On Wednesday, Bloomberg reported that MLB will now allow investment funds to take minority stakes in teams–a development which Ben Clemens dissects in a thoughtful piece for Fangraphs (link). The new policy is intended to address the fact that rising valuations of MLB franchises have made it increasingly difficult for limited partners (or minority owners, as they are often referred to) to find qualified buyers for their stakes when they feel the urge to sell. Essentially, as Clemens points out, it’s a rather tough proposition for a minority owner to find someone willing to pay upwards of $1BB just to own 49% or less of a team; the ability to have chief decision-making power over signings and team direction, in general, is likely a motivating factor in many franchise acquisitions. Allowing broader financial interests–which, though details on MLB’s new policy are sparse, could include pension funds, college endowments, or hedge funds–to purchase minority stakes should allow for current LPs to cash in on their franchise stakes more easily.
Clemens, however, foresees some problems in this road to greater liquidity. Primarily, investment funds are engineered to prioritize profit over all other considerations, with fiduciary duties to stakeholders and clients to secure maximum return on investments. Though professional sports franchises, too, care about maximizing profits, they are still, in the words of Clemens, “civic enterprises, competing for titles, and they care about winning for its own sake”. Potential conflicts of interest are obvious, but it is worth noting that there are already explicitly profit-motivated entities controlling major league teams, as seen with Liberty Media’s control over the Braves.
More notes from around the bigs with the sixth game of the ALCS underway…
- The Pirates are one of just three MLB teams to generate a cumulatively negative WAR rating from the pitchers they have drafted and developed over the past eight seasons–a fact that Rob Biertempfel turns a sour eye to in his piece for The Athletic (link). While poor trades, signing, and development have all played a role in the recently thin state of Pittsburgh pitching, the amateur draft, in Biertempfel’s estimation, is the fountainhead of GM Neal Huntington’s trouble. As the writer points out, the Rule IV draft is of critical importance to “small market” clubs like the Pirates, but the team has struggled to locate impact talent there in the last several years. Biertempfel, in a ten-year overview of Pirate drafts from 2008 to 2017, illustrates that Huntington has made some regrettable missteps in his time in the Pittsburgh war room. Notably, the club selected pitcher Brooks Pounders of the second round of the 2009 draft while Dallas Keuchel and Patrick Corbin were still available, and in 2012 the club failed to draft a single pitcher who would ultimately appear in a Pirates uniform.
- Like many other scribes in the baseball world, the San Francisco Chronicle’s Bruce Jenkins believes the Angels made the “perfect” managerial hire in bringing on Joe Maddon. As far as hot stove implications go, Jenkins speculates that the Maddon-led Angels will make an appealing destination for free agent Gerrit Cole and potential free agent Stephen Strasburg. Of course, the Angels may face some So Cal competition in the form of the Padres, who, if they decide to once again spend big on a free agent, could also offer comfortable confines for Cole (an Orange native) or Strasburg (a San Diego native).
Jenkins’ article was hilarious. The Joe Maddon managerial hiring “threatens” the Athletics. Like, congrats on being the brides maid to the Astros, losers.
This is why the SF Chronicle blows.
That headline, lol
Shouldnt it be the Astros who “take note”?
Why does it sound like Jenkins really hates Bob Melvin?
Article doesn’t even break down why the A’s should take note? Other than the obvious reason of Maddon being a good manager, but Melvin’s won the head to heads over the years, so….
He doesn’t hate Bob Melvin. He hates that Bob Melvin won’t manage the Giants next season. The entire San Francisco Chronicle, with the exception of Susan Slusser, can’t help but dump on the A’s whenever they get the chance. This is just the latest example of that.
That they focused the article on “catching the A’s” really highlights their bias. No one cares about the second place team in their division. They want to win it.
you can’t compare Maddon to Melvin, maddon has been in two world series and won it with the cubs.
No one is doing that, if you read it.
Minority stakes will only be good for baseball
Liberty Media is exactly what’s wrong with the Braves, and should not be expanded.
Why is that what’s wrong with the Braves ???
If you know anything about the situation you would know that couldn’t be further from the truth.
Fact of the matter is the TV deal they were saddled with before purchasing the team is the Braves kryptonite
if the poeple wanted a change they would get one. if someone so hates the team’s direction they can go put money on it. plain and simple.
Because I’m a Braves fan the last thing MLB needs is more Liberty Media type ownership.
If I were a pitcher, I’d be wary of signing with the Angels. This is an organization who has a high rate of injuries among their starting pitchers. Then you have the Tyler Skaggs situation where it appears the organization ignored the fact that one of their players was addicted to opioids & instead of getting that player the help he needed, the player ended up tragically dying. That isn’t a good thing for any team
You must be either a Dodger fan or Padres fan? Cole will ptch in Anaheim next year
And you must be an idiot. Eric Lord hasn’t said anything that is false, and nothing that relates to him supporting or rooting against any specific team. He is simply stating facts.
And this is coming from an angels fan. I would love to have Cole and any other big time pitcher. But if I’m Cole, hell no im not signing in Anaheim unless they reshape whatever the hell issue is with the pitching health in recent years.
Andrew and Eric – I thought they changed the entire training staff when Scioscia retired. The problem is they try to piece together a pitching staff on Moreno’s annual payroll budget instead of Moreno spending enough money to get proven durable pitchers who are good now. They dig up pitchers who were good three years ago and hope for a resurgence that never comes. Moreno hasn’t increased player payroll in several years regardless of where the tax line has been (between 160m and 170m-ish).
We are going into this winter with a payroll of about 120m not including arbitration eligible players and assuming they don’t keep Calhoun (spotrac.com). That leaves enough money to get a couple of good starters if Moreno keeps his payroll at 170m. They can play around with first year salary plus signing bonuses to stretch the budget even further until Pujols comes off the books (like with Trout’s new contract).
We are solid at every other position (except catcher) with decent depth, although I think Upton is way overrated. If Moreno is serious about winning now, how he spends money on pitching this winter will show it.
Man I wish we had that way overrated Upton back on the Braves.
Upton career stats: BA .266, OBP .347, OPS .822, SLG ,476, Fielding .974. Although good, I don’t think it matches the hype for this guy. Watching him defend his position, for example, he appears lazy and unmotivated. In contrast, look how Calhoun defends his position. You won’t see Upton lay out to catch a ball. He will always let it drop before he gets his uniform dirty. Those are my observations since he’s been an Angel. He may have been a different player previously. Maybe a healthy Upton in 2020 will change my mind.
I just watched a 3:47 video of Upton’s “Greatest Moments” on YouTube. It consisted of some well timed home runs and a few fly ball catches at the wall. That was it.
@steelerbravenation
Please take him! I’d do Upton for Ender in a heartbeat
If Adell and Marsh continue to develop at the same rate then Upton won’t be playing the outfield past this season. Of course the Angels will then have a glut of DHs, Pujols, Ohtani and Upton.
That’s a problem. A contract swap with SD or SF for Myers or Longoria should at least be considered as either of those players would give us an upgrade in defensive versatility.
Considering most, not all, but most of the pitchers the Angels have signed in recent years were stopgap retread short contract type players yeah no wonder they’ve had the injuries. They were mostly flawed with HOPES they could give us that career rebound season or half season and have trade value. It’s not like they had 4-5 all stars drop like flies. Oh and the team has changed its manager and supporting personnel twice now in the last 12-14 months.
Who sets the budget? What is the budget? Why did Cobb county bend over backwards to get them and the next thing we hear is how they’re going to use the $ from tax breaks and increased attendance to further develop the surrounding area but no mention of increased payroll.
They are not in a position to spend just to spend. They can not saddle their payroll because they have nowhere to pull money from if there is a loss from year to year. That is why they went to Cobb County
That is why they are developing so they can use that revenue to put into the team if they need to.
I am sorry Brave fans but you will see more offseasons like we did last year. There are not going to be a lot of long term free agent contracts dolled out in Atlanta. Also won’t be a lot of guys going year to year in arbitration either. They need to as clear about payroll as possible for a long time because like I said they have nowhere to be able to pull money from in case they lose money from year to year.
well said
Sounds like a prudent strategy…..
That sounds like a criticism of Cobb County. They made that stupid decision all by themselves.
Liberty Media has absolutely nothing to do with the day to day operations or the baseball decisions. That falls in the hands of Terry McGuirk. The team runs solely on the revenue generated by the team and only by the team.
Liberty Media owns the Braves for the sole purpose of having the tax breaks that come with owning the team.
MLB allowed Liberty to continue owning the team therefore able to take advantage of tax breaks as long as they adhere to their guidelines which they have no problem doing because their focus was not buying the Braves. The Braves were a throw in to the deal and the situation at the time benefitted both parties involved.
Somehow or someway for some reason the Braves provided Liberty Media with huge tax breaks for an insane amount of years. If they were not allowed those tax breaks they would have no interest in owning the team. With no interest in owning the team they would have had to sell the team immediately and even for a loss if that’s what MLB wanted. But MLB feared Mark Cuban coming in and buying the Braves so they designed a plan that would benefit all parties involved.
The problem for the Braves comes from the horrible TV contract that was signed previous to Liberty Media taking over. There are so many articles documenting this but yet Brave fans still want to blame Liberty Media.
But what they don’t care to realize is
A. Liberty Media cannot spend any money from any of their outside ventures towards the Braves
B. Liberty Media can not make any profit off the Braves
until they sell the team. The most they can do is break even with the tax breaks being their profits. Any money made has to go back into the team. Terry McGuirk is the tell all be all in regards to where and how that money is being spent. Appointed by MLB to run the day to day operations.
So please a Brave fans deflect the anger away from LM & to McGuirk because he is the one sitting on his hands still listening to JS and his fossil philosophies
Yes, Huntington and co. have been among the industry’s worst in developing quality major league players, but look at how much money they have saved Bob Nutting by not producing expensive talent.
The Pirates are just being used as a talent transfer to larger market Teams or Teams willing to invest in competing for WS. Poor ownership and leadership. The madness has being going on since 1980s.
Sounds like old news to The Toronto Maple Leafs who were somehow owned by the Ontario teachers pension plan for a long time.
Who the hell is JS? and how much stock do you have in Liberty Media
If you don’t know who JS is there is no reason to further this conversation. You proved yourself with that.
JS is Jerry Springer, right? 🙂
I hate the 20/20 hindsight with writers that pull out player names that were available to a certain team and that team passed them over. Well every team passed Keuchel over for over 6 rounds until Houston took him in the 7th round. They took 7 other busts prior to hm in that draft. If not for Keuchel they would have had no one of note in that draft ever make it.
Agreed. They act like the team is incompetent because they drafted a bust instead of this obvious star that everyone else passed. Particularly strange to pick on Brooks Pounders, its not as if Corbin or Keuchel were drafted right after him. Most, if not all, teams drafted pitchers that never made the majors before Keuchel was drafted. At least Pounders made the majors.
Players will sign with the Angels if they offer the most money not because Madden is the manager. Plus come on California will keep grabbing your money. He’ll resign with no state tax Astros. Believe me I’m from New York. We know taxes.
Bingo
Angel clowns, don’t get thinned skinned, angry, insecure, and please don’t become that wanna be tough guy like 99% of you are LOLZZZZ (until you see me in person and your tail goes between your leg). The scoreboard and standings don’t lie PERIOD This organization needs a direction, hopefully they stay out of Maddon’s way and allow a one that understands the game go to work.
Ive seen you in person. Your impressive man-boobs and your unusually small hands are hard to miss. I was afraid the wind was going to blow you over.
See you in person? I knocked on your door and your mother told me you were too busy playing video games in the basement to come to the door. And how does a tail go between a leg? You are a fool PERIOD.
I’ve been saying this about Pirates GM Neal Huntington & his advisors for 10 years now, nobody else seems to pick up on this.
Every year in the amateur draft, The Pirates draft players & pitchers in the early rounds that nobody else would have taken, while at the same time they leave many better players & pitchers on the board. If people would just look at where these guys they pick were ranked, they would see that most of them were ranked way lower than where they selected them. It is astonishing how they continually do this every single year.
It’s gut-wrenching as a Pirates fan to see so much highly-ranked talent still available in the early rounds beng passed over by the Pirates, only for other smarter teams to easily snap up. It’s probably quite laughable if you are any other team besides the Pirates.
They always seem to fall in love with certain low-ranked guys and obliviously overlook some of the best talent still available.
I have to give Rob Biertempfel credit for finally pointing this out publicly. This happens every draft and very few, if any, Pittsburgh writers ever seem to notice, mainly because they do not follow the amatuer talent closely enough to know how much lower-ranked the guys the Pirates took were, and did not see all of the good talent being passed over and left on the board as the draft is happening.
It’s so bad that I have to wonder if the advisors and scouts that GM Huntington is listening to aren’t secretly working for other teams and are purposely mis-advising
him.
It’s sign ability. They draft lower ranked guys so they can spend less than slot value to sign them.
I still can’t believe Pirates GM has his job. Between the Cole and Archer trades, and his failed draft strategy, he has failed in his duties. In 2015, the team had the 2nd best record in NL, plus one of the top farm systems in MLB. Now they have 2nd worst record in NL, plus a mediocre at best farm system. Does any other organization allow their GM to survive this type of failure?
Huntington has to be the worst GM in all of sports
Crazy that it was only a few years ago when Pittsburgh seemed to be an up and coming power in the NL Central. The botched trade of Cole & the Archer debacle show how quickly things can turn sour. Add to that the lack of development from Greg Polanco, the awful Felipe Vasquez saga, and the general bad luck with arm injuries and it’s easy to see why people are down on Huntington.
He’s got one more major trade chip in Marte and he has to absolutely nail that trade. PIT has some really nice players on the current roster but they need to get elite talent back for Marte
Who is your favorite “civic enterprise, competing for a title?”
In 2009, the Pirates passed on Mike Trout, whom they would have drafted had they not already cut an underslot deal with…Tony Sanchez.
You don’t need to go to the second round to find (comparatively trivial) examples of missed opportunities.
Also, there is no way to separate drafting and development, the latter of which is usually overlooked and underrated. Example, no one ever talks up the Penguins drafting skills, but after a few years in Scranton, they produce lots of NHL players because their development system is so strong.
If the players become busts with you but then have success elsewhere, the problem is with the development, not the drafting.
Not defending the pick of Sanchez but 24 other players we,picked,before,Trout, including Randal Grichuk by the Angels right before Trout. Maybe the White Sox should have taken Trout instead of Jared Mitchell with the 23rd pick. Still remember the book on Sanchez when he was drafted.. Good defense with an iffy bat. Turned out to be the exact opposite. That is why drafts are a crapshoot.
I did read somewhere that a lot of scouts were not on Trout to much because of the way the high school season & showcases In NJ developed his senior year. I read that the Pirates did have him on their radar but I don’t know bout 2 overall.
I believe I also read somewhere the scout for the Angels that pushed for Trout kinda stumbled upon him almost on accident.
Agree. It is development. NH picked Cole, Bell, Glasnow, and Trea Turner. That has the potential to be an all-time class. For as crappy as the 2009 class was, still picked Holt and Jake Lamb.
Even found DeJong and Buehler. I know they didn’t sign, but he still recognized talent enough to select them.
The problem isn’t necessarily in talent recognition, but the development for sure.
Cannot wait for a major sport to be owned by the people, not billionaires. We all should be able to own a part of a team.
Move to a Green Bay
The city owns the team
Sports teams need to be owned by people who know the business, or have enough money to hire people who do. Imagine the goof balls who comment everyday on here actually having some decision making power in real life…yikes.
as much as i agree with the liberty media sentiment, the fact of the matter is that its just like the A’s stadium situation. clearly the fans are being screwed, but you can buy shares to fix the problem. rarely can fans have such a direct effect on their teams, that must be noted.
I think it’s time the Pirates start their next rebuild.. seems like they are caught in the middle.