2021 Collective Bargaining Agreement Discussion Thread

[connorp]

How is the value of a sports team determined though. Is it really based on changes to the bottom line? I’m generally clueless. You know, is it like Tesla or something?

[TheHurl]

Why cherry pick the dow30.

 

If John Henry invested his entire $660,000,000 in Monster Beverage Company on the same day he bought the Sox he would have $691,597,500,000...and wouldn't have to live in Boston. f***ing loser and his $3.5B Red Sox.

[TheHurl]

How is the value of a sports team determined though. Is it really based on changes to the bottom line? I’m generally clueless. You know, is it like Tesla or something?

 

Fair market value is defined as the highest price, expressed in dollars, that a team would bring in an open and unrestricted market, between a willing buyer and a willing seller who are both knowledgeable, informed, and prudent, and who are acting independently of each other.

 

Business valuations are usually done (at a minimum) by looking at 5 years of financial statements, shareholder agreements, budget and forecasts and payroll records. I can't see it being that simple for a sports team though. I really think Dick would the poster who could answer this the closest. Or we could see if Forbes posts their methodology.

[Grant77]

How is the value of a sports team determined though. Is it really based on changes to the bottom line? I’m generally clueless. You know, is it like Tesla or something?

 

The estimates are probably largely based on what other teams sell for. Teams usually sell for above the estimates, at least recently.

[John_Havok]

The estimates are probably largely based on what other teams sell for. Teams usually sell for above the estimates, at least recently.

 

Here's one way to do it:

https://www.appraisaleconomics.com/sports-team-valuation-appraisal/

 

Coles' notes version - Over the past decade, MLB franchises have been sold for prices that equate to between approximately 1.5 and 3.0 times total revenue. Teams in larger metropolitan statistical areas (MSAs) with higher levels of average disposable income, lucrative long-term cable television contracts, and new stadiums where the team has significant rights to stadium income (naming rights fees, concession sales, etc.) will command multiples at the high end of the range. Conversely, teams in smaller MSAs, with less lucrative media rights contracts, and older stadiums, typically fetch multiples at the lower end of the range.

[connorp]

Here's one way to do it:

https://www.appraisaleconomics.com/sports-team-valuation-appraisal/

 

Coles' notes version - Over the past decade, MLB franchises have been sold for prices that equate to between approximately 1.5 and 3.0 times total revenue. Teams in larger metropolitan statistical areas (MSAs) with higher levels of average disposable income, lucrative long-term cable television contracts, and new stadiums where the team has significant rights to stadium income (naming rights fees, concession sales, etc.) will command multiples at the high end of the range. Conversely, teams in smaller MSAs, with less lucrative media rights contracts, and older stadiums, typically fetch multiples at the lower end of the range.

 

I’m just glancing through but got to the paragraph that said they really aren’t evaluated like a typical business based on returns. It’s a trophy asset essentially. Idk. Guess don’t care enough to keep digging in.. but obviously that’s important to know (meaning they aren’t seeing much larger returns in yearly actuals, just if they were to sell)

[saskjayfan]

 

You'd also have 172 times your money if you had invested in the S&P 5 years earlier at the beginning of 1976. It all depends the dates you pick and choose. The purchase price of the Dodgers in 2012 gets crushed by the S&P 500.

[John_Havok]

I’m just glancing through but got to the paragraph that said they really aren’t evaluated like a typical business based on returns. It’s a trophy asset essentially. Idk. Guess don’t care enough to keep digging in.. but obviously that’s important to know (meaning they aren’t seeing much larger returns in yearly actuals, just if they were to sell)

 

Yeah, the returns are really only expressed when the asset is sold. Until then it's just "value" sitting on a spreadsheet somewhere.

[Deadpool]

Yeah, the returns are really only expressed when the asset is sold. Until then it's just "value" sitting on a spreadsheet somewhere.

 

Value against which they can borrow at very friendly rates...

[Jimcanuck]

Value against which they can borrow at very friendly rates...

 

Right by overvaluing it for that purpose, and undervaluing it for tax purpose.

[Abomination]

Right by overvaluing it for that purpose, and undervaluing it for tax purpose.

 

Schrodinger's Accounting!

[Dick_Pole]

You guys sound super jealous for not having assets. You should try getting some. It's great.

[John_Havok]

You guys sound super jealous for not having assets. You should try getting some. It's great.

 

Naw not really, just poking the obvious holes in Manfred's libne of how owning a baseball team isn't a good investment and the owners see low returns. It's kinda laughable

[connorp]

Naw not really, just poking the obvious holes in Manfred's libne of how owning a baseball team isn't a good investment and the owners see low returns. It's kinda laughable

 

Bro, you can find arguments for whatever side you want. Show me some other successful businesses out there that give 50% of their top line rev to employees. I think it’s 40% to players, than whatever to all the admin…now all the other operating costs factored in.. you’re clearly a Dem. It’s not like franchises are flipped for profit all the time. There’s usually some major reason.

[connorp]

That said, there’s something to franchise values that have skyrocketed, you just can’t spike the football on it.

I just think there’s two sides to it, so I’m siding with the owners after the players dug in and refused mediation

[Abomination]

Naw not really, just poking the obvious holes in Manfred's libne of how owning a baseball team isn't a good investment and the owners see low returns. It's kinda laughable

 

I'd be interested to see it more on a year-to-year basis, particularly the last 10 years. A lot of franchises got a massive boost from MLBAM, new stadiums, and new TV deals. I don't see additional revenue streams providing that kind of gain in the near future. With regards to what the owners actually put in their pockets, it's possible that almost the entire gain comes from increases in franchise valuations as opposed to underlying fundamentals and actual cash flow. Manfred's statement, while perhaps misleading, may not be entirely inaccurate right now. Of course if MLB was to open up the books, it could all be put to rest one way or the other.

[connorp]

I'd be interested to see it more on a year-to-year basis, particularly the last 10 years. A lot of franchises got a massive boost from MLBAM, new stadiums, and new TV deals. I don't see additional revenue streams providing that kind of gain in the near future. With regards to what the owners actually put in their pockets, it's possible that almost the entire gain comes from increases in franchise valuations as opposed to underlying fundamentals and actual cash flow. Manfred's statement, while perhaps misleading, may not be entirely inaccurate right now. Of course if MLB was to open up the books, it could all be put to rest one way or the other.

 

As mentioned, you don’t really need to see the books to know they aren’t killing it. Besides 50% to salaries, what about payouts for benefits/pension, I assume they pay a giant payroll tax like every other company. Now marketing costs, stadium upkeep, finance charges, blah blah.. then if some team like the Dodgers can show a $200m net at the bottom, people will be like “they’re killing it, greedy f***s”.. God forbid you pay $5b for a business and make $200m at the end (4% cap or whatever)

[Ehjays]

[Abomination]

 

What would it actually cost clubs to pay the minor leaguers in ST? I mean, they're making next to nothing already.

[Ehjays]

[max silver]

What would it actually cost clubs to pay the minor leaguers in ST? I mean, they're making next to nothing already.

 

I find it to positively ghoulish that MLB owners refuse to pay minor leaguer even their meagre regular season wages during spring training. It's shameful that it's expected that players are expected to live in poverty while attempting to train for the upcoming season.

[Stangstag]

That said, there’s something to franchise values that have skyrocketed, you just can’t spike the football on it.

I just think there’s two sides to it, so I’m siding with the owners after the players dug in and refused mediation

 

The players refused mediation because it just slows things down and doesn’t even work. Read about the 1994 strike.

 

Mediation was a bs offer by the owners to try and look good in the press, seems like it worked on some people.

[connorp]

The players refused mediation because it just slows things down and doesn’t even work. Read about the 1994 strike.

 

Mediation was a bs offer by the owners to try and look good in the press, seems like it worked on some people.

 

Sometimes mediation doesn’t save the day but that doesn’t mean it’s worthless. We’ll see how much more it could’ve slowed things down I guess

[connorp]

When two sides are far apart, it can get ugly. Union issues can get very ugly in any business

[connorp]

Basically if one side decides they’re going to dig their heels in no matter what, yes mediation is just a waste of time

[Spanky99]

You guys sound super jealous for not having assets. You should try getting some. It's great.

 

Oh please, Dick. Give it a rest.

[Jays24]

Man... being so far apart when the game is pretty healthy overall just seems stupid from the fans perspective. You'd get it if one side was losing a lot more than the other but both sides seem to be doing pretty well overall.

 

Instead theyre both going to the other extreme without budging much. I get that's how negotiations work sometimes but just hurry it up and meet in the middle already.

[Dick_Pole]

At some point in time, the owners are going to turn on each other. Some like Steve Cohen are wannabe Elon Musks in terms of adoration and public perception and this lockout is only going to hurt that attempt. Other owners lose big time money if the season is lost and would be much more flexible in terms of giving players a reasonable deal. While the owners of the bottom feeding franchises thrive off of paying the majority of their roster $600K salaries for as long as they can and will dig in their heels.

 

I really hope owners like Rogers are aggressive in leading to a deal. Rogers has everything to lose and nothing to gain with a prolonged lockout. The team could absorb concessions made to players. Meanwhile a lockout will cost them tons of eyeballs on their own media platforms. The team is good right now so they want them to play. Finally, a deal in the players' favour could really screw the Rays, an irritating division rival that has caused a lot of the problems in suppressing player salaries by gaming the system for so long.

[glory]

Man... being so far apart when the game is pretty healthy overall just seems stupid from the fans perspective. You'd get it if one side was losing a lot more than the other but both sides seem to be doing pretty well overall.

 

Instead theyre both going to the other extreme without budging much. I get that's how negotiations work sometimes but just hurry it up and meet in the middle already.

 

The "meet in the middle" period comes when both sides feel pressure to make a deal and/or both sides start to lose money. That's probably going to happen some time in the next two weeks because if they want 4 weeks of ST and to start the season on March 31, then they'll need a deal by the end of Feb. That's when (hopefully) the urgency starts to kick in. If not, then who knows when it is.

 

I guess the good thing about their differences is that they appear to be mainly numbers. It's not like one side is saying they refuse to do one thing while the other is continuing to push for it. The MLBPA wants the CBT to start at $245m while the owners want it to start at $214m. The MLBPA wants the pre arb bonus pool at $100m while the owners are offering $15m. The MLBPA wants 12 playoff teams while the owners want 14. The MLBPA wants a set minimum of $775k while the owners want a $615k-$650k-$725k system for the first 3 years of service. They are clearly still far apart but you can meet somewhere in between with numbers, and they seem to agree with the general point of the changes. It's just a matter of which side concedes first, and unfortunately I don't think either side wants to feel like they "lost" when this is over, so stubbornness is a real threat.

[Grant77]

At some point in time, the owners are going to turn on each other. Some like Steve Cohen are wannabe Elon Musks in terms of adoration and public perception and this lockout is only going to hurt that attempt. Other owners lose big time money if the season is lost and would be much more flexible in terms of giving players a reasonable deal. While the owners of the bottom feeding franchises thrive off of paying the majority of their roster $600K salaries for as long as they can and will dig in their heels.

 

I really hope owners like Rogers are aggressive in leading to a deal. Rogers has everything to lose and nothing to gain with a prolonged lockout. The team could absorb concessions made to players. Meanwhile a lockout will cost them tons of eyeballs on their own media platforms. The team is good right now so they want them to play. Finally, a deal in the players' favour could really screw the Rays, an irritating division rival that has caused a lot of the problems in suppressing player salaries by gaming the system for so long.

 

This isn't exactly a union issue, but we have already gone above and beyond other teams in compensating minor league players. I don't think something like an increase to minimum salary is going to be the hill that Edward Rogers dies on.