January 25, 2019


One of the reasons teams now go less on starting rotations to more workload on bullpens is the disabled list. Yahoo Sports:

One of the changes brought forth by the 2016 Collective Bargaining Agreement was the reduction of the minimum disabled list stay from 15 days to ten days. At the time this seemed like a win-win. If they only faced being out ten days rather than 15, players would be under less pressure to play through an injury. Likewise, teams would be less likely to play shorthanded while injuries were assessed.

Teams began to use the DL as a means of cycling pitchers on and off the roster, allowing them to bring in fresh arms with greater frequency. The result: a significant increase in the amount of players used, particularly relief pitchers. Bullpenning strategies that have developed over the past couple of years have been greatly aided by a shorter DL stay. Such strategies, in turn, have contributed to a reduction in offense.

The Associated Press reports Major League Baseball has proposed going back to a 15-day disabled list and increasing the time optioned players usually must spend in the minor leagues, a person familiar with the negotiations tells The Associated Press, moves aimed at reducing the use of relief pitchers and reviving offense.

This bargained for operational rule does get more players on active major league rosters (with prorate MLB pay and benefits) so the union must like the 10 day DL. But perhaps the owners have found that adding players to payrolls (with benefits count toward the luxury cap) for the sole purpose of extending the 25 man roster to a turn style 30 man team is not worth the cost.  

MLB does want offense. The home run derby days during the Steroid Era helped keep baseball from having serious financial issues. If the game is deemed "boring" for lack of scoring, then casual fans will swipe their streaming device to find some other form of entertainment.

January 18, 2019


This off-season has been quieter than a strict library.

It has been dominated by the lack of offers for superstars Bryce Harper and Manny Machado.

But what is even more telling on how bad the market is for players is the other free agents who are not getting the attention; it is like a playoff roster waiting for an expansion team.

Yahoo sports broke down the unsigned talent:

Pos. Name fWAR
C Matt Wieters 1.3
C Martin Maldonado 1.0
1B Logan Morrison 0.8
2B Asdrubal Cabrera 2.0
3B Mike Moustakas 2.8
SS Manny Machado 5.0
LF Marwin Gonzalez 1.8
CF A.J. Pollock 3.1
RF Bryce Harper 4.9
IF Jose Iglesias 1.1
IF Josh Harrison 0.8
OF Adam Jones 0.8
OF Carlos Gonzalez 0.9

Total 26.3     
At 26.3 fWAR, the Free Agent Team would have projected the ninth-most offensive fWAR in the league. It’s a well-balanced team with solid power and versatility that slots ahead of the Oakland Athletics, Atlanta Braves, Cleveland Indians and New York Mets. The pitchers on the market are well known names, but like most pitchers they are on the second half of their career. But there are a few All-Stars on that list.

Pos. Name fWAR
SP Dallas Keuchel 3.3
SP Brett Anderson 1.3
SP Wade Miley 1.1
SP Clay Buchholz 1.0
SP Gio Gonzalez 0.8
CL Craig Kimbrel 2.1
RP Cody Allen 0.5
RP Bud Norris 0.3
RP Ryan Madson 0.1
RP Brad Brach 0.1
RP Justin Wilson 0.1
RP Drew Pomeranz 0.8

Total 11.5

January 14, 2019


The Machado rumors heated up with contradictory reports on the White Sox latest offer
(is it 7 years or 8 years? $200 million or $225 million?)

I read an interesting follow up article on the new aspect of the off-season: "player values."
Player agents are using the old system to value their clients: WAR from past seasons
was worth $8 to 10 million.

Teams have economists look at a new stat: player revenue generation. How much more
revenue does a free agent bring to the team? Teams found it is only about $1.5 million/WAR.

The great divide in valuation is probably better expressed as what a player brings to the table.
If a team is about winning, great. But most teams are now about making money because of
high debt loads and investors wanted return on their investment (dividends).

A team like the White Sox could get a substantial revenue jump with signing Machado.
If he draws in another 5,000 fans a home game, that would be at least $20 million in new revenue.
But that may not be enough to get his $30 million/season asking price. If he draws 10,000 more
fans per game, then he works as a profit center and a good team investment.

Teams like the Nationals are already at their local revenue ceiling. Signing Harper would not
increase the top line at all. How many new season ticket holders will there be if Harper re-signs?
Not many.

This is why teams are more focused on touting and developing their minor league players.
When they get to the majors, they are paid a league minimum. For home games, it costs
the team about $6,800. If a rookie can generate enough buzz to get more than 140 new fans
through the gate, the team is making positive revenue growth at minimum cost.

Teams are now looking at two component for player value. First, past performance metrics.
Second, cost-benefit analysis on whether the player will enhance local revenues. The latter seems
to be gathering more traction in front offices.

January 5, 2019


You are damned if you do; and damned if you don't.


It continues to be a quiet off-season for the Cubs, though president of baseball operations Theo Epstein said in the Chicago Tribune  that the team remains active in exploring various options for upgrades.  “There are times to be aggressive and times to be patient, and there are times when you can be aggressive and times where you have to be patient,” Epstein said.  “Every off-season is unique. We’re working hard, and there are a lot of things we’re trying to do behind to the scenes to make sure we have a successful season next year.  I know thus far we haven’t added the big names that get the fans excited. I understand that’s part of the expectations in the off-season.”  Trades, more so than free agents, have taken up much of Epstein’s time as of late, he told Paul Sullivan.  They cannot make a big play for a free agent like Bryce Harper only if they can carve out enough payroll room.

Ken Rosenthal wrote that baseball’s “current economic system is outdated and flawed.”  Teams are increasingly leery of signing players to ultra-long contracts, yet are also just as worried about signing players to contracts with fewer years but higher average annual salaries out of fear of crossing the luxury tax threshold.  The result is “baseball’s version of a Catch-22,” Rosenthal writes, and he also points out that teams seem unnaturally adverse to making luxury tax payments given that relatively tiny amount of money actually spent on the tax.

Rosenthal's analysis is only rudimentary. Baseball's economic business model is changing towards uncertainty. The sport has had very good revenue, but the idea that current revenue partners like cable television distributors are going to poor billions into national and local TV rights is a thing of the past. Cable viewership is being slashed on a monthly basis. The main entertainment demographic (24-54) is moving quickly toward on-demand choices through streaming services, internet videos and on-line game platforms.

Baseball, first and foremost, is a business. On both sides of the labor issue. Each side wants to get the maximum out of a contract. Owners have been burned by long term deals that turn into dead money. Players want to be paid for past performance and/or market values tied to other (better) players rather than statistical projections of future performance (which is usually less valuable).

A team wanting to sign a $400 million player contract for 10 years must have some reasonable guarantee that their team net revenue is going to go up at least $40 million a year. With some teams local broadcast rights hovering around that number to begin with, it is extremely difficult to think that those fees will double overnight to pay for a superstar. And teams with high attendance cannot imagine that signing a superstar will increase the gate and ticket revenue. Many teams believe that they have hit revenue ceilings.

As such, owners will not lose money long term. Ownership is getting more cautious and strict on how much money a GM can spend on players. These are not artificial constraints but business reality for teams with high debt loads, and mortgage covenants. Player agents do not realize the potential squeeze some teams may be under.

 The other aspect of cost control is a team's minor league system. More GMs are focused on building a deep minor league system because those players can be cost controlled for six years. Teams have found winning formulas by playing young players at the major league level. You do not have to field a team of All-Stars (at high salaries) to be playoff competitive.

This is the second off-season where the new economic shift is taking agents back a few steps from their client expectations. Only one team, the Phillies, announced that they were willing to spend like a drunken sailor. But there has been little action as quality first and second tier players start to get antsy as winter rolls toward spring.