Let’s begin by acknowledging the obvious: the entire premise of this piece is probably absurd. Considering that the Major League Baseball Players Association’s top priority over the last several decades has been to resist the implementation of a salary cap, it is highly unlikely that the players will reverse course and seriously consider agreeing to a cap on team payroll anytime soon. Opposition to the very notion of a salary cap is simply too deeply ingrained in the union’s culture.

But even if the players are unlikely to agree to a salary cap in the foreseeable future, there is a legitimate case to be made that they should at least consider the possibility during their upcoming collective bargaining negotiations with Major League Baseball.

Indeed, in many respects, the players have been subject to a de facto salary cap for quite some time without receiving any of the accompanying benefits.

Read the rest of this entry »

If you were glancing at baseball news around the internet recently, you might have come across some announcements from MLB Commissioner Rob Manfred. A Forbes‘ article features a headline, for example, that reads “Manfred Announces 3-Year Deal With FOX To Have MLB Games Streamed In-Market“. At MLB’s own website one finds “Streaming deal a huge leap forward for MLB, fans“. Viewing the headlines alone, we might conclude, or at least be hopeful, that this is a really big deal — that MLB is finally getting rid of its blackout policy on MLB.tv, allowing fans to watch their local team without subscribing to an expensive cable television package. Unfortunately, that’s not what’s happening. In-market streaming is a small step towards making baseball more accessible to fans, but does not deal with the principal blackout problems that prevent getting MLB games any way you want them.

In-market streaming, in the iteration announced yesterday, is helpful to fans provided they already pay for a cable service broadcasting their team’s local games. As the Forbes article indicates, the deal is with FOX-owned cable affiliates. Half of the league is broadcast on a cable network owned by FOX, with the other half spread out between other owners like Comcast, Time Warner and DirecTV. While the other networks could reach a deal with MLB, Manfred’s announcement relates exclusively to the FOX-owned properties. In the chart below, the column on the left features the teams whose broadcasts are affected as a result of this agreement, while the column on the right shows teams whose rights are not managed by FOX and are therefore not part of this announcement.

15 Teams With In-Market Streaming for 2016

With In-Market Streaming	Without In-Market Streaming
Atlanta Braves	New York Mets
Cincinnati Reds	Philadelphia Phillies
Cleveland Indians	Chicago Cubs
Texas Rangers	Chicago White Sox
Detroit Tigers	Pittsburgh Pirates
Kansas City Royals	Houston Astros
Los Angeles Angels	Los Angeles Dodgers
Miami Marlins	Seattle Mariners
Milwaukee Brewers	San Francisco Giants
Minnesota Twins	Oaland Athletics
New York Yankees	Washington Nationals
Arizona Diamondbacks	Baltimore Orioles
San Diego Padres	Colorado Rockies
St. Louis Cardinals	Boston Red Sox
Tampa Bay Rays	Toronto Blue Jays

SOURCE: MLB.com

Depending on the cable provider, one might be able to stream games through portable devices if also signed into a home wifi that has also been purchased from the same provider, for example. For the fifteen teams part of this agreement, cable subscribers should have significantly more viewing options. Prior to this agreement, a fan, even if he or she were a cable subscriber and even if he or she paid for MLB.tv, would still be unable to watch games on a cell phone or tablet while located in the home market — nor could could one watch games at the doctor’s office, friend’s home, or while commuting on the train or bus. MLB.tv blacked out the games on own its platform, nor was the local cable provider was providing its own options.

Read the rest of this entry »

The Chicago Cubs are located within the third-largest media market in the country, have a base of rabid fans supporting the team even in lean years, and — despite having closed the bleachers for much of the early part of the 2015 season — have received greater attendances at Wrigley Field since 2011, in part due to the team’s playoff run this year. While the team has started to have tremendous success on the field, they are moving forward slowly with payroll due to renovations around the ballpark, investments in rooftop bleachers, debt incurred by the Ricketts family when they bought the team, and a below-market television contract that runs out after four more seasons.

That the Cubs are interested in starting their own cable network in Chicago is not a secret. The team’s deal with Comcast runs out after 2019, and they have been setting the stage for an exit. The Chicago Cubs have a long history of airing games locally on WGN, which also found its way on to most cable packages around the country. The Tribune Company owned WGN as well as the Chicago Cubs, and the baseball team provided the company with relatively inexpensive programming that provided a big help to the bottom line.

The television industry, and in particular the sports television industry, have changed over time, rending the broadcast of games on WGN less beneficial. Regional sports networks began swooping up the rights to local baseball games, putting more and more games on cable. The regional sports networks gained much of their revenue from subscriber fees as opposed to traditional advertising, and cable providers felt these stations were necessary to give to subscribers as part of the basic cable bundle. This meant that the Tribune Comany airing games on WGN, while a cable channel to those outside of Chicago, was not maximizing revenue by putting games over the air in Chicago.

In 2004, Comcast Sportsnet Chicago (CSN Chicago) was formed. At the time the Tribune Company still owned the Cubs. CSN Chicago’s ownership was split between the local clubs. Right now, the split is 20% each to the owners of the Cubs, White Sox, Bulls, and Blackhawks, with the remaining 20% to NBC/Universal. Jerry Reinsdorf has the biggest share at 40%, as he owns both the Bulls and White Sox. The Cubs kept about half of their games on WGN, but opted out of that contract when it was up after the 2014 season. The Cubs negotiated their current contract with WGN and the local ABC affiliate so that they would expire after 2019, the same season as their deal with Comcast.

Read the rest of this entry »

In meeting with the press recently, Rob Manfred mentioned a “fun fact” that the small-market Kansas City Royals boasted a bigger payroll than the big-market New York Mets. That fact might not be quite as fun for Mets fans who want their club to spend “commensurate with the economic resources available to them,” to use the commissioner’s words. With increased revenue from higher attendance, a playoff run, and rising projected attendance in 2016, the Mets could be poised to increase attendance, but if they choose to keep the status quo with salaries, they might not have a lot of maneuverability in free agency this winter.

Earlier this week, I took a look at all the American League teams and their current payroll situations as we head into free agency. This post repeats the same exercise for those teams in the National League. When determining a team’s payroll, first we need to look at every team’s guarantees heading into the 2016 season. To nobody’s surprise, the Dodgers have a commanding lead, per Cot’s Contracts.

Read the rest of this entry »

This is the second piece in a two-part series previewing the upcoming 2016 collective bargaining negotiations between Major League Baseball and the Major League Baseball Players Association. Part I of the series examined the new leadership dynamic at MLB and the MLBPA, various economic issues (including the players’ declining share of league revenues, the qualifying offer system, and service time manipulation), and possible changes to the league’s Joint Drug Agreement.

In this post, I will be looking at bargaining issues related to the draft (international and domestic), along with various pace-of-play and scheduling issues, before offering a preliminary assessment of the likelihood that a work stoppage will impact the 2017 season.

International Draft

Since taking office, Rob Manfred has repeatedly suggested that one of his top priorities as commissioner is to implement a worldwide MLB draft, in one form or another (whether it be holding a single draft for all domestic and international prospects, or alternatively creating a separate draft for international players). As a result, one can safely assume that reaching an agreement on a “single method of entry into the game” – as Manfred likes to say – will undoubtedly be a top priority for MLB in the coming negotiations.

It is unclear whether the MLBPA will be willing to agree to subject international players to a draft, however. Read the rest of this entry »

With Major League Baseball’s 2015 season in the books, focus has shifted to 2016. And one of the story lines that you’ll be hearing a lot about in the next year is the upcoming negotiation of a new collective bargaining agreement between MLB and the Major League Baseball Players Association. Indeed, rather than wait for the current agreement to officially expire on December 1, 2016, the league and the players union will likely begin discussing a new agreement sometime in the next few months.

For the uninitiated, the CBA is the contract that governs the relationship between MLB (and its 30 teams) and the players. It dictates the rules governing free agency, players’ salaries, revenue sharing, and the length of the playing season, among a host of other issues.

As in any collective bargaining process, the league and union will discuss a variety of topics during the 2016 negotiations. And while new issues will inevitably emerge between now and next December, based on statements made over the last couple years by MLB and MLBPA officials, we can generate a pretty reliable list of what are likely to be among the most pressing issues the parties will face during the upcoming negotiations.

I’ll be examining these bargaining issues in a two-part preview of the 2016 CBA negotiations. In this initial post, we’ll take a look at: (i) the new leadership dynamic at MLB and the MLBPA, (ii) various economic-related issues that are likely to be discussed during the negotiations (including the players’ declining share of league revenues, the qualifying offer, and service time manipulation), and (iii) possible changes to the league’s Joint Drug Agreement.

Part II will then consider bargaining issues related to the draft (both domestic and, potentially, international) as well as various pace-of-play and scheduling-related issues, before offering a preliminary assessment of the likelihood that a work stoppage will impact the 2017 season.

New Leadership

While not a bargaining issue per se, one story line that is likely to emerge during the 2016 collective bargaining process is the fact that both MLB and the MLBPA will be represented by new leadership during the upcoming negotiations. On MLB’s side, the talks will be the first of Rob Manfred’s commissionership. Manfred is well acquainted with the collective bargaining process himself, having negotiated the 2002, 2006, and 2011 CBAs on behalf of MLB as its Executive Vice President for Labor Relations & Human Resources. However, with Manfred now in the commissioner’s chair, MLB’s chief legal officer, Dan Halem, will likely serve as the league’s lead negotiator.

Read the rest of this entry »

Major League Baseball teams are not in the habit of revealing their expected payroll numbers for the following season prior to free agency. Revealing such figures would provide agents negotiating deals with their clients important information regarding how much teams planned to spend. Additionally, telling fans how much a team plans to spend could be harmful from a public relations perspective: if a team misses out on a desired target, it is not always a great idea to spend money for the sake of meeting a budget if that spending would not improve the team and the money could be better spent elsewhere. None of those reasons obscure the fact that we still want to know how much money teams will spend.

Last year’s spending should provide a pretty good proxy for where teams will end up on Opening Day next season. By looking at guaranteed salaries and arbitration estimates, we can come with a decent idea of how much money each team has to spend going into the winter unless they make significant changes to the budget from previous seasons. In the American League, teams like the Tampa Bay Rays, Oakland Athletics, and more recently the Houston Astros have kept spending to a minimum while the New York Yankees, Boston Red Sox, and Detroit Tigers have had no issues with payrolls double or even triple the size of those at the bottom. Much of next year’s spending has little to do with potential free agents, and more to do with players who have already signed.

American League teams have already committed more than $1.2 billion in guaranteed contracts to 2016 payrolls, equal to roughly two-thirds the amount of 2015 AL Opening Day payrolls. As we might expect, there are considerable differences across the league, per Cot’s Contracts.

The Yankees have committed nearly $200 million in salaries before the offseason even starts. At close to $185 million, the guarantees in the Bronx are roughly equal to Oakland, Tampa Bay, Baltimore, Houston, and Cleveland combined. In Oakland, the team has signed Billy Butler, Coco Crisp, and Sean Doolittle to contracts already, giving them around $24 million in 2016 before arbitration and free agent signings.

Read the rest of this entry »

For the last three years, the Baltimore Orioles and Washington Nationals have been engaged in a feud over television rights fees. As both Wendy Thurm and I have previously discussed, the origins of the dispute date back to 2005, and Major League Baseball’s resolution of Baltimore’s objections to the Montreal Expos being relocated to Washington, D.C. (territory belonging at the time to the Orioles).

In order to alleviate the Orioles’ concerns, MLB structured a deal in which Baltimore would initially own 87 percent of the newly created Mid-Atlantic Sports Network (MASN), the regional sports network that would air both the Orioles’ and Nationals’ games. In exchange, the Nationals were scheduled to receive an initial broadcast rights fee of $20 million per year from MASN, an amount that would be recalculated every five years.

Jump forward to 2012, when Washington requested that its rights fee be increased to $120 million per year. MASN and the Orioles refused, and as a result the dispute ended up in arbitration, with a panel of MLB team executives – the Mets’ Jeff Wilpon, the Rays’ Stuart Sternberg, and the Pirates’ Frank Coonelly – ultimately awarding the Nationals roughly $60 million per year in broadcast fees.

Still not satisfied, the Orioles and MASN then went to court in 2014, asking a New York judge to overturn the arbitration award on the grounds that the panel was biased. After initially blocking MLB from enforcing the arbitration decision that August, presiding Judge Lawrence Marks gave MASN and the Orioles a more lasting victory on Wednesday, officially vacating the arbitrators’ award.

As a result, the Orioles and Nationals are back to square one in their dispute, potentially impacting both teams’ 2016 offseason plans.

Read the rest of this entry »

Television ratings can serve as a useful representation of interest in Major League Baseball, and in the playoffs, more attention is paid to the sport and more attention is paid to television ratings. Over the years, a decline in ratings has been used as an example of declining interest int he game of baseball. For the most part, the “Baseball is dying” motif is more of a silly meme than actual argument. Baseball games again dominated the last six months of programming on local television. On the whole, MLB drew more than 73 million fans, an increase compared to last season. Over a stretch of six months, there was a daily average of more 400,000 fans attending MLB games.

The first few rounds of the playoffs were a success on television, as well. The National League had the benefit of two great matchups in the division series, which featured the Los Angeles Dodgers against the New York Mets and the Chicago Cubs versus the rival St. Louis Cardinals. Three out of the four division series games went the full five games. The National League Championship Series set itself up for incredible ratings, with the Mets bringing the New York Market and the Cubs bringing not only the Chicago market but also a 100-year championship drought. The television schedule set up well for the series, putting all of the weekday games in a prime time slot on TBS, relegating the Toronto Blue Jays and Kansas City Royals to the daytime on FS1.

The ratings were good for the Cubs and Mets, but the four-game sweep robbed the executives at TBS of the higher ratings a longer and more competitive series would have brought. The Blue Jays-Royals series on FS1 did not produce great ratings, but given certain factors — an afternoon time slot, a fledgling cable cable channel, and a Canadian team — the result was an expected one. Despite the perhaps slightly disappointing factors present in the LCSes, ratings are up overall against last season by close to 20%, with an average of 4.6 million viewers over the first two rounds, which figure doesn’t even account for the millions of viewers in Canada tuning in to watch the Blue Jays.

Read the rest of this entry »

Minor league players scored an important victory in their minimum wage lawsuit against Major League Baseball on Tuesday, with a federal court agreeing to allow the players’ case to proceed as a class action lawsuit. As a result, Tuesday’s decision paves the way for potentially hundreds of additional current and former minor league players to join the lawsuit, dramatically increasing the scope of MLB’s possible liability in the case.

MLB’s minor league pay practices have been the subject of several different lawsuits over the past two years. One of those cases – asserting that MLB’s league-wide, uniform minor league wage scale violates federal antitrust law – was dismissed by the trial court last month.

Tuesday’s decision came in an earlier and more promising lawsuit, one that challenges MLB’s minor league pay practices under federal and state minimum wage and overtime laws. In Senne v. Office of the Commissioner of Baseball, a number of former minor league players contend that MLB routinely violates these legal requirements by paying minor league players as little as $3,300 per year – without overtime – for what is, in many respects, a year-round job.

Although the plaintiffs in the Senne suit had always hoped that their case would eventually be expanded to cover most current and former minor league players, until Tuesday the suit technically involved only the 50 or so players who had been formally named as a plaintiff in the case. Now, anyone who played in the minor leagues between 2011 and 2015, without being promoted to the major leagues, is eligible to join the lawsuit.

Read the rest of this entry »