Report: the Dodgers got a sweetheart deal limiting their revenue sharing liability

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UPDATE:  It seems this was not really news, despite Bloomberg’s reporting it as such.  Bill Shaikin of the Los Angeles Times reported this back in May.  We missed it then.  Apologies to the Times.

5:40 PMIf this report from John Helyar of Bloomberg is true, whoa, MLB is going to have A LOT of explaining to do to, well, every team that is not the Los Angeles Dodgers:

The Los Angeles Dodgers have shot out of bankruptcy and into the ranks of baseball’s biggest spenders, fueled partly by a secret agreement between former owner Frank McCourt and Major League Baseball that may limit the revenue the team is obliged to share with less prosperous clubs.

A settlement ending their 2011 battle in U.S. Bankruptcy Court gives the Dodgers’ new owners a chance to cap income subject to revenue-sharing from a proposed regional sports network at about $84 million a year, according to five people familiar with the confidential “special terms.”

The upshot: the Dodgers — based on assumptions about what their new TV deal will bring them — will be able to hold on to some $141 million a year that they would otherwise have to share with other clubs in the league. That’s because their new deal will bring in far, far more than $84 million a year. Indeed, its estimated that it’ll bring in $175 million to $225 million a year over the 20- year contract.

This would help in part to explain the massive sales price of the team, as the biggest financial hurdle a large market/revenue team faces is its revenue sharing obligations.

Major League Baseball Executive Vice President Rob Manfred pushes back against this, saying that the revenue sharing figures will be based on the actual TV revenue the Dodgers receive.  Which … seems like a direct contradiction of the whole story.  So, I’m not sure what’s going on here.  Bloomberg is obviously reporting, based on several sources, that there is a deal to cap revenue-sharing eligible TV money. Manfred’s words suggests that’s not the case.

Any help here, anyone?

Nick Markakis: ‘I play a kids’ game and get paid a lot of money. How can I be disappointed with that?’

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Earlier today, the Braves inked veteran outfielder Nick Markakis to a one-year deal worth $4 million with a club option for the 2020 season worth $6 million with a $2 million buyout. Though Markakis is 35 years old, he’s coming off of a terrific season in which he played in all 162 games and hit .297/.366/.440 with 14 home runs and 93 RBI in 705 trips to the plate. Markakis had just completed a four-year, $44 million contract, so he took a substantial pay cut.

Per David O’Brien of The Athletic, Markakis asked his kids where they wanted him to play and they said Atlanta. O’Brien also asked Markakis about the pay cut. The outfielder said, “I’m not mad at all. I play a kids’ game and get paid a lot of money. How can I be disappointed with that?”

This seemingly innocuous comment by Markakis is actually damaging for his peers and for the union. Baseball as a game is indeed a “kids’ game,” but Major League Baseball is a billion-dollar business that has been setting revenue records year over year. The players have seen a smaller and smaller percentage of the money MLB makes since the beginning of the 2000’s. Furthermore, Markakis only gets paid “a lot of money” relative to, say, a first-year teacher or a clerk at a convenience store. Relative to the value of Liberty Media, which owns the Braves, and relative to the value of Major League Baseball itself, Markakis’s salary is a drop in the ocean.

That Markakis is happy to take a pay cut is totally fine, but it’s harmful for him to publicly justify that because it creates the expectation that his peers should feel the same way and creates leverage for ownership. His comments mirror those who sympathize first and foremost with billionaire team owners. They are common arguments used to justify paying players less, giving them a smaller and smaller cut of the pie. Because Markakis not only took a pay cut but defended it, front office members of the Braves as well as the 29 other teams can point to him and guilt or shame other players for asking for more money.

“Look at Nick, he’s a team player,” I envision a GM saying to younger Braves player who is seeking a contract extension, or a free agent looking to finally find a home before spring training. “Nick’s stats are as good as yours, so why should you make more money than him?”

Contrast Markakis’s approach with Yasmani Grandal‘s. Grandal reportedly turned down a four-year, $60 million contract offer from the Mets early in the offseason and settled for a one-year, $18.25 million contract with the Brewers. Per Ken Rosenthal of The Athletic, Grandal said on MLB Network, “I felt like part of my responsibility as a player was to respect the guys that went through this process before I did. Guys like Brian McCann, Russell Martin, Yadier Molina, These are guys who established markets and pay levels for upper-tier catchers like me. I felt like I was doing a disservice if I were to take some of the deals that were being thrown around. I wanted to keep the line moving especially for some of the younger guys that are coming up … to let them know, if you’re worthy, then you should get paid what you’re worth. That’s where I was coming from.”

Grandal’s comments are exactly what a member of a union should be saying, unapologetically. The MLBPA needs to get all of its members on the same page when it comes to discussing contracts or labor situations in general publicly. What Markakis said seems selfless and innocent — and I have no doubt he is being genuine without malice — but it could reduce the bargaining power players have across the table from ownership, which means less money. They are already being bamboozled, at least until the next collective bargaining agreement. They don’t need to be bamboozled any more.