The Mets designated Robinson Canó for assignment today. That means they will be eating the remaining $39 million on his contract, unless he’s picked up by another team.
According to general manager Billy Eppler, he presented the baseball and financial ramifications to Mets owner Steve Cohen regarding the potential release of Cano, Cohen had one response. According to Eppler, Cohen said, “make the baseball decision.”
And that was the end of the conversation.
As for Cano, the eight-time All-Star with career numbers easily in the Hall of Fame discussion range, he wants to continue to play. According to his agent, Brodie Van Waggenen, who, as the former general manager of the Mets acquired Cano and that huge contract from the Seattle Mariners in 2018, Cano believes he can still swing the bat and help another major league team.
The Mets, now with an owner who can tolerate a significant financial hit, determined the current roster would be a better fit without the 39-year old Cano, who struggled in the early going of this season to seize a role on this team. Cano was batting only .195 in a small sample size of 44 at bats but, given his age and lack of position flexibility, he needed to hit early and hit well to be a factor on this win-now team.
The Mets previous owner, Fred Wilpon, did not have the financial capability to eat a contract of the enormity of Cano’s, Even if it was in the best interest of the team.
Times have changed around the New York Mets, who now have the best record in the National League.
New York Mets first baseman, Pete Alonso’s salary last year was $676,775. He and the Mets went through arbitration a couple of days ago. Alonso’s new salary for the 2022 season is now $7.4 million.
In a couple of years, when Alonso is no longer under team control, he will be earning in the range of $25 million per year. Somebody will offer the 27-year old first baseman something in the range of $175-200 million for seven to eight years. Or maybe much more than that.
We keep hearing baseball, as an industry is shrinking. However the owners know the real deal and salaries continue to explode upward. Must be that TV money teams are getting. Or, perhaps, baseball is going to evolve into a game, a business, where the point of entry to owning a franchise will start at something approaching a net worth of Steve Cohen money. The new Mets owner is worth approximately $14 billion. Since taking over the Mets a little more than a year ago, he has increased the team’s payroll by more than $100 million dollars. The previous owners, The Wilpon and Katz families, ran the organization as if it were a small market club, with a not unsubstantial $140 million payroll. It placed the Mets at the same level of spending as mid and small market teams like the Toronto Blue Jays and Minnesota Twins.
But, this is where baseball may find itself in a decade or less. It currently has 30 franchises. Of those teams, there are five or six which would have great difficulty surviving the financial requirements of a major league franchise without the millions of dollars each MLB team receives, equally, from television money. The cold, hard cash networks like Fox Sports and ESPN, and now, TBS pays Major League Baseball for the broadcasting rights to the games. From the financial side, television revenue will be split to give each team $60.1 million, annually. Combined with local tv deals that are worth at least $40 million each, every MLB club will make at least $100 million from television, alone. And, that’s before selling one ticket to a game, this season.
And that’s not all.
Along with the tv deals, MLB teams also receive extra money through revenue sharing. Each team pools 48% of the revenue they earn and the total amount is then split evenly (3.3% of the total) and given to each team. Teams receive more than $110 million through revenue sharing.
So, in the current model of ownership, major league baseball guarantees significantly more than $200 million, back to the franchise before a ticket or a hot dog has been sold. Suffice to say, the bottom feeders of baseball’s franchises, Baltimore, Cleveland, Pittsburgh, Oakland, and Miami would probably be unable to stay in business without MLB’s welfare system.
The reality is, the average team payrolls have declined every season since their previous high in 2017 despite revenue increasing in MLB every year, excluding 2020’s pandemic-shortened season.
But, what happens to these lower-echelon spenders when the tv money starts to dry up? If one looks at the landscape of the television industry, it would not be difficult to perceive shrinking revenues among the networks as fewer people watch television than ever before.
It says here, Major League Baseball will evolve away from smaller market teams and will be dominated by the wealthiest ownership groups or individuals, most of whom will be found in the largest revenue markets. Players salaries will flatten, if not reverse its trajectories. The realities of the mathematics in how teams can be successfully operated will change drastically. It won’t kill the sport. But, it will kill a handful of teams, unless those smaller market franchises discover ownerships with deeper pockets.
It will be a good reason young stars like the Mets’ Pete Alonso will choose to play in a major market like NYC for the sports’ wealthiest owner in Cohen. It’s also why we will continue to see the Yankees and Dodgers, not to mention the Red Sox, the Phillies and the White Sox continually vying for the most expensive stars of the game. Eventually, baseball will not be a business of “haves” and “have nots.”
It will just be the haves, having themselves a good time in the baseball business. As fans, we can enjoy watching behemoth bank accounts fighting it out amongst themselves.
Today, for Mets fans, begins what they hope and believe will be viewed someday, as the golden age of the New York Mets Baseball Club. With the transfer of ownership of the team from the Wilpon/Katz families to one Steve Cohen, a financial whiz on Wall Street with a net worth of $14 billion, Mets fans are rejoicing as if Cohen had just defeated Donald Trump for the presidency of the United States.
In a wide-ranging Zoom press conference this afternoon, Cohen laid out his plans for the franchise. If his words and goals are true, the Mets, struggling for decades as an undercapitalized professional sports team in the city of New York, will no longer be limited by the silly question, “So, how much will that cost us?”
Cohen is now the richest owner in the sport, possibly the wealthiest individual owner of a sports franchise in the world. If Cohen wants to sign a free agent because he believes that player is the difference between winning a championship or not, he will not get out-bid.
“If I don’t win a World Series in the next three to five years — I’d like to make it sooner — but if I don’t do that, I would consider that slightly disappointing,” Cohen said. “We are a major market team” that “should have a budget commensurate with that.”
“I’m essentially doing this for the fans,” Cohen said. “When I really thought about this, I can make millions of people happy. What an incredible opportunity that is. That’s how I’m thinking about this. I’m not trying to make money here … it’s really about building something great, building something for the fans, winning and I just find this an amazing opportunity and I’m so excited for it.”