Friday, November 28, 2014

Who Profits from the Postseason?

October 28th, 2010 | 2 comments »

I previously blogged this on Comcast Sports Southeast, but I wanted to repost here for those who don’t follow all my blogs.

Eight Men Out is one of my favorite baseball movies.  No matter how many times I watch, my heart still aches for Shoeless Joe.  I choose to believe the portrayal in the movie is completely accurate, and I’m devastated by how his baseball career came to an end.
 
Perhaps my affinity for this particular film is why I find the division of baseball’s postseason proceeds so interesting.  Have you ever wondered where all that money goes?  Who benefits more, the players or the clubs?

First, there’s a distinction between required and non-required games.  This is where Eight Men Out comes into play.  Required games are those that must be played: the first three of the Division Series and the first four of each of the League Championship Series and World Series.  The remaining games, that may or may not have to be played, are non-required games.

Under the current collective bargaining agreement, the players receive 60% of gate receipts in required games.  All of the proceeds are put into a fund, which is not distributed until after the postseason is completed.  Those profits are then split according to this formula:

World Series Winner                                              36%
World Series Loser                                                 24%
League Championship Series Losers (2)        24%
Division Series Losers (4)                                     12%
Non-Wild Card Second Place Teams (4)            4%

That last one is the most interesting.  Clubs who finish the season in second place in their division and who do not win the Wild Card and advance to the postseason still receive a share!
There are also set minimums to be distributed if the above formula does not achieve the desired result.  Here are the minimums:

World Series Winner                                   $2,416,450.00

World Series Loser                                      $1,611,000.00

League Championship Losers (each)   $805,500.00

Division Series Losers (each)                  $644,400.00

Non-Wild Card Second Place Clubs       $161,100.00

Once the funds are distributed according to the above formula, the players on the recipient team vote to decide how funds will be divided.  Players entitled to vote are all of those who were eligible for World Series participation and who were with the team as of June 1st.  Attendance at the meeting is limited to players.  However, Major League Rule 45 states that the field manager is entitled to give his opinion on the distribution before leaving the room.  The players may also choose to allow him to stay for the meeting.

One of the more interesting provisions of Major League Rule 45 is with regards to a player who has been with more than one club during the season.  If more than one of his clubs from that season is in the postseason, he can actually receive a share from each club that participated in the postseason.  However, there are provisions that limit his total amount received to the amount he would have received if given a full share as a player who was eligible and with the team prior to June 1st.

The players may also vote to give cash distributions to non-uniformed personnel, although it may not exceed the value of a full share.

What about the clubs?  There is no distinction made between the home and visiting team.  Instead, the two clubs playing split the gate receipts evenly.  For required games, they receive the remaining 40% share after payout to the players fund.  For non-required games, however, they split 100 percent.  Why the distinction?  Think Eight Men Out.  It appears the concern is that players might be tempted to throw games in order to play more games and earn additional money.

Think it’s only the players and clubs who profit?  Think again.  The Commissioner’s office receives a flat 15% off the top on all World Series gate receipts.  It also receives a percentage of all gate receipts from the League Championship Series.  That percentage is set each year by the Commissioner and approved by the Major League Executive Council.  

Of course, the real money is in the increased ticket/box sales each club might experience the following season, increased advertising revenue, a larger fan base and other sources of revenue that are bound to see a spike as a result of a club’s postseason appearance.

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2 Responses to “Who Profits from the Postseason?”

  1. JR

    Kristi – Great writeup! Are the amounts placed in the common fund and distributed according to the formula ticket revenue, or does it also include revenue from concessions, merchandise, etc?

  2. Tulip

    Kristi, fascinating stuff. Do have any actual numbers? I’m curious as to how much players, teams and MLB actually get. TIA


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