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This story was originally published at Baseball Prospectus on March 26.
There are a few maxims that I’ve held to over the years in my coverage of labor issues in Major League Baseball, and they’ve served me pretty well in keeping me focused on what the actual story is, whenever an MLB official or team executive or anonymous source leaks out something they want you to believe. “Labor peace is a lie” is the big one, as longtime readers know, but another worth having top of mind is, “you can’t trust MLB’s crying poor.” The league, a team, an owner, whomever. Your first instinct should not be to trust what they’re saying about finances, and with good reason: they are, far more often than not, lying about them for their own benefit.
To benefit from tax loopholes, as leverage in negotiations with the Players Association—be that leverage with the PA itself or with the public they hope to have turn on the players—as a way to build up support in the media in the months and years leading up to collective bargaining. The list of reasons for you to distrust MLB’s talk on finances is a long one, and often full of seemingly obvious things, but that doesn’t stop people from falling into the trap of believing them all the same.
Dejan Kovacevic has a long history of distrusting Pirates’ owner Bob Nutting, and pushing him to sell so that someone who might actually support the team financially can step in. Which is part of why he recently undertook a significant project, in attempting to map out the Pirates’ finances to the dollar to see if it was true that they were actually losing money and were in debt, as he’d heard whispered. Kovacevic’s conclusion is that yes, shockingly, thanks to his research which included, in his own words, the “complete internal books” of the Pirates, the team is in debt. And maybe it’s time to rethink MLB’s economics, with a call for a salary cap coming if the Pirates are to be saved from their situation.
Kovacevic also said:
All right, go ahead and get it out of the system:
Lies! These are all lies!
Stick to sports, people!
Anything can be hidden by accountants!
Really, go nuts. Including on me. Or the Pirates. Or just Nutting. I couldn’t care less.
Well, okay then. He got access to the “complete internal books?” That’s highly doubtful, since teams do not show even the union the “complete internal books.” There’s two sets of books. The real ones, which the team and only the team has access to, and then the version that’s cooked by the very accountants that Kovacevic mentioned. Teams showed the books once—once—under then-commissioner Peter Ueberroth, and the union handed them over to economist Roger Noll, who then tore them to pieces by pointing out every accounting trick used to make it appear as if the vast majority of the league had lost money, when, in reality, a profit had been turned. Remember, too, that, in 2020, the league was set to forfeit the entire season rather than open the books and prove that playing games without fans in attendance was going to cost them so much money that player salaries had to be lowered even further than they already had to account for the dip in games. They take keeping this information secret more seriously than anything else, as the entire empire they’ve built up over the years rests on the idea that they can tell you whatever they want to about their finances. To the point that the union isn’t even aware of the exact details of the various local television deals teams have made!
Did Kovacevic see a book? Modified specifically to make the argument the Pirates want it to make? A far more likely scenario. Remember: you can’t trust MLB’s crying poor.
The work in that piece is extensive, yes, in order to create a thorough picture of the Pirates’ finances. The issue is that, by involving team officials who were willing to hand over info on the team’s finances, the well has been poisoned. Oh, it looks like the Pirates have a ton of revenue they’re pulling in until you look at these specific series of massive line items that just so happen to put them in debt, absolving them of wrongdoing? It’s just a little too convenient, you know. Especially considering that there has already been extensive research done on the Pirates’ finances that showed that the gate alone supported the payroll of their last relevant teams. Now we’re supposed to believe that their off-the-field expenses were actually significantly higher than their on-field ones, to erase that entire pile of money they were seemingly still sitting on.
Let’s look at this from another angle, though, so that we’re also being thorough in our work rather than simply distrustful of a group of wealthy individuals who have made a career out of lying for their own gain. Let’s assume that this work is accurate, and that the Pirates actually are a little bit in debt each year, despite the revenue they pull in and their minuscule payroll, as Kovacevic’s work detailed.
If the Pirates are struggling in the present to the point where they need to take out some loans to make everything work, that’s self-inflicted. The drop in attendance over the years, and therefore a drop in gate revenue? That was a response by fans to the team refusing to invest in the on-field product like they should have, both formally with a temporary boycott that occurred, and informally, in the sense that attendance peaked at just under 2.5 million fans a decade ago when the Pirates did, and, while it’s recovered from the attendance-less and lowered-attendance games of 2020 and 2021, it’s only rebounded to the usual “the Pirates aren’t that fun to watch” levels. Namely because the Pirates aren’t that fun to watch.
Essentially, there needs to be a distinction between “we aren’t making money” and “we can’t make money.” The Pirates had a chance to turn not just the team, but their reputation, around a decade ago when they were one of the most successful and exciting teams going for a three-year stretch, and they didn’t. They cut corners, relied heavily on finding inexpensive diamonds in the rough and rehab cases and players who could be coached into being more productive than their salary, refused to complement any of that with legitimate spending and acquisitions that could push them over the edge, and then watched the rival Cubs of all teams end up snapping their World Series drought instead. Fans aren’t flocking in droves anymore? The local television deal isn’t paying quite as much as it should be since the team isn’t in a strong position to negotiate, given deflated fan interest? Wow what a mystery, how could anyone ever solve this one?
Think back to when the A’s first made it clear that Las Vegas was in their future, and that they’d be leaving Oakland behind. It was obvious that, given a reason to attend A’s games, that Athletics fans could have made the team money. “We can’t make money” can be a choice, not a sentencing, and, like with the A’s, for the Pirates, it’s more of a choice than anything else.
In addition, “the Pirates are in debt” is meaningless on its own. Even leaving aside the veracity of the debt claim, debt for an MLB team is not like debt for you or me, as Rob Mains has detailed in the past on these very digital pages. “So there’s debt that’s onerous. There’s debt that isn’t. And there’s debt that’s deceptive.” Remember: you can’t trust MLB’s crying poor.
And, despite the calls for it, a salary cap won’t fix whatever ails the Pirates, if something ails them at all. If anything, a cap would hurt the Pirates, given that it would come with a salary floor, which would assuredly be higher than their usual payroll. Other teams would spend less, and it might drive down the prices of free agents, but the Pirates already avoid free agency like the plague, especially free agents who actually cost any real money, and they’d be forced to dip into it more than they do in order to raise their payroll to the minimum level. Bob Nutting can say he supports a cap in private, sure, but does he? Or is that support tied up in something else entirely that actually would benefit the Pirates going forward in a way a cap would not?
No, if there actually is a problem, and there actually is a solution to it, it’s probably in further revising the revenue-sharing with the next generation of local and national television deals. If the Pirates aren’t getting enough to cover their expenses—and again, this is just generously assuming the premise of that argument is correct, not actually saying it is—then they need a more significant cut. Which MLB’s owners that align more with Nutting than, say, Steve Cohen, are all going to be angling for, to force the Dodgers and Mets and Yankees and Red Sox and so on to pay for more and more of their expenses in the new streaming-heavy landscape.
Say, would leaking to the public that you’re in desperate need of financial assistance be the kind of thing that would help get them on your side—even the fans and media members who normally distrust and despise you—when it comes time to argue against the big bad clubs with the biggest bank accounts, so that you’ve got the public in your corner instead of theirs? Seems like something that would be worth thinking about, at least, if you were in the position to do something like that. Say the line, Bart.
