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The Juan Soto deal has me thinking about the future a bit. Not Soto’s future, but what’s going on in MLB. You’ll have to excuse me for using this space to get some thoughts down and further organize them, but it’ll end up resulting in another piece or two down the line once that’s all done.
Event: The Dodgers spend and spend some more, deferring even more money, and are projected for a $279 million Opening Day payroll after kicking off 2024 at $267 million — please recall that Shohei Ohtani was paid just $2 million in 2024, with the other $68 million in the deal deferred until the playing time portion of the contract expires for 2034. The Dodgers ranked third in payroll, but second for luxury tax implications, as more of Ohtani’s deal counts towards that figure in the present than in the figure calculated with actual dollars.
Reaction: A whole lot of whining about deferrals and market imbalances and the need for a salary cap. Which I’ve already addressed.
Event: Juan Soto signs with the Mets. Even though Steve Cohen has more money than anyone besides a few wealthier people can comprehend of, and doesn’t behave as if he’s kicked in the head by a horse every morning when he gets out of bed but instead spends that money to try to win some baseball games, there were journalists saying that it’s simply too much money for a player to receive. And some cracks about him being a designated hitter, so definitely not being worth it, either.
Reaction: There is money out there, and it has to go somewhere. Why not to Juan Soto, who, as mentioned, is Juan Soto? The Mets maybe going overboard for Juan Soto isn’t the problem, so much as plenty of other teams not bothering to get in on the Soto chase, or the anyone chase being the issue.
These two events (and two teams spending like this) isn’t enough to make me think that there’s any seismic change coming to MLB, but there are some things worth thinking about and watching that cause these signings — and the massive amounts of money we’re talking about — to seem as if they’re presaging a change.
Consider: We went from nearly everyone avoiding the tax threshold as much as possible before the current collective bargaining agreement was signed, to a record eight teams crossing said threshold in the 2023 season — it would have been nine, too, if the Angels hadn’t started shipping players off before the trade deadline just to get under. The Mets, Padres, Yankees, Dodgers, Phillies, Blue Jays, Braves, and Rangers all paid the tax, with five of them making the postseason — a whole lot went wrong for the Mets, Yankees, and Padres, especially on the injury side, but they had all been projected to succeed. And then did in 2024.
Another eight were in line to pay in 2024, though, final calculations haven’t been done just yet. The Yankees finished third in payroll as calculated for tax purposes, and won the AL East while making it to the World Series. The Dodgers defeated New York in the Fall Classic, and ranked second in CBT payroll. The Braves (4) lost in the Wild Card round to the Padres (11) — San Diego took a step back in their payroll after the death of owner Peter Seidler, but came in just under the tax threshold all the same. The Phillies (5) and Mets (1) faced off in the NLDS, with the latter moving on and losing to the Dodgers in the NLCS. It was a spend-heavy postseason, especially in the NL: the NL Central representative, the Brewers, didn’t spend in a meaningful way, ranking 20th in CBT payroll and 22nd in actual, but no one in that division did, and someone gets to make it out of there regardless of quality every season.
We’re getting to the point where there is going to be a lot of haves and have nots discussion regarding resources and market advantages, as many of the larger market teams are utilizing those resources to try to build competitive baseball teams. The Red Sox were arguably unserious about acquiring Juan Soto, knowing a $700 million bid wouldn’t be enough, but even pretending to engage on that sort of thing signals a bit of a shift for them compared to recent years. The Blue Jays’ owners, Rogers Communication, seem to have remembered that they’re an enormous corporation with essentially limitless resources.
There’s been a whole lot of talk about the reshaped Players Association trying to figure out what matters to them now that there are thousands of minor-league members in there, too, but the owners might be starting to suffer a bit in terms of their cohesiveness and unity, as well. The more the bigger market teams spend, the more money filters down, through luxury tax payments, to the small-market teams. And those teams are supposed to be spending more, per CBA rules, the more revenue-sharing that they receive, which is why the A’s are suddenly willing to go out there and get Luis Severino on a deal that makes him their highest-paid free agent ever — not so much because they want to spend, but because they have to if they don’t want yet another grievance about revenue-sharing dollars to contend with.
These teams are not necessarily spending more. The half of the league with below-average payrolls is aggressively below that figure, and three teams fielded clubs with sub-$100 million payrolls in 2024. And, as discussed in that aforementioned Dodgers’ feature, not because they had to. That’s a want thing, because spending always runs the risk that you won’t get a payout on your investment, while not spending leaves you with something to pocket, since MLB’s revenues work like that.
Though, the nature of that might change a bit in the future, with the regional sports network broadcast model making way for a streaming-centered future. If MLB gets their way and is able to negotiate off all (or a huge chunk) of the streaming broadcast rights for local viewers in a single package, a bunch of the big market teams are going to wonder why they’re being used to financially carry, say, the Reds. Revenue-sharing is probably going to be even more important under what the new model is, which means it will cost the teams that do make more as they help lift up the teams that make less, which will only make the lack of effort and spending from those clubs that much more infuriating.
Commissioner Rob Manfred has these owners all under control now, as they all understand the game, but this is his final term in office: someone else is going to take over in 2029, after Manfred’s new broadcast deal is put in place in 2028, and he gets a chance to pass the job off to someone new. Manfred benefited from working alongside former commissioner Bud Selig in labor disputes as well as in the role of right-hand man, with the commissioner’s office presiding over what Selig built. Unity even when these men are divided has been front-and-center, as it was for Selig, but one wonders if that center will hold the further away we get from the reign of the commissioner that espoused this central tenet. When the broadcast money isn’t maybe flowing quite as easily as it was, when the revenue-sharing model has to provide even further support for the small-market clubs.
Is the behavior of the Mets and Dodgers, in part, a reaction to this rift between owners that exists now, this knowledge that things are going to be changing on the broadcast and revenue-sharing front? What kind of fractured ownership landscape is the next commissioner going to inherit? This is well off, sure, but we’re entering the 2025 season, the final full one before CBA negotiations begin again — Manfred’s last CBA as commissioner — and are just a few years away from the state of broadcasting and the money involved changing forever. Trying to connect some dots in the present is only natural.
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