Munhall, PA
Joined July 2015
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I generally respect Evans work but this screams bias disguised in math. While allowing for Meyer to be the loudest voice and discounting the largest of the large markets effect on player procurement and in turn wins.
Competitive balance sits at the heart of the fight that will soon shut down MLB. So @TheAthletic took a deep dive into what the state of parity in MLB really is.
@enosarris ran the numbers, the league and union were interviewed — and two takeaways stood out.
Unlocked: nytimes.com/athletic/7716072…
PNC Yark(GMBC Burner) retweeted
"For many families, I can make an argument it’s clearly best to buy a bunker before the apocalypse," says bunker salesman.
Scott Boras says it’s best for teams to sign players BEFORE the MLB lockout, Via @ByMcCullough
“For many teams, I can make an argument it’s clearly best for them to sign players currently, before the (new) CBA, than it is after. Because they have more freedom to do what they’re going to do. They can react later. Now they can get the talent. They can get what they want.”
(nytimes.com/athletic/7711126…)
Must read
An attempt at nuance: There is one publicly-traded MLB team (the Braves), with public financials. The Blue Jays are public, too, but part of a conglomerate. Pro sports franchise value estimates/sale prices have increased a lot in recent years, largely tracking with the public markets.
The Braves are no exception with their estimated franchise value up ~60% (average of Forbes/Sportico/CNBC valuations) since being spun off as a public company in July 2023. .... But since the spin off, the Braves' stock price (+24%) badly trails S&P 500 growth (+69%) and the Nasdaq (+92%) returns. And that is with The Battery revenues included, the mixed-used business model that many clubs are trying to copy.
What gives? Why the ~35% disconnect between the Braves' estimated franchise value growth and market value change?
The values are measuring two different things.
Operating margins in MLB are thin compared to many other publicly-traded business types (software, semiconductors, etc), whereas a franchise value is tied to something else that is more difficult to quantify, and has less to do with the underlying business.
This is what Stephen Dodson, a portfolio manager for the San Francisco-based Bretton Fund, told me at the time of the spin-off.
"A sports team is almost always worth more to a very rich person than it is to a company who only cares about its cash flows ... Sports teams are a bit of a vanity asset, like owning a Picasso, and the highest bidder is going to be a very rich person who wants to own the team so they can call themselves an owner of a sports team."
That premium can coexist with modest operating margins.
Now, greater margins would make franchises even more valuable.
So would greater revenue growth for MLB, where the sport badly trails NFL/NBA/NHL over the last 10+ years.
MLB's posted a 2.7% CAGR since 2015, lagging significantly behind other major N. American sports leagues like the NBA (10.7%), NFL (7.5%), and NHL (6.8%). The RSN collapse hasn't helped.
The overall point is franchise values cannot be explained by traditional discounted cash flow valuations. There is a valuation boost, a premium, for owning something rare -- absolute scarcity -- safe (little in-sport/industry competiton) and cool like a Picasso. There are big tax benefits, too, like depreciation deductions. But pro sports are not running margins like like a Micron. The margins are below the average S&P 500 company. These are unusual businesses.
Full piece from 2023 for theScore: thescore.com/mlb/news/230020…
PNC Yark(GMBC Burner) retweeted
The Rays have been the smartest team in baseball for decades. They haven't won a World Series.
Andrew Friedman was their GM from 2005-2014. The Rays only made it to one World Series during this time, and lost.
The Dodgers hired him away after the 2014 season. In the decade since, the Dodgers have made the World Series five times and have won three times.
Friedman is the number one case for why MLB needs to change. He didn't become smarter when he went from Tampa to LA. He just had more resources to work with. Front office minds. Scouting systems. MLB payroll.
If MLB had a fair economic system, the Rays would have been just as successful as the Dodgers when they had the same person leading their franchise.
PNC Yark(GMBC Burner) retweeted
This isn't even close to being a good point. It's missing every shred of important context.
He fails to mention with a cap, LAD likely can't afford to sign Shohei, unless they released several critical players. Which would add more talent to the open market. Additionally, you would see most of the top FAs HAVE TO sign with lower market teams, because LAD, NYM, NYY, and PHI are at or near the cap. You would also see teams like the A's, CHW, etc required to sign larger contracts to hit the salary floor because a majority of their active roster is pre-arbitration.
Top end players will NEVER vouch for a salary cap/floor. With the current setup, the best players don't have a cap on how much they can make, they can handpick their destination, regardless of the teams roster/payroll construction. But the proof is there. A top 10 payroll has won 9 of the last 10 World series. Dodgers alone have won 3 of the last 6.
Joe Kelly just dropped an anti-cap truth bomb:
Even if a salary cap meant every team could only offer Shohei Ohtani $10M, he’d still pick the Dodgers over Pittsburgh, Milwaukee, or Minnesota every single time.
Why? Because nobody’s Googling “best places to visit in America” and landing on those cities. Destination + winning culture still wins when the max money is the same for everyone.
A cap doesn’t create parity. It just makes the desirable spots even more dominant.
The Dodgers would love a salary cap.
🤔
ドジャースタジアム周辺で多くのバーを運営する企業が、ドジャースのワールドシリーズ敗退による売上減を補うため、予測市場カルシで「進出しない」に6万ドルを賭けた。結果は約2倍のリターンとなり、追加のプレーオフ試合で得られるはずだったバーの売上の損失を補填することができたという。賭けサイトについては否定的だけど、こんな救われ方もあるのだなと。
reuters.com/sports/la-restau…
PNC Yark(GMBC Burner) retweeted
Not only this, but people are ignoring that eight of the top ten payrolls made the playoffs this year. That’s 80% vs 20% of the bottom 20 teams. The playoffs are a crapshoot. A team slumps or gets hot at the right time and anything can happen. You need to get there though
👀
This October features great Cinderella/small market stories. MLB is a game of probability, not certainty. But a team making its first World Series trip since 1982, another trying to secure its first title since 1948 - and another having never won a WS does not to change the larger sample reality: mlb.com/news/mlb-competitive…
Travis is a G
This October features great Cinderella/small market stories. MLB is a game of probability, not certainty. But a team making its first World Series trip since 1982, another trying to secure its first title since 1948 - and another having never won a WS does not to change the larger sample reality: mlb.com/news/mlb-competitive…
Easiest decision of the offseason
It Would Appear the Pittsburgh Pirates will Extend the Qualifying Offer to Brandon Lowe
youtube.com/shorts/XAsCAaKMf…
Instead of a cap maybe we should just call a hat? Derby? At this point call it dungarees. The PA would agree to anything as long as the semantics are right. #BorasSquad
💯
Unfortunately, the ONLY thing we have to work on with this, because we can't see the books, is to use the Braves as an example.
In 2025, the Braves spent roughly $250m on non-payroll operating costs.
Based on that, even your most lean teams are probably still spending about $150m on this, with most teams being at least close to that Braves territory.
PNC Yark(GMBC Burner) retweeted
The Pirates went after Murakami, Okamoto and Alonso last offseason
Didn't get any of them, maybe with a salary cap they do because they can offer more
Salary caps help smaller markets get top free agents, we see this in the NFL and NHL
Their reasoning is not entirely wrong
