Fay Vincent has a (severely flawed) idea about how to compensate players


Former baseball commissioner Fay Vincent has a column in today’s Wall Street Journal in which, after noting how businessmen and actors get an equity stake or points on the gross in their deals, why baseball players can’t do the same thing and take an ownership interest in the team:

Mr. Pujols will in all likelihood negotiate a salary of around $35 million annually in a four- or five-year agreement. He and his agent will surely notice the enormous bite the tax collectors will take of that income. Why not take some of the pay in the form of a piece of the Cardinals franchise? Who would argue the Cardinals are not more valuable if they can keep him?

First: $35 million? Really? I kind of figured it would be like $30 million, but let’s save that for another day.

Second: As Vincent himself notes, baseball prohibits players from owning a stake in their team unless they get approval from the commissioner and unless, pursuant to Major League Rule 20(e), they sell their stake in the team if they switch teams.  Specifically, that rule provides that the agreement “shall provide for the immediate sale (and the terms there of) of such stock or other proprietary interest or financial interest in the event of the [player’s] transfer to or joining another Club.”

I’m just a dumb litigator, but I don’t think I’m wrong when I say that a player-ownership scenario that is designed to provide tax savings and greater flexibility is a tad bit hampered by a rule that requires the stake be divested immediately if the player switches teams.  That, my friends, would lead to an immediate taxable event. It would also severely hamper the value of the ownership stake, which would piss off both the player and the team’s majority owners, who likely don’t want to have to force chunks of the team out into the market the moment the team’s GM comes up with a spiffy trade.

Sure, you could change the rules about immediate divestment upon being traded, but then you run into the uncomfortable scenario of someone playing for the Cardinals, for example, who owns a stake in the Cubs. Or a Dodgers player — Juan Uribe, for example — whose wealth depends on the Giants having a greater franchise value.  In an age where franchise values are dependent upon regional sports network ratings, and those ratings are dependent upon winning and losing, that’s a recipe for disaster, is it not?

In other news, for all of Fay Vincent’s virtues, the game is way healthier, financially speaking, today than it was when he was commissioner. If this article is evidence of his business acumen, there may be a reason for that.

Kris Bryant wants to be Cubs’ player rep, vows to “fight” for next collective bargaining agreement

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Cubs third baseman Kris Bryant was one of the most prominent examples of service time manipulation in recent memory. He was ranked as the No. 1 prospect in baseball going into the 2015 season by Baseball America. He then had an incredible spring, batting .425 with a spring-high nine home runs and 15 RBI. The Cubs, however, didn’t add him to the Opening Day roster, instead keeping him in Triple-A for the first two weeks of the season, ensuring the club would get another year of control over Bryant because he wouldn’t accrue enough service time. He made his debut on April 17 and the rest was history. Bryant won the 2015 NL Rookie of the Year Award.

While the MLB Players Association filed a grievance on his behalf, Bryant didn’t say anything. But it was a learning moment for him. The same is true of the past offseason, which Bryant says “opened my eyes,” as Gordon Wittenmyer of the Chicago Sun-Times reports. He now considers labor issues a priority, saying, “I need to study up, have my voice heard, continue to learn, because this is going to affect us for years to come. And I’d be foolish not to kind of offer myself out there.”

As Wittenmyer notes, Bryant hopes to replace Jake Arrieta as the Cubs’ player reprensentative. The players make that decision later this month. Bryant also vowed to fight for the next collective bargaining agreement. He said, “Maybe the focus was on other things rather than some of the more important things. But I think with this next one things are definitely going to change, and there’ll definitely be more fight on our side just because we’re going to get the chance to experience the effects of some of the things we agreed to. The only way to get what you want here is to fight for it. And I think you’re going to see a lot of that.”

It’s good to see Bryant motivated by recent economic developments in baseball. Hopefully more players take his lead and become more informed, arming themselves with all of the tools they need to create a better situation for themselves when the current CBA expires.