For the past seven years, I’ve surveyed the members of the Society For American Baseball Research‘s Business of Baseball Committee about issues relating to baseball labor and economics, publishing the results and a cross-section of the comments in the winter issue of the Committee’s quarterly newsletter. With a new CBA in place and the Expos still in limbo, I decided to survey my fellow Prospectus writers, too. Unlike the usual Prospectus roundtable, no one saw or commented on anyone else’s answers.
BP writers who responded to the survey included Jeffrey Bower, Will Carroll, Gary Huckabay, Rany Jazayerli, Jonah Keri, Doug Pappas, Joe Sheehan, Nate Silver and Derek Zumsteg. As you’ll see, our views are far from monolithic.
- Rate the new CBA on a scale of 1 to 7, with 1 being a total win for the players and 7 a total win for the owners.
Jeff Bower: “Five-and-a-half.”
Will Carroll: “A four. The owners got their luxury tax, but it was weakened. They got drug testing but it’s crap. They got what they wanted, somehow, but I’m not sure how much is the economy and how much is the CBA.”
Gary Huckabay: “Six.”
Rany Jazayerli: “Five-and-a-half. It’s a win for the owners, but I think that the market correction we’re seeing would have happened either way, and at least in the short term the number of teams that are really curtailing their spending because of the luxury tax is minuscule.”
Jonah Keri: [Abstain]
Doug Pappas: “Four. My grade is an average. In absolute terms, it’s a five, but based on the way the parties actually negotiated it’s more like a three. The big fight was over the luxury tax, which as adopted will have minimal effect on payroll. The real downward pressure on salaries will come from greater revenue sharing, coupled with the lack of any requirement that recipients reinvest the money in their club–but the MLBPA never really fought the former and blocked all efforts to impose the latter.”
Joe Sheehan: “Six.”
Nate Silver: “After seeing the deflation in this year’s free agent market, I’ll give the CBA a five for now, which is still closer to being even than a total win for either side.”
Derek Zumsteg: “Five. The owners got a hard cap, they got increased revenue sharing. In future negotiations, it’ll just be a matter of moving the numbers down, and the players are going to have a harder and harder time striking after each set of concessions.”
- What ONE provision would you most like to add to, or change in, the new CBA?
Jeff Bower: “The contraction provision. I’d like to see it eliminated entirely–that there would not be any threat of contraction throughout the duration of the CBA. I think that somehow contraction will be used as a blunt instrument to gain still more concessions in the next agreement.”
Will Carroll: “Real drug testing. I know I’m odd on that one.”
Gary Huckabay: “The complete elimination of any salary constraint.”
Jonah Keri: “In a perfect world, I’d want to wipe out the disincentive to try to win in the revenue sharing system. There’s nothing stopping owners from grabbing revenue sharing funds and pocketing them. The Expos in the Brochu era did it for years, and there’s a body of evidence that suggests other teams may have done the same.”
Doug Pappas: “A minimum ‘baseball operations budget’ for all clubs receiving revenue sharing. A minimum payroll requirement is too crude–trading expensive veterans for prospects is the best strategy for a bad team to adopt–but the money should be reinvested somewhere on the baseball side of the organization: players, draft picks, coaches, trainers, scouts, equipment.”
Joe Sheehan: “I would have connected revenue sharing to market size, not actual revenues.”
Nate Silver: “Eliminate the Selig slush fund.”
Derek Zumsteg: “I’d change the revenue-sharing mechanism to favor small-market teams, as has been proposed on BP, rather than large-market teams that just don’t spend.”
- The CBA assigned draft-related issues to a joint committee. Which of the following changes, if any, will eventually be adopted?
a. Allowing teams to trade draft picks.
b. Expanding the draft to include foreign players.
c. Eliminating compensation picks for teams which lose free agents.
d. Adding compensation picks for teams which fail to sign high-round draft picks.
a) Bower, Carroll, Jazayerli, Keri, Pappas, and Silver Yes; Huckabay, Sheehan and Zumsteg No.
b) Huckabay, Keri, Pappas, and Sheehan Yes; Bower, Carroll, Jazayerli, Silver and Zumsteg No.
c) Carroll, Keri, Silver and Zumsteg Yes; Bower, Huckabay, Jazayerli, Pappas and Sheehan No.
d) Bower, Carroll, Jazayerli, Keri, Pappas, Sheehan and Silver Yes; Huckabay and Zumsteg No.
- According to the MLBPA, the average player salary in 2002 was $2,295,649, up 7.3% from 2001.
a. What will the average salary be in 2003?
Jeff Bower: “$2,100,000.”
Will Carroll: “Roughly the same, within 2 or 3%.”
Gary Huckabay: “$2,250,000.”
Rany Jazayerli: “$2,100,000.”
Jonah Keri: “$2,325,000.”
Doug Pappas: “$2,300,000.”
Joe Sheehan: “$2,043,198.”
Nate Silver: “$2,267,000.”
Derek Zumsteg: “$2,200,000.”
[Average: $2,208,983 (down 3.8%)]
b. What would it have been if the old CBA were still in place?
Jeff Bower: “$2,250,000.”
Will Carroll: “I’ll guess roughly the same.”
Gary Huckabay: “$2,450,000.”
Rany Jazayerli: “$2,150,000. This correction was coming either way.”
Jonah Keri: “About the same. The new economics for middle class players has started to kick in and will grow to become one of the biggest influences on average salaries.”
Doug Pappas: “$2,350,000. Historically, the best predictor of the change in next year’s salaries has been the change in this year’s revenues. MLB’s revenues rose only slightly in 2002, and more owners are realizing that mediocre players are fungible.”
Joe Sheehan: “$2,318,954.”
Nate Silver: [No Response]
Derek Zumsteg: “$2,300,000. I think this year’s long winter has been due more to the economy and the relative situations of teams, particularly the corporate-owned teams, than the CBA.”
[Average: $2,303,159 (up less than 0.1%)]
- Here are the 10 highest 2002 payrolls, as calculated for luxury tax purposes.
CITY PAYROLL ---------------------------- New York (A) $175,327,055 Texas $130,622,297 Los Angeles $120,009,194 Arizona $114,324,396 Boston $113,795,076 Atlanta $110,769,808 New York (N) $109,916,503 Seattle $100,044,597 San Francisco $ 96,222,368 St. Louis $ 96,112,859
a. How many teams will end up paying the 2003 luxury tax, which applies to payrolls in excess of $117 million?
Jeff Bower: “Two.”
Will Carroll: “Two, the Yankees and Dodgers. Texas will dump more salary by the All-Star break.”
Gary Huckabay: “Four.”
Rany Jazayerli: “Two, the Yankees and the Dodgers, who will pick up payroll as part of a late-season charge.”
Jonah Keri: “Top 5 (Yankees, Texas, L.A., Arizona, Boston)–Arizona and Boston thanks to in-season trades and added payroll.”
Doug Pappas: “Three: the Yankees, Dodgers and Mets.”
Joe Sheehan: “Four: the Yankees, Mets, Diamondbacks and Rangers. The Dodgers might.”
Nate Silver: “Three: Yankees, Mets, Red Sox.”
Derek Zumsteg: “Four.”
b. The luxury tax threshold rises to $120.5 million in 2004, $128 million in 2005 and $136.5 million in 2006. However, clubs exceeding the 2006 threshold will only be taxed if they had also exceeded the threshold in an earlier year. How many teams will end up paying luxury tax in 2006?
Jeff Bower: “Two.”
Will Carroll: “The Yankees, maybe the Dodgers depending on ownership.”
Gary Huckabay: “Three.”
Rany Jazayerli: “Two or three, doubtful more than that. I think it will take until 2005 for average salary levels to return to last year’s numbers, given that a lot of bloated contracts are going to end over the next few years, and it’s unlikely many similar contracts will be signed to take their place.”
Jonah Keri: “One (Yankees).”
Doug Pappas: “One. The Yankees.”
Joe Sheehan: “Two.”
Nate Silver: “Three.”
Derek Zumsteg: “Two.”
- Where will the Expos play the majority of their 2004 home games?
a. Montreal, Quebec
b. RFK Stadium, Washington, D.C.
c. Puerto Rico
d. Other (specify)
Jeff Bower: “Montreal.”
Will Carroll: “Montreal. I can see MLB hosing this one horribly and keeping the Expos in some sort of baseball purgatory.”
Rany Jazayerli: “D.C., maybe, in 2005.”
Jonah Keri: “Montreal!”
Doug Pappas: “Montreal.”
Joe Sheehan: “Montreal.”
Nate Silver: “Even with Angelos’ objections, D.C. is far and away the place that would most improve baseball’s aggregate revenue, and in the long run I think that will triumph over politics.”
Derek Zumsteg: “If they made the move now–announced ownership, announced a deal with RFK, left Peter Angelos tied to a tree at a rest stop in South Dakota–maybe they’d be able to pull off a move a year from now. I don’t see it happening, though.”
- Where will the Expos call home in 2007?
b. Washington, D.C.
c. Northern Virginia
d. Portland, Oregon
e. Charlotte, North Carolina
f. Puerto Rico
g. Other (specify)
Jeff Bower: “Washington, D.C.”
Will Carroll: “Either B or H. Damn, Vegas needs a team so bad…”
Gary Huckabay: “G. Las Vegas.”
Rany Jazayerli: “Washington, D.C.”
Jonah Keri: “D.C.”
Doug Pappas: “Washington, D.C.”
Joe Sheehan: “Washington, D.C.”
Nate Silver: “B … Washington, D.C.”
Derek Zumsteg: “If Peter Angelos demands too much, and as a lawyer he’s certainly going to be willing to take this to the mattresses, San Antonio’s got a large market and Austin near. A rail line makes it a huge MSA that could easily support a team, and it’d be a lot easier to work out the territory issues.”
Next Week: The BP Nine take the Bud Selig Prediction Challenge.