There has been a lot of speculation about the root causes of this year’s slow off season. You are likely familiar with all of the theories by now, but in case you aren’t these pieces from Jeff Passan, SB Nation and Deadspin can catch you up pretty quickly. Al took a look at this from a Bleed Cubbie Blue perspective last week. Whether the explanation is collusion, the luxury tax, analytics, a weaker Major League Baseball Players Association, or some combination of all of the above, it seems pretty clear that the story of the off season is that there are no stories.
If you read Al’s story last week, you’ll remember this chart showing that the players’ share of revenue across the league has been declining since 2002.
This morning the following table came across my Twitter feed, which adds to this picture by giving us a look at how much each team paid its players in 2017 relative to their 2016 revenue, and frankly, it’s staggering.
Since Fangraphs released their ownership rankings recently. This is 2017 opening day payroll/2016 revenue per Cots and Forbes. League average was 44.66% pic.twitter.com/G4hQ6GYbEh— FREE KANG (@EvilNeal) January 23, 2018
As an aside, I was curious how the Cubs and Red Sox had the exact same revenue numbers so I reached out to @EvilNeal, his explanation is below in case anyone else had a similar question.
Forbes rounds to nearest million. So adjusting for inflation makes it same to the cent— FREE KANG (@EvilNeal) January 24, 2018
But I digress: Let’s get back to the title of this article. What do the Cubs, Athletics and Yankees have in common? They are clustered at the top of the lowest third of team payments as a percentage of revenue, paying out approximately 36-39 percent of their revenue in payroll. I find that particularly interesting, because if you asked me which two teams I thought most resembled the Cubs in terms of payroll strategy, well, let’s just say that the Yankees and the Athletics would not be the first two teams that come to my mind.
Similarly surprising comparisons seem to be occurring around SB Nation today, as this Pinstripe Alley post shows, noting that the Yankees appear to have a lot in common with the Pirates in terms of their recent spending patterns. When was the last time you heard the Pirates compared to the Yankees non-ironically?
What does it mean for the Cubs?
It’s worth noting that the Cubs have been investing a substantial amount of money in capital improvements since the Ricketts family purchased the team in 2009. It’s also worth noting that during the Ricketts’ tenure with the team there was a wildly successful rebuild that allowed the Cubs to field a World Series-winning team at a bargain basement price, and that the front office didn’t hesitate to spend on free agents like Jon Lester and Jason Heyward in order to round out that team.
Additionally, the Cubs are already a top five franchise in terms of revenue and are looking at making a run at the top three with a Cubs TV network. If that venture works, those revenue numbers could grow substantially. Given the success of the Cubs business operations in the last eight years, I have no reason to doubt this media move will be similarly successful.
Maybe this means the Cubs are saving now so they can spend as their young talent hits free agency or that they have a plan to go big with the 2018 free agent crop. I am more than okay with either of those strategies. However, it’s worth keeping these staggering revenue numbers in mind as you read about front offices fretting over the luxury tax and players like Jake Arrieta, Yu Darvish and J.D. Martinez holding out for larger paydays.