Really happy about how this interview came out, hope you enjoy it.
Maury Brown is a self-confessed baseball geek, who just happens to cover it most closely as a sports business analyst. He is the founder and president of the Business of Sports Network, which includes BizofBaseball.com, is an author for Baseball Prospectus, and a regular contributor for Forbes (his personal blog "Bizball" launches this coming week). He can be found on Twitter @BizballMaury
On to the questions!
Brandon C: Will there be an adverse effect on IFAs because of limits the new cba puts on spending?
Maury Brown: In the sense that there is now a defined amount that is set for each club to spend on them, yes. For the 2012-2013 signing period, each Club will be allocated a Signing Bonus Pool of $2.9 million and in subsequent years after, an additional $700,000 is added. So, you're going to see a drop as it pertains to some of the top-tier talent. What will be interesting is to see how this plays out against the background of an international draft. The details around it, which can be found beginning on page 268 of the just released CBA.
BC: Do you personally think there should be a salary cap and/or floor in MLB?
MB: No. I'm opposed to them in baseball for a variety of reasons. At the top end, the labor agreement has constraints via a soft cap on total player payroll and now on total amount that can be spent on signing bonuses. The rate of tax on total player payroll now can exceed 50 percent on every dollar over the threshold, and when you throw in a Luxury Tax on signing bonuses, you get further salary compression. At the bottom, the minimum salary acts as your floor. A flaw in the prior labor agreement was that revenue-sharing was simply defined as being used to improve the play on the field. You want that flexibility in that it allows clubs to use revenue-sharing to develop talent through aspects like minor leagues. But, clubs were using it for things like paying down stadium debt, and that was something that clearly the union didn't want to see happen anymore, and has addressed in the new labor agreement.
But, beyond that, the capped systems we see in the NFL and NBA have been rife with issues. They create technical problems that don't always scale properly (the NBA is a good example here as costs exceeded revenues and yet the capped system provided certain thresholds to be met), or can lend itself to other problems, such as the NFL is now seeing (collusion charges by the NFLPA against the NFL for artificially constraining salaries during the 2010 un-capped season).
Follow me after the jump for more.BC: Will the Yankees truly stick to their guns and get under the luxury tax threshold in 2014?
MB: I think so. Going back to the tax rates climbing, that 50 percent rate would fall squarely on the Yankees' shoulders. Throw in signing bonus Luxury Tax, and the fact that you really don't require a massive payroll to be competitive, and well... why spend just to spend?
BC: Which MLB team would you say manages their resources best? Worst?
MB: Biggest bang for their buck in terms of allocating resources to player payroll and getting a return on them is the Rays the past few seasons. Worst is a matter of how you wish to view it. If you're the Yankees, you don't need to be as efficient with your resources as say, the Indians. If you win and overspend, it's not as big a deal because your margins are so much larger. What you don't want to do is be inefficient and ineffective. Cubs have been the poster child in recent seasons and just now are getting away from it. The other? The Mets. Alderson is trying to resolve that.
BC: If Babe Ruth in his prime played today, what contract would he get?
MB: Jeez, good one. Pujols money.
BC: Do you buy that the Dodgers will be intense buyers from now on after their recent sale?
MB: Buyers? Possibly. Intense? No, at least not initially and won't be mortgaging the player talent they are currently developing to be major players at the trade deadline. Just not Kasten's way, and besides.... they seem to be doing pretty doggone good at the moment without the need. Once they ink their new media rights deal, I suspect that they will be major players to compete for top talent, especially around the market for pitching. The market for free agents is already escalating with the Rangers and Angels using media rights dollars to go after talent. Throw in the Yankees, Red Sox, and soon, Dodgers, and it could get wild.
BC: What do you see happening with the other MLB teams "on the market?"
MB: I have the Padres projected at $700 million. The talk of the Yankees being sold was somewhat amusing. It see that more as a "feeler" in the wake of the Dodgers sale. I'd just say this: if you throw in YES Network and Legends Hospitality, the $5 billion figure being bantered about maybe well on the low side.
BC: Which Stadium in the MLB impresses you most? In terms of economics and overall experience?
MB: AT&T Park. Hands down. Not even close
BC: Tell us a bit about your fundraising for Autism research?
MB: Since my son was diagnosed 3 years ago, we thought it would be good to try and raise some awareness. I had no idea how well it would be received. Donations to Autism Speaks have been asked for voluntarily, but those willing to simply say that they advocate promoting awareness has been nothing short of staggering. The best has been Ken Rosenthal of FOX Sports and MLB Network. He approached me at the Winter Meetings in Dallas and said he was going to work very hard through Bow-Tie Cause to have an Autism Speaks bow-tie as part of his MLB on FOX Game of the Week. It took a lot of phone calls and emails to make it happen, but on the last weekend of International Autism Awareness Month, he did. For details on the Autism Awareness Challenge, see here.
Thanks a lot to Maury for the answers, he went into more detail than I ever expected. Hope you all enjoy his answers as much as me!