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November 27, 2012 BizballInside the 2012 Postseason Shares
Incentive. At the workplace, it comes in many forms. For some, it’s merely being able to keep your job. In other cases, one can receive a pay bonus. So whether for Clark Griswold in Christmas Vacation or players in Major League Baseball, bonuses can be used as a carrot for performance. For players in Major League Baseball, bonuses come in a host of different shapes and sizes. From signing to performance to awards, a player’s contract can have bonuses as a key element. One that often gets overlooked, however, centers on the postseason in the form of “shares.” Every player that makes the postseason gets a percentage of paid attendance, also known as gate revenue. Depending on how the money is split, the amount can be substantial. As part of the latest CBA (see page 36), a “Players’ Pool” is created from the World Series, the two League Championship Series, the four Division Series, and the two Wild Card games. Of course, the new wrinkle this year was the addition of the two five seeds in each league and the creation of the Wild Card play-in games, which bolstered the amount that could be garnered in the pool by two games. Not every cent of paid attendance revenue (the gate) from all games goes to the player shares but, rather, a percentage. For the current CBA, it’s defined as follows:
Once the total pool is created, the distribution is as such:
In previous years, the players’ pool was divided among 12 clubs, including the eight postseason participants and the four regular season second-place clubs that were not Wild Cards. That meant, for 2011, that these teams each got postseason shares while not making the postseason (figure shows full share amount)
Percentages of a share can be divvyed up or, in some cases, cash awards can be granted. There is no set criteria by which full, partial, or cash awards are given out. The players that make team’s postseason roster determine who gets what. In terms of cash awards, someone like a clubhouse assistant can wind up with a nice gift, or it can go further with those on the roster. This past season, the Giants players gave a full share to Melky Cabrera even though he was suspended for 50 games due to failing a drug test for elevated levels of testosterone. The logic seems simple: without Cabrera’s performance—artificially created or not—it’s possible the Giants would not have made the playoffs. The players, it seems, thought he should be rewarded for that. In other cases, players that have been traded mid-season can wind up with partial shares. Examples of that are the 2008 Red Sox (Manny Ramirez got a two-thirds postseason share for playing two-thirds of the season with Boston before being traded to the Dodgers). Conversely, Jason Bay, who came over to the Red Sox in the trade for Ramirez, received more than a one-third share. In 2004, Nomar Garciaparra received three-fourths of a World Series Championship share from the Red Sox players even though he played only two-thirds of the season with Boston before being traded to the Chicago Cubs. As noted in the data released each year, clubs do not always release who got full, partial, or cash awards, and the players can decide to award small fractions of a share if they so desire. So, how did 2012 stack up? All told, the players’ pool was $65,363,469.22, and a total of 501 full shares were dolled out by the teams. A full postseason share for the 2012 World Series Champion San Francisco Giants amounted to a record $377,002.64 while a full share for the American League Champion Detroit Tigers totaled $284,274.50. By comparison, in 2010 (the last time the Giants won the World Series), their share of the players’ pool was $19,764,779.19 with the value of each full share at $317,631.29. At that time,the Giants awarded 50 full shares, 9.89 partial shares, and five cash awards. This year’s record share total eclipses the previous high of $362,173.07 for the 2006 World Series Champion St. Louis Cardinals. Last year’s share amounts were $323,169.98 for the 2011 World Champion Cardinals and $251,515.76 for the AL Champion Texas Rangers. Here’s a complete breakdown of how postseason shares and cash awards were given out this year: World Series Champions American League Champions League Championship Series Runners-Up St. Louis Cardinals (share of players’ pool: $7,843,616.31; value of each of full share: $122,558.29) Division Series Runners-Up Cincinnati Reds (share of players’ pool: $2,124,312.75; value of each of full share: $37,865.12) Oakland Athletics (share of players’ pool: $2,124,312.75; value of each of full share: $34,325.16) Washington Nationals (share of players’ pool: $2,124,312.75; value of each of full share: $37,045.32) Wild Card Game Runners-Up Texas Rangers (share of players’ pool: $980,452.04; value of each of full share: $16,999.09) What Else do the Numbers Tell Us? Remember, the criteria for the Wild Card games in the new CBA is “50 percent of the total gate receipts from each Wild Card game after deducting the traveling expenses of the visiting clubs (up to a maximum of $100,000 per club) from the total gate.” Using the Braves’ total pool, we can do some math. After deducting travel expenses, they had a total pool of $980,452.04. Since the provision for the Wild Card game losers is 50 percent after travel expenses, twice that (100% after travel costs) would come out to $1,960,904.08. On those travel expenses, let’s split the difference of the maximum amount allowed and say it came to $50,000. That would make total gate receipts $2,010,904.08 for the one Wild Card game played in Atlanta. Paid attendance for the game at Turner Field was 52,631. Therefore, the average ticket price for game was approximately $38.21. That data for these one-game Wild Cards are now available should allow for a better understanding of gate revenues for the postseason as each year passes in this most current labor agreement. Another question that often surfaces is why the players get such a high percentage of the first games of each series (something negotiated by the players). The reason for this is that the high percentages are part of all the game minimums that had to be played for a given series (the first four of the seven-game series and the first three of the Division Series) which maximizes their return. And, as odd as it sounds, the design of players getting the percentage of the gate in the early games keeps players from potentially throwing games in order to get to a longer series. Remember, after the minimum number of games for a series is played, 100 percent of the gate goes to the owners. To that, while the players saw a record pool this year, the owners did not. While each of the Division Series went the full five games and the NLCS went seven games, the ALCS and World Series both ended in sweeps and, with it, the potential for six games of additional revenues for owners weren’t garnered. So while players do play in the postseason for the honor of winning a World Series Championship, remember that there is also extra money for teams that enter the postseason—one more incentive to play better each year. Complete Postseason Shares Data
Maury Brown is an author of Baseball Prospectus.
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Does this money count toward the luxury tax? Let's say the 2014 Yankees are on the ragged edge of resetting their tax. Could a deep playoff run push them over the edge?
No. This is not considered salary. It is negotiated "shares" of postseason revenue not counted. Now, the gate revenues the owners pull in for the postseason, does. So, 40% of the first four World Series games gate money does count as revenues toward revenue sharing.
Thanks.