The Revenue Pie

Via BBTF, The Ringer examines the commissioner’s assertion that ballplayers are receiving about 50% of revenue, and have for a number of years.

According to MLB’s data, the players’ percentage of revenue has hovered within 1.5 percentage points of the 50 percent mark for at least the last eight seasons. The discrepancy between these numbers and the figures from FanGraphs and Deadspin is attributable largely to the table’s inclusion of player benefits (which in 2018 will amount to $14,044,600 per team, or $421.34 million leaguewide) and postseason shares, which totaled $84.5 million last season. Add in the earnings of baseball’s chronically underpaid, nonunionized minor leaguers?—?the sport’s only true paupers?—?and the players’ share of revenue rises to more than 56 percent.

“You can’t get to the right numerator just by adding up Cot’s salary estimates,” author and Smith College economics professor Andrew Zimbalist (who has consulted for both MLB and the MLBPA in the past) says via email. Stephen Walters, a professor of economics at Loyola University Maryland who consults on player evaluation for the Orioles, elaborates via email: “Clubs sign a lot of guys to deals that involve [minor league] bonuses, a lot of teams (especially big-market ones) pay well to store players in [minor league] inventory as insurance, and clubs also spend a good amount insuring contracts (which can push seven figures on eight-figure contracts, though it’s not clear that’s accounted for here in ‘benefit costs’). Those issues can reconcile the ‘estimates’ from outsiders like Forbes/Cot’s with MLB’s accounting.” Insurance, of course, is a cost to teams but not a boon to players’ bank accounts.

The article also notes that the MLBPA hasn’t disputed the 50% figure.

The problem isn’t share of revenue, the problem is that the owners side has gamed the system to their advantage after the players held the advantage for decades. Kris Bryant is being vocal about changes to that system:

Yet, Bryant has now seen firsthand how a compensation structure that worked relatively well for decades has turned against he and his peers. Bryant was paid $652,000 for his MVP season, during which he hit 39 home runs and produced an NL-best 7.7 Wins Above Replacement.

For years, players accepted that imbalance; in exchange for clubs reserving the right to unilaterally set their salaries for three seasons, they reached free agency after six, often signing lucrative deals that included seasons where perhaps the player was overpaid relative to his production.

Now, however, players are experiencing a form of double jeopardy, with their earning power pinched on both the front and back of their careers.

And Bryant’s career didn’t even begin until he bore the brunt of a business decision. A shoo-in to win the third base job in 2015, the Cubs delayed his debut by eight games to harvest an additional year of service.

Bryant needs to fight for fewer rules. I want to see the players adopt a free agency for all approach, from amateurs to aging veterans. Every CBA from now on needs to chip away at the time it takes for a player to become a free agent, and like it or not, the players have to fight for the non-MLB players as well. Players deserve to be paid what they are worth.

from baseballmusings.com http://ift.tt/2Cc1suB