Earlier this year MLB Advanced Media chose to sell off BAMTech. That’s the arm of MLBAM that handles the streaming of MLB.tv (and a bunch of other high level products for other companies – including HBO). Jim Bowden was the first to report about the deal.

Craig Calcaterra of NBC Sports says that he’s spoken to people believe that the number could be even higher than $50M. Perhaps as high as $68M. There’s a pretty big difference between the two numbers. Both, however, would be a big boost to the revenue.

The question is, what will the Reds do with that money. There are a lot of options. First, they could just divvy it up to the ownership group. That, of course, wouldn’t go over well with fans, but it’s a possibility. The Reds could also split up the money and give some back to the ownership group while also putting some towards the team. Whether that’s directly to payroll, or investment in other areas.

The Reds could also just decide to put all of it towards payroll. That, however, seems unlikely. At least for 2018. Maybe they set it aside for later – perhaps a deadline acquisition if needed. The team knew this money was coming before the offseason began. They’ve basically stayed out of the market for anyone with a real amount of money being requested. What they’ve been looking at, it would seem, is players willing to sign 1-year deals, or picking up players on the trade market.

With everyone getting the same amount of money, one could argue this doesn’t help a team like the Reds. I will disagree with that. Larger market teams are certainly going to benefit from some extra money. But they are also looking at signing players to contracts that in total cost more than the total payment they will get from Disney. Smaller market teams aren’t in the market, even with this payment. But what it could do is make it easier for them to make several moves for role players and an every day non-star. It may also allow them to make moves at the deadline to take on salary that they otherwise would have struggled to make work.

Over the next two seasons it will be interesting to see just what the Reds do. If they see an influx in money spent, we may know where some of it has come from. If the payroll doesn’t go up, though, it could be a fair critique to suggest that the owners just kept the money rather than re-investing it back into the team.


34 Responses

  1. MK

    How will the fans know if they divvy it up among the investors? That is typically how it works. Investors invest to get a return on their dollars and I can not imagine these rich people are any different.

    • Matt V

      The thing is though, just like any business, there are two ways to generate a return, and one isn’t necessarily any better than the other: returning capital to shareholders (e.g. dividends), and re-investing in the business to increase its value.

      If you can find a good way to re-invest and increase the value of the business [in this case, baseball franchise], it can have a higher return in the long-run and can be the right move even from a pure monetary standpoint. If you can’t, then it makes sense for an owner to desire a return of capital. It’s hard for us as fans (and really, just hard in general, even if you’re deeply involved in the running of the business) to determine how much concrete value you’d get out of reinvesting.

  2. MK

    Completely off topic, but has there been a finalization between the Reds and Greenville team? Would think they would be needing to sell tickets and create their new branding by now.

    • Doug Gray

      No, still nothing official. That was as of about a week ago.

  3. Greenfield Red

    As fans we have to remember the $90 or so million the Reds spend on payroll does not count international money or draft money. However, they are going to have to spend more to compete, and I believe they will have to compete to keep fans interested.

    If this is not the year to start competing, I’d like them to save that money and continue to build through the farm. Next year they can then bring the youngsters to the majors and supplement with some additional major league spending to compete for a World Series. The question is, will they?

    As a side note, I really like what Atlanta did with regard to building their team by taking on expensive contracts and shedding a bad contract. I’d like to see the Reds help out some high dollar organization but with high end prospects, as well as a bad contract or two coming their way, to invest in the future.

    Simply said, the Reds have got to find an advantage somewhere when it comes to adding really good young talent.

    • Bill

      I like what Atlanta pulled off to. What worked for them is that they really needed a starting pitcher and infielder and were able to get them on a cost neutral basis while offloading a big dead contract (Kemp).

      The contract the Reds would have used to cover a comparable amount of money would have been Bailey’s ($48M guaranteed remaining compared to $43.5M for Kemp). The problem is that Bailey, in my opinion, is far more likely to generate positive WAR over the next 2 years than Kemp as Bailey seemed closer to returning to form in September. My guess is that the Dodgers would have preferred moving the contracts they moved plus Culberson rather than offer a prospect to the Reds (I’m guessing Reds would have wanted Verdugo to play CF).

  4. Colt Holt

    From a business perspective, the payout on MLBAM should be irrelevant to the day to day operations of the team. This was an investment which operated independently from the team, having value on its own, that was sold.

    If increasing spending will improve the profitability, that decision should be made independently of the presence of the cash.

    • RobL

      You are right Colt. This was money the owners put up outside of the team. They didn’t use the teams operating budget for the start up. The owners got together and made an investment, and are now reaping the benefit.

      Now, it does mean that the owners have extra money laying around. I believe if Bob C has a real opportunity to better the team he will dip into it. However, with an unknown rotation and SS, the time to invest is probably not now.

  5. Patrick

    The 30 million they got in 2017 went to the investors. This money has been known about for some time.

    The Reds with their analytics have figured out that from a bottom dollar standpoint their is no reason to put more than 100 million into payroll. The money to put a winner on the field is greater thab the money that they would generate in revenue. They just rather play the farm build game and hope to get lucky. It is the same basic plan they used under Linder and allen.

  6. Simon Cowell

    so if each team in a union based league run by the players gets a 50 million dollar bonus what happens? Hmm, the prices just went up by $51 million. This is not going to benefit the Reds or any other team. It just means that the price to purchase players went up.

  7. Shamrock

    The more I see of this current regime the more I long for the days of Jim Bowden.
    He was GM of the Reds in the same small market of little Cincinnati Ohio. Yet he always made moves and tried to actually win for us (Konerko, Cameron, Kelly, Portugal, Smiley, Vaughn, Gant, Bichette, Neon Deion, etc etc etc)

    Now, I’m sure you will argue that, even with all the moves and roster turnover he made, we still didn’t hang a banner during his tenure.
    But never once did he say to us “Yea, we’re not going to even try to compete for the division crown the next 3-4 years. Keep on supporting us though.”
    He at least tried to field a winner for us every single year.

    • Shamrock

      Heck, as a Reds fan the offseason was almost as exciting as the actual season was.
      We never knew exactly what top prospects/established stars Bowden was going to trade for or sign up as free agents.
      But every winter he did seem to make a splash or two. Which allowed us fans to dream that maybe this is the year it all comes together.
      “Dad, please let’s go buy some baseball cards, tickets, and apparel. The Reds have really got a chance this year. Did you see who they just signed??”

      • Datdudejs

        It’s ok son, I read that DW had some “good dialogue” at the winter meetings! Maybe that means the reds will be good when Joey Votto is 40. I’m sure he will still be crushing the ball then!

      • Colorado Red

        The off season is not over yet.
        Not everything happens at the WM.
        Chill man

    • MuddyCleats

      Well put; what a breath of fresh air calling it like it is!

      • Shamrock

        That was me as a 12-14 year old boy.
        Nowadays, as a Dad, it’s impossible to even get our kids excited about baseball in Cincinnati.
        I mean, what are we even supposed to say “Well son, if Peraza gets on the juice right now he may actually be about half as good as Cozart was last year”
        Or “Ya know sweetie, If everything goes absolutely perfect Hunter Greene will be a frontline mlb starter by the time you’re a sophomore in college.”

        It’s just not the same…….

      • Shamrock

        Ahh, one more huge name I forgot for a second that Bowden traded for and got us fans excited:
        KEN GRIFFEY Jr.

        And, when our All Star shortstop Barry Larkin was about to become a free agent we actually resigned him. (even though we did flirt with the idea of a trade on that one)

    • Earmbrister

      My fandom (feel free to wisecrack as appropriate) dates back to 1970. The Jim Bowden days are best forgotten. Yeah, there were plenty of moves, but the team never won much. I’ll forgo the splash for a methodical approach to building a team that contends year in, year out for several years as opposed to one and done. A few years ago everyone was singing the praises of the new GM in San Diego. He was bold, he was courageous … How did that work out?

      • MuddyCleats

        Yeah, and when was the last time Reds had a team that contended yr in and yr out w/ their current approach? Small Market teams hope to catch lightning in a bottle and then go for it. Reds have a decent lineup; but SP is the problem. I don’t think it’s asking too much to bring in one legitimate ML SP 2 help Castillo. Disco, Bailey, Finnigan and many others R coming off injuries. To think they’ll be ready to go all yr is unrealistic. The other young guys have been slow to develop. Castillo innings will need to be controlled. One avg BP arm is not going to solve all that. Reds need another young SP like Castillo to build around and trading Duvall or Hamilton isn’t the solution IMO.

  8. Piggly Wiggly

    Well at least the Bengals are doing something to get better.
    Too bad Dick Williams can’t make some personnel decisions soon.

  9. Bill

    Because this transaction was announced prior to the sale of the Marlins, this windfall would have been factored into the sale agreement of the franchise. So it is most likely the new group will not enjoy the benefit from this sale.

    I would expect the Reds to hold a portion of the money in hopes of competing in 2019 and distribute a portion to the ownership group. How it’s divided we will likely never know.

    The only way I could see this be used this season is if the Reds wanted to take on bad contracts to acquire a premium player. Although the Marlins are near their $90M payroll goal, there may be an opportunity to take on contracts such as Ziegler, Tazawa or Volquez to offset the prospects needed to acquire Yelich. The resources are there, but its unclear how motivated the Marlins would be at this point having moved Stanton and Ozuna’s contracts.

  10. Wes

    The reds aren’t a small market team. They spent top 10 in baseball when they were at their peak a few years ago. They paid homer all that money and votto. Small market teams can’t do that.

    Reality is that most, as in almost every, free agent contract benifits the player and not the organization. So you are basically throwing your money away signing free agents because they aren’t worth what you have to pay and toward end of contract they kill the organization. Like meseraco and homer.

    So it’s not small market or cheap- not signing guys is right thing to do. Reds could have easy easy paid cozart that money- it’s just not worth it.

    If reds can play billy ball with staples like votto they can compete for ws. Reds can pay 4 guys 12 mill plus all at same time but you u have to be patient and lock up right guys. Jocketty locked up wrong ones. Dick seems like a smart dude and I’ll give him benefit of doubt til he actually makes a move worth complaining over.

    • Doug Gray

      The Reds literally are the second smallest market in all of baseball. Only Milwaukee has a smaller market.

      • Wes

        Always seen market size as amount of funds you have and/or are willing to spend.

  11. Richard Williams

    Money, money, money, money, money. Money.
    The fans will see a small addition to the beer garden, a new eatery, and a couple of extra bobble head give aways. That is all the fans will see.

  12. HavaKlu

    Travis Wood is available virtually for free. Could he be that lefty in the pen or emergency starter? He would at least give the Reds, along with Lorenzen, the best pinch hitting pitchers in the majors!

    • victor vollhardt

      since the cost of his contract (most of which is paid for by the Royals and whats left is split with the Padres) is not very much—–it would be a low risk/possible high reward to bring to spring training. In any case he would have to pass a physical. So unless there is another (or off the field) factor it would be worth the try.

  13. James Vincent

    Does anyone pay attention to this team. The ownership group never has taken a dime out of this team. This is a regional development project that supports thier other businesses. They have always said that. They get their value by increasing the worth of the team. It’s already tripped since bob got it. Pay attention if you plan on writing about them please!

    • Shamrock

      Not taking a dime out of it doesn’t necessarily mean they’ve invested a single penny into it either.
      So, once again beckoning back to the Bowden era, it would be nice to have an owner who actually loves baseball and desires fielding a winner over worrying about the bottom line.
      Jim+Marge > Dick+Bob
      All day every day