It is reported that one of the Dodger owners in he Guggenheim group, Todd Boehly, was seeking to purchase the Washington Commanders of the National Football League. His interest in the team has waned in the past few days, but if Boehly wanted out and decided to sell share of Dodger’s ownership, we are talking “big” money. Amounts that few of us could ever imagine. Here’s the kicker though. If you wanted to purchase Boehly’s 20% share, it may cost you about what the Guggenheim group paid in their entirety for the Dodgers in 2012. Yes, about $2 billion. That might be a stretch, but these things are tough to gauge and the money being paid in a sport that has all the signs of decreasing in fan interest, is still astronomical.
This is the world of professional baseball in which we now live in. All this money in play and we are bandying about discussing how the Dodgers can reduce payroll by a few million to get under the luxury tax. The $32.4 million that the Dodgers owe MLB for exceeding the competitive balance threshold in 2022 is chump change to these guys. Yes, it is stupid to be paying $20-40 million in Competitive Balance Tax penalties, but that it is still practically nothing to ownership on the grand scale. It is no wonder that Steve Cohen with the Mets doesn’t blink at paying close to $200 million over the CBT threshold.
As I was driving across the country this past week, I tuned in to satellite radio and much of the time had the MLB network on my dial. Former Rockies General Manager Dan O’Dowd was discussing the enormous contracts being offered players these days and he brought up an interesting concept with regard to the future of free agent negotiations and where the game is heading. He speculated that superstar players in the future may be offered equity shares in teams that they agree to play for.
It might be time for free agent bidders to consider offering ownership deals to top tier free agents in the future, perhaps as soon as next year. Shohei Ohtani, that once in a century multi-faceted player, could command a half billion dollars or more in the free agent market. What if the Dodgers were to offer him a 2.5% equity share of the team plus some salary? Back in 2012, 2.5% equity in the Dodgers was worth $50 million. That same 2.5% today is worth perhaps as much as $175 million. You really don’t know how much the share is worth until the team is sold, but speculation is that the Dodgers could be worth in the neighborhood of $7 or 8 billion dollars. I understand that Forbes estimated the Dodger franchise value at $4 billion last year, but some experts claim that to be a very conservative number on the low side. Team values have been appreciating at enormous rates, some claiming about 10% each year.
It would be problematic for MLB to calculate an equity share payout to a player when calculating for the luxury tax threshold. Most likely that is something that they will soon have to figure out. I guess it would have to be an appraised value set by some sort of non-biased arbitrator. It would definitely be very complicated, but I can see them facing this hurdle in the near future.
We are in an unprecedented era in which there are additional streams of revenue that can be created in the game. You look at Nascar and professional soccer where corporate sponsorships have inundated their sports. Corporate logos are plastered everywhere the eye can see. Slowly but surely we have seen this happening in baseball. Remember when Dodger Stadium was void of advertising except for the Union76 ball on top of the scoreboard. Now we see it in everyplace imaginable.
I honestly don’t see the visual ads in the ballparks as distracting at all. You look at artwork and photos from the old days where advertising was prevalent, and it provided a bit of charm to the game. Ebbets Field had the “Abe Stark, hit the sign, win a suit,” on the right field wall. Also, there was the Shaeffer beer sign integrated into the scoreboard with the “H” and “E’ in Shaeffer used to also cover “hits vs. error” judgement calls by the official scorer. These were creative uses of advertising in the game, and we are already seeing it recur ball parks around the country. But innovative marketing minds in the game can stretch earnings even further aside from profits earned from sign advertising and corporate naming rights to venues.
I am simply wondering if we will see a player agreeing to a corporate logo on their uniform. This is an area that will meet some MLB resistance, but perhaps an agreement can be reached between the players union and management. We see it now with Nike’s MLB agreement on all the uniforms, but an individual player with a Toyota or Pepsi logo patch on their sleeve? We aren’t there yet, but it could happen. Imagine if MLB allowed that. It just might be the future of the game, just as shoe and apparel contracts are used with many from other sports (and baseball as well). Owners would want their piece of the pie, but there appears to be a lot of money available to keep players and owners satisfied.
With the massive TV contracts, corporate sponsorships, fairly steady attendance figures and merchandise deals that currently are in place, the billions of dollars flowing into the sport seems to indicate it to be healthier than I believed. Even with declining TV ratings. We have known that the popularity of the game has been subsiding over the years. Particularly with the younger demographic (hence: the numerous rule changes and attempt to speed up the game). Indications from the spending habits of several owners show that they aren’t concerned with the game slowly dying. The big money is there, some are spending it. It’ll take a lot for baseball to dwindle into disinterest.
Discussion (16)
Disagree, not disagreeable
I am skeptical about Trayce Thompson. He struck out over 40% of the time. There is a better than-even chance that he regresses to the mean.
Not Hernandez over Heyward. You want a power bat to come off the bench to pinch hit. Not another infielder. I thought there were six bench players because they added DH now so wouldn’t it be Taylor Thompson Heyward Barnes Martinez and Busch. With Rojas at shortstop since he started with Miami. And I had Vargas in Leftfield because Muncy has to pay third and Lux at second base. So thatvwoild be bench players andthebither guys I mentioned would be the starters Outman and Vargas in outfield with the other guys in the same postions as I said before.
Mark I’m surprised you left Stone off your pitchers list. I’ve read you talking quite highly of him. From what I’ve seen and heard of him, it seems he’s ripe and ready. Might be the best young pitcher we got at this point. I’ve never seen Hernandez play but by going off recent stats can’t see him making opening active roster. Other than those two believe your pretty right on
The Dodgers pursuit of Shohei Ohtani or maybe Juan Soto will be interesting to say the least.
As for Ohtani, his value lies in being a starting pitcher and a big time hitter. You get two big big pieces in one player.
For a team to invest the kind of money being tossed around in the rumor mills, he has to be able to do both at an elite level and be able to sustain that for a lengthy period.
Sooner or later the big contracts like the ones given last winter have to hit the wall. Make a mistake or two in a long term deal and it hurts forever.
Although I consider Ohtani a very unique talent, unless they find a vein of gold in the Japanese market, the Dodgers might be wise to pass.
Sure I’d like to see Ohtani in a Dodgers uniform, but would he actually put the Dodgers over the top and help them win three or four World Series in the next 10 years?
Hi Evan. That picture you posted of the right field wall in Ebbets Field sure brings back memories. I can still hear Vin saying “and there’s another one for Bedford Ave.” after Duke hit one out. When I saw the Schaefer beer sign, I couldn’t get the jingle out of my head. 🙂
That might work Vargas in LF Betts in CF and Outman in right all outfielders with elite arms and Betts with speed the quickest then u have Thompson Heyward and Taylor as backup outfielders. The Leonard rookie and Busch are infielders so I say one of them makes it. With Muncy Rojas Lux Freeman and Smith in the infield. Are there any clips of that rookie Leonard? And of course Taylor can play the infield postions to. Sounds like a way better bench then last year’s.
Dodgers To Sign Tyler Cyr To Minor League Deal
The Dodgers have agreed to a deal to sign right hander Tyler Cyr, according to Robert Murray of Fansided. It’ll be a minor league deal and comes with an invite to big league spring training, per Fabian Ardaya of The Athletic.
Cyr, 30 in May, split time last season between the Phillies and A’s. He put up promising numbers in Oakland in a short sample size, tossing 13 innings of 2.08 ERA ball in relief. Those numbers came with a quality 30.8% strikeout rate alongside a 9.6% walk rate. He also made one appearances for the Phillies, giving up a home run in 1/3 of an inning of work.
Cyr was drafted by the Giants in the tenth round of the 2015 draft. He had some solid numbers coming up as a reliever in San Francisco’s system, but never got a crack in the big leagues and was granted minor league free agency at the end of the 2021 season. The Phillies gave him a minor league deal, and he worked to a 2.50 ERA in 36 innings of work for their Triple-A affiliate, earning his first big league callup. His time with the Phillies was short lived, and he was DFA’d after that three batter stint.
Cyr throws a mid-90s fastball and mixes in a cutter and changeup. He still has a full slate of options and under one year of service time, so it wouldn’t be a surprise to see the Dodgers call on Cyr at some point in 2023 given the inevitable churn of relief pitching over a long season.
If I am a part owner of a business and expenses exceed revenues then the difference comes out of my pocket. Hopefully when a business is sold, it sells for more than I invested, otherwise I am worse off than when I invested. T
How many times can a team offer 2% to a player?
This is an interesting conversation. A
Computer issues today. Grrrrrrrrrrrrrrrrrrrrrrrrrrrrrrr.
Five thousand million $ ? Are you *&^% Kidding me? How much does that come to per pitch? Over a million? Easily! We’re talking about a human. And there is no such thing as a superhuman. When people get that kind of pay for their talent at a kid’s game I’ll claim I’m not human at all. Stupid is as stupid does and at that point the game won’t get my attention. They’d have to pay me to watch and that would be to only see them fail. Geez let’s find another topic. I mean it’s not even dangerous at least not life threatening. But with that kind of pay it could become life threatening. And I might join that threat. For all those who believe in Heaven there’d have to be a Hell for those who think they got that coming. Kings don’t tax nearly that high. And I don’t respect many kings. I’m chasing my final dream of which I’m $15,000 short and I’d sell my soul for that. I just can’t find a buyer.
My thoughts on Ohtani is that he is a better pitcher than a hitter. He can do both at a high level, but he is elite on the mound. At the plate, he is closer to a healthy Max Muncy than to Freddie Freeman. As stated by others, the appeal is that whoever signs him gets a pitcher who can DH. However, the liability doubles when you weigh the potential of injury.
I realize there is a marketing appeal to Ohtani. How much is that worth? Don’t know but how much is the marketing appeal of Julio Urias to the Mexican American community who follow the Dodgers and/or baseball in general? Julio Urias could very well surpass Fernando Valenzuela as the top Mexican born pitcher by the time his career comes to an end. How do the Dodgers handle that from a PR perspective if they allow him walk in order to sign Ohtani?
Ohtani’s free agency is bound stir some serious debates and I’m looking forward to it.
Evan: Thanks for a great post. Talking about today’s money reminded me of the great 1966 tandem holdout of Koufax and Drysdale.
In 1965, the Dodgers won a 7 game World Series against the Twins. That year Koufax won 26 games, his 2nd Cy Young and finished 2nd in the MVP race behind Mays. Drysdale won 23 games, batted .300, hit 7 HRs and finished 5th in the MVP race. Koufax was paid $85,000 and Drysdale $80,000 for that great year. There was no free agency at the time and MLB operated under the Reserve Clause, which in effect, said the players were the property of the team and had no leverage in negotiating their contract except to the ability to hold out.
For 1966, the Dodgers offered Koufax $100K and Drysdale $85K. Due to the Reserve Clause, if the player didn’t like what the team offered, he could stay home, which is exactly what both Koufax and Drysdale did. The only difference is they did it as both or none and asked for a $1MM pact, split equally, over 3 years, or $167K/year/player. Spring training started with neither player in camp.
It took roughly the next month for the players and the team to come to an agreement paying Koufax $125K and Drysdale $110K for 1966. Marvin Miller got involved 2 weeks into their holdout and became the players union rep negotiating the 1st Collective Bargaining Agreement in 1968, which changed the economic structure of MLB forever.
I remember this event vividly. I was in college and being an avid fan of the team followed the news of this daily. This was the event that led us to where we are today.
I have to say if Lux can’t handle shortstop and can only play 2nd base which I hope he stays at 2nd base. And then Rojas becomes the everyday starter at shortstop. If Muncy struggles at third base. Do the Dodgers then look for a good third baseman and trade Muncy. For say someone like a Jose Ramirez or a Matt Chapman. So like by the trade deadline do they look atifMuncy isn’t hitting like before or do they look at his fielding. Because all other infielders would be pretty good fielders except Muncy.
Geez Evan, you read my mind on this subject then put it into words better than I ever could.
My thoughts on offering ownership went back and forth for some time. My numbers were considerably smaller, nothing more than 1%. I finally decided it was a bad idea, but did decide what DNS just proposed – NIL deals.
Being old school, so old I was at Game 5 of the ‘59 Series, I abhorred the idea of billboards at Dodger Stadium and cringed when they finally showed up. Used to it now. Some ad color to a stadium. Noticed that at Chase in Arizona.
I am currently a believer in front loading contracts. Trevor Bauer’s contract, likely to go down as the worst ever by anybody at any time in the history of historical history, looked like a good idea to me at the time. Drain the guy for a few years, get as much WAR as you can out of him, then throw him from the train. $WAR is somewhere around 8-9, I think, and should be rising the way things are going, so $40 million per for 5 looks pretty damm generous to me. $300 million? Well, depending on where $WAR might go in a decade, money like that feels dangerous, but then, look how much money a few teams have, the Dodgers among them.
I don’t know where this goes. And at my station in the life I’m behind the curve in understanding it all. So, I’ve become an observer, which makes it more interesting. My “oh sh*t, did he/they just say/do that?” moments are more frequent, but what do I care. Ain’t my money.
I saw Dan O’Dowd talk about Ohtani possibly getting an equity stake from the Dodgers, or a piece of the merchandising revenue on Ohtani jerseys and such. Certainly seems plausible, especially for Ohtani. (I really don’t like the idea of ads being placed on uniforms–even though I remember representing 7Up back in Little League, and also a local sheet metal shop.)
In other news, MLB.com ranks Busch as the No. 2 2B prospect, with the “highest floor.” Also ranked him as the most likely 2B prospect to win ROY.
The only hitch, of course, is that he might not make the roster.
Thought experiment: The Marlins just dealt Pedro Lopez to the Twins for AL batting champ Luis Arraez, a throwback high-contact, low-power hitter like Carew and Gwynn. If we want to get Ks out of the Dodgers lineup, Arraez would have been a good trade target. But would we want him more than Busch? Busch strikes out a lot–but he could hit 30 HRs too.
My guess is that most people here would prefer the potential of Busch to the AL batting champ. Because it’s not just chicks who dig the long ball.
It is staggering to consider how much a player like Koufax, or Mays could make in today’s game. Sandy’s largest deal was 125,000.00. I have always said, he would be a part owner. But this franchise so far has not given pitchers a deal longer than 4 years, Makes Ohtani an interesting case. How long can any team expect him to pitch at the level he does now? Shoei will be 29 when he becomes a free agent. I have to believe any contract he signs is going to be heavily frontloaded. His pitching skills will no doubt diminish as he ages. And are you really going to pay him 40 mil a year to DH? He has played exactly 7 games in the outfield in his 4 years. He projects as a 15-game winner. He also projects as a .258 hitter with 31 bombs and around 85 RBI’s. But it is doubtful he will achieve those kinds of stats as he ages. He is in his prime right now. But 1/2 billion dollars? That is one hell of an investment in a single player who guarantees you nothing. He would do one thing though that owners love. He would put a lot of butts in the seats.