With all of the arbitration cases heard and the major free agent signings completed, save for perhaps a Cuban free agent or two and a few relievers, we can come up with a solid estimate the Opening Day Payrolls for 2015. In 1998, the Baltimore Orioles’ payroll of $70.4 million topped all of Major League Baseball followed by fifteen straight seasons of New York Yankees payroll dominance. For the first time this centruy, the Los Angeles Dodgers finally unseated the Yankees last year. Despite Alex Rodriguez‘s suspended salary returning to the Yankees payroll and the signing of Chase Headley, the Dodgers remain well ahead. Trades for Jimmy Rollins and Howie Kendrick, the signing of Brandon McCarthy and agreeing to pay for much of Matt Kemp’s salary this season were more than enough to keep the crown for highest MLB payroll.

Figures from Cots. Minimum salaries of $507,500 added to guaranteed contracts to complete the 25-man roster.

For the second straight year, the Dodgers will have the highest payroll in baseball as the season starts. The Dodgers’ $266 million payroll figure appears staggering, more than 25% higher than the Yankees second place number and more than the ninth (Philadelphia Phillies) and tenth (Toronto Blue Jays) highest payrolls combined. However, the Dodgers’ buying power is still not at the level of the Yankees’ last decade. As a percentage of total team salaries, the Yankees’ payroll from 2004-2010 averaged 8.2%, never dipping below 7.5% before finally falling to 7.3% in 2011. The Dodgers’ payroll in 2015 accounts for 7.3% of total team payroll.
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The Chicago Cubs scored a preliminary victory on Thursday in the lawsuit filed last month by the owners of several of the rooftops looking into Wrigley Field.  As I explained at the time the suit was filed, the case is the latest in a series of legal proceedings challenging the on-going Wrigley Field renovations, and in particular the Cubs’ construction of two new outfield scoreboards.   Unlike earlier legal challenges to the project – which are focused on trying to overturn the city’s approval of the renovation plans – the rooftop owners’ suit against the Cubs charges the team with a variety of legal violations (antitrust, defamation, unfair business practices, breach of contract).

Last week, the rooftop owners asked the court to issue a temporary restraining order (“TRO”) preventing the team from building the scoreboards until the case is resolved.  Following four hours of argument on Wednesday, Judge Virginia Kendall issued a decision on Thursday morning denying the rooftops’ request, helping clear the way for the Cubs to move forward with construction of the disputed scoreboards.

In order to receive a TRO, the rooftops generally had to show that they: 1) were likely to prevail in the case, and 2) would suffer an “irreparable” injury (i.e., one that cannot be fully remedied by money) if the restraining order was not granted.  The rooftop owners believed they had established both requirements, arguing in particular that the imminent construction of the scoreboards would destroy their business. Meanwhile, the Cubs argued that the rooftops were unlikely to prevail on any of the claims they had asserted in the lawsuit, and that they could easily be compensated for any damage to their business resulting from the construction of the scoreboards through the payment of monetary damages.

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Despite television deals with ESPN, FOX, and TBS that will net Major League Baseball an average of $1.5 billion per year over the next years, franchises derive most of their revenue locally. Ticket sales, advertising, naming rights, local radio broadcasting rights, and local television rights constitute the majority of each team’s revenue. In recent years, new local television deals have generated incredible revenues with one-third of all teams now having signed deals worth at least one billion dollars. The deals have raised a question: When will this television rights bubble burst and send these skyrocketing guarantees back to earth? The Arizona Diamondbacks new television deal, believed to be in excess of one billion dollars, partly answers the question: Not yet.

Skepticism regarding the continual rise of local television contracts is justified. There have been indications recently that all is not well for the regional sports networks. The Los Angeles Dodgers generated news when they signed a contract worth more than $8 billion two years ago. Unfortunately for the Dodgers, that contract is still generating news as Time Warner Cable has been unable to successfully negotiate with the rest of the television providers in the Los Angeles area, leaving 70% of LA homes without the ability to watch Dodgers games on television. The San Diego Padres have had trouble getting their product in local homes before reaching a deal prior to the start of last season, and Houston’s deal has been a disaster as they try to charge high subscriber prices to watch a team they had no plans to make successful for several seasons.

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You may have heard that football is in the midst of a bit of a concussion crisis. Not only is the National Football League facing a number of concussion-related lawsuits, but suits have been filed at the collegiate, high school, and Pop Warner levels as well. Meanwhile, both professional hockey and soccer are also facing their own concussion litigation.

Like football, hockey, and soccer, baseball is also – at times – a contact sport, and baseball players occasionally suffer concussions. In 2013, for instance, former outfielder Ryan Freel became the first professional baseball player to be diagnosed with chronic traumatic encephalopathy (CTE) – the brain disease often associated with professional football players – following a career during which he reportedly suffered nine or ten concussions.

So it is reasonable to ask whether Major League Baseball could be the next league to face a concussion-related lawsuit, and if so, how such a case would compare to those in the other sports?

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Blackouts suck. We don’t like them. This isn’t news. What is news is that Major League Baseball is driving hard to get the ball rolling on lifting blackouts, potentially for good. Yesterday, Maury Brown laid out an idea for this over at Forbes. And as it turns out, the league is trying to execute just such a plan.

The plan, in case you don’t feel like clicking both links, involve the league getting its biggest media partner, FOX, on board with streaming games. Brown notes that 37 percent of all games last year were shown via FOX regional sports networks (or RSNs). That’s a pretty huge chunk. Comcast checks in next at 17 percent. That gets you up to 54 percent, and then it is drips and drabs from there. While a big network like FOX might be able to unilaterally make these moves, there is going to be a couple of sticking points. The first, as Brown notes, is who exactly gets to stream these games? Obviously MLB wants the exclusive rights, since they have a decade-old product that people know and love. FOX doesn’t appear to see it that way, and it’s hard to blame them. That really rolls up into a second sticking point, which is cost.

In thinking about this the other day, I postulated on Twitter about the creation of a Super Premium MLB.tv package. The theory goes, essentially, that you would add to the normal $130 cost of an MLB.tv Premium account in order to get a service that would solve your blackout problems.

The Plan

Each cable company charges a carriage fee for carrying it. We know that last year, NESN — which is owned jointly by the owners of the Boston Red Sox and Bruins (though mostly by the Red Sox) — charged as much as $4.22 for its carriage fee. As a long-running RSN, with a very dedicated fan base, that is probably close to the top of the food chain. ESPN, which charges the largest carriage fee, charges less than two dollars more than that.

Continuing to use NESN as the example, when we multiply that over 12 months — 12 rather than six since NESN charges the carriage fee every month and not just during baseball season — that comes out to a high end of $50.64. Let’s call it $50 for simplicity sake. So, the plan would be to say to MLB.tv subscribers who live in the Red Sox territory, and can presumably get NESN as part of their basic cable package, that if you want a version of MLB.tv with no Red Sox games blacked out, you can get that for $180. During commercials, instead of the six or seven MLB.tv ads you normally get ’til you have them memorized, you would get the normal NESN ads, with the MLB.tv ads spliced in every now and then in place of a NESN house ad (which, as any Red Sox fan will tell you, are plentiful).

Doing it this way satisfies a number of things. First, NESN doesn’t need to lose money on carriage fees. That’s huge, since carriage fees are essentially the way these networks stay in business. Second, it wouldn’t hurt ad rates during games — the customer base would be the same, they’d just be watching on different mediums. Theoretically, that shouldn’t change much, except maybe ads with small words in them would need to be rethought if they want to impact customers watching on smaller mobile devices. Not a huge deal, as advertisers should already be taking this sort of scale into account. It would also allow MLB.tv to recover a modicum of revenue from the few ads that they sell each season (not that they need that money, or can’t find a way to get it in some other fashion).

The best-case scenario for the RSNs, of course, would be to have that loyal consumer who not only buys the super-premium MLB.tv package, but also doesn’t cancel their cable package. Going back to NESN, they show a lot more than Red Sox games. In fact, the actual Red Sox games only make up a tiny portion of their programming each year. Less than half, certainly. They also show Bruins games, Hockey East college hockey games, and a number of other live sporting events, as well as long-running shows like Charlie Moore Outdoors. So, there is a chance that a lot of consumers, even if given the option to purchase this super premium MLB.tv package and get rid of cable, wouldn’t actually get rid of cable. That’d be sweet, because then the RSN would be double dipping the carriage fee, and could maintain their customer base for ads that run during all the non-Red Sox game-times. And if the NHL or NBA worked out similar deals, RSNs could be triple or even quadruple dipping, depending on the teams that play on that particular RSN.

Drawbacks

There are a number of drawbacks. The first is the aforementioned ad rates. In talking to Nathaniel Grow, our resident sports business expert, he mentioned that the RSNs probably aren’t keen on being able to say that their customer base has shrunken dramatically for all those times when a live baseball game isn’t being played. So that’d be an issue, and the number one reason why the cable companies or RSNs might force you to keep your cable package as a part of any agreement between MLB and FOX. That would not alleviate the problem for people who are blacked out of a specific team without having the opportunity to watch them on their local cable package.

Another drawback is that this plan is, as Homer Simpson would say, needlessly complicated from MLB and MLB Advanced Media’s perspective. While it might be peachy keen for the RSNs to sit back and collect stacks on stacks on stacks on stacks, MLB would be put in the position of expending energy on a product that sees the revenue split between it and its partners. And what of the total cost? Sure, Red Sox fans could justifiable have to pay an extra $50, but what about Astros fans, whose RSN hasn’t been able to get on the air and whose viewership is going to be much lower given all the tanking the Astros have done the last few years. In other words, should the package cost a different amount for each team? Or should they set a price based on the most expensive market and go from there? There’s no easy answer, and there would undoubtedly be some headache-inducing accounting issues, at the very least. For RSNs that are owned by a team, it wouldn’t be as big of an issue, since the league already has relationships with the teams, but it would still require a lot of logistical thinking.

Still another issue is for the fans with overlap, be it geographic or otherwise. A couple of examples. Say you live in New York, and are accustomed to watching the Mets and Yankees on TV. Now under this plan, if you want stream both blackout free, you can, but you would be in the position of having to buy a super-super-premium package, where you pay to eliminate blackout restirctions for both teams. Is that fair? Or, say you live in the Chicago area, and you as a Cubs fan married a White Sox fan. Do you want to pay for the privilege to stream both teams blackout free? Perhaps there is a compromise, but that seems unlikely.

The extreme version of this, of course, is areas such as Las Vegas and Iowa, where as many as six teams are blacked out. Do you pay to alleviate all six blackout restrictions, in a package that could end up being close to $400, or do you simply pick the one team you want to see and live with the blackouts in other areas? That is, of course, if MLB allows such options. Which, as we mentioned above, just might not be in the cards.

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Baseball fans don’t like blackouts, or anything else that restricts their access to the game, and these sometimes artificial restrictions are as old as the game itself. That is unfortunate. What is encouraging though is that the league is working on the problem, and has generally been at the forefront of digital streaming in sports — so much so that their technology is used as the “backbone” when companies and leagues make streaming products. So while we may have to pay for the privilege, hopefully the blackout restrictions will be solved soon, say the next five-10 years. Whether it’s a super premium package like what I have suggested here or something else, the initial solution probably will be messy. There are a lot of cable companies involved and a lot of money at stake, and so a clean solution seems unlikely right from the jump. And of course, none of this addresses what is the ultimate problem — the territory rights and how they can be resolved. But that is for another day. This reported agreement between MLB and FOX is a nice first step. Hopefully we’ll see more steps soon.

When the Atlanta Braves announced 15 months ago that the team would be moving to a new stadium in nearby Cobb County in 2017, the news surprised a number of people. The announcement was unexpected in part because the Braves’ current stadium, Turner Field, is less than 20 years old.

The news was also surprising, though, because it largely seemed to come out of the blue. There had been relatively little speculation that the Braves would be building a new stadium – let alone moving out of the Atlanta city limits – ahead of the formal announcement in November 2013. This was due in no small part to the fact Cobb County and the Braves negotiated the $397 million in public funding for SunTrust Park largely behind closed doors, without public input.

The lack of a public referendum for the stadium project is the basis of three legal challenges the Georgia Supreme Court heard earlier this week. If successful, these appeals could not only delay construction of the Braves’ new stadium, but could potentially disrupt the project’s financing.

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The legal controversy surrounding Alex Rodriguez seemingly knows no end. Fresh off a season-long suspension – and a year filled with litigation – Rodriguez is currently preparing to return to the New York Yankees for the 2015 season. In addition to the $61 million the Yankees still owe A-Rod under the 10-year contract he signed back in 2007, Rodriguez can potentially earn another $24 million in bonuses by reaching four different home run milestones in the next three years.

Under the terms of his 2007 contract, the Yankees will pay A-Rod $6 million every time he moves up the all-time home run leaderboard. Rodriguez’s 654 career home runs currently rank fifth all-time, trailing only Willie Mays, Babe Ruth, Hank Aaron and Barry Bonds. If Rodriguez hits six home runs in 2015, he would earn the first $6 million bonus by tying Mays’ career 660 home runs.

According to a recent report in the New York Daily News, however, the Yankees are preparing to contest the bonus provisions in A-Rod’s contract. When the team agreed to the milestone bonus structure back in 2007, it assumed Rodriguez’s march to the all-time home run crown would prove to be quite lucrative. In light of Rodriguez’s subsequent fall from grace, though, the team now understandably thinks A-Rod’s home run milestones will not be nearly as valuable as it initially hoped. As a result, the team is exploring its legal options.

So do the Yankees have any realistic chance of voiding Rodriguez’s bonuses? As is so often the case with the law, the answer is: It depends.

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The proposed renovation of Wrigley Field continues to keep Chicago-area lawyers busy. A week and a half after the owners of rooftops overlooking the stadium filed their second lawsuit against the city of Chicago – arguing that the city’s approval of the renovation was legally invalid – the owners of two rooftop businesses sued the team itself on Tuesday.   The new lawsuit asserts a variety of claims against the Cubs, including illegal monopolization, deceptive trade practices, defamation, and breach of contract.  A copy of the complaint is available here.

I discussed the history of the dispute between the rooftop owners and Cubs in a post last week.  In short, though, the rooftop owners contend that the team’s renovation plans – including two new scoreboards to be constructed in left and right field – will block their views into Wrigley Field.  Although property owners traditionally do not have any legal right to an unobstructed view – meaning that your neighbor can lawfully build a structure blocking your ocean view, for instance – in this case the Cubs and rooftop owners entered into an agreement back in 2004 giving the rooftops some limited rights to an unobstructed view into the stadium.

Despite this agreement, until yesterday the rooftop owners had focused their legal efforts on challenging the city’s approval of the Wrigley Field renovation.  This was due to contractual language in the rooftop owners’ 2004 agreement with the Cubs stating that “Any expansion of Wrigley Field approved by governmental authorities shall not be a violation of this Agreement.”

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The MASN dispute between the Orioles and Nationals continues to wage on in New York state court. As a review, the fight involves an arbitration decision issued last year by MLB’s Revenue Sharing Definitions Committee (the “RSDC”), awarding the Nationals roughly $60 million dollars per year in broadcast rights fees from the Mid-Atlantic Sports Network. This award was nearly $30 million more per year than the team had previously been receiving, but far less than the roughly $120 million it had requested.

The Orioles, who own a majority share of the MASN network, have contested the arbitration outcome, contending that the arbitrators – the owners of the New York Mets, Pittsburgh Pirates, and Tampa Bay Rays – were biased in favor of the Nationals. MASN and the Orioles filed suit back in August, asking the court to overturn the arbitration decision. Last month, the court ordered MLB to produce documents in the case relating to commissioner-elect Rob Manfred’s involvement in the arbitration proceedings.

This week both MASN and the Orioles filed new papers with the court, further describing the alleged bias of MLB and its arbitrators.

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Earlier this off-season, the Chicago Cubs began work on their long-awaited renovations to Wrigley Field. The team launched phase one of the project in October, tearing down the stadium’s existing bleachers with the hope of rebuilding and expanding them in time for Opening Day. In addition, the $575 million project will eventually include new clubhouses, luxury suites, concession areas and signage throughout the stadium — as well as the construction of a nearby hotel and office-building complex.

Unless, that is, owners of the rooftops overlooking Wrigley Field get their way. These building owners have filed two lawsuits over the past four months — the first coming this past August, and the second on Thursday — in an attempt to stop the renovations. In particular, the rooftop owners fear that two new scoreboards to be constructed as part of the renovation project will block their views into the stadium, threatening the roughly $20 million in annual ticket revenue the rooftops currently generate.

In an interesting twist, though, rather than suing the Cubs, the building owners have instead sued the City of Chicago in the hopes of having the renovation halted. Understanding why the rooftop owners would sue the city, rather than the team, requires some knowledge of the lengthy history of the dispute.

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