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

6 Comments

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.

Padres to place Franchy Cordero on DL, activate Hunter Renfroe

Denis Poroy/Getty Images
Leave a comment

Kevin Acee of the San Diego Union-Tribune reports that the Padres will place outfielder Franchy Cordero on the 10-day disabled list and activate outfielder Hunter Renfroe from the DL on Monday.

Cordero, 23, has been slumping, batting .140 with four extra-base hits in 47 plate appearances dating back to May 11. The Padres noticed that the forearm issue has been affecting his swing in recent games. Manager Andy Green said, “It was something where he could swing a certain way to manage it. But swinging that way was not him.”

Renfroe, 26, has been out since mid-April due to inflammation in his right elbow. He hit .200/.281/.440 in 57 PA prior to landing on the disabled list. Renfroe played in 10 rehab games with Triple-A El Paso.