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MLB, MLBPA Close Loopholes Around Personal-Service, "Marketing" Clauses PDF Print E-mail
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Written by Maury Brown   
Friday, 20 April 2012 12:06
MLBPA

Kiss personal-service and “milestone” marketing clauses in MLB goodbye. Going forward, MLB and the MLBPA have agreed to stop allowing those aspects into contracts following  deals by Albert Pujols and Ryan Zimmerman, according to a report by Jayson Stark of ESPN.com.

In those contracts, both players were offered personal-service clauses – salary after the player retired. As detailed on The Biz of Baseball regarding Pujols’ contract:

After the 10-year deal expires in 2021 (or possibly earlier, depending on how his play goes), a new 10-year deal kicks in. The sides agree that after the expiration of the contract or Pujols' retirement as a player, they will enter into a 10-year personal services relationship and Pujols will be paid $1 million annually, or $10 million total. What is involved in the contract is not totally known, but we can assume that one possible route would be to use Pujols as a hitting coach, or possibly an emissary for the Angels in a PR capacity.

Zimmerman gets a five year, $10 million personal service contract at the end of his deal. Both Zimmerman and Pujols will be grandfathered in. No further provisions of that type will be allowed.

Also, the league and union for the players agreed that provisions that allowed for “marketing agreements” would no longer be allowed. This aspect was in the Pujols deal and prior with Alex Rodriguez. As part of the Pujols deal, he receives $3 million payment for 3,000 hits and a $7 million payment for 763 home runs.

As Stark reports, Michael Weiner, executive director of the players union, also confirmed the new rules, saying: "Both clauses raise questions under the Basic Agreement, and both parties felt they should not be a subject of individual negotiations."

While the latest CBA has not yet released to the public, the 2007-11 agreement reads on page 22 (page 10 after the Table of Contents):

(6) Other Forms of Additional Compensation

All other forms of compensation, including but not limited to the following, are not addressed herein and are to be determined according to the facts in each situation:

(a) payments for performing services for a Club in addition to skilled services as a baseball player;

Stark adds at the end of his piece:

One source also told ESPN.com that baseball is trying to close loopholes that teams might be able to use to avoid paying luxury tax, and both of these provisions fall under that heading because neither milestone bonuses nor personal-services deals are considered to be guaranteed money.

Maybe some of you are recalling the loophole that the Red Sox used on contracts with Josh Beckett and later with Adrian Gonzalez. In those deals, the Red Sox were looking to avoid having their salaries count against the Luxury Tax for the season in which the deal was reached. The loophole was that if you signed the player after Opening Day, the Luxury Tax computations rolled over to the following year.

So, what Stark speaks of in his piece today is not what this is about. That’s because that loophole was closed as part of the new labor deal. Stark touched on this as part of his piece on Cole Hamels (see blog post, Don’t discount Blue Jays’ great spring under the subheading “Strike Two – Luxury Lane Dept.”)

The rule now goes like this, according to sources familiar with the new labor agreement:

• If Hamels signs a long-term deal before Opening Day 2012 and his $15 million salary for 2012 doesn't change, he and his team would have the right to choose whether they want the luxury-tax computations to begin with his 2012 salary or with the rest of the extension, beginning in 2013.

• If he signs an extension at any point during the season, the luxury-tax stuff automatically kicks in starting in 2013.

But the moral of the story is, it doesn't matter when he signs. The Phillies can put off the luxury-tax pain until next year if they were to get a deal done this weekend, next weekend or on Labor Day weekend.

So, the league and MLBPA are firming up contract language, none of which are likely to make agents happy. Such is the cat and mouse game that’s been raging since free agency came about in MLB in 1974.

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Maury BrownMaury Brown is the Founder and President of the Business of Sports Network, which includes The Biz of Baseball, The Biz of Football, The Biz of Basketball and The Biz of Hockey. He writes for Baseball Prospectus and is a contributor to Forbes SportsMoney blog.. He is available as a freelance writer. Brown's full bio is here. He looks forward to your comments via email and can be contacted through the Business of Sports Network (select his name in the dropdown provided).

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While Attendance Up, Early 2012 MLB Season Still Sees Some Lagging PDF Print E-mail
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Written by Maury Brown   
Wednesday, 18 April 2012 21:58

MLBLet’s start with the glass half-full: attendance in Major League Baseball is much better than at this point last season. As of April 17, the league is averaging 31,965 per game compared to 29,151 in 2011, a difference of 2,814 per game. Early in the season, there has been just one weather related postponement compared to 10 last season. And, while there have been two games that have seen paid attendance under 10,000 (both hosted by the Indians), that pales to last season where there 6 below 10,000, two of which were below 9,000.

So, attendance is up. But, that isn’t to say that there aren’t lagers early on in the season. There have been 13 games with attendance below 15,000.

Here’s who hosted those games along with the number of them below 15,000:

  • Indians – 3
  • Orioles – 1
  • Astros – 1
  • Athletics – 3
  • White Sox – 2
  • Royals – 2
  • Mariners – 1

As mentioned, there haven’t been many rainouts, and that holds true for rain delays for these low attended games. Of those below the 15,000 threshold, only Tues, 4/10 game between Royals and A’s in Oakland sees a delay (51 min). Three of the games saw sunny or clear skies while two games were played with the roof closed (Mariners and Astros). The rest were cloudy, chilly, or rain threatened. Such is baseball in spring.

But, the biggest reason was matchups and the day of the week.

Unsurprisingly, the low attended games were on Sunday through Weds. Also, the teams that drew poorly haven’t done well in the standings as of late.

The tough one here is the Royals hosting the Tigers on Monday, 4/16. While cloudy, Verlander was the starting pitcher. That normally counts for something.

For details on those with attendance below 15,000, select the image below


Click to see in larger view

Source: Biz of Baseball research

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Maury BrownMaury Brown is the Founder and President of the Business of Sports Network, which includes The Biz of Baseball, The Biz of Football, The Biz of Basketball and The Biz of Hockey. He writes for Baseball Prospectus and is a contributor to Forbes SportsMoney blog.. He is available as a freelance writer. Brown's full bio is here. He looks forward to your comments via email and can be contacted through the Business of Sports Network (select his name in the dropdown provided).

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Rangers, Brewers Now Pass 2M Tickets Sold, Showing MLB Primed for Great Year PDF Print E-mail
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Written by Maury Brown   
Monday, 16 April 2012 21:38

It’s early, but with the weather continuing to be good to great, and optimism still abounding, ticket sales in MLB are already looking good.

Both the Rangers (last Weds) and the Brewers (on Monday) surpassed the 2 million tickets sold mark. It was the fastest that either club had done so.

In 2011, the club did not sell its two millionth ticket until May 19. The Rangers sold its two millionth ticket on August 7 in 2010. The mark set last week is the earliest that the club has reached the 2,000,000 mark since records are first available in 1999.

For the Brewers mark set on Monday, the previous record for the fastest to two million came on April 19, 2001, the first year that the team played in Miller Park.  In comparison to last season when the Brewers set an all-time franchise attendance mark with nearly 3.1 million through the turnstiles, the two-million mark was reached on April 27.

“Brewers fans continue to over-deliver in every way,” said Brewers Chief Operating Officer Rick Schlesinger.  “We want to thank all of them for their incredible support."

The five fastest years of reaching two million tickets sold for the Brewers include:

  • 2012 – April 16
  • 2001 – April 19
  • 2009 – April 21
  • 2011 – April 27
  • 2010 – April 29

As mentioned, the improved weather compared to last year is already playing a part for all of MLB. To date, there has been one weather related cancellation (White Sox at Indians on Tues, April 10 due to snow). Compared to last year at the same time there had already been 10 rainouts.

The league is already seeing a solid showing. As of Sunday, the league saw a total of 6,146,468 compared to 5,603,279 on the same date last year.

Source: Texas Rangers, Milwaukee Brewers, Biz of Baseball research

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Court Set to Approve $2.15 Billion Sale of the Dodgers on Friday PDF Print E-mail
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Written by Maury Brown   
Thursday, 12 April 2012 20:10

Sale of the Los Angeles Dodgers

The final potential hurdle in the $2.15 billion sale of the Los Angeles Dodgers to a group led by Magic Johnson appears to be on the cusp. According to the LA Times, the Dodgers have agreed to provide written confirmation to FOX Sport that Time Warner Cable will not be directly or indirectly involved in the purchase of the club. According to the report:

Under its settlement with the Dodgers, Fox had the right to challenge any sale in which rival Time Warner Cable was involved. The Dodgers already had told the court that TWC was not involved, but Fox asked for assurances from the new owners.

FOX, who is the current broadcast partner of the Dodgers, filed papers asking for reassurance that Time Warner would not somehow be tied directly to the club. FOX Sports, through PrimeTicket, have right of first negotiation for a new broadcast agreement in November of this year. The contract expires at the conclusion of the 2013 season.

The upcoming broadcast deal will likely see a floor of $4 billion and could go for as much as $5 billion. FOX, TWC, and possibly CBS have all been mentioned. The Dodgers might also start their own regional sports network.

On Friday, US Bankruptcy Judge Kevin Gross is expected to approve the sale. The deal is expected to be finalized no later than Monday, April 30. That day current Dodgers owner Frank McCourt owes his former wife Jamie $131 million as part of their divorce settlement.

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Maury BrownMaury Brown is the Founder and President of the Business of Sports Network, which includes The Biz of Baseball, The Biz of Football, The Biz of Basketball and The Biz of Hockey. He writes for Baseball Prospectus and is a contributor to Forbes SportsMoney blog.. He is available as a freelance writer. Brown's full bio is here. He looks forward to your comments via email and can be contacted through the Business of Sports Network (select his name in the dropdown provided).

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Dodgers Expect to Exit Bankruptcy, File Documents with Court PDF Print E-mail
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Written by Maury Brown   
Friday, 06 April 2012 15:55

Dodgers Sale

In a sign that the sale of the Dodgers is progressing, the club announced today their debtors that they expect to emerge from their chapter 11 bankruptcy reorganization cases at the end of the month, as has been the plan by the Dodgers and MLB since Frank McCourt and the league agreed to the process of the sale. The reorganization would comes as part of the confirmation hearing which is scheduled for April 13th in the United States Bankruptcy Court, District of Delaware.

In filings today with the court, the Dodgers presented several documents including an Amended Plan of Reorganization, a Plan Supplement to the Amended Plan of Reorganization, a Proposed Confirmation Order, and a Memorandum in Support of Confirmation of the Amended Plan.

The Dodgers said in a statement, “The amended Plan of Reorganization, among other things, provides for the payment of all allowed claims of creditors in full, includes a substantial distribution for debtors’ equity interest holder, and provides a solid foundation for the long term success of Los Angeles Dodgers and its affiliates.”

The Dodgers added, “The centerpiece of the Amended Plan is the agreement by Guggenheim Baseball L.P. to pay $2 billion to acquire the equity of the reorganized debtors. This agreement is the culmination of an auction process that was conducted over several months and reflects the highest and best bid generated by that process. The successful auction process attracted numerous prospective purchasers and numerous proposals, all of which confirmed the substantial value of the Dodgers, the media rights associated with the team, and Dodger Stadium.”

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Maury BrownMaury Brown is the Founder and President of the Business of Sports Network, which includes The Biz of Baseball, The Biz of Football, The Biz of Basketball and The Biz of Hockey. He writes for Baseball Prospectus and is a contributor to Forbes SportsMoney blog.. He is available as a freelance writer. Brown's full bio is here. He looks forward to your comments via email and can be contacted through the Business of Sports Network (select his name in the dropdown provided).

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Complete List of 243 Foriegn-Born Players on 2012 Opening Day Rosters PDF Print E-mail
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Written by Maury Brown   
Thursday, 05 April 2012 19:47

MLBTwo-hundred forty-three players on 2012 Opening Day 25-man rosters and inactive lists were born outside the 50 United States, it was announced today.  This year’s percentage of 28.4 marks the third highest of all-time and is up from 27.7 in both 2010 and 2011.

The 243 players born outside the United States came from a pool of 856 players (749 active 25-man roster players and 107 disabled or restricted Major League players) on April 4th rosters and represent 15 countries and territories outside the U.S.  The 28.4 percent trails only 2005, when 29.2 percent (242/829) of Opening Day players were foreign-born, and 2007, when 246 players – 29.0 percent of all players – were born outside the U.S.  In addition, this year’s 243 foreign-born players rank as the second-most in history, trailing only the 2007 high of 246.  Last season, 234 out of 846 players were foreign-born, totaling 27.7 percent.

The Dominican Republic again leads the Major Leagues with 95 players born outside the U.S, which is the second-most the nation has produced on Opening Day rosters, behind its 99 in 2007.  Venezuela ranks second with 66 players, its highest total ever on Opening Day rosters.  Canada ranks third with 15 players, followed by Japan (13); Cuba (11); Puerto Rico (11); Mexico (9); Panama (7); Curaçao (4); Australia (4); Nicaragua (3); Taiwan (2); Colombia (1); Italy (1); and South Korea (1).  The three Nicaraguan-born players are the most on Opening Day rosters since 1995, when MLB began to release annual Opening Day data.  Cuba matched its high of 11 set in 2002 and 2011, and Curaçao tied its high of four set in 2009.  In addition, infielder Alex Liddi, the first Italian-born and developed player to play Major League Baseball after debuting last September, made the Seattle Mariners’ Opening Day roster.  Liddi, 23, is just the seventh Italian-born player in Major League history and the first since infielder Reno Bertoia in 1962.  Liddi is the first alumnus of the MLB International European Academy, which was established in 2005, to make an Opening Day roster.

The Kansas City Royals, the hosts of the 2012 All-Star Game, have the most foreign-born players with a total of 13, followed by the Colorado Rockies and the New York Yankees, who each have 12.  Three Clubs – the Milwaukee Brewers, the New York Mets and the Mariners – each have 11 foreign-born players.  The Yankees have players from seven different countries and territories outside the United States: Canada, Curaçao, the Dominican Republic, Japan, Panama, Puerto Rico and Venezuela.

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Derek Jeter, Cliff Lee, Albert Pujols Top-Selling Jerseys in MLB for 2011 PDF Print E-mail
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Written by Maury Brown   
Thursday, 05 April 2012 14:22
Jeter
Derek Jeter was MLB's top-selling jersey in '11

Gear. If you’re a fan of baseball, you’ve got some. A cap… a jersey. You’ve probably got one or both.

But, when you think about being a fan and your favorite active player, owning a jersey is to show you’re elegance.

Today, MLB and the MLBPA released info on jersey sales for last year with 4 of the top 20 jerseys by sales numbers coming from the Yankees, Jeter, A-Rod, Cano, and Rivera).

Derek Jeter of the New York Yankees, Cliff Lee of the Philadelphia Phillies and Albert Pujols of the Los Angeles Angels of Anaheim top the list of MLB Most Popular Jerseys based on sales of official Majestic jerseys for the 2011 calendar year.

Seven players – Robinson Cano, Carl Crawford, David Freese, Adrian Gonzalez, Hunter Pence, Mariano Rivera and Justin Verlander – who did not make last year’s list cracked the top 20 this time around. Players representing 11 different MLB Clubs make up the list of top 20 most popular jerseys, with seven different clubs in the top ten. In addition, 12 of the top 20 players are under the age of 30. The Phillies and Yankees, the teams with the two best records last season, each have four players in the top 20. The top 20 include nine infielders, five pitchers, four outfielders and two catchers. Of the top 20, 12 were All-Stars in 2011 and 14 played on teams that reached the Postseason.

MLB Most Popular Jerseys
Based on Majestic 2011 sales figures
1. Derek Jeter, New York Yankees
2. Cliff Lee, Philadelphia Phillies
3. *Albert Pujols, LA Angels of Anaheim
4. Josh Hamilton, Texas Rangers
5. Roy Halladay, Philadelphia Phillies
6. Tim Lincecum, San Francisco Giants
7. Dustin Pedroia, Boston Red Sox
8. Ryan Braun, Milwaukee Brewers
9. *Hunter Pence, Philadelphia Phillies
10. Buster Posey, San Francisco Giants
11. Chase Utley, Philadelphia Phillies
12. Joe Mauer, Minnesota Twins
13. Justin Verlander, Detroit Tigers
14. Adrian Gonzalez, Boston Red Sox
15. Alex Rodriguez, New York Yankees
16. Ian Kinsler, Texas Rangers
17. Robinson Cano, New York Yankees
18. Mariano Rivera, New York Yankees
19. Carl Crawford, Boston Red Sox
20. David Freese, St. Louis Cardinals

Source: MLB, MLBPA

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Maury BrownMaury Brown is the Founder and President of the Business of Sports Network, which includes The Biz of Baseball, The Biz of Football, The Biz of Basketball and The Biz of Hockey. He writes for Baseball Prospectus and is a contributor to Forbes SportsMoney blog.. He is available as a freelance writer. Brown's full bio is here. He looks forward to your comments via email and can be contacted through the Business of Sports Network (select his name in the dropdown provided).

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Bud Selig’s Comments Before MLB's 2012 Opening Night PDF Print E-mail
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Written by Maury Brown   
Wednesday, 04 April 2012 18:16

Selig

By now it’s a well-worn tradition that the commissioner of baseball talk up how well Major League Baseball is doing before a season starts. And, 2012 is no different as Commissioner Selig is on-hand at the inaugural game the new Marlins Park.

Addressing the media, Selig said the following:

On Marlins Park: On the "I just stood out on the field & looked around. All you can say is, `Wow.'" (Jayson Stark via Twitter)

On Marlins Park: "I have no trepidation in saying that 10 years from now, people will say this was a tremendous thing for this city." (Jayson Stark via Twitter)

On the mega-deal that Joey Votto reached with the Reds: "Some signings I'm not wild about, but that isn't one of them." (Jayson Stark via Twitter)

On getting the A’s into a new ballpark, we’re no closer: "Like every other problem we've had, it will be solved." (Jayson Stark via Twitter)

On a new ballpark for the Rays, Selig touts patience: "Five or 10 years ago, you could make a case this (Marlins Park) would never happen" (Jayson Stark via Twitter)

On the DH: It will take a catalytic event" to put the DH in both leagues or kill it in both. (Jayson Stark via Twitter)

Finally, Selig, in an interview with the SportsBusiness Daily said that he believes MLB will see a 3-5% attendance increase in 2012. We agree. In fact, it could be higher. See what we said on March 1.

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Maury BrownMaury Brown is the Founder and President of the Business of Sports Network, which includes The Biz of Baseball, The Biz of Football, The Biz of Basketball and The Biz of Hockey. He writes for Baseball Prospectus and is a contributor to Forbes SportsMoney blog.. He is available as a freelance writer. Brown's full bio is here. He looks forward to your comments via email and can be contacted through the Business of Sports Network (select his name in the dropdown provided).

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Scarborough Sports Releases Info on Gen Y Interest in MLB PDF Print E-mail
Written by Maury Brown   
Tuesday, 03 April 2012 14:29

MLBWhile baseball has been pained as a stogy old-man’s game, the fact is that, yes, MLB has a young audience. As the 2012 season gets fully underway tomorrow when the Marlins host the Cardinals on ESPN, Scarborough Sports Marketing has released data on Generation Y Major League Baseball fans. Generation Y, defined as American adults age 18 to 29, make up 20% (46M) of the American adult population and 44% of them are MLB Fans. According to Scarborough:

  • 30% of Gen Y MLB Fans are willing to spend $25-$49 on a single game MLB ticket.
  • 12% of Gen Y MLB Fans are interested in purchasing season tickets.
  • Gen Y MLB Fans are 37% more likely than all MLB Fans to have bought MLB apparel with a team logo in the past 12 months.
  • The season opener will be between the St. Louis Cardinals and the Miami Marlins. 72% of Gen Y St. Louis residents watched, attended or listened to a Cardinals game in the past year and 36% of Gen Y Miami residents watched, attended or listened to a Marlins game in the same time period.

Some thoughts on the report…

The idea that less than a third of Gen Y MLB fans are willing to purchase a single game ticket in the defined price range isn’t exactly great news. While there are tickets priced below that threshold, the majority of tickets, aren’t.

On the flip side, you get 12 percent interested in purchasing season tickets. The bad news is, Scarborough doesn’t say how many of that 12 percent actually acted on it.

The third bullet point is interesting in that baseball merchandise is seen as a fashion trend that is increasing. One need only look at some of the colorway options available (pink hats for women, all red Yankee or all green Red Sox, as well as pretty much all teams represented as black hats with black logos) shows that MLB as a purely fashion statement – something that may be outside of interest in “baseball” – is trending with Gen Y.

On the last bullet-point… well, this should be expected. The Cardinals, of course, won the World Series last year. The Marlins haven’t been relevant since last winning the World Series in 2003. However, getting back to the “fashion” aspect, while one can quibble with whether the new Miami Marlins logos and uniform colors “work”, it is new, and in that, fans will likely purchase the merchandise. And, let’s not forget that the additions of Jose Reyes, Mark Buerhle, Heath Bell, and Ozzie Gullien (plus having the Marlins be the subject team for this year’s edition of “The Franchise” on Showtime) will give the Marlins increased marketability. Expect interest in the Marlins to go up considerably this year.

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Maury BrownMaury Brown is the Founder and President of the Business of Sports Network, which includes The Biz of Baseball, The Biz of Football, The Biz of Basketball and The Biz of Hockey. He writes for Baseball Prospectus and is a contributor to Forbes SportsMoney blog.. He is available as a freelance writer. Brown's full bio is here. He looks forward to your comments via email and can be contacted through the Business of Sports Network (select his name in the dropdown provided).

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