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.

42 Responses

  1. LDS

    Either owners are really stupid and agreed to unprofitable FA contracts, e.g. Gerrit Cole or teams are vastly more profitable than they let on and 2020 affords them the excuse to reign in the big contracts going forward. Good article.

    • Doc

      Or revenues were way down for a totally unforeseen reason, covid, and teams did lose money. If it was stupidity, then hopefully owners learned their lesson and all future contracts will be based on the revenue experience of 2020. Maybe there will be some adjustment to mediocre players getting seven figure raises, and aging veterans raking it in.

      In Doug’s world there is an unlimited income stream to MLB teams no matter what economic conditions exist or arise. Real estate holdings around ball parks could not possibly have lost revenue during the pandemic shutdowns, although I must have missed the announcements that exempted restaurants from shuttering, tenants from being evicted, other businesses limited or shut down, as long as they are on property owned by MLB teams. And those properties must have been full of customers every night. Where else would all this ‘hidden’ revenue come from.

      • LDS

        So am I to infer that you guys believe that $300+ million dollar contracts for players is a sustainable business model?

      • Doug Gray

        I’m sure that these super savvy business moguls are just throwing down $2.6 billion dollars in this economy for the New York Mets because there’s real issues with profit in this business.

      • rojobenjy

        Doc, Doug is talking about TV money isn’t he?

  2. Pablo

    I don’t trust any of the numbers I hear from either side of this business but the owners can take a hike if they expect any sympathy from the public.

    • RojoBenjy

      “ the owners can take a hike if they expect any sympathy from the public.”

      I hear that!

    • 2020ball

      Yup, owners of *Billion* dollar companies crying poor is among one of the dumbest things I’ve heard this year, and I’ve definitely heard a lot of dumb things this year.

      • Da bear

        Billion dollar companies fail. There’s Enron. A great number of oil service drilling companies are going under, many of them formerly with billion dollar plus valuations. In a free market valuations go up and they go down. How much were Sears, KMart, Aeropostale, ChuckECheese worth?

        Sports franchises are recent billion dollar enterprises protected, exempt from anti-trust laws. They have bubbled up over the past three or four decades, but nothing prevents them from experiencing the bursting of a bubble or valuation decline resulting from serious mismanagement.

        They are highly dependent upon television advertising dollars of cars, diabetes inducing soft drinks, alcohol, beauty products, and smart phones tablets & smart watches. If these companies find better means of finding eyeballs or selling their products…..pop goes the bubble.

        Rules were put in place to prevent owners from financially ruining themselves which aided some veterans while seriously hampering the ability of productive rookies and young athletes from being paid in accordance with their productivity. Without these salary limiting rules on younger baseball players, who knows how many MLB owners would have gone bust and lost their ‘capitalistic’ trophy wives.

  3. Bob Purkey

    They are all making money. . . If someone is willing to pay you a bunch of money, then you take it.
    The only thing that I disagree with is arbitration where a player/agent compares his stats to someone else who is getting overpaid, ie., the Yankees overpaid for their .235, 3 HR, 25 RBI middle infielder, that means I have to pay the same thing-baloney!

    • Doug Gray

      How about the arbitration process where you can literally win an MVP and make $1,000,000?

      • Bob Purkey

        Good point, but trust me, that MVP will make one hell of a lot more in the very near future.

      • IndyDoug

        arbitration is part of the CBA so it’s agreed upon by both parties–not imposed by either side

  4. Don

    There will be MLB owners that will take the “loss” = Make less money than expected in 2021 to attempt to win and there will be will not take the “loss”.

    I would agree with the expectation of little movement until January or later as the teams figure out what different governments will allow them to do.

    As a business owner why take on the business liability of new salaries until having more information on the business opportunities.

    There are many outside variables for many companies (each MLB team is a company) to be making significant long term (or short term) plans for higher expenses.

  5. jim walker

    Anyone who merges lost opportunity with actual out of pocket loss isn’t to be trusted.

    I if I am not a gazillionaire today because I didn’t suck it up and find several hundred $$$ to invest in Microsoft or Apple 30 to 40 years ago, do I get to claim that “loss” on my taxes? NO. So because it wasn’t really a loss.

    If the parking garage I own next to my stadium in a downtown setting still generates enough revenue to serivice its debt and pay for its operation despite not taking in all the game day revenue it would have if games would have been played is that a declarable loss, NO.

    • Michael Smith

      Really wish I had a like button for your comment Jim.

    • RojoBenjy

      “Anyone who merges lost opportunity with actual out of pocket loss isn’t to be trusted.”


  6. Sliotar

    Just an observation, that ties into “no certainty” and how/if fans are in the stands in 2021 …

    i own a small delivery business and I consult with large corporations on logistics and supply chain issues.

    If/when there is a vaccine deemed “safe enough” … getting it out effectively and quickly is going to be a massive, massive undertaking. There aren’t many details online, but so far, any vaccine will have to be kept very cold until shortly before use.

    I am advising my clients to lock in contracts and rates for “reefer” (refrigerated) trucks, which are already in demand from increases in frozen food purchases.

    The idea that that a process will be seamless to distribute effectively nationally feels like a goal to be hit by Spring/Summer 2022.

    I hope I am wrong … but getting a vaccine actually finalized is only the beginning.

    • Sliotar

      TL:DR – If having a vaccine taken by a lot of folks is a requirement to let a lot of fans back in the stands ….

      I expect 2021 to be “bare-bones” on MLB expenses, as it will be tough to get a vaccine approved and mass distributed next year.

      I remember reading that MLB projected that they would not be fully recovered until the 2023 season.

    • Charlie Waffles

      The military is already activated to do much of the distribution. Air National Guards units will use their C-130’s, C-5’s and C-17’s to do the bulk of the national distribution. Air and Army National Guard units will do much of the local distribution to get the vaccines from the air bases to the nursing homes, first responders, and hospitals first. Hot spots where there are spikes in cases will be next. They will then get it out to pharmacies and mass distribution centers. They also will guard the vaccines with MP units and Marine Reservists at bulk sites.
      It will require a Hurclean effort to get tens of millions of doses out to the general public. It is going to take that times 10 to get billions of doses out to the world. The U.S. Militray though is up to the task. Logistics is one of many things the miltary does well. They aren’t perfect but there are none better. Plus, they have a logistics oriented general in charge of this.
      All that is waiting now is for the FDA to give their approval to the vaccines. Once that happens watch how it goes.

      • Michael Smith

        Excellent points Charlie. The military has the logistical capability and experience to pull it off quickly.

      • Sliotar

        My father did logistics work in the Air Force, and there is a large Air National Guard base in one of the towns where we do work.

        There is a lot of talk about what they plan on executing.

        FedEx claims they can do distribution better than than anyone on this, including any military.

        Cold storge facilities and reefer trucks/boxcars will play a huge role.

        There is much outside of the scope of this baseball blog we aren’t discussing … but, even getting the vaccine to locations still viable still leaves a lot to do.

        I think most would agree this is all going to be rushed, as no vaccine has been before … lots of potential for trial-and-error as its rolled out whenever in 2021.

        I would not budget for large amounts of fans next year, if I was MLB.

    • jim walker

      I think you are correct. The only thing I would add is that I feel like it would be in the public interest for folks with hands on experience which is applicable in our current situation to drop the preface of hoping they are wrong (which we all do) and simply say based on their experience what they believe the likely situation to be. I say this NOT with intent of being critical of you and others who make hope statements but only because too many people latch onto the “hope” and lose the facts in the process.

      • Sliotar


        Agree .. but no one, especially politicans, in an election year … wants to be the bearer of bad news. CEOs don’t for fear of being ousted, etc.

        We cover almost all of Northern Ohio, in one way or other … and there is no quick fix for where we are at. Industry after industry telling us, or showing us by laying folks off or cutting back on business.

        If they thought there was a “return to normal” in 2021, they would not make those moves.

        MLB has quietly let go of hundreds of team employees already.
        Mid-level players are going to be the next to feel the impact of all this.

    • Rednat

      even if there is a vaccine there will be social distancing and (face masks) from here on out because the virus will still be out there. i believe all resources need to go into creating a socially distant safe venue where people can be 6 feet apart. this will take some money but it will be well worth it and is in fact the only way baseball can survive. the game cannot survive on tv revenue alone. unlike football. most people love baseball because of the atmosphere. the smell of the grass and the warm summer evenings.

  7. Jonathan

    @ Doug – thats a great breakdown/analysis of Manfred’s claimed debt… I hope MLB/Manfred shows their work on how they came up with their numbers. Is the withholding of information lying or manipulation? either they don’t trust the numbers

  8. Droslovinia

    I really love the blog you shared, and I tend to agree with it. Any word “official” word on why the game was played last night with a COVID-positive player on the field? It would be nice to hear the lies directly, rather than having to speculate, like we do with finances. Between that and cooking the books, we really need to be asking some hard questions about why Manfred is still employed.

  9. Swayback8

    While I do agree that these franchises are not as poor as they claim, I understand cutting costs until the financial landscape improves. Owning a business myself, the ramifications of this year will have long-term affects. My business has a lot of overhead, just like sports franchises have. While I have not lost a lot of business my costs have not changed and every little bit of lost revenue changes your outcome. There’s so much more overhead that baseball team has than just player salaries. I’m not defending the owners crying poverty, but they are also millionaires for a reason. They are not going to operate at anywhere near a loss.

  10. Rednat

    i just think the teams that can get fans back into stadiums safely can dominate the baseball landscape for the next decade. people are itching to get back to the stadium but it has to be safe and socially distant (even after a vaccine). the reds need the best engineers and architects in the world to create safe seating. it will be expensive but well worth it

  11. west larry

    I’m sickened by this tactic being employed by the owners through their mouthpiece. I realize that this is a low ball move, but to use the people that earn less than a hundred dollars a year as pawns is really low.

  12. Charlie Waffles

    Many players are having their club options for 2021 being declined today. The free agent list is getting bigger by the hour.

  13. Tom Mitsoff

    St. Louis today declined a $12.5-million option for second baseman Kolten Wong, instead buying him out for $1 million. We’re going to hear many more instances like this. No matter how you feel about it, this year’s free agents are going to be massively underpaid, and teams that want to rise even slightly above the very depressed market salary level will be able to make huge improvements.

    Don’t be totally shocked if Trevor Bauer accepts a qualifying offer of somewhere in the $17 to $18 million range. (I’m not clear on what the exact number will be.) He likes it here and the market will definitely be a buyer’s market. Maybe he will decide to go the Marcell Ozuna route and bet on himself by taking a one-year deal and waiting for the market to reopen perhaps in late 2021.

    • Mark Moore

      You have to believe he’ll get the QO. Will he roll the dice on something else. Have to admit this is already looking very strange. The Wong buy-out was a bit of a shock.

      • JB

        I cant believe the Cards let Wong go. Total shocker.

    • Charlie Waffles

      I believe I read that the QO for this winter is $18.9MM. That would be a small raise for Bauer. I’d be hard pressed not to believe he will get a much better offer for 1 year. But the QO deadline comes in a few weeks. Bauer won’t have a lot of time to make up his mind on that and then again maybe he won’t need much time on that issue. Maybe about 10 seconds to say no. He and his agent will have to keep a finger on the pulse of the free agent market right up to QO deadline day.

      • jazzmanbbfan

        I would guess that Bauer and his agent have already decided if he will accept or decline a QO.

  14. Kevin Patrick

    …its definitely going to be slow since Redsfest is already cancelled. Really though, I can’t help but think about the strain covid is putting on the “expendable” fringe elements of baseball… as their support will be quickly dropped by the wealthy…right or wrong. As fans, our judgement on what we should rightfully expect our favorite teams’ businesses to invest in their product will be even harder to pin down. I don’t know where the money is or where its going…Mongo just pawn in game of life.

  15. MBS

    Maybe I’m overthinking this, but what if the Reds aren’t closing their check books in 2021, but the Indians are? After all, Bob’s got a big bank account, and he says he wants to win. The Indians have been shedding payroll, even before the 2020 Covid season.

    With that thought, maybe Lindor wouldn’t be as expensive in terms of prospects as we think. India and Roa, or something like that. The Bauer money is off the books, and yes I know that money will be eaten up by pay raises to other players in 2021, but it’s not too crazy of a scenario.

    • Jon

      Bob’s getting older and he can’t take his money with him. Might as well bump payroll and try to win a World Series.

  16. Don

    Corey Kluber will be an FA after being bought by Texas today per MLB Trade Rumors