I have posted several times before that the TIGERS are not a "small market" team and determined what revenue they brought in. Today, I learned a little bit more about revenue sharing by MLB.
Per the recent CBA (2022) with last year being the first year of enforcement, MLB teams pool 48% of the total local TV money and redistribute equal shares to all the teams. In 2023, this came to an additional $110 million dollars per club. On top of this, in today's article in THE ATHLETIC by Ken Rosenthal, the penalty money generated by clubs who exceed the upper limits of the payroll threshold, can and is redistributed to teams who are in the bottom 15 in payroll but demonstrate efforts to grow their revenue. Last year this was as much as an additional $15 million. https://www.nytimes.com/athletic/6037958/2025/01/05/orioles-offseason-spending-roki-sasaki-timeline/
So before the national tv revenue distribution (~$50 million per team), before local tv revenue (in 2022, it was an additional $45 million, but no numbers have been reported the last two seasons, but it is rumoured to be less), before attendance (another ~$50 million) as well as parking and concessions (~$60 million), before the merchandising revenue (~$15 million) and local add revenue. stadium marketing, etc. (no reported figures but typical amounts are 40% tv revenue and attendance ($145 *.4 = ~$58 million), the TIGERS are given up to $125 million just for having a franchise?!?
Oh, and the CBA negotiations are famously contentious between owners and players due to owners refusal to open their books. So take it with a grain of salt (or wonder how much they really made if they are one of few reporting profit margin), Forbes reports DETROIT is one of 4 teams in MLB that what numbers they do share show them being profitable each of the last 3 years.
I find this interesting. In the mentioned Ken Rosenthal article, he takes the ORIOLES to task for being a good young team that really needs to improve their pitching and instead have been making cost-conscious deals with 41-year old Charlie Morton and 35-year old Japanese pitcher Sugano who will be making his Mlb debut this season. He later throws the TIGERS into same group, citing they have only committed to two $15 million one year deals so far this off-season and not using their resources to improve team off of last season. He then brought the lesser teams getting additional money the "bigger" markets are paying for which in some ways, balance out inequities of uneven local revenue streams. He cites 6 teams (MARLINS, MARINERS, PADRES, TWINS, BREWERS, & CARDINALS) as being recipients of these shared funds but have not spent one dollar as of yet on a free agent and questions why not.
11 comments
Honestly the economics in baseball leaves a bad taste in my mouth.
I’ve explained this to my non-baseball fan friends many times and they’re always stunned when I tell them that a team could go 0-162, field a bunch of assholes from the street, and still make money.
Trust fund baby billionaire that inherited his daddy’s MLB team couldn’t score in a whorehouse. Seriously fuck Chris Illitch
Maybe the padres haven’t spent this year but they have a ton of payroll already.
There needs to be a rule requiring teams to share more records. I know the answer is more of the same, “they’ll never do it”, just like with a salary cap it’s “the PA will never entertain it”, and I’m so fucking sick of the finger pointing and pushing the problems back on the fans. Especially at this time of year, there’s so many accounts trying to shape the narrative on social media with info carefully selected to further the purposes of either front offices or player’s agents–but we can’t really have informed takes, because the truth is under lock and key.
It’s all just so gross, and I resent how much time we’re forced to think about it as fans (essentially their customers).
Not only that, Illitch is richer than the owner of the Yankees, and one of the richest in baseball. Dont let anyone tell you otherwise. Chris Illitch is an unholy douchebag.
It would be a lot more effective to penalize teams for missing the playoffs for 5+ consecutive years while spending less than their revenue sharing.
Sometimes, rebuilding is necessary. Detroit truly needed to rebuild after their run. Good franchises are able to rebuild their farm system and get back to being competitive. I have no issues with lower payroll teams that are trying to win. Right now, Baltimore and Detroit are both coming out of rebuild, so they have a ton of players under team control. Both teams will see payrolls rise naturally. The judge of how good the franchise is well be whether they resign their cores or trade them off.
What we as fans need to understand, unfortunately , is that our favorite players might not want to stay and want to test free agency. That is their right. It doesn’t mean the team does not want to resign them. Some are not going to stay. It’s a fact of life in baseball. It doesn’t matter how much a team may offer them
They have money. If owning a team lost money, no one would do it.
Does Illitch have ambition? He could be as loaded as Bezos, and it doesn’t matter if all he wants to do is balance the books.
I mean there’s alot more expenses for a baseball team that just payroll as well.
That aside, I’d argue the money we have spent was poorly spent. (Not Torres, but Cobb)
Do you realize there are more bills to pay in an organization other than the salaries of the players on the MLB team?
The revenue sharing replaces about half of local revenues (TV, tickets, concessions) So is not additive to the total of those things.
League-wide payroll is about half of total revenue.