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

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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.

Rays lose, clinching postseason berth for Athletics

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The Rays lost 4-1 to the Yankees on Monday night, which clinched a postseason berth for the Athletics just as they began their own game against the Mariners. For the 94-62 A’s, it’s their first postseason appearance since 2014 when they lost the AL Wild Card game to the Royals.

Major League Baseball celebrated the Athletics’ achievement by tweeting this fact: The A’s are the first team since 1988 to make the postseason with baseball’s lowest Opening Day payroll ($66 million).

Yay?

John J. Fisher, who has owned the A’s since 2005, has a net worth approaching $3 billion. The Athletics franchise is valued at over $1 billion. Yet the A’s have never had an Opening Day payroll at $90 million or above and have consistently been among the teams with the lowest payrolls. The cultural shift towards embracing analytics has allowed the A’s to get away with investing as little money as possible into the team. Moneyball helped change baseball’s zeitgeist such that many began to fetishize doing things on the cheap and now the league itself is embracing it.

What the fact MLB tweeted says is actually this: John J. Fisher was able to save a few bucks this year and the A’s still somehow made it to the postseason.

The Athletics’ success is due to a whole host of players, but particularly youngsters Matt Olson, Matt Chapman, Sean Manaea, Daniel Mengden, Lou Trivino, among others. All are pre-arbitration aside from Manaea. When it comes time to pay them something approaching what they’re actually worth, will the A’s reward them for their contributions or will they do what they’ve always done and cut bait? After reaching the postseason in 2014, the A’s traded away Josh Donaldson, Brandon Moss, Jeff Samardzija, and John Jaso. Each was a big influence on the club’s success. Athletics fans should be happy their favorite team has reached the postseason, but if the team’s history is any precedent, they shouldn’t get attached to any of the players. Is that really something Major League Baseball should be advocating?