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Maury Brown Article Archive
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Written by Maury Brown
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Thursday, 02 February 2012 20:29 |
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 UPDATE: Rays win salary arbitration case with Niemann. He will earn $2.75 million rather than the $3.2 million he had been seeking. The Rays are now 6-0 in salary arbitration hearings.
On the same day that a panel of three arbitrators ruled in favor of the Washington Nationals over John Lannan in the first salary arbitration hearing of 2012, Jeff Niemann and the Tampa Bay Rays made salary arbitration cases before a panel comprised of arbitrators James Oldham, Howard Edelman and Mark Irvings.
Based upon history (and comps this salary arb season), Niemann is likely to lose his case.
For those that don’t know, the Rays have historically gone with a “file and go” policy with players in salary arb. That is, if the player does not agree to an offer in advance of salary figures being exchanged, the Rays have said, “If you file salary figures, we intend on going all the way to hearing. We won’t be negotiating after that point.”
It’s clearly designed as a deterrent, but there’s more: those players that took the gamble and went against the Rays have lost in every case. The Rays are batting 1.000 in salary arbitration hearings going 5-0, most recently beating B.J. Upton in 2010 before a panel comprised of Gil Vernon, Elizabeth Neumeier, and Elliott Shriftman.
SEE THE COMPLETE HISTORICAL SALARY ARBITRATION SCORECARD
More than history weighs on the side of the Rays with Niemann, however. Niemann was hurt from May 4 and June 20 with a strained back. That doesn’t help his case.
Also, looking at this year’s class of players in salary arbitration, if Niemann loses, he might have to look to the Cubs and Chris Volstad for the reason why.
Volstad and Niemann are good comps. They have nearly identical Major League Service Time (Volstad - 3.076, Niemann - 3.022). Volstad avoided arbitration with a 1-year, $2,655,000 deal on Jan. 17. Niemann is seeking $3.2 million while the Rays have offered $2.75 million.
Uh, oh. Here’s why.
Volstad’s ERA with the Marlins over 29 games was 4.89 going 5-13. Niemann was 11-7 with a 4.06 ERA in 23 starts. Wins and losses become an arguable point for the Rays with the comp as clearly the Rays were better than the Marlins last season.
Volstad’s splits for ERA were identical (4.89), while Niemann was 4.95 at home and 3.27 away.
Niemann is seeking salary above average for his MLST and ERA, while his ERA of 4.06 on the wrong side of the league ERA average of 3.94.
Niemann doesn’t get help from Volstad in strikeouts, as well. In 23 games, Niemann had 105 Ks. Volstad had 117 in 29 games. In other words, it’s a push based on the number of games Niemann played due to that back injury, and it comes back to looking at Niemann’s asking figure compared to the Rays offering number, which is higher than what Volstad settled for with the Cubs ahead of arbitration.
We can drill down deeper. On 0-1 counts Volstad had 79 Ks last season to 77 for Niemann, another push. When the pitchers are in jams, it’s the same deal: a push. Niemann struck out 12 with RISP and 2 outs. Volstad struck out 14 in the same situation.
In almost every statistical category used in salary arbitration (advanced metrics are rarely used due to arguing before arbitrators, not "baseball people"), the two are nearly identical. So, it’s going to come back to that asking figure of $3.2 million compared to the Rays offering $2.75 million.
The ruling is expected to be handed down on Friday. We’re going to land on the side of the Rays on this one. If so, Tampa Bay will retain their perfect record going 6-0 in salary arbitration cases.
 Maury Brown is the Founder and President of the Business of Sports Network, which includes The Biz of Baseball, The Biz of Football, The Biz of Basketball and The Biz of Hockey. Hewrites for Baseball Prospectus and is a contributor to Forbes SportsMoney blog.. He is available as a freelance writer. Brown's full bio is here. He looks forward to your comments via email and can be contacted through the Business of Sports Network (select his name in the dropdown provided).
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Maury Brown Article Archive
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Written by Maury Brown
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Thursday, 02 February 2012 12:27 |
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UPDATE: The Nationals win the first salary arbitration case of 2012 against Lannan. He will earn $5 million for the 2012 season as opposed to the $5.7 million he had been seeking (see the Salary Arbitration Scorecard)
The first salary arbitration hearing for 2012 took place yesterday between LHP pitcher John Lannan and the Washington Nationals.
Beyond it being the first hearing of the year (it’s likely that the results of it will be made known today), as arb hearings go, it’s a substantive one for the Nationals.
Lannan has his work cut out for him if history holds court. From 2005-2011, the Nationals were involved in 7 salary arbitration hearings, and won 5 of them (71% record). The two that they lost were Shawn Hill in 2009 (Hill sought $775,000 to the Nats’ $500,000) and Chad Cordero in 2007 (Cordero sought $4.15 million to the Nationals $3.65 million).
In other words, if Lannan wins, the difference between asking ($5.7 million) to Nationals offering ($5 million) would be the highest sum won by a player in a Nationals uniform ($700,000) since the Expos relocated to DC.
That likely doesn’t bode well for Lannan.
He’s a second-time salary arb player with 4.011 years of ML Service Time. He went 10-13 with a 3.70 ERA in 33 starts last season ranking him 50th in the league by ERA. With the acquisition of Gio Gonzalez, he’d rank 3rd on the Nat’s pitching staff by Ks (Gonzalez – 197, Zimmerman – 124, Lannan – 106). Gonzalez was a Super Two who reached a $2.7 million deal avoiding arbitration. In terms of splits, he pitched a 3.34 ERA at home compared to 4.11 on the road. He pitched exceptionally well in June (1.95 ERA), after posting the worst ERA of his season the month prior (5.14 in May). He was, at the very least, consistent posting an ERA of 3.64 before the All-Star break and a 3.79 ERA after the ASG break.
Nothing screams “spectacular” for Lannan. He’s consistent and only saw wild fluctuation between the May and June numbers. His one goose-egg outing was a mid-season game against the Astros where he popped up a 15.43 ERA, the only double-digit earned-run average outing of the season.
Still, it comes back to the amount he’s seeking against his service time and stats. We’re going with the Nationals to win today. Remember, it’s salary arbitration… depending on how well a presentation is made, it can swing the three-member panel either way.
Maury Brown is the Founder and President of the Business of Sports Network, which includes The Biz of Baseball, The Biz of Football, The Biz of Basketball and The Biz of Hockey. Hewrites for Baseball Prospectus and is a contributor to Forbes SportsMoney blog.. He is available as a freelance writer. Brown's full bio is here. He looks forward to your comments via email and can be contacted through the Business of Sports Network (select his name in the dropdown provided).
Follow Maury Brown on Twitter
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Pete Toms Article Archive
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Written by Pete Toms
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Monday, 30 January 2012 22:26 |
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This week in “Last Week in BizBall“, an all tidbits edition including Indians TV rights, Liberty Media & the Braves, the annual Harris Poll and more.
- LWIB, The Plain Dealer published this piece from Bill Lubinger detailing the growing importance of local TV rights in MLB. This trend became glaringly obvious when the Angels new 20yr/$3 billion deal with Fox Sports West allowed them to sign Albert Pujols. Bill’s piece focuses on the state of Indians’ local TV rights. While the Yankees (YES) and Red Sox (NESN) are the franchises most often mentioned when the subject of team-owned RSNs is discussed, the Indians launched their own RSN, SportsTime Ohio, in 05. According to Bill, STO pays the Indians an annual rights fee of approximately $30 million. But, could the Indians soon see a significant increase in local TV revenues? Bill addresses the rumours that Dolan will soon sell STO, with Time Warner Cable the most frequently mentioned buyer. Fuelling the speculation is the fierce competition in recent years amongst MSOs, telcos and RSNs to lock up local MLB TV rights to long term deals. This competition is a result of the TV industry’s conclusion that live sports programming is THE offering which will enable them to retain subscribers and fend off the so-called OTT alternatives. The 162 game schedule of MLB makes it a uniquely valuable source of programming for all-sports channels, particularly during the summer. More specifically, the value of Indians TV rights could benefit from competition between TWC and Fox Sports. Fox Sports Ohio is STO’s competitor and TWC is the dominant cable provider in Ohio. Albeit on a much smaller scale in this instance, the battle for local sports rights in the LA market between TWC and Fox demonstrates the vital importance that both of them place on controlling local sports rights. A sale of STO would not be hindered by their current rights deal with the Indians, which, according to Bill, is year to year. Lots of good info in the piece also on the valuations of RSNs.
- LWIB, Tim Tucker of the AJC discussed the state of the Braves with club CEO Terry McGuirk. The report notes that, as of last month, owner Liberty Media is allowed to sell the Braves. When Liberty purchased the Braves in 07 from Time Warner they had to agree to not sell the team for 4.5 years. Beyond that, the rest of the deal remains too complex for me to understand. The bottom line is, most believe Liberty has never wanted to own the Braves, that their ownership resulted from a MASSIVE deal with TW in which the franchise was a trivial component. In the piece, McGuirk defends Liberty’s middle of the pack player payroll, a subject of frustration amongst Braves fans, equating it with the club‘s middle of the pack attendance. McGuirk also sheds some light on the realities of the corporate approach to ownership of a pro sports franchise. He notes that Liberty accepts that they don’t generate yearly profits operating the franchise but expect that the value of the asset will increase over time. McGuirk also speaks to the difficulties inherent in a publicly owned company owning a sports franchise, where the seasonal spikes in revenues isn’t compatible with quarterly earnings reports and expectations of shareholders. In addition, the report reveals that Braves local TV rights are locked up for the next 25 years. With that revenue stream becoming increasingly important in MLB, it does not bode well for future Braves payrolls or franchise value.
- LWIB saw the release of the annual Harris Interactive Poll which measures the popularity of a broad range of sports amongst adults in the US. 2,237 persons participated in the online survey between December 5 and December 12. “Over one-third of adults who follow at least one sport (36%) say professional football is their favorite sport while just 13% say baseball is their favorite. The gap between the two sports has widened in the past year - last year 31% said pro football was their favorite while 17% said baseball was their favorite sport.” Harris goes on to note that when they first asked Americans to identify their favourite sport in 1985, 23% responded baseball. Harris also tells us that the largest group identifying baseball as their favourite is, not surprisingly, folks aged 50-64. The 2nd largest group choosing baseball as their favourite was Hispanics; good news for MLB considering their burgeoning population numbers. Again, not surprisingly, a disproportionate number of respondents on the east coast identified baseball as their favourite.
- It has long been assumed that many minor and major league players from Latin countries are older than their clubs officially list them. In addition, many have long been circumspect about the identities of these players. For instance, David Ortiz played a handful of seasons in the Mariners’ organization as David Arias. But in recent years, as signing bonuses for international free agents have rapidly escalated, these matters are no longer treated as trivial. In efforts to reduce age and identity fraud amongst signees from the Dominican Republic, both MLB’s Department of Investigations and Scouting Bureau are assisting clubs in player evaluation. LWIB, in light of the well documented cases this off season of the Ps formerly known as Fausto Carmona and Leo Nunez, Tyler Kepner reported on the challenges facing MLB in the DR.
- Last year it was the opening of the PNC Club and the installation of the Toyota sign in the left field bleachers. This upcoming season will see the Budweiser Patio area and an LED board in right field. Of course, I am describing the Cubs continuing efforts to increase revenues at Wrigley Field. LWIB, Ed Sherman reported on what other changes fans can anticipate at Wrigley. If Ed is correct, this is just the beginning.
- The Miami Marlins home opener is just over two months away. LWIB, Marlins President David Samson stated that their new ballpark will be known as “Marlins Stadium” at least for “..the start..”. And, on that note, after four seasons, the Washington Nationals still haven’t concluded a naming rights deal for Nationals Park.
You can follow me on Twitter @PeteToms
Pete Toms is senior writer for the Business of Sports Network, most notably, The Biz of Baseball. He looks forward to your comments and can be contacted through The Biz of Baseball.
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Maury Brown Article Archive
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Written by Maury Brown
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Thursday, 26 January 2012 15:48 |
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It’s often said that players in MLB “make too much money.” In relationship to some professions (teachers often get cited), the relationship in pay gets brought up. Of course, when you really think about it, MLB is really a form of entertainment. It’s a capitalism thing – supply and demand – if people didn’t pay the money they did to watch games and purchase merchandise, well… players wouldn’t make as much.
But, with the Fielder signing, I made the comment to my Baseball Prospectus brethren that “the AL had gone bat-s%$# crazy” in terms of spending.”
Rebecca Glass responded by asking, “Have you thought about looking at how some of the salaries add up compared to the gross-domestic product (GDP) of some small countries?” I said I hadn’t but it would be a fun look.
To that end, Rebecca hit Wikipedia and came up with below.
If you combine A-Rod’s current deal, plus the recent Pujols and Fielder signings, you come up with a total contract amount of $729 million. These countries have a GDP less than that:
In Millions
Source: Wikipedia
Special thanks to Rebecca Glass
Maury Brown is the Founder and President of the Business of Sports Network, which includes The Biz of Baseball, The Biz of Football, The Biz of Basketball and The Biz of Hockey. Hewrites for Baseball Prospectus and is a contributor to Forbes SportsMoney blog.. He is available as a freelance writer. Brown's full bio is here. He looks forward to your comments via email and can be contacted through the Business of Sports Network (select his name in the dropdown provided).
Follow Maury Brown on Twitter
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Maury Brown Article Archive
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Written by Maury Brown
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Tuesday, 24 January 2012 14:28 |
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 The NFL is king. Or, at least it’s king on television. No matter your sports allegiance, it’s an undeniable fact. To put this in perspective, the Conference Championship games this past weekend averaged 53.7 million, making it the most watched Conference Championship Sunday since 1982. The Giants-Niners game on FOX drew 57.6 million viewers to rank as the third most-watched conference championship, ever.
The Ravens, Patriots game pulled in 48.7 million on CBS.
What did Game 6 of the World Series last season draw? 21.06 million viewers, or less than half the Conference Championship Sunday average.
When I published my article for Baseball Prospectus last week (see Selig’s To-Do List), one commenter declared that Selig should be blamed for allowing the NFL’s ascension to surpass baseball on television.
It’s not Selig’s fault. It’s an awful lot about timing.
What I mean is this: the growth in the NFL’s popularity can be tied closely to the television becoming a commonplace household appliance, and Pete Rozell’s brilliance in making the NFL part of the American landscape on the weekends and Monday night.
It’s also about the game’s design.
The NFL is the only Big-4 sport (up until MLB adds the additional Wild Card teams) that thrives on “win, or go home”—every game in the postseason is sudden death. That lends itself to the excitement which boosts the ratings and viewership needle.
Another thing is the field and timed play. With almost full adoption of theater-aspect ratio to television screens, it’s as if the football field was designed for HD. Throw in that in today’s fast paced society, fans know that on the weekend, games will start and end (unless OT), right around the same time.
It’s a formula that works. We can argue about whether the best team really wins any given playoff game. We can talk about whether the sport has the same level of intellect as others. But, no one—not Selig, or anyone else—can alter baseball in the near-term to get to the NFL’s excitement level.
And, maybe it’s how it should be.
Major League Baseball is incredibly popular. Is it as popular on television? No. Is it a better experience in person? Many would argue that.
But, baseball should never rush to alter its core design all in an attempt to be competitive with the NFL in terms of television. There are massive, and insanely lucrative national broadcast deals on the horizon for MLB. That shows that the game is still a winner with the likes of ESPN, FOX, and TBS, and more importantly, the fans. Being second isn’t a bad place to be.
Maury Brown is the Founder and President of the Business of Sports Network, which includes The Biz of Baseball, The Biz of Football, The Biz of Basketball and The Biz of Hockey. He writes for Baseball Prospectus and is a contributor to Forbes SportsMoney blog.. He is available as a freelance writer. Brown's full bio is here. He looks forward to your comments via email and can be contacted through the Business of Sports Network (select his name in the dropdown provided).
Follow Maury Brown on Twitter
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Pete Toms Article Archive
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Written by Pete Toms
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Monday, 23 January 2012 20:52 |
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This week in “Last Week in BizBall“, paperless ticketing and the secondary market, plus tidbits.
PAPERLESS TICKETING & THE SECONDARY MARKET
Last month I blogged about the problems that secondary ticketing has created for many MLB franchises. Many clubs believe that the secondary market has diminished the value of their season tickets and hurt their walk up gate. Within that post I brought attention to reports that the Braves are offering some ticket inventory via Ticketmaster’s paperless option. There was speculation that the Braves motive behind this offering was to control this inventory if/when it is offered on the secondary market. Tickets purchased via Ticketmaster’s paperless offering can only be resold via Ticketmaster. In May, I blogged about the glut of cheap MLB tickets on the secondary market. At that time I wrote, “…across professional sports, clubs appear set to impose stricter controls over who they allow to resell “their” tickets. This initiative is made more feasible with the move to “paperless ticketing” which will allow ticketing vendors to impose restrictions on reselling. Ultimately, some speculate the future of ticketing will be decided in court over the question of who owns the ticket and what they are allowed to do with it.” LWIB, the New York Times published an Op-Ed piece from Albert A. Foer. Mr. Foer is president of the American Antitrust Institute and formerly a lawyer with the FTC. Mr. Foer’s piece is a direct attack against the practice of paperless ticketing and the restrictions it imposes on where and how a ticket can be resold.
But in reality, the restrictions represent an effort to control the secondary-ticketing market and stifle competition from independent resellers and resale marketplaces like StubHub, where tickets are often sold for less than face value. (The American Antitrust Institute, of which I am president, received a modest contribution, in the form of sponsorship of a conference last year, from an advocacy group financed in part by StubHub.) Paperless tickets bought through Ticketmaster may be resold, for example, only through its own resale Web site, which often prohibits sales below face value, sets maximum sale prices and charges a fee for transfers.
As Mr. Foer notes, the practice of paperless ticketing is today a very minor concern. He estimates that it represents about 1% of all live-event tickets sold. But, going forward, will an increasing number of MLB tickets be sold via the paperless option? After all, it isn’t the tickets being resold on StubHub at greater than face value that is the problem. The problem many clubs have is the cannibalizing of their primary sales due to large amounts of inventory for low-demand games dumped on the secondary market for well below face value by ticket brokers and season ticket holders. If clubs, via the paperless option, can control where and how “their” ticket is resold and, more importantly, set the secondary price….problem solved.
MLB’s formal secondary ticketing partnership with StubHub expires after this upcoming season. Commissioner Selig has already acknowledged that secondary ticketing is problematic for MLB as evidenced by his formation of a committee last year to study the situation. MLB’s unrivalled success in digital media and soaring value of local media rights rightfully garner much attention when the industry’s record $7 billion plus annual revenues is discussed. But, good ol butts in the seats remains the industry’s largest single source of revenue. More recently we are also beginning to understand that secondary ticketing is not only important to MLB but to fans of MLB also.
SELECT READ MORE TO SEE THIS WEEK'S TIDBITS
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Salary Arbitration
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Written by Maury Brown
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Monday, 23 January 2012 14:50 |
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As we’ve done for several seasons now, The Biz of Baseball has been updated to give you all the players that have exchanges figures as part of the salary arbitration process.
(SEE SALARY ARBITRATION FIGURES)
The table is broken out by:
- Player
- Club
- Position
- Major League Service Time
- Number of Times Player In Arb Process (Includes listing Super Twos)
- Player Asking Figure
- Club Offering Figure
- The Difference Between the Two
- The Mid-Point Between the Two
- Resolution
Some interesting tidbits:
- There were 43 players that exchanged figures out of the 142 that filed
- The two clubs with the highest number (4 ea) are the Diamondbacks and the Orioles.
- The largest gap to overcome is between Matt Garza and the Cubs at $4.55 million. Garza is seeking $12.5 million while the Cubs are offering $7.95 million. Mid-point is $10.225 million.
- Tim Lincecum’s $21.5 million asking figure is just $1 million less than the record ever garnered through the salary arbitration process to Roger Clemens in 2004. But, there’s a catch in that… Clemens was a free agent and had been in the league years (his service time then was 20.142). Lincecum’s number is the highest asking figure ever for a non-free agent. The mid-point between the Giants ($17 million) and Lincecum is a whopping $19.25 million.
- The “file and go” system seems to work for the Rays. Just one player (Jeff Niemann) exchanged figures with the club.
- NL MVP Clayton Kershaw in his first year of salary arbitration is asking $10 million from the Dodgers. If the two went to hearing, and the Kershaw won, it would equal the highest award for a first time salary player (Howard).
See a complete listing of salary arbitration figures dating back to 2009
Maury Brown is the Founder and President of the Business of Sports Network, which includes The Biz of Baseball, The Biz of Football, The Biz of Basketball and The Biz of Hockey. He writes for Baseball Prospectus and is a contributor to Forbes SportsMoney blog.. He is available as a freelance writer. Brown's full bio is here. He looks forward to your comments via email and can be contacted through the Business of Sports Network (select his name in the dropdown provided).
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Free Agency, Trades, and Signings
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Written by Joe Tetreault
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Sunday, 22 January 2012 10:54 |
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Dan Shaughnessy, who long ago did his heel turn, had already blasted the club’s ownership for the penny pinching ways, when Red Sox GM compounded the complaints with a text book salary dump sending designated starting shortstop Marco Scutaro to the Colorado Rockies for righty Clayton Mortensen.
The move perplexes Rob Neyer. And the overall tenor of the offseason has largely upset legions of Red Sox Nation. The acquisition of Andrew Bailey being the primary positive among a sea of head scratchers.
But the tactics are not designed to construct a playoff roster. They are designed to avoid the newly sterner luxury tax penalties as spelled out in MLB’s new collective bargaining agreement. The Biz of Baseball’s Maury Brown touched on this topic when the new CBA was announced in November:
The Competitive Balance Tax (CBT), or as it’s commonly known as the Luxury Tax that has been part of MLB, stopped at the end of the season. It’s back in the new agreement, with some undefined tweaks. In a sign that the players are happy with where the model currently is, the soft cap for the league will see no changes in the threshold from the 2011 season -- $178 million based on end-of-year salaries
The quiet offseasons that both the Red Sox and Yankees have overseen suggest both clubs find the new provisions onerous enough to pull back from their free-spending ways. The Yankees big splash came in two pieces just over a week ago. First they dealt Jesus Montero and Hector Noesi for Michael Pineda and minor leaguer Jose Campos. Then they announced an agreement with Hiroki Kuroda on a one-year contract for the budget conscious price tag of $10 million.
Still, the Red Sox and Yankees both face the prospect of exceeding the tax threshold in 2012. The Yankees certainly will. Boston is working like crazy to prevent that.
Speculation centers around Roy Oswalt. The Red Sox would not have been able to sign the veteran right handed starter, even at his reduced salary demand of one-year and $8 million unless they moved some salary. Thus exits Scutaro.
Among the agida inducing activities Cherrington continues to deal with is the club’s full slate of players facing salary arbitration. And with David Ortiz seeking $16.5 million the Red Sox were looking at an even greater cash crunch.
They settled one of their cases last night, with an announcement sent out minutes after the trade was officially announced. Right-handed reliever Daniel Bard agreed with the team on a one-year deal for the $1.6125 million. The two met int he middle between Bard’s asking price of $1.825 million and the club’s offer of $1.4 million. The contract represents a raise of 219.3% over his 2011 salary. He qualified as a Super Two player.
Bard is a candidate to start for the Red Sox in 2012 after serving as the club’s primary set up for Jonathan Papelbon since joining the team in mid-May of 2009. He and Alfredo Aceves, who is also poised to go to an arbitration hearing, are both looking to shift from the pen to a starting role. Picking up Oswalt would ensure one, if not both, would be back in the bullpen next year.
 Joe Tetreault is a contributor to the Business of Sports Network, which includes The Biz of Baseball, The Biz of Football, The Biz of Basketball and The Biz of Hockey. He can be contacted here through The Biz of Baseball
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Maury Brown Article Archive
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Written by Maury Brown
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Friday, 20 January 2012 13:20 |
Yu Darvish has been signed with the Rangers. Here's the breakdown |
With 5 minutes left before the deadline to get him signed, agent Arn Tellem and the Texas Rangers agreed on a six-year, $56 million deal that sees $49 million of it guaranteed and the 2017 salary of $11 million a player option based on certain awards. According to Cot’s Contracts, that player option kicks in if 1) Darvish wins the Cy Young in 2012-16 or 2) 2nd in voting once in another season for 2012-16 and finishes 2nd-4th in two other seasons 2012-16.
To add, he gets a roster bonus of $800,000 annually if he stays off the DL. If he’s on the DL more than 30 days, the $800K is reduced by $5,228.75 per day starting on Day 31.
He gets some standard boilerplate award provisions, as well. Darvish gets $50,000 each for AL ROY, All-Star. $100,000 for Gold Glove, LCS MVP. $150,000 for World Series MVP, $250,000 ea for AL MVP or Cy Young ($200,000 if 2nd if either voting category, $150,000 for 3rd, $100,000 for 4th, $50,000 for 5th)
Here’s the salary break down
- 2012 - $5.5M
- 2013 - $9.5M
- 2014 - $10M
- 2015 - $10M
- 2016 - $10M
- 2017 - $11M (player option based on Cy Young voting)
Confused? There’s more.
There’s the posting fee.
By tomorrow, the Rangers will have had to have made the $51,703,411 posting fee payment to the Nippon Fighting Hams, a new record high. It’s how that money moves around on the books that is interesting.
The posting fee money does not count toward player payroll, which is key as the Rangers had a player payroll at the end of the 2011 season in excess of $106 million. Because the posting fee money does not count as player payroll, it’s not counted against the CBT (or, as it’s more commonly known, the Luxury Tax).
Evan Grant of the Dallas Morning News reported that the fee will be amortized over 6 years, which brings the $52 million fee down over time.
From an ownership perspective, Darvish is both an asset and a liability. The difference is in how the money is placed in the ledger.
If the posting fee were connected to the contract and that amortized payment moved out over the 6-years with the guaranteed money, he would be more difficult to move if the Rangers saw fit. That $10 million a year at the end of the contract looks more far forgiving that $16 or $17 million.
As one sports exec said of the posting fee being attached to the contract or not is “fungible” from an ownership perspective.
On paper, Darvish comes off eye-popping at possibly $111 million. The 2017 player option year allows for Darvish to opt out if he hits all the marks. The posting fee is also a massive write-off, which lowers its true cost further.
It’s enough to make your head swim, especially when you consider this: Yu Darvish’s current Major League Service Time is 0.000.
RELATED CONTENT
Demystifying the Posting System for Japanese Players Entering MLB
Maury Brown is the Founder and President of the Business of Sports Network, which includes The Biz of Baseball, The Biz of Football, The Biz of Basketball and The Biz of Hockey. He writes for Baseball Prospectus and is a contributor to Forbes SportsMoney blog.. He is available as a freelance writer. Brown's full bio is here. He looks forward to your comments via email and can be contacted through the Business of Sports Network (select his name in the dropdown provided).
Follow Maury Brown on Twitter
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