Tis the season.
When it comes to Major League Baseball (MLB), many fans call it the Hot Stove season. This is when things gear up for player transactions. Free agency is about to kick off and we are in for a few months of massive speculation.
Fans will be wondering where some of the biggest names are going. Teams will be looking at how they can improve. Aside from the Los Angeles Dodgers, everyone went home short of the ultimate prize.
Ultimately, it is a time of optimism for fans since teams might make the moves that could make them contenders. Of course, the salary situation coupled with smaller market teams lack of resources means many teams are out of the bidding. The Tampa Rays, for example, are known for their low payroll. This offseason, they have the added onus of trying to find someplace to play in 2025 since the roof to their stadium was ripped off during Hurricane Milton.
Speaking of salaries, this is the crux. Oh the money that will get tossed around.
The Business of Baseball
Like many professional leagues, MLB players make a ton of money. At the top of this year's list is Juan Soto. The bidding is expected to bring his total contract into the neighborhood of $700 million. He will likely top $60 million per year.
This is not unheard of. We see some quarterbacks in the NFL making in this range along with some NBA players. $50 million is not unheard of anymore.
While the fans are into the sport as recreation, it is a business to everyone else. The owners, players, management, and agents all have a financial interest. This is how they make their money, and they make a lot of it.
For this reason, decisions are financial, not emotional. Each day is focused on a different part of the uniform.
The players are concerned with the back of they jersey, i.e. their name. They are trying to get whatever they can for themselves, This is why they have representatives (agents). These are the people tasked with negotiating on the players behalf.
On the other side is the owners. They care only about the front of the jersey. That is where their interest. Like the players, owners hire people to represent them. General managers are responsible for engaging with the agents as part of the process of constructing a roster. These people operate within the parameters set down by ownership.
Each side will talk about their love for the other part of the jersey. While there could be some validity to the feelings expressed, it all boils down to business.
If the player doesn't fit, whether it because of the direction of the team or financial, he is gone. At the same time, if an offer is more to the players liking, see you later; he signs with a different team.
Fans get upset about this for no apparent reason. It is the nature of the game. None of this is hidden.
If a player is getting more money, 99% of the time that is where we will sign. Also, many players are not even pursued by their present teams simply due to the fact the money isn't worth it for that player's services.
It is cold but that is the business.
Billions of Dollars
Over the next few months, we will see billions of dollars in contracts given out. This is only the portion of what is offered to free agents. There are players such as Otani and judge, each of whom signed long term contracts in the past couple off seasons who are not in this total.
In other words, these are new contracts handed out.
Of course, to pay this, the owners need to get the money from somewhere. This is where the gate for the games along with television contracts enters. It is why a successful postseason in terms of ratings should be encouraging to MLB.
Every couple of years, these contracts come up. If networks are getting the viewers, then advertisers will pony up the money. This is why billions are spent by the networks to get the rights to broadcast these leagues.
As mentioned in the past, live sports is going to continue to pull in huge money. With the threat posed by generative AI, we will see the entire world of entertainment altered. The advantage to live events, is they are not at risk from AI.
Hence, when there is a proven commodity, such as a super star music act or live sporting event, someone is going to pay up for the rights to that.
This is exactly what is happening.
All that money flows into the game. During the Winter, many of the owners go on a spending spree.
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