Category: Management Bullshit

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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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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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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Notes: Other teams unhappy with A’s, gambling, Scott Boras axed

Catching up on a week of news that wouldn’t stop.

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Last week, Buster Olney tweeted out something that made the whole internet groan. Not at Olney — not this time — but at pretty much all of MLB. You can probably figure out why just from reading what was said:

Within other organizations, there is a lot of disgust with how the A’s have handled the ballpark situation — especially when there’s no actual ballpark plan settled in Las Vegas. And there is an assumption the A’s will tank in the next few years, because their revenue stream will be down to a trickle. “This makes us all look bad,” said one person.

This was met with a chorus of “why did they approve the A’s move, then?!” which, understandable. A few things I’ve been thinking about, though, that should get a mention. For one, Olney doesn’t clarify whether this is from an owner, or an executive who happens to work for one, who had nothing to do with the move being allowed. It would be helpful if we knew: my guess is that it’s an executive who knows how bad of a look this is, and not one of the owners, who by and large are too removed from humanity to ever consider how something will make them “look” to people at large.

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Why are the A’s allowed to be this way?

The A’s are moving to Sacramento temporarily, so let’s remind ourselves of why this is happening at all.

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On Thursday, it was announced by the A’s that they would be spending the 2025-2027 seasons (and possibly 2028’s) playing their home games in Sacramento, at a Triple-A stadium. Not just in terms of what team already plays there, but also in terms of its facilities, per former player Trevor Hildenberger.

The move isn’t fully official, since the Players Association still has a say in whether those facilities are going to be on par with what’s required (which might require forcing them to be improved somehow, perhaps), but that’s not the focus of today’s wonderings. Let’s unpack some social media posts from yesterday. Nothing dramatic happened, it’s just to set the scene of the question being answered.

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Kansas City votes against the Royals, A’s and Oakland remain far apart on lease

The Johns are at it again.

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One of the first tests for whether Kansas City would hand over hundreds of millions of dollars to the Royals for a new stadium was given on Tuesday night. Good news, if you’re not an employee with the Royals: the voters rejected the proposal. Neil deMause has the details and some thoughts about what might happen next over at Field of Schemes.

All it took was a little bit of math by me — a non-math person — months ago to determine that the Royals are seeking what very well may be the largest publicly subsidy in history for a new stadium and surrounding development:

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Notes: MLBPA, Orioles ownership change, A’s boycott

A normal week, a change of hands via loophole, and John Fisher getting embarrassed. A busy Friday, really.

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As promised, my latest for Baseball Prospectus is a reaction to the news that there is a whole lot of internal grumbling going on in the Players Association — grumbling that, for a brief time, made it look as if there was going to be major leadership turnover in the form of lead negotiator and deputy director Bruce Meyer and executive director Tony Clark losing their jobs.

That time has passed, however, the worst possible damage from the storm now evaded. However, that storm is not quite finished. Luckily, as I get into, everything left is honestly just normal business: the kind of behaviors that you’d expect from a union that is nearly six times the size now as it was when it signed the 2022 MLB collective bargaining agreement, thanks to the addition of 5,400 minor leaguers as a sub-unit under the PA’s umbrella.

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Peter Angelos was an MLB owner from another time

Peter Angelos, 94, passed away this weekend, shortly before a sale of the team he’s owned for decades takes place.

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Given you’re reading a newsletter dedicated to sports labor, and especially in baseball, chances are good that you’re aware that Orioles’ owner Peter Angelos, who passed away over the weekend at the age of 94, refused to use scabbing replacement players during spring training in 1995. It’s been mentioned in every obituary and reflection on his professional life that’s come out since, but that’s because it’s still worth pointing out — especially in today’s climate, where it’s unlikely you could find an owner willing to go against the majority on practically anything, never mind something that was anti-labor and pro-ownership.

The thing is, this wasn’t some random act by Angelos. And not even in the sense that Angelos was a union and personal injury lawyer whose practice made a point of representing “working men and women since 1961.” Angelos purchased the Orioles in 1993, and then made enemies of practically every other owner in the course of a year. Here’s the Washington Post on Angelos, from February 5, 1995:

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Notes: J.D. Davis, MLBPA’s ‘coup’ attempt

Loopholes and growing pains.

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My latest for Baseball Prospectus published on Thursday, and it covered the J.D. Davis/Giants saga. Davis was awarded a $6.9 million salary in arbitration for the 2024 season, and then the Giants signed free agent Matt Chapman. Davis was shopped around for a trade, placed on waivers for anyone willing to take him and the $6.9 million for ’24, and then, when no one bit on either method of acquisition, San Francisco cut him.

They did so using what was described as a loophole in the collective bargaining agreement, but as I got into for BP, that’s not an entirely accurate way to explain what went down. What the Giants did was not great, in the sense they made a move they needed to make in a way that is only technically correct if you’re willing to grant them a whole lot of leeway on the spirit of that rule. Like, to the point of it being a different rule entirely: Davis was not cut because of a sudden injury or decline in his skills, but because the team signed a better player, and only after his arbitration hearing had already come and gone.

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