I had fully meant to do a Hot Stove post last year. Between a heavy workload and a flurry of trades and signings, I couldn’t keep up. I just made a couple of notes and didn’t bother trying to reconstruct everything afterward. On some level, I was sort of disgusted by the amount of money getting thrown around and by the richest teams in the league trying to become “super teams.” This profligate spending does not guarantee a World Series victory, but it does guarantee a league of “have” and “have-nots” when it comes to signing free agents by driving up player salaries.
These were the only notes I made over the winter:
Blade Snell signed with the Dodgers, who threw a no hitter last season. The Dodgers currently have $1B in deferred money contracts.
12-8-24 The night right before the Winter Meetings, Juan Soto signed for the largest contract in professional sports with the Mets. $760M over 15 years, no deferred money and escalators for the contract to go over $800M. The race to a billion dollar contract continues.
12-10-24 Yankees make Max Fried the highest paid lefty pitcher in history.
Seriously though, I’m wondering if in five years, a baseball player will get a contract worth more than a new stadium. (We’ll get to the stadium issues later.)
Last year, the MLB and the sports media finally got what they wanted: a Yankees/Dodgers World Series. In return, they got the second-highest rated World Series in the last ten years. That’s all. MLB is sure that if the series had gone a full seven games, it would have been an all-timer. (It wouldn’t have.)
The TV packages for regular season baseball have become a nightmare for the teams and the fans. Some teams have scattered their product over several cable and online services, which fans do not want to pay for and patched-together deals are costing the teams lots of revenue. The Regional Sports Networks have gone bankrupt. ESPN will cease to show baseball after this season after a dispute with the league. Granted, the network wouldn’t talk about or promote baseball, but did a decent job of presenting the games themselves. MLB would like to put all of the games, that aren’t playing on a national network, on MLB.TV or sell the package another streaming service, but teams like the Yankees and Dodgers have very lucrative TV contracts and aren’t interested. Selling a package without them would have limited success.
The Dodgers financed a huge renovation to Dodger Stadium themselves. Meanwhile, the A’s and the Rays aren’t playing in big-league facilities this season and their future homes are in serious doubt. League expansion keeps getting put on hold waiting for these two teams to get settled one way or the other. This process has taken long enough that other teams are becoming dissatisfied with their stadiums or need major repairs to them. Some of these teams are looking for new cities, further mudding the waters of expansion.
I bring all this together by saying what a mistake it has been catering to the Yankees and Dodgers (more or less specifically) nationally and not promoting the league as a whole. The sports media, which doesn’t really want to talk about baseball, is thrilled to only have to talk about two teams in the two biggest media markets. (And just two players: Shohei Ohtani and Aaron Judge.) MLB recognizes that these are the two most popular teams in the league and that it must promote them. This has all set up a scenario where it only matters what the Yankees and Dodgers do during the season and the postseason only matters if it’s those two teams playing each other. All the rest is only for hardcore fans of other teams.
This has real business consequences. You’re down to maybe three teams in the league who are willing spend whatever to win (Dodgers, Yankees, and Mets). You’ve got a few more that have overspent and have had to rein it in and a few big market teams that are clearly restraining themselves. They can’t keep up and there aren’t any Moneyball-esqe efficiencies to exploit at this point for lower level teams. Injuries to star players might be the only leveler to make smaller market teams competitive.
27 teams likely want a salary cap and would accept a salary floor (or they’ll sell the team to someone who will accept a floor). The Yankees, Dodgers, Mets, the sports media, and the Players Union think everyone else should just spend more to compete. MLB, which is the owners, wants the cap, but practically, they also want the Dodgers and Yankees to always be World Series contenders.
That the big-market teams make more money from their teams than small-market teams is a given, but without a cap on team spending, the high-revenue teams will always be at an advantage and will set the market for free agents. You’re even giving the lower-revenue teams an excuse for not spending, because they can’t compete monetarily in their markets. They just sit back and collect the Competitive Balance Tax proceeds from the rich teams. Is the MLB selling competition or the Dodgers and the Yankees?
Part 2
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