The World Series wasn’t even over before Rob Manfred started laying the groundwork for a slow offseason where owners aren’t going to spend money. Or so that’s what it feels like. In an interview with Barry M. Bloom of Sportico on Monday afternoon, Manfred spoke about the amount of money teams “lost” this year due to fewer games and no fans.
The word lost is in quotes for a reason. That reason is that teams only account for what they count as baseball revenues in those losses, while ignoring ventures that only exist because of the baseball team they own – such as their ownership stakes in regional sports networks they got by taking less cash for television deals for their baseball games, and their real estate ventures around the ballparks that they got as parts of sweetheart deals from local municipalities as a part of their stadium deals. Any money made from those ventures…. well, they weren’t accounted for in his citing of how much money teams “lost”.
We also learned earlier this year that when teams begin talking about “losses”, they aren’t always talking about actual losses that required them to go into the bank account and take money out, but that some of them were simply stating they weren’t going to make as much money as they originally projected.
We’ll never really know just how true or untrue these statements are. Major League Baseball teams aren’t going to open up their books to show us the numbers. Only the Atlanta Braves are owned by a publicly traded company and have to show *some of* their numbers to investors. What we do know, though, is that there does not appear to be a bunch of rich people turning down buying sports franchises. The New York Mets are being sold for $2,600,000,000 RIGHT NOW. It’s a tough sell, at least to this particular writer, that there’s not a whole lot of money to be made owning a team in Major League Baseball if that’s the sale price.
But it’s not just talk of losses for the owners. Those same owners are also cutting hundreds and hundreds of jobs around the game. Evan Drelich of The Athletic covered it on Monday, noting that many teams are making a large number of cuts from their operations both inside the actual baseball side of the game as well as the business side of operations. The Oakland A’s, for example, are laying off nearly 150 employees. The Cubs just laid off more than 100 people last week, as reported by Patrick Mooney and Sahadev Sharma of The Athletic. They aren’t the only teams making large scale layoffs, but they do seem to be the biggest two that we know of thus far.
We’re going to see the same thing extending to the players. It’s not going to be just the free agents that feel the pain of lowball contracts. The expectation among many in baseball is that there are going to be quality players who are going to be non-tendered before the deadline because their projected arbitration raise will be “too much” and teams would rather just allow them to become free agents than pay them their expected salary.
On one hand, with an expected larger number of free agents out there due to non-tenders, that could lead to some interesting movement. On the other hand we could see a situation like we did a few years ago where no one is really being offered contracts until mid-to-late January. That could be a big problem, which Murray alludes to in his article at Sportico:
With no certainty about revenues or costs, some club executives are already saying they may not be willing to commit dollars to players, which makes the start of spring training as usual in mid-February highly improbable.
While spring training is still pretty far off – think about what’s being implied here. Teams may not be willing to commit enough money to enough players to even begin spring training on time. Maybe we’ll get some better news as the offseason goes along, but right this second there’s a whole lot of reason for concern.