The Biz of Baseball :: Business of Sports Network
Rob Smith Article Archive
Written by Rob Smith
Friday, 09 December 2011 15:16
It took only one regular season start for Matt Moore to convince the Tampa Bay Rays that he was worth keeping around for the long haul.
Sure, there was a glimpse of playoff brilliance and a few years of minor league dominance sandwiched around that. But the fact remains that less than three months after making his MLB debut, the Rays signed Moore to a five-year, $14 million deal which could become an eight-year, $37 million contract through team options and incentives.
It's the type of shrewd foresight that Rays' Executive Vice President of Baseball Operations Andrew Friedman has consistently demonstrated in turning the Rays into a playoff team three out of the past four years despite strict payroll constraints.
Signing Moore buys out his first two years of arbitration (2015 and 2016), and will delay Moore's free agency by two years (2018 and 2019) if the Rays exercise each of their option years.
While Moore will earn far more than the minimum salary he was slated to earn in 2012, 2013 and 2014, the team will recoup that money in the following two seasons when Moore is locked into $2.8 million salaries instead of going through the arbitration process. The logic assumes that Moore will be the elite, front-line starter that most people in the league expect him to become, but it seems like a safe bet. Moore dominated the Yankees in his first career start, striking out 11 in five shutout innings. He also gave the Rays their lone postseason win over Texas, yielding only two hits over seven shutout innings.
As an example of what can happen if teams go the arbitration route, the Giants signed Tim Lincecum to a two-year, $23 million deal just before Lincecum was set to go to arbitration for the first time. He had won the past two NL Cy Youngs (in 2008 and 2009) and would've been eligible for four years of (pricey) arbitration before hitting free agency. Still, by waiting for Lincecum to put his elite talent on full display for a couple years before signing him, the Giants ended up paying a steeper price than the Rays will if Moore fulfills the potential he's already exhibited, albeit briefly.
This isn't to imply that Moore will win back-to-back Cy Youngs. But if he becomes the ace that baseball executives expect him to, the Rays (a team that needs all the financial help it can get) will have saved themselves a considerable amount of money buying out his arbitration years alone.
The three team options will keep Moore affordable for the Rays (or whatever their team name is by then) into his thirties. Had Moore played out his mandatory six years (at his projected elite level) before hitting free agency at 29, the Rays would've almost certainly been outbid for his continued services by the Haves of the baseball world. By giving themselves the option to delay Moore's free agency by two years at a reasonable rate, the Rays may have bought themselves a little extra time to get their stadium issue resolved and create the revenues necessary to keep elite talents like Moore instead of watching them sign with the Red Sox or Yankees.
The plan to pay Moore immediately could backfire of course. He wouldn't be the first prospect to not pan out. Still, the $14 million commitment from the Rays is a pittance compared to what it would've cost them if Moore becomes the ace that most MLB executives believe he will eventually be, if he's not already.
Rob Smith is a contributing writer for the Business of Sports Network. He can be reached on Twitter @RobSmithUSF or on his personal blog, http://smithersports.blogspot.com/
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Pete Toms Article Archive
Written by Pete Toms
Monday, 27 February 2012 18:03
This week in “Last Week in Bizball”, dynamic pricing and the secondary market, worldwide draft update, plus tidbits.
DYNAMIC PRICING & THE SECONDARY MARKET
Seemingly every week I mention that another team has either implemented, or expanded their use of, dynamic pricing of tickets. Another subject that I frequently bring attention to is the challenges that the secondary ticket market pose to many MLB franchises. Despite the reported approximate $60 million annually that BAM earns from their formal partnership with StubHub, and the avalanche of qualified sales leads it generates, many clubs believe that secondary ticketing is killing their primary sales. My piece from December on MLB and secondary ticketing included this quote (courtesy of SBJ) from Braves Executive Vice President of Sales and Marketing Derek Schiller, “I don’t believe there is any bigger obstacle or issue, any bigger threat to the professional team sports marketplace and industry as a whole…This is the single biggest issue facing our industry….The amount of dollars at risk is growing near exponentially. And we absolutely as an industry — and not just baseball — need to manage it.”
The Giants were the first MLB franchise to implement dynamic pricing, using it on a limited basis for the 09 season. This season, 17 teams will use dynamic pricing. 10 of those teams will use dynamic pricing to set the price of all single-game tickets. Initially, the motive behind dynamic pricing was both to increase the number of tickets sold and the average sale price. More recently, clubs are also implementing and expanding the use of dynamic pricing to limit the amount of ticket inventory resold on the secondary market. LWIB Danny Ecker reported on the Cubs decision to use dynamic pricing this season for 5,000 bleacher seats. According to the piece, “Expanding that model to the entire ballpark could mean recouping as much as $11 million a year from resellers.” And, “Teams are looking at (dynamic pricing) to capture some of that secondary market that they're not capturing,” says Colin Faulkner, the Cubs' vice president of ticket sales and service…”
WORLWIDE DRAFT UPDATE
January 9 was the date of the first meeting of the International Talent Committee. The co-chairs for the committee are MLBPA ED Michael Weiner and MLB’s senior executive on labour matters, Rob Manfred. According to the press release, “…the International Talent Committee is responsible for examining a number of areas related to the procuring of international players including but not limited to the exploration of the possibility of an international draft, improving the education and acculturation programs of Clubs at their international academies and the development of appropriate country-by-country plans for playing and development opportunities for players prior to draft eligibility.” This committee exists as a direct result of the new CBA, which contemplates either an expansion of the Rule 4 draft, or the introduction of a wholly separate “international” draft. (The Rule 4 currently includes Canada and Puerto Rico). After years of attempting to control club spending in the Rule 4 via his office’s “slot recommendations” commissioner Selig succeeded in the last round of negotiations in implementing fundamental changes to the acquisition of amateur talent. Beginning this season, clubs exceeding spending limits in both the Rule 4 and international free agent market will be severely penalized by MLB. In addition, MLB foresees the implementation of a draft in the Dominican Republic as part of its ongoing efforts to reduce age/identity fraud and bonus skimming there. LWIB, commissioner Selig commented to Baseball America on the much discussed worldwide draft, "It is inevitable. I would like to see it. We have made some significant progress to that end. When we went to the draft in 1965, it was to create a more level playing field. We've done that, and the same thing will have to happen internationally." Josh Leventhal added that there is plenty of opposition to a worldwide draft, both within, and outside of, MLB.
….many front-office officials have said they neither want an international draft nor are confident that MLB has the ability to pull it off.
The Dominican Republic, Venezuela and the other Latin American countries all have their own issues with laws, player registration and investigations that would need to be worked out. Then there are agreements with Asian baseball governing bodies that would have to be worked out, including Japan, Korea and Taiwan, all of which have their own professional leagues.
Some major league club officials think an international draft will penalize teams that work hard in Latin America and have invested more resources into scouting the region. However, many teams, trainers and agents have seen the writing on the wall the last couple of years that an international draft was behind MLB's efforts to reform Latin America, even if MLB didn't always explicitly frame it that way.
Also LWIB, Zachary Levine examined how the Astros attempt to greatly increase the quality and quantity of players they recruit in Latin America is being impacted by the aforementioned changes in the CBA.
SELECT READ MORE TO SEE THIS WEEK'S TIDBITS
Written by Maury Brown
Saturday, 18 February 2012 00:00
For several years, The Biz of Baseball has provided detailed reports on salary arbitration in Major League Baseball. Whether it has been those reports, filing info, the historical salary arbitration scorecard that breaks down each hearing, or a scorecard that shows how each club has fared since 1974, we’ve been a clearinghouse for that data.
Today, we go one step further.
The analysis that drives our predictive analysis comes from hundreds of hours researching salary data. Now, you have that data at your disposal.... for free.
MORE DETAILS AVAILABLE ON BASEBALL PROSPECTUS MONDAY
Detailed information for the 142 players in the 2012 class of players is available for download. The spreadsheet (or CSV file) is broken into these 29 categories:
- Uni #
- 2011 Major League Service Time (MLST)
- Status (is 1st, 2nd, 3rd, etc. eligble)
- Super Two? (is the player a Super Two)
- Signed (Date signed)
- Filed? (Filed, Exchanged figures)
- Action (Avoided, Extension, Hearing outcome)
- Player Ask figure
- Club Offer figure
- Diff between ask and offer
- Mid-point between ask and offer
- 2011 Salary
- (subsequent salary for yrs in multi-yr deals)
- % (+/-) from '11-'12 salary
- mid (+/-) based on club #
- Increase ('11 to '12) in terms of dollars
- Term (Length of contract)
- Total contract dollars
- Annual Average Value (AAV)
- Details (player notes on performance, bonus info, etc)
While an expansive analysis of the data will be available via an article on Baseball Prospectus this Monday (link provided at that time), here are some key notes on the data:
- Salaries for the 142 players increased 83 percent from what will be earned in 2011 and salaries in 2012 (not factoring bonuses or deferments).
- Salaries in 2011 totaled $276,328,860 for the 142 compared to $504,847,000 for those same players.
- The 83 percent increase is a decline from 2011 when salaries totaled $417,617,250 compared to $222,894,345 for the same players in 2010.
- According to Ronald Blum of The Associated Press, using AAV in mult-year contracts, not actual salary in 2012, as defined in this study, “The 142 players who filed for arbitration last month averaged an 89 percent increase, according to a study of agreements by The Associated Press. That was down from an average jump of 123 percent last year and was the lowest increase since a 73 percent rise in 1996.”
- The largest salary increase went to NL Cy Young winner Clayton Kershaw. As Kershaw was in his first year as salary arb eligible, he went from $500,000 in 2011 to $7.5 million in 2012 as part of his 2-year, $19 million extension, or an increase of 1400%
- Two players saw salaries go down: Third-baseman Ian Stewart of the Cubs ($2.29 million down to $2.237 million) and Francisco Rodriguez of the Brewers who as a free agent that accepted salary arbitration went from $11.5 million in 2011 to $8 million in 2012 as part of changing from closer to reliever.
- Nine players reached “mid-point deals” – deals that see their 2012 salary exactly between the figure the player was asking and the figure the club was offering. They were: Robert Andino, Daniel Bard, David Ortiz, Shaun Marcum, Brett Gardner, Hunter Pence, Casey McGehee, Jason Motte, Casey Janssen
- In terms of multi-year extension there were seven 2-year contracts, three 3-year deals, and one 5-year deal (Gio Gonzalez)
- The two largest contracts by total dollars were the 5-year/$42 million deal for Gio Gonzalez with the Nationals, and 2-year, $40.5 million deal between the Giants and Tim Lincecum.
- Lincecum’s 2-year deal had the highest average annual value ($20.25 million)
- The biggest single-year deal avoiding arbitration was with the Phillies and SP Cole Hamels ($15 million), followed by the FA arb deal between the Red Sox and DH David Ortiz ($14.575 million)
- The clubs beat the players 5-2 in hearings this year. If not for the two losses by the Marlins (Anibal Sanchez and Emilio Bonifacio), the clubs would have had their first-ever clean sweep in hearings.
- Overall, owners lead 291-214 in 505 cases (a 57.62% to 42.38% advantage) since arbitration began in 1974 (see the total scorecard)
SELECT READ MORE TO DOWNLOAD THE MLB SALARY DATA
World Baseball Classic
Written by Maury Brown
Thursday, 22 March 2012 14:33
World Baseball Classic, Inc. (WBCI) today announced the venues and pools of the new Qualifiers for the 2013 World Baseball Classic. The winners of each Qualifying Pool will advance to compete in the 2013 World Baseball Classic tournament next March. The four venues that have been selected to host a Qualifying Pool are:
- Armin-Wolf-Baseball-Arena in Regensburg, Germany;
- Rod Carew Stadium in Panama City, Panama;
- XinZuang Stadium in Taipei, Taiwan; and
- Roger Dean Stadium in Jupiter, Florida
Initial opening round match-ups (including home and visitor designations) as well as ticket information will be announced at a later date by the host venues.
The pools for each Qualifier are:
Sept. 20th-24th in Regensburg, Germany
Nov. Dates TBD in Jupiter, Florida, USA
Nov. Dates TBD in Taipei, Taiwan
Nov. 14th-18th in Panama City, Panama
“We are excited to expand the scope of the World Baseball Classic and maintain our commitment to global baseball development, starting with four excellent venues hosting the new Qualifiers this fall,” said Paul Archey, Senior Vice President, International Business Operations for Major League Baseball. “We are very pleased with the level of interest from venues and organizers around the world who share our enthusiasm for the World Baseball Classic and its mission of celebrating the global nature of our game.”
We are pleased to have 12 new countries participating in the World Baseball Classic,” said Major League Baseball Players Association Assistant General Counsel Ian Penny. “Sports fans around the world will witness one of the greatest events on the international sports calendar when the 2013 World Baseball Classic launches its new Qualifiers with games in Regensburg, Germany. We’re confident the Qualifiers will further expand the international popularity of the game we all love. We thank all participating nations for their commitment to the World Baseball Classic and the Qualifier host locations and organizers for their passion and interest in the game of baseball.”
The Qualifiers will feature a six-game modified double-elimination format. The composition of the pools was determined after venues were selected, with consideration given to competitive balance, existing rivalries and each national team’s geographical location.
“The implementation of this qualification system into the World Baseball Classic framework is a true sign of the strong collaboration between the IBAF and our colleagues at Major League Baseball and the Major League Baseball Players Association,” said Riccardo Fraccari, President of the International Baseball Federation. “We are very encouraged about the inclusion of emerging baseball territories and the continual growth of the international baseball landscape that this represents.”
The Qualifiers will expand the competitive field from 16 to 28 countries. The teams invited to participate in the Qualifying Pools will include the four World Baseball Classic teams from 2009 that did not win a game – Canada, Chinese Taipei, Panama and South Africa.
The winners from each Qualifying Pool will advance to the World Baseball Classic tournament, scheduled for March 2013. Those four teams will join the 12 countries – Australia, China, Cuba, Dominican Republic, Italy, Japan, Korea, Mexico, Kingdom of the Netherlands, Puerto Rico, United States and Venezuela – that receive automatic invitations based on their performance in the 2009 tournament.
The 2013 World Baseball Classic will mark the third edition of the tournament. The inaugural event was held in 2006, and the second World Baseball Classic was held in 2009.
Source: MLB, MLBPA, World Baseball Classic, Inc., IBAF
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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