It appears that spring training and the 2021 regular season will start as scheduled for Major League Baseball. Well, unless COVID-19 and its various iterations don’t provide any interruptions, which is always a possibility.
The last-minute proposal from the MLB owners and commissioner Rob Manfred was predictably rejected by the MLB Players Association. And if you think there won’t be a labor stoppage after this season, you probably should immediately hang up on any calls about your car’s warranty expiring.
The Twitter mailbag will report to Arizona along with pitchers and catchers, and you can be sure it will be in the best shape of its career — a relatively low accomplishment to achieve.
As always, these are real questions submitted to the Twitter mailbag …
The concept of “financially viable” might differ for people who own the team vs. the people that cheer for the team.
Given the business model, it’s logical that every team experienced some level of lost revenues in 2020. A large portion of the spring training games were canceled. There were only 60 regular-season games without fans — meaning no ticket, minimal corporate sales, concession or merchandise revenue associated with a game experience. MLB says that in-game experience accounts for 40% of its annual revenue. Yes, the games were televised locally and nationally, but any revenues coming from those broadcasts are shared among the 30 teams. And a reduction to 60 broadcasts meant less advertising and sponsorship dollars.
In late October, Evan Drellich of The Athletic — a friend of the Mailbag — was told by an MLB official that the “league lost $3.1 billion in the 2020 season and their EBITDA — earnings before interest, taxes, depreciation and amortization — showed a loss of $2.7 billion.” Those losses include the additional revenue accrued from Turner Sports and other networks by expanding the postseason to 16 teams.
That information can’t be verified because MLB and its owners have refused to make their full financial numbers available. Also any team revenues reported by the league and owners are often incomplete because they don’t include secondary avenues, such as controlling interest or minority ownership in the regional sports network that broadcasts their games.
The Mariners, like most MLB teams, made major employee reductions due to COVID. Upper-level employees were asked take salary deductions, others were required to furlough for extended periods or many others were laid off or didn’t have their 2021 contracts renewed.
But even with the losses, the Mariners ownership — whether it is majority owner and chairman John Stanton or the minority ownership group led by Chris Larson — won’t be bereft financially. As chairman of Trilogy International Partners, Stanton’s net worth is placed at $1.1 billion by many outlets.
The Miami Marlins recently sold for $1.2 billion. It’s fair to assume the Mariners’ franchise value would be worth much more, considering typical attendance projections, the majority ownership of ROOT Sports and the geographic footprint in the Northwest.
Something to consider is the recent agreement with ROOT Sports and the Kraken to televise the expansion NHL franchise’s games. This gives ROOT, and by extension the Mariners, another tenant for the network and increased live programming — approximately 75 regular-season games plus preseason games. Live sports programming is one of the last real money earners for cable networks. That should be a revenue generator even if ROOT is paying between $15 million to $25 million per year for the rights to those games. While NHL broadcasts don’t rival other sports in either local or national ratings, the newness of the team, the possibility of limited attendance for the inaugural season in 2021-22 and high ticket prices should lead to solid local ratings.
It’s very possible that the 2021 MLB season will start with either no fans or minimal fans in attendance. Given COVID case rates, vaccination projections, population density and past guidelines, it’s likely Washington will be one of the last states to allow fans into games along with California, New York and Colorado. So there could be more lost revenue for the Mariners.
And yet the idea of financial viability shouldn’t be an overlying concern. They’ve never been considered a small-market team and they’ve reduced player payroll significantly since starting their rebuild. Based on the detailed payroll tracking from Darren Gossler and also Cot’s Baseball Contracts, the Mariners had an estimated payroll of $171 million on August 31, 2018. After the decision to rebuild, Seattle reduced its payroll to $152 million in 2019. Because of the 60 games, Seattle paid just over $56 million in payroll in 2020.
As for the expected salary of the current 40-man roster, the Mariners’ projected payroll commitment is about $83 million, which is lower than 24 other teams in baseball. Only the Rays, Orioles, Marlins, Indians and Pirates project lower payrolls. Looking ahead to 2022, the Mariners have just $18 million committed in guaranteed MLB salary with another $14 million possibly going to Yusei Kikuchi if he exercises his player option.
By lowering some of their massive salary commitments pre-pandemic as part of their rebuild, the lack of in-game revenue has been less punitive compared to other teams.
Given the combined wealth of the ownership group, the franchise’s value, which will only increase with each season, the expected added revenue from the Kraken television deal and the minimized contract commitments in 2021, 2022 and 2023, financial viability shouldn’t be a concern. But the Mariners’ viability within the team’s fan base should be a concern.
It depends on your definition of successful. General manager Jerry Dipoto said at the beginning of the offseason that he wanted to supplement the bullpen while adding some depth to the starting rotation. He has done that by acquiring right-handed reliever Rafael Montero from the Rangers in a trade and signing free-agent reliever Keynan Middleton and free-agent starting pitcher Chris Flexen to contracts.
Of course, Mariners fans might not view a potential closer (Montero) with only nine career save opportunities, a reliever with past arm issues (Middleton) who was non-tendered by his team and a starting pitcher (Flexen) whose only success came in the Korean Baseball Organization as meeting their requirements of a successful offseason.
To be fair, the offseason isn’t over. The Mariners could still add more players in the coming weeks. But again, multiple MLB sources have said Dipoto received a lower-than-expected payroll budget for the offseason, which would make adding a legitimate MLB contributor like Taijuan Walker difficult, regardless of the obvious fit. Normally, Dipoto is aggressive and steadfast in setting price points for perspective free agents, often moving quickly. The inactivity and context of recent comments, saying “if that’s possible” about adding more free agents is indicative of his situation.
The idea of payroll limitations to offset financial losses is galling for average fans. They live in a state of constant debt, now magnified with the pandemic, and have still invested their earned money into those often overpriced game experiences. To them the Mariners aren’t mitigating lost revenues, but refusing to match their own relative financial investment and commitment. Or put simply, fans don’t want to hear about billionaires losing money due to COVID.
As for a successful 2021, Dipoto and manager Scott Servais have said “getting better” every day and hopefully competing for a postseason spot would be their expectations. With the current roster, this team might be closer to 95 losses than 85 wins. Perhaps it is Evan White and J.P. Crawford “getting better” at the plate, Justin Dunn and Justus Sheffield “getting better” with their consistency and off-speed pitches, Jarred Kelenic eventually “getting better” at the MLB level and not the minor-league level and the possibility of a future playoff appearance “getting better” after this season.