Or you do what most rich people do nowadays and just borrow against the value of/equity in the franchise and live off that…
Well the original owner didn’t want to sell it and was just a huge baseball fan running a passion project. He died so now his brother and family who took over don’t care and want to cash in. The only issue is who wants to buy a business that has that much debt and recently had to take out a loan to pay payroll (unless you think a salary cap is on the horizon that will instantly raise the value of your investment)
I agree with your first point, but less so on the second point. There are legitimate cheap owners, but there are other ways than a salary floor. The NFL has mechanisms that allow the team to retain their top players for longer than the original contract length. They also reward teams who have players signed away contract values being higher than their own spending on new contracts. The NBA has max contracts on individual players as well as teams, with current teams allowed to offer higher contract values as an incentive to create some continuity in the league, or at the very least to give teams losing top free agents a return when they do sign and trades. Baseball could also think outside of the box and rather than giving the cheap teams checks, allow teams to designate certain players as franchise players and have MLB supplement/pay part of those players salaries. In general my goal would be to have similarish payrolls, but also to somehow increase top player retention while not forcing the players to stay like with the franchise tag in the NFL. With pitcher injuries, I don’t think a tagging method like that would be fair to the players.
I say all of this because I know there are cheap owners who need to be incentivized to spend money, but also I do think certain teams don’t make much income and creating a salary floor would probably lead to certain markets being forced to give up their franchises, with the Reds and Guardians being two top candidates. In general, though, there needs to be better revenue sharing akin to the NFL, and then you can have a floor.
Is the new owner is buying the debt as well or are they negotiating the old owners to cover it from the sale? If the value of the franchise is almost certainly going to increase faster than the new debt you accrue can’t they start the same cycle over, sell it and pocket the profit? Seems like a good deal and you get to own a professional sports team for a bit.
This is another thing that I think would be helpful. I’m a Pirates fan. As things currently stand, the Pirates have absolutely zero chance to retain their generational current Cy Young winner. Even buying out a few of his arbitration years is probably out of reach. The fear is he will be traded before his second or third arbitration award (if not first, but I think the Pirates will at least pay that). Part of this is due to Bob Nutting being unwilling and/or unable (I think a bit of both but more the former) to spend money to contend. The other part is a lack of a salary cap.
Putting in a rule that allows teams to offer their homegrown talent bigger/longer contracts combined with a cap would at least give the Pirates of the world a chance. I also want some sort of floor because I want Nutting to sell the team… it’s probably worth into the 10 figures at this point, if not very close.
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Umm, did anyone push back on this assertion?
“We’re not going to open our books, but trust us we lose money every year. Except that one time we made the World Series.”
So a team that generates an estimated $325-350 million in revenue on $100 million payroll is losing money? Not to mention the valuation of the team has increased from $323 million to $1.4 billion in the last 25 years. To be fair, that’s an annualized rate of return of 6%, which isn’t that great compared to the market.
I believe two things can be true at the same time:
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Teams all understate their profit as a negotiating tactic with the players union and also to appease the general population.
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I also believe the general population underestimates the number of expenses a team has in addition to the MLB payroll. I believe the Braves reported $180 Million in expenses outside of the MLB roster. All those things add up. Draft pick/ international signing bonuses, travel expenses (50 hotel rooms at a 5-star hotel in the countries most expensive cities) 81 times a year, flights, managers, insurance, grounds crew, maintenance and depreciation, the list goes on and on.
I bet most small-market teams are keeping some money for profits, but not as much as most people believe.
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