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Olney: These teams will be impacted most by MLB's changing financial landscape

Written by 
Published in Baseball
Saturday, 11 April 2020 16:16

The longer that baseball's doors are closed because of the coronavirus, the greater the cost, as is the case with every other business. Team officials and player agents are bracing for what they expect to be a dramatic shift in the financial landscape if the sport is shut down for the season.

What that will look like is impossible to know for sure, but projections are being constructed. There is already anticipation that if a sizable portion of the 2020 season is lost, there will be a natural response among clubs to scale back, to reduce vulnerability, to offset the hit to revenue. Whenever the game returns, there may well be a flurry of player movement that is driven by the need to unload as much debt as possible. Whenever clubs get the go-ahead to make deals again, it could be similar to the stock market at the opening bell on those days when bad news is expected.

As some clubs look ahead, they forecast a time when a defining characteristic for franchises might be the volume of long-term deals and dollars remaining on the books -- deals negotiated before the coronavirus changed the world, including baseball's yardsticks for defining value.

Take the Chicago White Sox, for example, a team that has gone through years of rebuilding to now be at the edge of contention. To goose their push to reach the top of the American League Central, the White Sox aggressively dove into the free-agent market over the winter, signing catcher Yasmani Grandal to a four-year, $73 million contract and pitcher Dallas Keuchel to a three-year, $55.5 million deal. Jose Abreu re-signed with Chicago at $50 million over the next three years. Additionally, they have put together a flurry of deals with their young players -- Tim Anderson, Yoan Moncada, Eloy Jimenez -- under the accepted premise that it's better to pay a little more guaranteed money at the outset of a contract to save money at the back end of the deal.

What the White Sox and other teams could not have known is those deals signed under the pre-coronavirus business models may not have the same context as anticipated.

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