The first major free-agent domino finally fell yesterday when the Milwaukee Brewers signed outfielder Lorenzo Cain to a five-year, $80 million contract. Nevertheless, the MLB Players Association is bracing itself for an oncoming labor battle as owners are becoming increasingly resistant to spending money in the free agent market.
Part of this preparation includes a possible investigation of this offseason's most notable sellers, the Pittsburgh Pirates and Miami Marlins.
Jeff Passan of Yahoo Sports reported that the league is looking into whether the Pirates and Marlins are complying with league rules that require teams to reinvest revenue-sharing dollars back into baseball operations.
Sources: Amid the Pittsburgh Pirates and Miami Marlins' offseason trading sprees, the Major League Baseball Players Association is looking into the possibility they've run afoul of rules that teams invest revenue-sharing dollars into baseball operations. https://t.co/UZe0fXT6Pg pic.twitter.com/jkUddZ7piz— Jeff Passan (@JeffPassan) January 26, 2018
Currently, every team in the league throws 31 percent of their local revenue into the revenue-sharing pool, which is totaled and divided evenly among the 15 teams with the smallest markets. Revenue sharing also includes a large portion of MLB's central fund, which consists of funds acquired from national broadcast deals, MLBAM, and other league-sponsored endeavors.
However, there are some rules as to how small market teams, like the Pirates and Marlins, can spend the money they receive from revenue sharing. The MLB/MLBPA Collective Bargaining Agreement (Article XXIV, Section B, Paragraph 5(a)) stipulates the following as unacceptable uses of revenue-sharing dollars:
- Payments to service acquisition debt or any other debt that is unrelated to past or future efforts to improve performance on the field.
- Payments to individuals other than on-field personnel or personnel related to player development.
- Payments to entities that do not have a direct role in improving on-field performance.
- Distributions to ownership that are not intended to offset tax obligations resulting from Club operations.
Basically, the revenue-sharing funds must be pumped back into baseball operations. If the MLBPA suspects that a team is not correctly utilizing their revenue-sharing dollars, they could petition the Commissioner to investigate their expenditures.
The investigation would require the accused teams to present a detailed financial and competitive plan for the next two years that "specifies its attendance, revenues, payroll, player development expenditures, non-player costs, and capital spending."
Following consultation, the Commission may require the team to alter portions of their two-year spending plan or escrow a portion of their revenue-sharing funds.
The Pirates certainly do not want the league dictating how they spend their money, but their recent trades have prompted many people around baseball to question their commitment to producing a winning baseball team. Because of this, it's unsurprising that the Bucs are on the shortlist of teams who may be abusing the revenue-sharing system. It will be interesting to see what, if anything, comes out of this potential investigation.