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  1. #16
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    Quote Originally Posted by 1908_Cubs View Post
    Harper/Machado will likely be worth the contract they sign in 2018 and the reason is opt-outs and that you can game the Luxury Tax a little. I expect both will be paid in the 34-40m range for the first few years, but will likely have multiple opt-out points and a contract that's backloaded in years to take the AAV down (Lux Tax calculates from AAV, not yearly salary).

    Wins on the FA market are around $8m or so from what I last checked. Both are easy 5 win players. Even at $40m, while they may not provide a ton of surplus value, they'll be worth their deal. For teams who can afford it, it's anything but ridiculous. A single 5 win player = more than two 2-3 win players when you take into account roster size and limited number of players making consistent contributions in the lineup.

    I would expect both Harper and Machado to opt out within 4 years.
    What about from a business standpoint? If a team is making X amount of dollars with a full stadium, or near full stadium, and they add 35 million to their expenses, and their profit does not go up by more than their investment, how is that worth it? After all, this is a business first, and a game second.

    If we invested $5000 in a product and after a year our investment returned $4000, is that a good investment? I know it's an odd comparison, but isn't the goal to make money of an investment? If the signing team doesn't get back at lest the amount they signed him for, how is he worth the contract?

    Conversely, if a team puts another 5,000 seats in the stand because of the signing, and they turn a profit on him, that would be considered a good investment.
    Last edited by thawv; 01-12-2018 at 09:10 AM.

  2. #17
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    Merchandise, marketing, value of team rise, value provided on field.....nobody has to worry about not getting a profit off of Harper as long as he stays away from career changing injury.

  3. #18
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    Quote Originally Posted by thawv View Post
    What about from a business standpoint? If a team is making X amount of dollars with a full stadium, or near full stadium, and they add 35 million to their expenses, and their profit does not go up by more than their investment, how is that worth it? After all, this is a business first, and a game second.

    If we invested $5000 in a product and after a year our investment returned $4000, is that a good investment? I know it's an odd comparison, but isn't the goal to make money of an investment? If the signing team doesn't get back at lest the amount they signed him for, how is he worth the contract?

    Conversely, if a team puts another 5,000 seats in the stand because of the signing, and they turn a profit on him, that would be considered a good investment.
    Well putting seats in the park has very little to do with the profitability of the teams today. It's largely based on tv deals. The better the organization and the more marquee players they have that people will tune in to see on tv, the better they can demand in their next tv contract.

    Don't get me wrong, selling out is big. But ticket revenue doesn't generate anywhere close to the revenue that tv dollars do. Cubs, for example, have a new tv deal coming up in 4 years, which they will begin negotiating in 2 years (likely during the 18-19 seasons). Harper would help those negotiations along rather nicely (next to Bryant, Rizzo, a recent chip, etc, etc).

    I believe the average ticket price is around $30.00 per team, per game. So adding 5K per night for 81 games a year is only $12.15M.

    That's simplifying it. Some markets, tickets are more expensive, fans buy merch and concessions, pay to park, etc. but also, no individual player is going to increase ticket sales by half a million tickets in a year unless they are chasing a milestone or breaking a record.


    If teams had to pay all of their players based only on ticket revenue, players salaries would be about 30% where they are today.
    Last edited by Jeffy25; 01-12-2018 at 09:54 PM.

  4. #19
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    Not to mention every owner or ownership group has different concept of win value. Some owners are ok being cash flow neutral in any given year if it means they are in a position to win as they know long term they are sitting on what has historically been a greatly appreciating asset.

    By the way this would have been the FA year for the GOAT - Mike Trout. He would have likely received the first half billion dollar contract that would have taken him to age 36. Instead he is "suffering" through 144 million through age 29 season. Poor guy.

  5. #20
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    Quote Originally Posted by Jeffy25 View Post
    Well putting seats in the park has very little to do with the profitability of the teams today. It's largely based on tv deals. The better the organization and the more marquee players they have that people will tune in to see on tv, the better they can demand in their next tv contract.

    Don't get me wrong, selling out is big. But ticket revenue doesn't generate anywhere close to the revenue that tv dollars do. Cubs, for example, have a new tv deal coming up in 4 years, which they will begin negotiating in 2 years (likely during the 18-19 seasons). Harper would help those negotiations along rather nicely (next to Bryant, Rizzo, a recent chip, etc, etc).

    I believe the average ticket price is around $30.00 per team, per game. So adding 5K per night for 81 games a year is only $12.15M.

    That's simplifying it. Some markets, tickets are more expensive, fans buy merch and concessions, pay to park, etc. but also, no individual player is going to increase ticket sales by half a million tickets in a year unless they are chasing a milestone or breaking a record.


    If teams had to pay all of their players based only on ticket revenue, players salaries would be about 30% where they are today.
    Fair enough. I fully understand what you're saying. I just threw attendance out there as an example to make a point.

    Let's say we take into account everything you mentioned and the new free agent does not generate the money that he costs, how would that be considered a good investment?

  6. #21
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    Quote Originally Posted by thawv View Post
    Fair enough. I fully understand what you're saying. I just threw attendance out there as an example to make a point.

    Let's say we take into account everything you mentioned and the new free agent does not generate the money that he costs, how would that be considered a good investment?
    If he helps the team win then most (or many) owners would consider that worth it. Winning also helps with overall value down the road. Think bigger picture...

  7. #22
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    Quote Originally Posted by zookman65 View Post
    If he helps the team win then most (or many) owners would consider that worth it. Winning also helps with overall value down the road. Think bigger picture...
    I am thinking big picture. I would like to know if everything is considered that can be considered and you don't make that additional money is it still worth the signing? I'm absolutely referring to playoff money and World Series money included

  8. #23
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    Quote Originally Posted by thawv View Post
    Fair enough. I fully understand what you're saying. I just threw attendance out there as an example to make a point.

    Let's say we take into account everything you mentioned and the new free agent does not generate the money that he costs, how would that be considered a good investment?
    I imagine teams keep payroll costs and acquisitions into the whole, rather than on the individual merits.

    This much was spent, this much was made, we won this many.

  9. #24
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    Quote Originally Posted by thawv View Post
    Fair enough. I fully understand what you're saying. I just threw attendance out there as an example to make a point.

    Let's say we take into account everything you mentioned and the new free agent does not generate the money that he costs, how would that be considered a good investment?
    The Cubs TV contract expires after the 2019 season. Their plan is to launch their own network. They feel like there's an 80% that it's going to get done.

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