition, the threat of relocation from teams looking for new stadium deals serves to slow expansion; MLB likes to have potential expansion cities available to threaten municipalities into providing new ballparks.

Modern expansion isn’t about the talent levels available or growing to meet the needs of an increasing population. If it were, we would have seen expansion at some point in the last decade. The talent pool has gotten incredibly good, with fastball velocities and strikeout levels rising to the point that diluting the talent pool could have a positive impact on the game, resulting in more action and balls in play. And in terms of population, the number of people per team is approaching levels last seen in 1960 when baseball had just 16 teams. The graph below shows the U.S. population and the number of major league teams in five-year intervals, to show how the number of people per team in the U.S. has changed since 1960:

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How Optimistic Are You That the 2020 Season Will Be Played?

The exact date of this season’s Opening Day is still unknown, and what with the negotiations between the players and the owners over what to do should there be no baseball played at all this year, it wouldn’t be a surprise if 2020 proved to be a lost season entirely. Given that uncertainty, having our readers guess when the season will begin might be of little utility. And of course, the subtext of guessing when the season will start involves taking a guess at when the COVID-19 pandemic will end, or at least subside sufficiently for us to attempt a return to something resembling normalcy; that’s a tricky, and potentially insensitive, question to contemplate, particularly in service of something as relatively trivial as baseball.

However, it does seem to be of some utility to determine how you, our readers and fellow baseball fans, are feeling about this baseball season. Normally, this time of year is marked by us coming together to share our hopes for individual players and teams. Optimism abounds. But players and teams are at home. So instead, we can share our hope for baseball being played at all. To that end, here is a series of questions meant to gauge your thinking on what this year will look like — or not look like — for baseball. Read the rest of this entry »

MLB’s Sticky Service Time Situation

While the long-term financial implications of a pandemic for baseball players and owners might not be top of mind for many of us right now, discussions between players and owners on the myriad issues resulting from the season’s delay are taking place right now, and those discussions will have considerable effects on the sport’s future. Last week, among reports of the league potentially skipping June’s amateur draft, service time emerged as the most significant potential baseball issue resulting from COVID-19, particularly if the 2020 season is lost.

The problem is not a simple one, as players generally receive service time for being on a major league roster, with the resulting time accrued inching players closer to larger salaries in the form of arbitration and, eventually, free agency. If a partial season is played, some sort of service time pro-ration based on the actual number of days in a season seems likely. If the season goes 100 days instead of 186, starting every player who sees major league time with 86 days is another potential compromise. Likewise, salaries don’t seem to be a big issue, per Jon Heyman, with pro-ration also likely in that case. But what might happen should no season take place is more difficult to say.

Joel Sherman reported the MLBPA has proposed a full year of service time if players had a certain amount of service time accrued in 2019, with Ken Rosenthal reporting the time period was 60 days, essentially pushing forward service time for players who were on rosters for a significant portion of last season. MLB, for obvious reasons, does not want to provide such credit. Unfortunately, the framing of this issue has been somewhat problematic. In his tweets, Sherman said the following:

Pretty much certain MLB would not give full service without games played/revenue taken in. Remember service time is an MLB lifeblood impacting arbitration, free agency, pension.

While Rosenthal framed the issue in this manner:

The owners, after losing an entire year of revenue, would want relief in a variety of areas, including service time. They would not simply grant a year of service to every player who appeared in a single major-league game in 2019. The union, likewise, knows a certain threshold of service in ’19 would be required, and its proposals reflect that understanding.

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Craig Edwards FanGraphs Chat – 3/19/2020

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