With MLB now in the overture of its musical, entitled “Winter of Discontent,” they’re still making it clear just how desperate they want people to think things are. My colleague has written about Cleveland’s desperate “need” to move Francisco Lindor before they have to pay him anything close to what he’s worth. There have already been players non-tendered who would never have been in the past, and there are whispers of others joining them. Projections of free-agent signings look something like your grocery store after a week of panic shopping.
Ideally, MLB owners would be patient types, realizing that either at the end of next year or in 2022 their usual bonanza of profits will return, and considering that each one of them is a billionaire, would ride out this rough time of simply missing out on those profits, rather than losing a ton, as they’re selling to anyone who’ll listen. But that’s not how these guys work. They want the money they got into this for now. There is no long game.
Which is probably why you’ll hear more about expansion than ever before. Both the NFL and NHL have 32 teams, or soon will, and MLB certainly must look at that and want in. The idea of expansion has been muted before, but there’s no shortage of candidates. Nashville has a group with Dave Dombrowski already trying to drum up an ownership push and fund a site on the Cumberland River for a new park. Montreal was sounded out as a possible summer home for the Tampa Bay Rays, who would still spring and fall in Florida (are those seasons verbs to the ultra-rich? I don’t speak Republican). Las Vegas would present some challenges, but MLB probably doesn’t want to be left out of whatever the NHL and NFL benefit from being there. Portland, Oregon and Charlotte are other cities that have been mentioned.
And it’s not hard to do the math on this one. The Seattle Kraken, who come into play next fall in the NHL, paid $650M for that right. That’s money those owners didn’t have to share with the players, and neither would MLB. And the MLBPA isn’t likely to put up much of a fight on not seeing any penny of the expansion fees when it’s 50-52 new jobs opening up.
What would expansion fees be for MLB? $1B seems like the absolute bottom estimate. The average franchise value of an MLB team is almost triple that of an NHL one. Even at $1.5B a pop for two new teams, that’s essentially the $3B loss MLB is claiming from this past season wiped out.
If it goes higher, they can start to balance out what they might lose on a 2021 season with no fans, though it won’t come close to erasing that. Or so they will claim. If I may quote myself from last week:
Seeing as how MLB will never open its books, nor has ever done so, your first reaction should be that this is utter horseshit.
The problem for MLB is that even Nashville is probably a long way off from finding a group that could pony up that kind of cash, especially now in the pandemic. But it won’t be so distant as to prove impossible.
The other problem is that expansion would greatly hamper MLB’s tried and true tactic of using other cities as leverage against MLB cities with stadium problems. There are two currently that MLB says it needs to “solve” before it thinks about expansion. That’s Oakland and Tampa. But what it means by “solve” is to hold out Nashville or Portland as potential relocation sites for either or both of the A’s and Rays, to grease the wheels for new parks. If MLB just grants teams to two new cities, it loses out on the possible bidding war for relocation.
MLB’s dream scenario is to get new parks in both places that start spinning cash, while hopefully not requiring either owner or the league to put too much of their own cash into it, and then add two teams on top of that. But that would depend on how long they can keep their owners tummies rumbling for another buffet of profits and cash. If 2021 ends up being nearly as bad as 2020 or worse for their accounts, you can be pretty sure they’ll start eying the quick injection of money from expansion fees pretty hard. Just because the teams wouldn’t play for years down the line doesn’t mean they couldn’t get the expansion fees much sooner than that.
This will probably be a much bigger discussion next winter, but it’s only going to get louder.