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Referencing this article on VORP, some BTF readers make some curious statements, while JC makes some puzzling ones.
I made this post at both blogs:
I like the idea. This is along the same lines as that minor league player who sells 4% of his future earnings for a fixed price today. If he makes the big time, you get your cut.
Scholarships (for athletes) could work in a similar spirit. Either you make it a straight refund of the scholarship for any player earning a full year of salary in MLB, NHL, NFL, NBA, MLS. Or, get colleges to bid on athletes. “Hey, Alex, come to college, we’ll give you a scholarship, and since you are so good, we’ll only ask for 1% of your future earnings until you are 25.” Or, also allow the inclusion of payments, like giving him 100,000$ to play for your college team. Something, anything, that shows that NCAA is a business, and not slave owners of athletes under the guise of an educational system. In hockey, junior clubs (filled with high school and college-level players) are not affiliated to any schools.
The floor is yours. What kind of a business system can you create with high school and college players?
Just linking this story to show the financial data:
Last year, the team - which hasn’t won a World Series in eight years - grossed a record $188 million in gate receipts, a 20.5% increase over the 2006 season. Factoring in other revenue streams like overpriced hot dogs, beer, pizzas and souvenirs - and income from the cable TV rights to home games - Stadium income surpassed $319 million in 2007.The team’s annual rent report filed with the city Parks Department shows the Yanks netted $65.3 million in concessions last year.
Two excellent issues from editor Phil Birnbaum (Nov 07, Feb 08). Here are my thoughts:
Dave likes to talk about him, and I like to look him up. Following the 2004 season, Beltre signed a 5/64 deal. Presuming a cost per win of 3.31 (in 2005), 3.64, 4.00, 4.40, 4.84 (in 2009), they were buying 16 wins above replacement for that money (and it makes little difference the shape of that distribution). This is what they’re actually getting:
At the very least, it gives you a starting point and historical perspective. Any baseball executive that allows himself to be quoted by the press that what Forbes does is cr-p is full of the same thing himself. Either you are part of the problem or part of the solution, and giving reasonable numbers as a starting point for bright people to manipulate is far better than not giving any numbers at all.
(Hat tip: SOSH)
Might as well follow the in-season moves as well.
No! Are you crazy?
The Marlins will end up trading Ramirez before he hits free agency. The Marlins exist to turn a profit, before they exist to make the playoffs. The trade value of Ramirez is highest if he plays at SS. Since there will be some MLB out there deluded enough to think that he’s a capable shortstop, Marlins will get the most value by keeping him at SS.
I mean, look at what they just did with Cabrera. He should be a corner OF or 1B, but they managed to convince the Tigers that he is a 3B, even though the Tigers already had one of the best fielding 3B in the game today.
It works out like this:
value = wins on offense + fielding wins relative to position + win value of position
Regardless of position, there will be some MLB team that will have “fielding wins relative to position” equal to zero. The win value of SS is 1.0 greater than a corner OF (MLB teams have figured that one out already). That’s 4.4 million dollars every year of non-free agency right there of overvaluation that the Marlins will trade against.
I can’t wait to see which team will overpay for him.
This is Rob Neyer‘s list. Does it make sense? Has be balanced current talent level and aging? While I have big problems with Win Shares, we can make some use of my 5-yr Win Shares aging curves. The players we are interested in will follow the “20+ WS” pattern, so focus on that column. A guy who is 22 will generate double the wins as a guy at age 34, and 50% more a guy at age 30. How does Neyer do?
Let’s take ARod. He averaged 34 win shares over the last 3 years. Therefore, his 5-yr looking forward Win Shares for a guy who is 32, would be around an average of 54% of that per year. 34 * 0.54 * 5 = 92 win shares. That’s what we should expect from him over 5 years. Zimmerman (whom I love), at age 23 is expected to be at 84% over 5 years. In order to match ARod, he has to have a current talent level today of 22 win shares: 22 * .84 * 5 = 92. Zimmerman averaged 23 win shares, so that gives him a forecast of 97 win shares. Pretty good, Rob. Pretty good.
You guys can go through the list and see if it makes sense. In post 13, I have a smoothing function that will make life easy for you. In the case of ARod, that would be:
23 + 0.64 * 34 - 0.78 * 32 = 19.8 per year.
Multiply by 5, and you get 99.
Pretty close.
I introduced my salary scale last year. It works fantastically well. There’s nothing “black box” about it. You can create your own. It’s just very basic. Vince Gennaro introduces something similar, but instead of WAR, he simply uses the pitcher’s role. Does his conform to mine? Let’s see:
This is a 140 page pdf. I haven’t read it yet.
I’d suggest that any comments made reference the page number (note if it’s the PDF page number, or the printout page number).
An Analysis of Final-Offer Arbitration Outcomes for Batters in Major League Baseball from 2002 – 2006 (pdf), by Benjamin Einbinder.
Are you going to bark all day, little doggie, or are you going to bite?
—Mr. Blond to Mr. White
There’s an issue, you are mildly perturbed—a feeling that will soon pass like indigestion—yet our new information world in the meantime transforms this issue into an explosion before the feeling will go away. Phony Outrage. Repeat something loud enough and it’s the truth. Some people have built their lives around this: Lou Dobbs, Bill O’Reilly, and Plankton. No less an expert than Stephen Colbert said so to Papa Bear himself.
Today, it’s advertisements on baseball uniforms, as they play in Japan.
Here’s my summary opinion:
Ten years ago, Davd Bowie sold the rights to his royalties for a 10 year period for $55MM. Frank Thomas did, or was considering doing, the same thing, among other entertainers. Now, Randy Newsom, minor leaguer, is offering futures in his salary.
This idea happens because there is a great disparity between what a player earns now, and what he will earn in the future. This is unlike the NHL, where a guy that will make lots of money is just a year away. With minor leaguers in MLB, they serve rather long apprenticeships. And young players reaching the majors are at an all-time low. With so much time going on between him being in the minors and him finally making the majors, anything can happen. This issue can be solved by increasing the minor league contracts of all players, and lowering the minimum salary for all rookies. Basically, instead of the Fans paying the minor leaguers extra money (and getting their money back from rookies and sophs basically), MLB does it.
But, because of the gap, the idea is born. And it’s a fantastic idea.
The NHL’s average team payroll, average team revenue, and average everything is about 50% that of MLB. So, you can try to scale NHL salaries by simply doubling them to compare to MLB. Alexader Ovechkin, who beat out Sidney Crosby for Rookie of the Year in his first year, and had a great second year last year, and is on his way to another great year this year, his third year, at the age of 22, signed a 13yr, 124 million$ contract. In MLB lingo, that calls for a guy to get 248 million$. For a guy not yet eligible for arbitration.
Chase Utley didn’t get anything close to this kind of deal, and neither did Joe Mauer. Would you give it to Ramirez, or Ryan Zimmerman, or Jonathan Papelbon? What is happening in the NHL is incredible. They have one little rule that is different from MLB that is causing the young players to be locked up: after 3 years, you are a restricted free agent, meaning that any team can offer you a contract, but your existing team has a right to match. On a no-match, your team gets compensated with a number of draft choices (and in the NHL, draft picks are more valuable than in MLB). So, NHL teams have determined that young players have tremendous surplus value (they are way underpaid). The Capitals, not willing to take a chance some team will make their Hanley Ramirez a cornerstone of its team, decided to treat him as a quasi-free agent.
The NHL’s distribution of payroll is far fairer than it is in MLB. There is no gulf between the young players and the true free agents. The net effect is that you don’t get into the situation MLB finds itself, to way overpay for the limited supply of questionable free agents. However, it is this gulf in payroll disparity that allows small market teams to lock up their young players and keep their surplus value to themselves, to leverage.
Fascinating systems in both leagues.
Have you heard of NBA China? It’s worth 2 billion$. All 30 MLB teams are currently worth something close to 15 billion$. How much of that is MLB.com? I don’t know, but I wouldn’t be surprised if it’s 5 billion $. And MLB.com will likely comprise 50% of the 30 team’s combined value, and eventually exceed it. But, if NBA China can be worth 2 billion$, why isn’t there an MLB Japan? And NHL Europe?
I’ve been using 10% growth rate (for payroll, franchise value, and revenue) because that’s been the growth rate for the last 5, 10, and 20 years. Isn’t it possible that this is fairly conservative, in the face of internet and internationalization? Forbes reported 5.1 billion in revenue last year, and Selig reported 6 billion this year. That’s a 17% gain already. And, with more centralization of revenue, there’s no real reason for teams to pass those revenue gains to the players (i.e., marginal revenue goes to marginal wins… in this case, the revenue exists, regardless of which team wins). This will further accelerate franchise values (i.e., margins will increase, since expenses won’t match the pace of the revenue).
The latest is up on Phil’s site. I just zipped through it. The one from Wang looks good. And, he reports something interesting that I was going to do (I love it when someone else has the same idea, and does it before me):
The $/WARP for a fourth year player was $.64 million/WARP, for a fifth year player it was $.83 million/WARP, and for a sixth year player it was $1.29 million/WARP. Remember, it cost $1.525 million for every additional WARP in the free agent market.
0.64/1.525 = 42%. 0.83/1.525= 54%. 1.29/1.525= 85%.
What those numbers represent is the cost for the 3+, 4+, and 5+ year player, relative to a free agent. I’ve been using 40%, 60%, 80%, which is fairly consistent with the above set of numbers.
I’m using Tulo here, but I really mean the most valuable young player in MLB. If I had to guess in 3 seconds, I’d say it’s Tulo. If you want to bring up someone else instead, please do so.
Anyway, how much is a player like this worth in a trade? Tulo has it all: he’s
Another year, another look at who is being paid by which for how much.
Note: For those looking for last year: This was for the 2007 pre-season. You can start at post 29 or so for the blow-by-blow.
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