The Athletics were singled out in something of a unique fashion in the last collective bargaining agreement, as their status as a revenue-sharing recipient was gradually phased out over the course of the five-year deal. Under the terms of the now-expired 2016-21 CBA, the Athletics’ normal take of revenue-sharing funds dropped to 75% in 2017, 50% in 2018, 25% in 2019, and then nothing for the CBA’s final two years.
As negotiations about the new CBA (slowly) continue between the owners and players, the league is now looking to once again reinstall the A’s as a recipient of revenue-sharing, MLB Trade Rumors’ Tim Dierkes reports (via Twitter). This appears to be one of the relatively few areas of common ground between the two sides, as the MLBPA is “willing to” restore the Athletics’ former status.
It remains to be seen exactly how baseball’s revenue-sharing system could be altered in the next CBA, though given the owners’ unwillingness to discuss any revenue-sharing changes whatsoever with the union, whatever changes are made could be pretty minor. It could be that Oakland’s shift back into the recipient category might stand as the biggest move in this area, as the A’s will now stand to make tens of millions of extra dollars each year.
Under the terms of the last CBA, 48% of each team’s local revenues were placed into a pool, then divided equally among all 30 teams. Since some teams’ local revenues are naturally much larger than others, this provided quite a windfall for smaller-market clubs. While the exact figures weren’t known, MLB.com’s Jane Lee wrote in December 2016 that the A’s received over $30MM in revenue-sharing funds in 2016.
This will have a wider impact on the other 29 teams, as the revenue-sharing teams will now be paying a slightly larger share of that revenue pot with the Athletics now removed from the sharers list. Likewise, the teams receiving funds will now also get a slightly lesser share of the pie, with the A’s joining the party. There was also the concept of the revenue-sharing rebate for larger-market teams in the last CBA (as explained by The Boston Globe’s Alex Speier) though it isn’t known if a similar mechanism might be in place for the next agreement.
The seemingly neverending saga of the Athletics’ quest for a new ballpark was the reason for their initial inclusion on the revenue-sharing list, and now the reason for their return. Despite the lack of revenue generated from the Coliseum, the A’s don’t exactly play in a “small market,” given the size of Oakland and the Bay Area market in general. As such, the decision was made to gradually remove the team from the group of revenue-sharers, though with over five years now gone, the Athletics are still not much closer to landing that long-desired new stadium.
Amidst much speculation about a potential move to Las Vegas, there has recently been more positive momentum towards a new ballpark in Oakland. The franchise’s longstanding concept of a new stadium in the Howard Terminal area was recently given a vote of confidence by Oakland’s City Council, which certified an environmental impact review on the project.
There are still more logistical hurdles to be jumped, however, and between those potential obstacles and the time necessary to actually build the ballpark and adjoining infrastructure, it is quite possible the A’s might not have their new stadium in place before the end of a hypothetical 2022-26 term of the next CBA. More will be known about the Athletics’ fate (whether in Oakland, Las Vegas, or elsewhere) in the next few years, so by the time the next CBA talks roll around, it would seem like the A’s would again be removed from the revenue-sharing recipient category if a new stadium project is indeed up and running.
In the interim, the A’s will reap the benefits of additional revenue. For Oakland fans wondering if this means the team will spend these new funds on player payroll, it’s worth remembering that Athletics weren’t big spenders in their previous era of receiving revenue-sharing money, so a sudden spending splurge probably isn’t likely. Since the A’s wouldn’t get any new funds until the end of the 2022 season anyway, it won’t do much to forestall the speculation that the A’s will be looking to cut payroll and move at least some of their higher-salaried players once the lockout is over.
From the MLBPA’s perspective, it was almost exactly four years ago today that the union filed a grievance against the Athletics, Rays, Pirates, and Marlins about how the teams were allocating the money collected via revenue-sharing, as receiving those funds wasn’t reflected in any boosts in player payroll. To that end, it might seem curious that the union would be okay with the A’s again joining the revenue-sharing list, though speculatively, there could be a bigger-picture tactic at play. As much as the league has claimed that any negotiations about revenue-sharing practices are a non-starter in CBA talks, the Athletics’ situation itself counts as a notable change in the revenue-sharing plan, which the MLBPA might perceive as a crack in the owners’ stonewall on the subject.
Beyond just the extra cash, the A’s may also benefit in another fashion from being a revenue-sharing recipient, depending on how the new CBA addresses free agent compensation. Under the last agreement, revenue-sharing recipients stood to land a compensatory draft pick directly after the first round if they had a free agent who rejected a qualifying offer and signed with another club for more than $50MM. While teams that lost certain free agents would still be eligible for a compensatory pick in the league’s new proposal, it remains to be seen exactly what the criteria would be for that compensation, or if revenue-sharing teams would be in line for a greater draft reward.
DarkSide830
weak
FredMcGriff for the HOF
Does this mean the A’s aren’t going to do the reported fire sale if a new CBA is ever reached? Why reward teams for trading away players right before they become expensive?
iverbure
Why punish the A’s when they can stay competitive with a limited budget? If a team can win by spending the least payroll in a league they should be reward and yet the dummy fans who consistently say you gotta spend to win year after year, are made to look like goofs when the rays and A’s make the playoffs after trading away multiple expensive players in the offseason. Arguing against their tactics is the dumbest thing anyone can say other then replying back with “how many World Series titles do the rays or A’s have”? Because anyone with a iq above 3 knows the playoffs are a total crapshoot.
Yankee Clipper
Joke
zacharydmanprin
Please fix the title.
RadioPirate
The A’s have one of the richest owners in MLB and play in MLB’s wealthiest market, with a per capita GDP more than $10,000 higher than any other market, yet those cheap-a** b**t**ds are still asking for a handout? Move ’em to Vegas and make ’em stand on their own billion dollar feet.
zacharydmanprin
Please define the A’s market. Just because there are a lot of uber rich people in the Silicon Valley (not the A’s market) that have a tremendous amount of wealth it does not mean the grocery store checkout clerks and the bus drivers are also suddenly wealthy. If an owner has a business that continually loses money how long must they be expect to pump in their personal income to prop up the business? The A’s ballpark and TV revenue issues can largely be laid at the feet of MLB. While large market and high revenue teams got enormous help from MLB in new ballparks and new TV deals and networks the A’s have been left to their own devices for decades.
deweybelongsinthehall
I thought the Giants were a big reason why the team couldn’t move locally. Made no sense because as I recall the A’s declined to interfere when the Giants moved out of Candlestick. I just don’t get the justification for revenue sharing based on attendance. Teams should in my view be self-reliant on their fan base.
passed_balls
Oakland has quickly become a boutique city for rich tech people. There’s a long running false dialogue in these comments from ppl who have never been there that it’s this awful “ghetto” but the truth is, apart from a few rough areas (like most cities) – homes well exceed $1MM and the cost of living there has skyrocketed. There is a lot of money in Oakland and the suburbs of the Bay Area.
zacharydmanprin
Just because the cost of living increases in an area it does not mean the quality of life improves. There are “$1 Million homes” that are worth zero in that part of the country. The land they are on is worth $1 million – but the house is condemned an unlivable. You might want to adjust your viewpoint.
passed_balls
Your argument doesn’t address the false claims that there is not a tremendous amount of wealth in the Bay Area. The Bay is ranked as the #2 wealthiest metro in America with 20% of households making $200k or more.
So in the face of real facts not opinions from internet guys, you may want to adjust your viewpoint.
Dorothy_Mantooth
@ RadioPirate – The majority of John Fisher’s net worth come from his is GAP stock holdings and the value of the A’s franchise itself; neither of which are “healthy”. In 2020, his net worth was estimated to be $2.2B but that figure is considerably lower now, given that the GAP’s share price has fallen over 50% in the last 12 months. This major decline in The GAP stock price has reduced his net worth by at least 30% over the past 12 months and perhaps well more than that.
Regardless of net worth, MLB owners do not pay ongoing MLB team expenses out of their personal wealth. They do purchase the team with a combination of personal wealth and loans from financial institutions but once that initial purchase is made, owners run the team as a separate business off of its annual revenues / cash flow. Should the team lose money, the owners will secure a line of credit or loan from a bank or other investors rather than pay the losses themselves. They keep their personal cash completely separate and completely protected from the MLB team investment, so being a wealthy owner really doesn’t impact a team all too much.
The reason why the A’s have to cut expenses this year and are constantly in the bottom 3rd of annual MLB payroll is that the team (asset) doesn’t generate enough revenue to be self-sustaining at higher payroll levels. This has to do with a lack of attendance in that horrible ballpark and a bad, local TV contract. It has very little to do with John Fisher being cheap. Much like every other franchise, the team has debt service and the team has to maintain a certain level of financial health in order for the lender to not change the terms of that debt (increase interest rates) or call the debt altogether. Since the A’s cannot grow top line revenue with that crappy stadium and bad tv deal, they need to cut expenses to maintain the required level of profitability. It’s really no different than any other business other than it takes billionaires to afford to purchase a team and it’s a really cool to own a franchise.
For Love of the Game
I have zero sympathy for John Fischer who inherited his wealth from his parents who started The Gap. Crocodile tears for a guy whose former $2.2 billion is now worth considerably less. Poor guy couldn’t afford to diversify his portfolio because the taxes on his zero-basis Gap stock would have been crushing!
lgofromny
1. Sounds like the league should get Fisher to sell the team to an owner who has the funds/liquidity available to infuse cash into the business if necessary to remain competitive, on top of whatever loans and LOCs are set up.
2. As far as the wealth of the owner not impacting a team much, Uncle Steve and the Mets would like a word.
stymeedone
He’s the exception, not the rule. Lets see how many years he keeps this spending up.
kodiak920
Stevie Cohen’s beautiful money.
babysasquatch
I don’t understand how there aren’t many A’s fans that don’t/ refuse to believe this. It seems like the most basic principle of business. Even if Fischer were to really dig deep and use some of his own personal wealth to make a big free agent signing or long term investment in a homegrown player where does it end? The team is supposed to be self sufficient.. Not just today but for the foreseeable future.
sorrynotsorry
Guys, this entire situation changes with a new ballpark. This is something the team has been attempting to achieve for 20 years. Most of the blame for not having one yet goes to the Giants, the city of Oakland, and environmental reports.
And to call owners cheap for wanting to privately fund a new ballpark is ridiculous. Once they have a new ballpark everything changes financially for the team, and to a certain extent the league.
User 2079935927
How does team get put into this category?
Do they meet MLB’s Criteria?
#1 Have a outdated ballpark ?Check
#2 Have low attendance? Check
#3 Have a very rich owner? Oops guess not
stymeedone
@winSLOW
have a very rich owner? Really? Is there any team that does not have a rich owner? Even McDonalds franchise owners are richer than the average person. The business stands alone. Its part of MLB and its franchises. Everything will be compared to the other franchises.
User 2079935927
stem- I worded it wrong.
zacharydmanprin
Fix the title, please.
User 2079935927
Zach-Is it supposed to be MLBPA?
zacharydmanprin
They had “Revenue-Paying” up for almost an hour.
Yankee Clipper
It should say “revenue-paying” because this team doesn’t need anymore handouts…… MLB!
jaysfan1978
29 teams, not 30. Toronto does not participate in any revenue sharing schemes.
m34josh
Why reward the A’s Billionaire owner for being a cheap-ass?
deweybelongsinthehall
Why blame the owner? Fans should support their clubs or they should consider moving. I don’t believe other teams should give part of their gate to other clubs outside of a flat fee to offset travel costs. If there is revenue sharing, there should be both a floor and a cap with the revenue sharing being added to a team’s salary floor. Also add in a cost of living adjustment (COLA) to both the floor and the ceiling. Now big market areas where due to housing costs and/or local income taxes get a fairer playing field. I think the union when the COLA is added, will see that the number is high enough to consider a formal ceiling. Also make it a hard cap and owners will also be happy.
passed_balls
Why would anyone waste time on an Internet forum defending billionaires?
zacharydmanprin
Because some people prefer facts to lies and hyperbole.
CursedRangers
MLBPA should have said, we will let the A’s get x amount in revenue sharing as long as the A’s spend at least x every year. Fall below that agreed upon threshold and the A’s lose the revenue share.
Right now there is no accountability for teams to spend any rev share they get. Hence the issues with teams such as the Pirates.
Old York
This does not encourage owners to spend. It just gives them extra income to store away. Wish they got rid of revenue sharing. Only making the quality of the game decline.
Yankee Clipper
Exactly! The people that say this improves competitive balance have taken the bait. It does no such thing. It perpetuates ownership money-making. That’s it. They’re buying each other’s loyalty come contract time.
RobM
So the A’s play in a large market, and now they’re about to do everything they can to depress attendance as they negotiate a new deal, and they’d like the major market teams to fund them.
The only revenue that should be shared is national TV contracts, or other type of national deals. All local revenue should go to the local teams. Encourage teams to grow their local revenue.
Yankee Clipper
And encourage them to invest in their own teams with that revenue, instead of CAPPING it.
stymeedone
@yankeeclipper
Easy to say when your team has the largest, and one of the oldest markets, and are one of the few teams who are effected by the CBT, to help offset the heavy advantages that market provides. Is spending 2.5 x others in your division not enough?
zacharydmanprin
And MLB used its lobbyists to help the New York teams get their new ballparks built with not only taxpayer money but huge tax cuts and considerations. They were also able to dip into MLB funds and take money from small market teams.
Yankee Clipper
Stymee: The problem is that the current system is only encouraging mediocrity. If money can’t buy championships, which most people acknowledge, then your assertion holds no water.
But, what they’re doing is allowing teams to swim in non-competitiveness for the sake of saving money and fans are lapping up the big-market victim excuse.
Do you really think if this was hurting big markets it would be allowed? No, money rules the day and big markets would never allow it. Your small market teams would not do this in spite of big markets when big markets could simply side with the union and squash the small markets.
Stop buying the BS excuses, man. This is part of the problem in MLB and the reason this team hasn’t been good since the 70s.
Yankee Clipper
Zachary: Take money from small market teams? Lol, my friend, lol. But as to taxpayers laying for Yankee stadium, yes, that is complete and utter nonsense. Should’ve never been allowed. Just like the A’s owner should have to pay for his own team.
kodiak920
Amen, brother.
Ga
Funny how owners and conservatives love “socialism” for the rich! How about we have “socialism” for the fans? We get rid of a handful of criminal owners who always get taxpayer cash (“poor” Rays want 350 million from taxpayers for a stadium when the owner bought whole team for 200 million!), and the fans/cities/regions own the teams just like the NFL Packers and countless soccer teams in the world. End of a handful of guys destroying the national game.
Randomuser4567
Which handful of owners are criminals?
kodiak920
Well, Stevie Cohen was found guilty of insider trading and paid almost 2 billion dollars in fines, among other things. He’s the only one that comes to mind off the top of my head, though.
bjupton100
He means get rid of small groups or single owners period.
Yankee Clipper
This isn’t socialism for the rich, I disagree with you there. It is far from it. This is ownership buying loyalty to prevent any invasion of their absolute authority over their money. They’re giving money to each other – splitting their billions. They’re keeping it from the working class, which isn’t socialism at all.
It somewhat mirrors it when extrapolating the market sizes out of the economic framework, but the large-market owners are fighting FOR it. It’s far from socialism. It’s a scheme to keep each other spreading the money as an excuse for competitive balance and to cap their own payrolls.
angelscamp
The owners have been hostile from the beginning. I hope the players don’t give an inch. Manford is an idiot and has repeatedly been exposed as bargaining in bad faith. The owners piss 100 dollar bills every time they sneeze. Do not feel sorry for them.
Rsox
Apparently there really are “rich teams, then poor teams, then 10 feet of crap, and the the Oakland A’s”…