Just before the 2016 MLB playoffs, Baseball Prospectus emailed its staff and contributors to tell them that they would not be paid for work they did in August and September until January 2017. The costs of a website redesign and the collapse of daily-fantasy ad spending, the email explained, led to the payment freeze.
Within the company, there was more than just frustration over the missed payments—there was fear that BP could be headed toward bankruptcy. The beloved baseball analysis and statistics company has always run on a shoestring budget, but two months of delayed payment was new territory for the company, according to many current and former BPers. And while pay for work done between August and October of last year was in fact added to checks that went out this past January and February, the delay did nothing to lessen BP employees’ deep distrust of ownership.
During the baseball winter meetings in December 2014, BP staff learned that the company, long held by a cobbled-together ownership of former writers led by majority owner Dave Pease, would be sold. (One inside estimate of the transaction put the sale price at roughly $200,000.) The sale was formally announced on March 9, 2015, introducing an ownership group led by Jim Walsh, who’d come on as company president, and two partners, Sean Neugebauer and Stephen Reichert.
“Jim and his partners were readers of the Annual and subscribers to the website from way back (we checked), and they knew what we were about. We didn’t have to introduce our operation or explain our vision to them,” Pease’s post on BP’s website read. “The new management team has a lot of experience, enthusiasm, and ideas, and you’ll be hearing about all of that soon.”
Baseball Prospectus once was one of very few shops in town for statistical development and analysis. Now, the company must compete in a cottage industry it played a large part in creating. To continue to thrive, the new owners felt it was necessary to come up with new ways to grow the website—their first measure was to expand the site to a handful of satellite sites, each covering a specific team. The staffers they inherited were skeptical of the new ownership, despite their established credentials as long-time BP subscribers.
Interviews with over a dozen current and former Baseball Prospectus employees reveal that at this time the company was in a tangle of conflicts: one between the new ownership and existing staff, and the other between the company’s place in the baseball industry of today, and the baseball industry of tomorrow.
Baseball Prospectus was founded in 1996 by a group of writers and statisticians consciously following on Bill James’s revolutionary model of baseball evaluation and analysis. More than 20 years on, the idea of covering the sport through a mainly quantitative lens and from the perspective of the informed outsider seems, if anything, slightly retrograde; at the time, it was revelatory.
Founding members Gary Huckabay, Christina Kahrl, Rany Jazayerli, Clay Davenport, and Joe Sheehan knew each other through Usenet groups—pre–World Wide Web groups similar to message boards—and decided, rightly, that they could make a baseball annual better than what was available at the time. So was born the Baseball Prospectus preseason book, a jam-packed tome of statistics, player analysis, and team-specific essays. Dave Pease came on later that year to launch the website, and BP was off and running.
At the time BP was formed, baseball’s front-office revolution was still years from taking hold—Billy Beane was still a few years out from taking over as general manager for the Oakland A’s—and so, consequently, was the attendant revolution in coverage. By insisting, snarkily and sometimes caustically, on the value of such basic ideas as making outs is bad and what players do on the field matters more than what they look like, BP helped along and inspired both revolutions. In time, BP came to serve as a de facto farm team for both front offices and the press.
BP’s role as a launch pad is ingrained so deeply into the company culture that its namesake annual has a designated spot to list alumni who have since gotten MLB front-office jobs. In all, this year’s annual boasts 45 alumni in front offices throughout baseball, among them are Kevin Goldstein, the director of pro scouting for the Houston Astros; Jason Parks, special assistant to the president and general manager of the Cubs; Colin Wyers, senior analyst for research and development with the Astros; and Keith Woolner, principal data scientist, baseball analytics for the Cleveland Indians.
The list of former BPers in the baseball press, meanwhile, could basically double as a list of the best writers covering the sport, taking in Christina Kahrl, Jonah Keri, Keith Law, Ben Lindbergh, and Sam Miller, among others. The biggest name to come out of BP, of course, is Nate Silver, who developed the PECOTA player projection system and ran the website before leaving to pursue FiveThirtyEight full-time.
It’s not a stretch to say that BP has totally altered the baseball landscape, and that its influence on the game, both in front offices and in the media, is bone-deep. It’s also fair to say that this influence has created the conditions for its own obsolescence.
The proliferation of BP’s values has made the site far less revolutionary than it once was. The use of statistics in both front offices and the press is now the norm, not a subversive approach to the sport. Not only does the site have a significant direct competitor in FanGraphs, which also offers projections and prospect coverage along with a statistical inventory similar to that of Baseball Reference, but every mainstream outlet at least nods in the direction of analytics.
The best way for BP to distinguish itself would be to offer analysis better and more sophisticated than that on offer anywhere else, but conditions have made this increasingly difficult. The most promising research areas have to do with MLB’s proprietary Statcast system—which the league has employed public-facing sabermetricians and analysts to delve into—and where there are opportunities for huge steps forward on the order of PECOTA or Mike Fast’s pitch-framing research, they’re also opportunities for analysts to get poached. (Fast was poached by a front office—the Houston Astros—within a year-and-a-half of his first piece for BP.)
The talent turnover is as fundamental to BP as is its statistical advancements. Like the ubiquity of sabermetrics, it is a blessing and a curse for the company. There’s a bittersweet sense about BP’s position as a feeder system for high profile baseball jobs. It’s been commonly understood that BP’s top talent might only be there for a short period of time; eventually, a bigger media company or a team front office comes knocking. That type of talent churn makes consistency difficult, and requires an ever-flush pipeline of people ready to develop and write at a highly-skilled level.
One former BP writer speculates that the website no longer holds the cachet it once did, citing the rate at which writers have been poached by front offices. The website has taken on a number of new writers, some of whom mix more whimsical forms of writing with analytics. In recent years, the annual has also featured a more light-hearted approach to some of its team essays. If reviewers on Amazon are to be taken as reliable indicators of opinion, some longtime BP subscribers feel the company has moved away from its core mission. However, BP, like any company, has to grow and evolve, and the different flow of some of the site’s writing may attract as many readers as it confuses.
It’s not as if BP is neglecting to create new models: three statisticians for BP have recently developed the concept of pitch tunnels, for instance, a genuinely promising advance for how pitchers could think about the consistency in their deliveries. What’s not evident is whether the new ownership group’s ideas for keeping the site relevant—the proliferation of the team-specific sites; a less stodgy approach to smart baseball writing—will be the right call in the long run.
A current BP writer who was caught up in the missed-payroll situation told me that he believes “BP is still what it’s always been—which is a good place to be a young writer starting out bc you get read by everyone influential in the industry, and good talent can and does still move through BP—but I feel current management has visions for making it more than that and have been absolutely ineffective at executing on that vision.”
The business infrastructure of Baseball Prospectus was “a mess” when Walsh, Reichert and Neugebauer took over in 2014, according to multiple people within the company. Bits and pieces of BP ownership shares were spread throughout baseball media and MLB front offices, and employment contracts were inconsistently administered. Until the ownership change in 2014, the company resembled exactly what it was: a longtime passion project that had at some point turned into an industry-leading source for baseball information.
Reichert did not respond to a question about what kind of state the company was in when he, Walsh, and Neugebauer took it over in 2014.
Walsh was the man who’d run Maple Street Press, a now-defunct company that produced team-specific baseball annuals. Maple Street Press had started with Walsh producing a Red Sox annual in 2006, and soon after expanded to other MLB teams, college football, the NFL, and a few slim baseball history books.
In 2012, Maple Street quietly folded, leaving some contributors without payment for work that was completed on assignment, according to one person who wasn’t paid and two others familiar with the situation. Opinions on Maple Street—and, by extension, Walsh—are sharply divided between those who were paid out before the company went under and those who were not.
The baseball industry is small, insular, and gossipy, so when Walsh’s name was first linked to the sale, some people who had been stiffed when Maple Street dissolved—or had heard stories from those who had—shared this with friends at BP as a warning. It made them skeptical of Walsh’s business acumen, fairly or unfairly.
Walsh wouldn’t comment on the specifics of Maple Street’s collapse, but he does not see any connection between its folding and BP’s financial troubles, or between the business models of the two companies. When contacted about this story, Walsh emailed the following statement:
It’s easy to take pieces of information and circumstances from the outside and create a narrative without an entire picture, but that’s unfortunately going to happen at times.
The goal of Maple Street Press was to find the best writing about sports teams and provide an outlet for that writing. To bring together old-school journalism with new in the interest of providing the best information available about a given team. At the time, this was not common as web-based writing was still in its relative infancy. Facebook was less than two years old and Twitter was six months from launch when I started MSP.
We provided a national newsstand and bookstore platform that allowed many up-and-coming writers to reach readers, and many of those writers have gone on to great things. I hope everyone involved with Maple Street Press takes great pride in that, and the quality work that was produced. I greatly enjoyed working with everyone there to help bring that style of writing and content into the mainstream.
Whether or not Walsh’s running of Maple Street was indicative of how he’d run BP, the company’s fate became a driving force behind the distrust between existing writers and editors and the new ownership group.
Walsh, in his capacity as company president, was preceded by Joe Hamrahi, who split with the company upon the ownership transition. Hamrahi joined BP in 2008, and led the company through some of its strongest years. His tenure featured marquee names—Kevin Goldstein, Jason Parks, Colin Wyers, Ben Lindbergh—and the decision to bring Brooks Baseball, the premier source for Pitch f/x and other pitching data, into the company.
Hamrahi was described to me by a former BPer as someone who was intensely committed to the work of BP and those who produced it. Hamrahi made mistakes along the way, people who worked with him and feel fondly of him told me, but they trusted his motives. One longtime associate of Hamrahi said “he ran the company well in terms of environment, despite his explosiveness.”
People within the company first learned sometime around September 2014 that the company would be sold, and by early December Hamrahi decided he wouldn’t be a part of it going forward. Hamrahi declined to be interviewed for this story, and current ownership declined to speak about the terms of Hamrahi’s split with the company.
The story I’ve gleaned from three sources is that Hamrahi had been taking a below-market salary for running the company (every full-time and freelance salary for BP could be described this way as well), and when he learned there would be new ownership, and that his position would likely be changed drastically, he pushed for a salary that he felt would be commensurate with his position. New ownership offered him a year to stay on for the transition, but offered him a significantly lower salary that they felt was within their budget. Hamrahi decided to walk.
Profit margins for Baseball Prospectus have always been slim, and salaries and wages for staff and contributors have been notoriously low. The business of baseball stats, at least outside of a major-league front office, has never been particularly lucrative. Almost everyone who has had a hand in BP over the years has had a second, full-time career—including Hamrahi.
Upon purchase, the new owners felt they had to tighten the ship in order to allow BP to continue to do smart, innovative writing and thinking about baseball. They inherited a company that started as a side project and had historically been run by people who were plenty passionate—early BP members often clashed intensely—but weren’t seasoned businesspeople. One former BPer described the company as being “run on momentum with enough money to keep people paid and everything going well, but not a lot of money to invest in new things.”
The new owners’ first order of business was announcing that the main site would expand with a series of small sites aimed at specific fanbases. Staffers were immediately resistant to the idea, and registered concerns about the financial resources and personnel required to run those sites. Things were tense from the start, and ownership, sources say, was a bit naïve about the pushback they would receive.
The business plan for the local sites was to broaden BP’s audience by catering to fans who might enjoy smart baseball coverage, but didn’t want to have to wade through general coverage to find articles about their favorite team. It was based upon the SB Nation model, where a core website is supplemented by small sites that operate somewhat independent of the mothership. It’s an enviable model until you get into the nitty-gritty of how it actually works: Writers are mostly unpaid, the team sites are essentially unsupervised, and any screw-up or lack of quality on a team site reflects poorly on the company as a whole.
BPers current and former are fiercely protective of the company and the work they have produced for it. They are highly skeptical of change, and a total takeover in ownership and management was cause for concern for many on staff. A major change in business strategy was destined to cause tension, particularly because it wasn’t perceived as something that grew organically. BP has shifted focus and strategy before—Kevin Goldstein’s increased focus on scouting and prospect coverage comes to mind—but this particular change was different in that came from the top down.
One month to the day after Walsh, Reichert, and Neugebauer were officially announced as new ownership, the group announced the company’s first three team sites: BP Bronx, BP Boston, and BP Wrigleyville. BP Milwaukee followed two months later. The roster of team sites now includes BP Kansas City, BP Mets, BP South Side, and BP Toronto.
The budgets set for each of the sites were tiny, somewhere between $500 and $800 per month. Each site operates with the general structure of any website: Editor-in-chief, managing editor, writers, etc. Given the small budgets, payments to contributors are negligible, and deals are negotiated on case-by-case basis. One writer might get $50 per piece while another might be unpaid. Some writers’ agreements were for flat rates, such as $100 per month no matter how many stories are written, though the base deal is likely closer to $25-$50 per month, or unpaid.
Many writers refuse to write for intangible exposure, which is essentially what sub-$100 per month stipends equate to, but for others, a BP byline is a bucket-list item. BP, unlike some other websites that ask people to write for free, is neither VC-funded or owned by a major media company, which sways the power dynamic a bit in their favor when it comes to asking people to write for exposure.
Through the expansion to local sites, new, fresh writers were discovered and brought into the fold for writing for the main site. This, some BPers believe, has made the site stronger and helped round out the site in terms of perspective and coverage.
Reichert agrees with this, telling Deadspin “These sites have not only continued to grow in popularity, but they have already provided an expanded group of talent that has contributed greatly to the flagship site. On the main site we added substantially to the previous staff and have brought in many talented and diverse voices.”
But the benefits come with a flip-side: Some BPers worry that the widened net of coverage could dilute the standard of coverage BP’s reputation is built upon. According to two current and two former BPers, many of the local sites have struggled to gain sizable audiences, which leads to speculation that the investment could be a poor allocation of BP’s already sparse resources.
However, Reichert told Deadspin that “the resources for the locals came directly from investments made by ownership. No resources were taken away from the main site in order to finance the locals.”
BP’s funding comes from traditional models like advertisements and partnerships, but the bulk of the company’s business is through subscriptions to its website, sales of the annual, and licensing for its proprietary statistics. The subscription offerings are tiered, with its prospect and fantasy coverage making up most of the premium content. In addition to front office executives, a handful of major leaguers are loyal subscribers to the site and the annual, to the great delight of the staff.
The revenue from the annual, by the understanding of multiple independent parties, is kept separately from the website, existing in its own ecosystem. The annual, which provides a comprehensive preview of all 30 teams, was, of course, the genesis of the company, and is an extensive yearly undertaking. The 2017 edition of Baseball Prospectus clocks in at a hefty 576 pages and three-and-a-half pounds. The website’s editor-in-chief, along with an additional editor, compile the book over a period of a few months beginning near the end of the regular season. The job requires a quick turnaround, as the shelf life is short: An MLB season preview goes stale only a handful weeks into the season.
According to current and former BPers, business proceeded mostly as usual for the first year of Walsh, Neugebauer, and Reichert’s tenure; Neugebauer and Reichert remained largely behind the scenes.
Walsh, as president and CEO, stayed mostly behind the scenes as well, according to many people who worked for him. The site was run by Sam Miller, who declined to be interviewed for this story, but received universal praise from the many BPers I spoke to while reporting this story. Miller, a brilliant writer who is now a columnist and feature writer with ESPN, handled most of the interactions between ownership and its staff.
Despite Miller’s placement as a buffer, one current and one former BPer had what they described as pained interactions with Walsh. Most others I spoke with said they had little to no interaction with Walsh after the initial conference call. Two sources characterized Walsh as seeming to be mostly interested in being close to the “glamorous” world of baseball. Some shared a story about Walsh attempting to be credentialed for games—something writers felt should be reserved for, well, writers. Walsh waved this off as a non-issue, and told me that he thinks he only attended two spring training games on behalf of BP.
As the 2015 season came to an end, the company’s resources and attention turned to the production of the annual.
However, paychecks for the 2016 baseball annual did not begin to show up for contributors until July, six months after the annual was published. The going rate for an essay in the BP annual is $300—that’s $9,000 for the entire book. One explanation given to writers and editors was that the book publishing company, Turner, had not paid out the full amount owed on its contract for the issue. Management declined to comment on the specifics of the book deal, and Turner did not respond to a request for comment.
According to multiple people who worked on the 2016 annual, there was little to no communication about the severely tardy payments for the annual, despite being confronted about the delays. Eventually, all debts for the annual were settled by August 2016, and that’s when non-payments for all writers and staff began.
On Sept. 28, 2016, BP’s treasurer and COO Sean Neugebauer sent an email explaining that BP was in “a challenging financial situation that will require some changes and patience to see us through to better days,” and that each contributor would be paid for their August and September contributions, plus a small amount of interest, in their January 2017 paychecks.
In the email, Neugebauer wrote:
This is a letter we were hoping we didn’t have to write, though it should have been written sooner. Baseball Prospectus faces a challenging financial situation that will require some changes and patience to see us through to better days.
Several factors have led us here, some beyond our control (the implosion of Daily Fantasy advertising spending) and some of our own making (the excess time and cost of launching the new website). The projections for 2017 look bright. Exciting growth in the data provision business, potential sponsorship opportunities and better content monetization that will come from the new site will increase our revenues from 2016 levels. But, the end of the year (always a lean time for our seasonal business) is going to be tough.
Neugebauer announced that BP would “be significantly reducing the budget for contributors beginning on October 1. This will be done in order to prevent these kinds of issues in the future, though our expectation we will be able to return the site to a more normal budget as the 2017 season approaches.”
No one was paid for August or September, from people on the masthead down to contributors. In his email, Neugebauer said “management has foregone any sort of compensation since the beginning of the year.”
Neugebauer pointing to a website redesign as one of the causes of financial hardship likely hit a nerve. Talk of a website redesign has become something of a running joke amongst longtime BPers; a former high-level BPer said he’d been seeing mockups for a new website since “before the Obama administration.”
BP has had the same site design since 2003; the UX reflects the site’s antiquity. On the backend, the CMS—the Wordpress-like system used for publishing articles—is still a convoluted relic of the dial-up days.
However, current members of the BP staff say that mockups have been produced for a site redesign, and that an outside company is handling the work. Because a large part of BP’s product deals with data and sensitive systems to produce said data, a website overhaul is not as simple as it might be for other sites.
Reichert reiterated to Deadspin that the website redesign was the biggest contributing factor to the budgetary issues, explaining that “the site, which was custom built in 2003 and has so much interaction with statistical data, was more difficult to transition out of than we had anticipated.”
Pinning some of BP’s financial troubles on the implosion of daily-fantasy ad spending makes perfect sense—that bubble grew and popped in a matter of months—but BPers I spoke with were left wondering why daily fantasy was treated as a permanent revenue stream for the company. Perhaps it was because daily fantasy seemed harmonious with BP’s core product; it provided an opportunity for the site to pair its extensive fantasy baseball coverage with a new, exciting way to make money.
Multiple BPers told me they felt the reasons given for the missed payments were “bullshit,” and that there was likely an inciting incident to which they were not made privy. More concerning, however, was the possibility that the factors given were genuine, and that the new owners had simply failed to properly budget for problems that should have been forseeable.
At one point, a number of BPers began to wonder, to varying extents, if the company was going to fold. On Sept. 27, the day before Neugebauer sent the email explaining the two months of missed payments to staff, Walsh sent an email announcing his resignation (he is still a partial-owner of the company).
In his email, Walsh wrote: “While I love BP, all it is and all it can be, it has become apparent that my vision and business plan are not going to be possible to implement.”
To those within the company, Walsh’s resignation looked to be clearly linked to the budget crisis. The “vision and business plan” most in the company had seen from Walsh was the expansion to the team sites, which many felt were a disaster from the get-go. In an email to Deadspin, Walsh provided an explanation that appears to directly contradict his own email to staff:
This was unequivocally, 100% a personal decision of mine to resign. It simply was time for a different challenge and opportunity. There is nothing more to it than that. It was something I had been thinking about for a couple of months, had mentioned to Sean and Stephen, and there came a point where I knew it was the right thing for me to do.
I resigned as CEO of Baseball Prospectus, but remain the president of the board and I am updated regularly on our progress, I simply resigned from working with Sean and Stephen to run day-to-day operations. I love BP and have the utmost confidence in our leadership.
A few days before Walsh and Neugebauer’s emails went out, BP EIC Sam Miller announced he’d be leaving to take a job with ESPN. Months before I began reporting this story, I’d heard that ESPN had reached out to Miller about the gig, suggesting that Miller’s departure wasn’t necessarily influenced by the financial issues or the strain between management and staff. Aaron Gleeman was hired from outside the company to succeed Miller; he described the opportunity as “literally the job I dreamed of when I was 16.”
In September, following the missed payments, budgets for the team sites and the main site were cut by 60 percent. By the end of 2016, it was fairly common knowledge throughout the baseball media industry that BP was in poor financial health. A longtime friend of Walsh’s ran into him at Winter Meetings at the beginning of December, and asked him what was going on with BP. Walsh said it was business as usual, and when pressed on the rumors of financial issues, Walsh said they weren’t true.
The payments that were missed in August and September began being paid out to staff and contributors in January. The payments were spaced out through January and February, but were paid out in full as the company said they would be, according to BP staffers who received due payments.
Reichert and Neugebauer have not issued any updates on the financial health of BP since September, nor have they detailed plans to avoid the same payroll situation in the future, but the backlog of missed payments have been paid out, and there’s been no interruption with payroll since the end of 2016. Payments for the 2017 annual were processed within six months, so the company has at least avoided a repeat of last year’s troubles with the annual.
When asked about the financial prospects for the company going forward, Reichert said the company “finished 2016 strong,” and they “look forward to a successful 2017 and beyond.” He went on to say that the annual sold well, and that a “modern website” will help the site’s audience grow.
But recovering from a major financial issue does not necessarily merit uncritical confidence in the ability of the company to weather tough financial situations going forward. That good faith will be up to Reichert and Neugebauer to rebuild (or build in the first place), but they have indicated to me that they intend to make every attempt to do so.
Overall, BPers felt Reichert and Neugebauer handled the payroll episode as well as could be expected, with one person allowing that “there’s not much more you can do when you get in that situation.”
“Of course,” he added, “the thing to do would not be getting into that situation in the first place.”