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MLBAM and the Future of MLB’s Revenues

With the announcement of its partnership with the National Hockey League, and rumors that a potential spinoff of it’s streaming technology arm might be worth $5 billion, Major League Baseball Advanced Media (MLBAM) has moved past being the The Biggest Media Company You’ve Never Heard Of. The base of the deal with the NHL, though relatively small compared to many television rights deals at $100 million per year for six years for control of the NHL’s digital media rights, comes after a whirlwind of activity as well as speculation about MLBAM’s present and its future. MLBAM’s increasing diverse clientele and the partnership with NHL signifies MLB’s digital media arm is prepared to be a player outside of baseball. The move represents part of the slowly changing landscape of consumer consumption, although the potential spin-off could have ramifications the new companies devotion to MLB as well on the next collective bargaining agreement as owners attempt to separate baseball revenue from potentially significant non-baseball revenue.

Close to 15 years ago, MLB owners agreed to invest $1 million each per year for four years to create a digital arm to stay on top of technological advances as the internet. In the years since, the business has created incredible growth for MLB. From mlb.com, online ticketing, MLB AtBat mobile app, and mlb.tv to Pitch f/x and the recent unveiling of Statcast, MLBAM has changed the way fans watch, interact, and appreciate the game. Read the rest of this entry »


NL Rookie of the Year No Longer a Two-Horse Race

Heading into the season, Kris Bryant enjoyed favored status when it came to predicting a National League Rookie of the Year. When FanGraphs writers were polled before the season, 20 of 36 votes went to the Chicago Cubs’ third baseman; seven went Joc Pederson; six were cast for Jorge SolerNoah Syndergaard, Jung Ho Kang and Raisel Iglesias each got one. A couple months into the season, Pederson inserted himself into the race with 13 home runs by the end of May. As the year has moved on, Bryant and Pederson have come back to the pack a bit while Matt Duffy, Kang and Syndergaard have moved into the conversation for the NL’s top rookie. The award is no longer a two-horse battle, and all the players who have risen up are sure to see plenty of exposure since each of them is in the middle of a pennant race.

As Owen Watson wrote, this season has been a historic one for rookies, particularly position players. With Bryant and Pederson leading the way, the rookie class is producing at a greater level than any in the past decade. It’s likely the best class in nearly 30 years, back when Barry Bonds and Jose Canseco were rookies. In the past month, Bryant and Pederson have allowed a few other players to enter the race. Pederson — a three-true-outcomes player to begin the season — has removed the two positive outcomes over the past month, walking just 3% of the time and hitting only one home run. Bryant hasn’t fallen quite as far. He’s still drawing walks, but he is striking out nearly one-third of the time and has a wRC+ of 58 over the past 30 days. Read the rest of this entry »


Cardinals Billion-Dollar TV Deal and In-Market Streaming

As digital technology and internet speeds have improved, there has been an increasing realization that consumers do not — or should not, given the incredibly powerful cable providers — need to subscribe to massive cable bundles with hundreds of channels. Netflix has shown people the amount of programming they could have for under $10 per month, and iTunes and Amazon have allowed people to purchase individual shows while Hulu has provided a combination of both options. HBO Now has lent optimism to the idea that consumers will soon be able to purchase their desired channels a la carte.

For years, MLB.tv has provided both the best and worst aspects of meeting consumer needs, providing an incredible amount of games to fans at a generally acceptable price, but accepting big cash outlays to blackout local games and help keep the current cable bundling model alive. While the St. Louis Cardinals’ new television contract, the latest in a line of local billion-dollar deals, is another example of increasing awareness in Major League Baseball that the current cable model will not last forever. How long it will last is still a matter of great debate.

In many ways, the Cardinals new deal is similar to the deal signed by other teams over the past few years. Despite a market that ranks behind Orlando, Cleveland, and Sacramento, and just ahead of Portland, Charlotte, and Pittsburgh in terms of households, the Cardinals were able to sign a lucrative deal due to incredibly high local ratings and generally high interest in the ballclub. According to Derrick Goold of the St. Louis Post-Dispatch, the deal is set to pay the Cardinals more than a billion dollars over 15 years, an amount that does not include a signing bonus or a 30% stake in FoxSports Midwest, with any revenue received from station ownership not subject MLB’s revenue sharing.

The Cardinals, in the last three seasons of their current deal, are receiving between $25 million and $35 million with the new deal starting close to $55 million in 2018 when the new contract begins. Over the life of the contract, the yearly payout will increase to around $85 million, according to Forbes, who estimated that the new deal increased the value of the Cardinals’ franchise to $1.6 billion, a $200 million increase over their estimate at the start of the season. Read the rest of this entry »


Padres Negotiate With All, Strike Deal With None

Every season, teams play roughly 100 games before the trade deadline. During that time, there are two kinds of teams: buyers and sellers. As sellers, it is their job to give buyers a hard time to trade worthwhile players to the buyers in exchange for players to be used in the future or moving financial obligations that selling teams no longer wish to possess. By all accounts, the San Diego Padres were clearly in the sellers’ camp, yet they held on to all of their players, both potential short-term rentals like Justin Upton, Joaquin Benoit, and Ian Kennedy and longer-term players like Tyson Ross and Craig Kimbrel. The Padres have desirable players on their team, and the decision to hold onto all of their players is curious, although they did make a small move, acquiring lefty reliever Marc Rzepczynski.

After the trade deadline passed, Padres general manager A.J. Preller was said to believe the Padres had a chance to make the playoffs this season:

The Padres, as presently constituted, do not look like a playoff team. They are 49-53 with a -53 run differential, and BaseRuns, which strips out sequencing, indicates the Padres have actually been pretty lucky, as their BaseRuns record is actually five games worse than their present one. Our projections do not seem to hint at any great improvement moving forward either, as the team is projected to finish with an 80-82 record. They are currently eight games out in their division and 7.5 games out of the wild-card spot. More troubling than the deficit in the standings, they would have to pass four teams that all appear to be as good or better than the Padres to make the postseason. Their current playoff odds are under 4% for this season. Preller is either delusional or he simply could not get the type of return on his players that he expected. Given the huge amount of rumors associated with the Padres over the last few days, it is fair to assume the latter.

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Cardinals Trade for Brandon Moss After Holliday Injury

The St. Louis Cardinals have reacted quickly to Matt Holliday’s injury, trading last night for Cleveland Indians’ outfielder/first baseman Brandon Moss. If Holliday, who already missed a month with a quad tear earlier this season, did not re-injure his quad in a game last night, the St. Louis Cardinals very well could have stood pat through the rest of the trading deadline. The team has had trouble all year finding production at first base, but had recently called up top hitting prospect Stephen Piscotty. With Holliday back from the disabled list, and the addition of Piscotty, the team hoped the offense would improve after experiencing some struggles heading into the All-Star break. The Holliday injury scuttled those plans, and they paid a fairly high price for a somewhat struggling Moss in Rob Kaminsky, a top-100 prospect heading into this season.

The move speaks to the lack of optimism that the Cardinals have about the return of Holliday. Already missing Matt Adams and getting little to no production from backup Mark Reynolds, the team was rumored to have been in talks with the Milwaukee Brewers for Adam Lind. Consecutive shutout losses to the Cincinnati Reds highlighted the Cardinals’ struggle to score runs, but the injury to Holliday created a real need. Even at 35, Holliday was likely going to be the Cardinals’ best hitter moving forward. His power had dropped off in the first half of the season just like it had in 2014, but a strong second half that included 14 home runs provided hope that Holliday’s bat could still do a lot of damage. His .290/.409/.420 line was still good for a 134 wRC+ and his projections for the rest of the season were in line with those numbers.

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Jay Bruce and Carlos Gonzalez: Twin Trade Chips

The market has moved forward as we approach the trading deadline, but its shape is still difficult to make out, especially in terms of hitters. We have seen the mega-deal, with franchise cornerstone Troy Tulowitzki moving from the Colorado Rockies to the Toronto Blue Jays. We have seen the rental, with Ben Zobrist helping the already strong Kansas City Royals. There appear to be solid outfielders remaining on the market, including Justin Upton, Yoenis Cespedes, and Gerardo Parra all available as rentals. Even so, it still looks to be a sellers’ market on the hitting side. The Cincinnati Reds and Colorado Rockies are in a decent position to move two hitters, neither of whom are rentals nor franchise cornerstones. Jay Bruce and Carlos Gonzalez are remarkably similar players and both could provide a jolt of offense for a team needing help this season and in the future.

Both Bruce and Gonzalez were called up to majors in 2008, and while Gonzalez has played some center field, both are good-hitting corner outfielders. Both are left-handed hitters with platoon splits that make them just good enough to hit everyday. Both have contracts lasting potentially through 2017, with Bruce carrying a reasonable $13 million team option in 2017 after a $12.5 million salary in 2016 and Gonzalez owed $37 million over the next two years. In addition to being cheaper, Bruce is also slightly younger, at 28, compared to the 29-year-old Gonzalez. In Gonzalez’s favor is slightly better production over the course of their respective careers. Their career lines are below.

PA AVG OBP SLG wRC+ BsR OFF DEF WAR
Carlos Gonzalez 3471 .292 .349 .520 120 20 101 -14 20.5
Jay Bruce 4343 .252 .325 .468 111 9 62 -19 18.6

Even factoring in Coors Field, Gonzalez has been the better hitter than Bruce, who plays in a decent hitters’ park himself. The pair have both been adequate on defense while losing some overall value due to the negative positional adjustment produced by a corner-outfield spot. Gonzalez has been the better runner, as well, but Bruce has closed the gap in overall value by staying healthy and recording nearly 1,000 more plate appearances than Gonzalez. They have accumulated their WAR in a very similar manner, though, both breaking out in 2010 and having very good years in 2013 before experiencing major struggles last season. Their cumulative WAR chart below is remarkable for the singular progression between the two players.

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Mets Continue to Act Like Small-Market Team

The New York Mets have been one of the more active teams leading up to the trade deadline, trading for Juan Uribe, Kelly Johnson, and Tyler Clippard, but the Troy TulowitzkiJose Reyes/Jeff Hoffman trade between the Toronto Blue Jays and Colorado Rockies has raised questions about the moves New York hasn’t made. The Mets are in contention and are making moves in attempt to better their team. That’s true. But when a player (in Tulowitzki) after whom the Mets, or at least their fans, have been pining for is moved for a decent, but not colossal package, and the other big-name player in the trade (in Reyes) was once a fan favorite and requires only a two-year commitment after 2015 — and would immediately be one of the best position players on the Mets if added to the team — a question is asked.

The question: where were the Mets?

The snarky answer: counting their money.

The more technically accurate answer: paying down owners’ debts.

The Tulowitzki trade might not be the best example of lost opportunities for the Mets, as the Rockies were at least paying lip-service to Tulowitzki’s request not to be traded to New York. Unfortunately for Mets fans, however, their other transactions indicate that the snark-filled answer is not that far from the truth. In both Mets trades, the club negotiated for a portion of the remaining salaries to be paid by the Atlanta Braves and even the perpetually cash-strapped Oakland Athletics.

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Hamels Goes Out on Top?

Even if it were not the most important game of his life, Cole Hamels’ might have just pitched the very best game of his life on Saturday, a potentially fitting end to a fantastic Philadelphia Phillies career. Hamels has started 13 playoff games, including three in the World Series. He put together a 3.20 ERA and 3.51 FIP in over 80 innings of postseason work. Five times Hamels has pitched the opening game in a playoff series and his team has won the last four. He won the World Series MVP for the champion Phillies in 2008 after starting two of the games and pitching 35 innings during that postseason. In 2010, he clinched a series against Johnny Cueto and the Reds with a shutout. So no, Cole Hamels’ start on Saturday was nowhere near the most important start of his career, but it might have been the best and it might have been the last. If Hamels is traded, he left the team nearly a decade after he started, and he provided one final memory in a career that already had plenty to begin with.

The Phillies called Hamels up early on in 2006, and by 2007 he was the ace of a staff that would help the Phillies to five straight division titles. In 2010, the team added Roy Halladay, and in 2011 it was Cliff Lee, although those additions could not top the World Series win in 2008, nor the appearance in 2009. After the run of division titles ended following 2012, injuries and age caught up to Roy Halladay and Cliff Lee, with stars Ryan Howard, Chase Utley, and Jimmy Rollins also in decline, but Hamels kept pitching well as the losses piled up in Philadelphia.

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New Numbers Suggest Cord-Cutting Revolution Not Imminent

Ratings news were a mixed bag for Major League Baseball over the past few weeks. The Home Run Derby was the number-one rated cable show of the week and saw a significant increase from the previous year with more than seven million viewers. The All-Star Game itself was a disappointment in the ratings, as the broadcast was at its lowest-viewed level of all-time — although it did have more viewers than any other program that week, and the ratings were in line with the past few years. The best news MLB received in the ratings department came in the form of local broadcasts, which are once again dominant. The most troubling item over the last month was the news that ESPN had lost more than seven million subscribers in the past four years, perhaps a sign of the crumbling cable model.

Breaking each one down:

All-Star Game and Home Run Derby

The Home Run Derby was a clear success for MLB after a disappointing rain-delayed derby last year. The derby did a 4.9 rating, a big increase over the 3.9 from 2014 and aided by the excitement of a new timed format that kept the event lively. The show averaged another 75,000 viewers digitally over the WatchESPN app, per Forbes, with more than 250,000 unique viewers. The derby’s viewership nearly doubled the second-highest rated cable show of the week (TNT’s Major Crimes) and was the seventh-most watched show of the week when including broadcast network shows.

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Worrying About the Recent Performance of Hamels and Cueto

Between the All-Star break and the trade deadline, most starting pitchers make only a couple starts. For starting pitchers who could be on the move, the small timeframe places those starts under a microscope for those anticipating a trade. Teams wanting to trade for the starter want to ensure that they are getting a pitcher at the peak of his abilities to help with the last few months of the regular season and potentially the playoffs. For the best two starting pitchers on the market, Johnny Cueto and Cole Hamels, recent performance has begun to raise questions about their trade value. Whether recent performances have hurt their trade value is debatable, but we can look over the past few seasons and determine whether other pitchers have gone through a dip in performance prior to a trade and compare that performance after the trade.

Some have asserted that Hamels’ last two starts hurt his trade value. While he has given up 14 runs in less than seven combined innings in his last two starts, his underlying stuff (which is great) has not been affected, there was an extended layoff between the two starts due to the All-Star break, and in the outing prior to those starts, Hamels threw seven shutout innings with six strikeouts against no walks. Hamels does have a 3.91 ERA this season, but his 3.37 FIP is still in line with his stellar career numbers.

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