The Appropriate Balance of Revenue and Payroll and Other Bullets

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The Appropriate Balance of Revenue and Payroll and Other Bullets

Chicago Cubs

wallet cashIn case you missed it, yes, the BN Podcast did return with a new episode yesterday. On with your non-Hall of Fame Bullets …

  • For as long as professional sports have been a big business, there has been a relationship between overall sport revenues and the percentage of those revenues that is making its way into the pockets of the players who are the living embodiment of that sport. Maury Brown has written extensively on MLB’s revenue growth over the past 20 years, and did so again in a great piece for Forbes. Revenues in 2013 surpassed $8 billion, which represents another year of significant growth, even accounting for inflation. Player salaries, however, were just shy of $3.8 billion – something near 47% of the revenue figure, depending on just how much over $8 billion the revenue is.
  • The rule of thumb in pro sports these days is that players should be getting about 50% of the revenue, and that’s just about how it is in the NBA, NFL, and NHL. To achieve that kind of balance, payrolls would have to come up by $200 to $300 million across baseball (depending on the final revenue figure), which could be as much as an additional $10 million per team per year on payroll. Baseball salaries continue to explode, but, clearly, it’s for good reason. As long as MLB is raking in the revenue, a fair system will see the players raking, too.
  • I know where your minds are immediately going: have the Cubs been spending 50% of their revenue on payroll? Well, that depends on what you believe about the Forbes report (estimated $274 million in revenues in 2012) or the Bloomberg report (estimated $320 million in revenues in 2013). In either case, if you credit those estimates, the Cubs’ payroll has fallen far shy of a 50/50 split – the Cubs’ final reported payroll for 2013 was $101 million, and final reported payroll for 2012 was $108 million. That said, with debt service payments that could range from $20 million to $40 million, and reported limitations on the amount the Cubs can spend on payroll relative to revenue, the Cubs’ ability to allocate 50% of revenues – however much those revenues actually are – to payroll is probably restricted right now. Right or wrong.
  • Incredibly, home run distance has varied very little over the past eight years.
  • The Pirates are ditching the Jolly Roger logo this year in favor of the “P” as their primary logo. Arrrrrrrrrrre they serious?
  • For you crossover fans who haven’t checked out his work yet, Jay will be reviewing Bears players/positional groups this offseason, and he started with the kicking specialists.
  • (And in case you’re wondering: yes, I know that John Sickels has come out with his top Cubs prospect list. That will be getting its own post shortly – and I didn’t want to bury it yesterday afternoon with the Hall of Fame announcement.)

Author: Brett Taylor

Brett Taylor is the Editor and Lead Cubs Writer at Bleacher Nation, and you can find him on Twitter at @BleacherNation and @Brett_A_Taylor.