How MLB’s perfect storm of business and labor created $1.77 billion in player contracts in less than a week

It doesn’t happen every year. Probably won’t happen again for some time. But a combination of factors conspired to create a record-setting MLB frenzy during the 2022 winter session, with player contract agreements approaching $2 billion.

Yes, you read that right. From Monday through Thursday, 23 players have signed deals or outright deals with half of the league’s 30 clubs totaling $1,770,316,666.

Among the eye-popping numbers are three nine-figure contracts ($360 million for Aaron Judge, $275 million for Xander Bogaerts and $300 million for Trea Turner), two of which span 11 years. according to jason stark or Athletic, in the first 46 years of MLB free agency, only one player (Bryce Harper, who played 13 years with the Phillies in 2019) has a contract longer than 11 years. Both Turner and Bogartz won the decade-plus-one Monday through Thursday.

It’s not just total spending. The annual average value (AAV) of the total contract sum divided by the contract life soars. The Mets already have Max Scherzer, whose AAV of $43.33 million is the highest in the league. Not content with that, owner Steven Cohen sent the same number to 2022 AL Cy Young champion Justin Verlander for the same price, worth $86.66 million over two years.when adding additional signatures amazing AAV was a mind-numbing $86,583,333 when they signed. To put it in perspective, several clubs (Orioles, Buccaneers, A’s and near-Reds) will be included in their 2022 luxury-tax player payrolls.

Spending at five clubs might make a drunken sailor blush. The Phillies and Yankees each allocated more than $350 million, with the Phillies close to $390 million ($387 million). In addition to the Red Sox, Padres and Mets, 12 players earned a staggering $1,435,166,666.

But how did this happen? Why, when so many winter meetings in baseball are dozing off? A combination of factors creates the perfect environment for homeowners to spend extravagantly.

New labor deal creates calm

Remember the 99-day lockout when MLB owners delayed the start of the 2022 season? Seems to be based on distant memory from the past week. But the pain of labor negotiations has given owners a sense of certainty, knowing parameters like the minimum wage, the structure of the luxury tax, and the fact that they still have four years of labor peace.

Total revenue will approach or set new records in 2022

Commissioner Rob Manfred said the league’s total revenue for 2022 is “just under” $11 billion, suggesting the league has emerged from the impact of the pandemic. The league’s last record revenue was $10.7 billion in 2019 before the pandemic. The league will likely meet or exceed the robust numbers when the final numbers are released.

National media rights increase

The 2022 season begins with new media rights extensions with FOX, ESPN and TBS, adding nearly $250 million annually. MLB will receive $12.24 billion over the life of the agreement through 2028.Streaming deals with Apple
NBC and Peacock, as well as the league’s 30 owners, have all seen bottom-line increases.

Adding additional playoff teams incentivizes owners to compete

A big change in the latest CBA is the addition of two wild-card teams — one each in the AL and NL — giving clubs reason to try to compete. With a total of 12 teams making the playoffs, clubs have been more aggressive heading into the trade deadline as buyers rather than sellers, as ownership sees an increased likelihood of making the playoffs.

Owners collect an extra $900 million from Disney

While it’s not a baseball company, MLB’s 30 owners invested in creating a streaming service, marketed as BAMTech. It was sold to Disney, where it was renamed Disney Streaming, hosting Disney+, ESPN+ and Disney-owned Hulu. Disney bought the final 15 percent of MLB for $900 million in November. While some money might go to the commissioner’s general fund, it would add roughly $30 million to the wallets of all 30 owners, giving them an extra incentive to spend money in free agency that they might not otherwise spend.

MLB owners continue to diversify

Call them “ballpark villages”. Call it assisted development. But owners continue to take real estate risks to develop outdoor baseball stadiums that don’t count toward baseball-related income but benefit from the fans who attend games. Think these are not important? See how A’s owner John Fisher is getting tough not only on Oakland, but Las Vegas to build around the new stadium.

Baseball isn’t “dying.”Six clubs to exceed luxury tax threshold in 2022

While MLB has a system that taxes clubs over the salary threshold, so much revenue is pouring into clubs that six clubs are projected to cross the $233 million base threshold in 2022. Those clubs are projected to be the Mets, Dodgers, Yankees, Phillies, Red Sox and Padres. The only time the six clubs exceeded the luxury tax threshold was in 2016 (Dodgers, Yankees, Red Sox, Cubs, Giants and Tigers).

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