Notes: Tax loophole, MLB realignment, Oakland sells Coliseum, NCAA settlement

More on the tax loophole, a couple of thoughts on realignment, Oakland’s stadium situation gets additional wrinkles, and the NCAA is primed for a major change.

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Lots to get through today, so let’s get to it.

I went in deeper on the billionaire sports owner tax loophole news for Baseball Prospectus earlier in the week, getting into the origins of the loophole, what it is, why it’s a problem, and why we should hope the IRS decided to remove or rewrite it. The shorter version of it is that it would keep, say, a team that costs $2 billion from pretending 80 percent of the team’s valuation is going to lose value instead of gaining it like what happens with sports franchises simply for existing, allowing them to avoid $650 million in taxes over the next 15 years that they really should have paid. The longer version, well, I wrote that for BP, and while you need a subscription for that, at the least, you could always read the ProPublica reporting from three years ago on the subject.

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Fanatics claims it owns your kids’ likeness rights, forever

Fanatics has their latest cost-cutting scheme, and it’s trying to get perpetual likeness rights from children and potential future minor leaguers years before they go pro.

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Thanks to some excellent reporting from Britt Ghiroli at The Athletic, we now know what the latest chapter in the “everything Fanatics touches is terrible in some way” saga is. Fanatics is partnering together with Perfect Game, the “world’s largest baseball scouting service” which serves as both a showcase for amateur players and a high-level competitive environment for amateur baseball, in order to create memorabilia for these kids. Sounds innocent enough, right? Of course there’s another layer to all of this.

Perfect Game already had kids giving up the rights to their likenesses, as agents have been warning parents for a couple of years now about the practice, but, as Scott Boras told Ghiroli, “They have now gotten into profit-taking on this.” Amateurs can’t have agents, but agents can advise them, and not signing is one thing they’re being advised about now.

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On the salaries of MLB’s ‘disposable pitchers’

A day in the majors isn’t worth what happens to the salary of this new class of churned-through pitcher.

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Last week, I shared a Baseball Prospectus story written by Jarrett Seidler and Rob Mains on the rise of the “disposable pitcher.” A trend has emerged, with teams calling up a pitcher — a not-really-a-prospect kind of pitcher — on the 40-man roster up from the minors for a very temporary stay in the majors, and then designating them for assignment after they’re done with them rather than optioning them back to the minors. This allows for them to, effectively, stream a 40-man roster spot for additional call-ups like this down the road, while also allowing them to avoid exposing any genuine prospects to the majors or the need to be optioned before they feel like those players are ready for the show.

As I wrote last Friday:

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Notes: Manfred speaks, the disposable pitcher, Diamond Holdings

Looks at the week that was.

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Forgive me for being a little behind here on the coverage dates, but my phone was undergoing a slow and then rapid death, which cuts into the whole keeping up with the news thing. So now, new and working phone in hand, we can hit some notes from around MLB, starting with the thing Rob Manfred recently opened his mouth about.

On May 6, Manfred spoke to (or spoke “at,” as Neil deMause put it) a gathering of editors at an Associated Press conference, with an emphasis on extolling the virtues of publicly financed stadium projects. It is incredibly Manfred for its… style. You know the one. That thing where he exaggerates and makes wild, indefensible claims without any proof to back them up, and would definitely get angry at a reporter or fans or sitting Congressperson for calling him out on it and asking for more details.

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Tax loopholes beloved by sports teams under IRS ‘scrutiny’

Maybe the first step toward closing a tax loophole that sports owners abuse every year.

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Let’s rewind to the summer of 2021 for a moment. A trio of ProPublica reporters published an extensive look at the legal tax loopholes that sports team owners used to, essentially, lie about their finances. The idea being that they could make a profit, but, by utilizing some tax loopholes, report the opposite, allowing them to not have to pay their share of taxes. And that kind of money adds up, whether you’re talking about what owners are allowed to pocket, or the money that should have gone into the federal government’s coffers. Maybe there would be more money around for repairing the country’s failing infrastructure if the wealthiest actually paid their portion each year!

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Notes: MLB/Roku streaming deal, White Sox still bad

MLB might have a new streaming partner soon, and Jerry Reinsdorf’s White Sox are certainly made in his image

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According to The Athletic, Major League Baseball might be leaving Peacock behind when that deal is up, and moving over to Roku for streaming Sunday morning baseball games. It’s not that Peacock is uninterested in maintaining their relationship with MLB, so much as, per Andrew Marchand, they were willing to do so for one-third the value of the current deal, which pays $30 million annually.

Now, exactly which service MLB ends up with isn’t of much concern, but the thing to wonder about here is what Roku will be willing to pay to pry the league’s Sunday morning games away from Peacock. If there is no other competitor for the services, then sure, maybe Peacock gets away with offering less than last time, because MLB’s choice is then $10 million per year or nothing. With Roku involved, though, maybe Peacock bumps their offer up, or, in order to get their foot in the door in this realm, Roku is happy to surpass any offer coming from Peacock in order to be the most attractive option. Which could in turn mean MLB is (1) finding new partners to increase their revenue or (2) finding new partners in order to maintain their current level of revenue. Whether it’s the first or second thing depends a lot on how everything shakes down with Diamond and MLB’s eventual streaming-heavy future.

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MLBPA picks up a win, awful uniforms will see changes

And the Players Association would like everyone to know Fanatics wasn’t the issue here.

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Not every labor win has to wait for bargaining. Take the recent issue with MLB’s uniforms, for instance: in short, they’re terrible, and now they’ll be fixed. The when of that is a bit more up in the air — according to ESPN’s Jeff Passan, it’ll be early 2025 at the latest — but hey. The players won, despite the defense of MLB this spring basically being a gaslighting, “no, we’ve always been able to see your balls.”

It’s not just that the fabric was see through, either. Pants and tops didn’t match. The lettering on the jerseys was small, and looked like it belonged on children’s replica jerseys. The pants would rip at seemingly the drop of a hat. The supposedly breathable fabric of the new-style jerseys resulted in a lot of pictures of players absolutely dripping with sweat from games played during the coldest part of the season. It was all a terrible experiment in… well, in who knows what, really. The kind of innovation companies always looking to make more money or cut costs play around with, that results in messing with what already works in a way that makes it worse? The Google, if you would. Nike didn’t need to do any of what they did here, with the players even warning them they didn’t like the directions they were taking, and yet, here we are.

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The Rockies and Marlins are bad, too

Woof, again.

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The White Sox got my full attention on Wednesday because they are simply that bad — like, angling for historically awful if they keep it up for too long, they’re one of four teams ever to lose 22 of their first 25 contests and help does not appear to be in sight for a team we already knew would be terrible — but they’re not the only horrid team in the league this year.

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The White Sox might be terrible

Woof.

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In all honesty, I had planned to write about the teams that were looking horrific due to their roster mismanagement and lack of spending and effort besides the A’s, just to change things up a bit, you know? I keep staring at the White Sox’ 2024, though, and forgetting why I ever needed to check in on what’s happening with the Marlins and the Rockies, too, because it seems like it barely compares.

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Notes: The A’s can get worse, Diamond Baseball Holdings

Why the A’s can get worse, and what is Diamond Baseball Holdings up to?

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My latest at Baseball Prospectus published on Tuesday, and it’s on how the A’s can get worse. You would think they’re already as bad as they can be, but no. Right now, at least, there’s some hope that maybe things could get better, because the move to Las Vegas could get John Fisher to become a completely different person who spends money like he’s said will happen. But that’s very unlikely. Unlikely enough that I went on the record to say that it’s not happening, while feeling pretty good about my chances of not having to eat crow about it later.

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