Episode 187: David Samson (Former MLB Executive)

[00:00:00] Welcome to episode number 187 of the Marine Layer Podcast. We welcome on David Samson, former baseball executive and host of Nothing Personal. We'll talk with him about the dynamics of owning a baseball team, whether or not teams make money, and how this all relates to the Mariners.

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[00:00:46] follow us on Instagram, TikTok, Twitter, YouTube shorts, blue sky at Marine Layer pod. Let's get it rolling. And we welcome you to this episode of the Marine Layer Podcast, part of the Just Baseball Podcast Network recording on Monday evening, December 2nd. Lyle, who is holding up the hot stove this off season? Nothing is happening. Nothing. Well, actually, no, not nothing. Blake Snell signed. So that was something.

[00:01:26] Well, okay. So Seattle area people are allowed to sign with the super team of deferred money, which by the way, Blake Snell gets a lot of deferred money in that contract. Surprise, surprise.

[00:01:35] Hmm. I just think it's hilarious, by the way. Quick side note that everybody knows he wants to be a Mariner, but he has to pick a different option because the Mariners will not offer him the money. Like everybody knows if it was up to him, he'd be in Seattle.

[00:01:50] The Mariners could defer his money into 2082. I don't think he'd care. Great. By that point, there'll be a new ownership group. It's not the problem of this current one.

[00:02:00] It's like the Dodgers. Like, does the Dodgers current ownership group actually plan on paying this money out of their own pocket?

[00:02:07] That's a great question. Nobody's going to want to buy the Dodgers 10 years from now. So this ownership group, for their sake, I hope they stay because they're not going to sell this team.

[00:02:16] Well, they're not going to they wouldn't make money off. So they're I would say revenue wise. I'm going to take a guess and we'll talk about this a little bit with David Sampson coming up.

[00:02:24] But operationally, the Dodgers do make money and due to a number of factors or television deal, their relationships with brands in Japan now, etc., etc.

[00:02:35] But you're right. Teams don't owners or perspective owners don't want to buy teams that have outstanding debt.

[00:02:43] It's like buying a business that it's losing money. It's the same idea of that. So that'll be interesting.

[00:02:49] But that's the Dodgers problem, not the Mariners. We just missed the Mariners would make a move right now.

[00:02:54] I mean, we passed Thanksgiving this past week and Jerry DiPoto didn't make any moves.

[00:02:59] He must actually been focused on cooking this time. It's December.

[00:03:04] Mariners haven't made any moves by December. This never happens. They're always active.

[00:03:07] They're always right on the ball with this stuff. Yeah, who's holding it up?

[00:03:12] You could say Juan Soto, but I don't think it is because how many teams are really in on Juan Soto?

[00:03:17] I don't even really think the Dodgers are in on him. I think it's really the serious players.

[00:03:22] Red Sox, Yankees, Mets. If you want to throw the Blue Jays in, I guess the Blue Jays.

[00:03:26] Is it because those are the only teams that really want to spend money this offseason?

[00:03:30] Because most of the league is still in some version of TV flux? Maybe.

[00:03:37] That could be.

[00:03:38] It could be it. I think of it in the Roki Sasaki sense too.

[00:03:41] Some teams might just want to keep a roster spot open, given that he won't sign until mid-January.

[00:03:48] And if teams think they could sign him, their priorities of signing elsewhere on their roster change with that.

[00:03:55] That could be the case.

[00:03:56] Yeah, it's true.

[00:03:58] The other part of this is I don't know the quantity of moves the Mariners are going to make this offseason.

[00:04:03] The quantity may be down. Maybe they only make a couple.

[00:04:06] Hopefully the couple they make are of significance and impact, a.k.a. if they were to trade for Alec Boehm.

[00:04:12] That could take a while to come together if that's who they're really focused on, if that's what they're working toward.

[00:04:17] Rather than in a lot of other offseasons, they make a bunch of moves and they kind of flow in time after time.

[00:04:24] Maybe this year it's only going to be a couple.

[00:04:26] Isn't it weird to think about it?

[00:04:28] This time last offseason, the Mariners had already traded Eugenio Suarez away.

[00:04:33] And it was this past weekend a year ago, Lyle.

[00:04:36] If I have my timing right, they traded away Kelnick.

[00:04:38] Is that right?

[00:04:40] Yeah, what great vibes that was.

[00:04:43] Speaking of Gino.

[00:04:43] So from a content perspective, selfishly, I'd rather have that again.

[00:04:48] From a vibes perspective, you're right.

[00:04:50] It sucked.

[00:04:51] And from the perspective of wanting the team to be good, it sucked.

[00:04:54] Hey, you know who could use a third baseman right now?

[00:04:57] The Mariners.

[00:04:58] You know who went 30 and 100 last year and was one of the seven most valuable third basemen in baseball last year?

[00:05:03] Oh, that was Gino.

[00:05:05] Despite a really tough first half.

[00:05:07] It's funny today that on Monday, there's a Rosenthal article that gets published that's reporting that the Mariners were, in his words, looking to upgrade at third,

[00:05:19] believing that after the Mariners had previously asserted at the GM meetings earlier that they were looking to upgrade second.

[00:05:26] They were going to pick a position.

[00:05:27] They were going to pick second to upgrade.

[00:05:28] But Rosenthal's here saying they're looking at third base.

[00:05:32] What do we choose to believe here?

[00:05:36] I don't know if I can choose to believe anything.

[00:05:39] Until they actually physically transact and make moves, I don't know what to believe.

[00:05:44] I think we know they're going to try and upgrade on the infield.

[00:05:46] Do I like how they're operating this offseason?

[00:05:49] No, that's no secret.

[00:05:51] Everybody who listens to this podcast knows that.

[00:05:53] Anybody who knows me knows that.

[00:05:54] You know that.

[00:05:55] You feel the same way.

[00:05:56] Operating with a $60 million payroll is a joke.

[00:05:58] That being said, if the Mariners are going to make impact moves this winter, now focusing just on the Rosenthal report,

[00:06:09] doesn't it make more sense to actually gear that focus towards second base?

[00:06:14] And I know.

[00:06:15] I just said that the Mariners trading for Alec Boehm would be great.

[00:06:17] I think it would be.

[00:06:18] The problem is, once you get past Alec Boehm, who are you acquiring to play third base?

[00:06:24] Yes.

[00:06:25] There's way more options over at second, whether it's Nico Horner, whether it's HaSung Kim, whether it's others.

[00:06:31] At third base, it's Boehm, and then what?

[00:06:34] That's what the Mariners say in their farm system, too, though.

[00:06:37] If you list out the options the Mariners could play at second, it's Dylan Moore, Ryan Bliss,

[00:06:43] and you could put Leo Rivas at second base, and you could put Cole Young at second base.

[00:06:48] Right.

[00:06:48] They have the options there.

[00:06:49] And that's why the Rosenthal report likely has that they are more interested in third base,

[00:06:55] and Rosenthal mentions that in his report, that the Mariners feel better internally about what they have at second

[00:07:01] than what they have at third.

[00:07:02] And look, by the letter of the law, and by definition, I understand what Rosenthal is saying.

[00:07:07] If a ground ball was to roll to second base or to roll to third base, where do you have more depth right now?

[00:07:13] Second base.

[00:07:13] Second base.

[00:07:14] Are either good options for everyday players?

[00:07:16] No, but they do have more options at second base by definition.

[00:07:22] Yes, Dylan Moore can play plenty at second base.

[00:07:24] I also think Dylan Moore is much better suited in a utility role than he is in an everyday role.

[00:07:30] But yeah, if they have to find options at second base, they can do it.

[00:07:33] I don't know what they're going to do at third base.

[00:07:35] I think it was a friend of the pod, Jason Churchill, was tweeting about this earlier and noting that as the offseason rolls along

[00:07:42] and teams canvas for what's actually available, needs do change.

[00:07:46] It could very well be that when Justin Hollander mentioned at the GM's meetings that the Mariners were focusing on second base,

[00:07:52] they spent the last few weeks calling around about second basemen, checking on the availability of free agent second basemen,

[00:07:58] and realized, huh, I don't think that's realistic.

[00:08:01] It's more realistic to go after third base.

[00:08:04] That's a real thing right there.

[00:08:06] So when you look at it that way and you look at what the Mariners have internally,

[00:08:13] if that is true, the first part I mentioned, what I think Jason mentioned on Twitter,

[00:08:18] if that part is true, then this part makes a whole lot more sense.

[00:08:21] I don't think Mariners fans really care which position the Mariners go upgrade,

[00:08:24] because they're not going to be able to truly upgrade at all three positions given the budget they have.

[00:08:29] But you just want one, right?

[00:08:31] You just want one serious acquisition at these positions.

[00:08:36] That's all you want.

[00:08:37] It can't be in three weeks from now it's like, oh, we're going to pivot on to the first base market now

[00:08:42] because we don't like what we see at third.

[00:08:43] It's like that's not giving us very much confidence because now you've gone in a circle around the entire infield,

[00:08:49] which if we're being realistic, Lyle, where there is the most options is at first base,

[00:08:54] yet it has not been mentioned.

[00:08:56] No, they need to upgrade at two positions.

[00:08:58] Are they going to do that?

[00:09:00] That's a different question.

[00:09:00] They need to upgrade at two positions.

[00:09:03] I think that's what Mariners fans should be settling on, not one.

[00:09:05] Oh, and bullpen, by the way.

[00:09:07] Yes.

[00:09:07] But you mentioned I think Mariners fans just want to see one upgraded.

[00:09:11] No, I think they want to see at least two upgraded.

[00:09:13] It's just the team has yanked down the expectations so low that people have settled with one.

[00:09:19] I haven't seriously upgraded at multiple positions since what?

[00:09:26] I don't even know.

[00:09:27] Right.

[00:09:28] So that's why I just want one.

[00:09:30] Yeah.

[00:09:30] Because people don't even have the confidence they're going to do one.

[00:09:33] Right.

[00:09:34] Because what you're saying is they haven't done it in years, years and years.

[00:09:37] So, I mean, after the 22 offseason, it was Teoscar Hernandez was the upgrade.

[00:09:42] That was a serious outfield upgrade.

[00:09:45] Mm-hmm.

[00:09:45] Where was the other one?

[00:09:46] They didn't do another serious one.

[00:09:49] Colton Wong, as we could tell at DFA midseason, was not a serious upgrade.

[00:09:53] I think the idea was a serious upgrade, but the execution of it was not.

[00:09:57] Right.

[00:09:58] Jorge Polanco last year was supposed to be the big one?

[00:10:00] Didn't happen.

[00:10:01] Didn't happen.

[00:10:02] Mitch Garver was supposed to be a big one?

[00:10:03] Didn't happen.

[00:10:04] Got to mode it.

[00:10:04] They have not been able to do two serious acquisitions.

[00:10:09] So that's why when you look at this, one would be a great start.

[00:10:14] Because people are paranoid.

[00:10:16] Read our comments.

[00:10:17] To all of you that listen and don't spend time commenting on our things and might just

[00:10:21] think, while I'm reiterating some of these points to try and hammer home, especially

[00:10:26] about the relievers, by the way.

[00:10:27] They do need a reliever really bad in that bullpen.

[00:10:30] High leverage would be great.

[00:10:32] I know some of you listening don't read our comments all the time, but there is a paranoia

[00:10:38] out there from a large swath of people that they're not going to do anything.

[00:10:42] That's why I think one is just so important.

[00:10:45] Because one, even if it's not perfect, Lyle, even if it's not perfect, one serious upgrade

[00:10:53] in the offseason and a bounce back across this roster leads to a potential playoff position.

[00:10:59] Am I wrong?

[00:11:00] How do you think those calls went between Jerry and Justin when they were trying to figure

[00:11:04] out how to upgrade at second base?

[00:11:05] Do you think they called Haesung Kim's camp?

[00:11:07] It was like, hello?

[00:11:08] They were interested in Haesung Kim?

[00:11:10] Oh, $10 million a year?

[00:11:12] Yeah, we're out.

[00:11:14] Bye.

[00:11:16] Hang up the phone.

[00:11:17] Well, now they should go to Haesung Kim.

[00:11:19] No, absolutely not.

[00:11:21] And I'm totally kidding.

[00:11:22] They shouldn't, but that's in their budget.

[00:11:26] While we're on this topic, I'm spending 30 seconds on this.

[00:11:29] I think Haesung Kim is Josh Rojas, who, by the way, they just let go.

[00:11:34] I think he's a good defender and isn't going to hit in the big leagues.

[00:11:38] I will be shocked if his WRC plus in his first year is over 95.

[00:11:42] In other words, that is Josh Rojas.

[00:11:44] And if you spend real money on that, I'm not going to be happy.

[00:11:49] And it's going to cost more.

[00:11:51] Mm-hmm.

[00:11:52] Again, I think Haesung Kim is Josh Rojas.

[00:11:56] Can you not wait for winter meetings?

[00:11:57] Jerry's going to trade for someone while we're at winter meetings.

[00:12:00] Are we going to make a scene while we're there in the ballroom or wherever the main common area is?

[00:12:05] Well, it just depends what it is.

[00:12:07] And by we, I mean me.

[00:12:11] Yeah.

[00:12:11] I mean, you.

[00:12:12] I can be tame emotionally in public.

[00:12:15] Yeah, TJ.

[00:12:17] One, TJ doesn't quite get worked up as worked up as I do.

[00:12:20] He'll get worked up, but not to my level.

[00:12:21] And yeah, he's probably better about keeping it together in public.

[00:12:24] If the Mariners do something stupid while we're at the winter meetings, I cannot guarantee I won't just be unhinged.

[00:12:29] What's going to be the best thing, though, is like Jerry's finishing it walking down the hall, like across the hotel.

[00:12:34] But we're all going to be on the ground level.

[00:12:36] So he's going to make the trade.

[00:12:39] Rosenthal or Paston's going to tweet it out.

[00:12:40] You're going to go,

[00:12:41] Fuck!

[00:12:43] And Jerry's going to be like, Oh, was that because of me?

[00:12:47] Oh, is that those Mariners podcasters?

[00:12:51] Oh, boy.

[00:12:52] But then we're going to walk over to Mike and Jerry, first reaction.

[00:12:58] Would you like our reaction to the trade?

[00:13:02] Not really, guys.

[00:13:04] What?

[00:13:05] Why not?

[00:13:05] Can you give me 15 seconds?

[00:13:10] Well, it's like, why don't you want our reaction?

[00:13:12] Well, I heard you across the hall in front of all these people.

[00:13:16] It's like, I'll be calm.

[00:13:17] It's like, I don't think so.

[00:13:19] Right.

[00:13:20] Speaking of which, another reminder, if you guys are going to be at the winter meetings next week for any of you that might be listening, please let us know.

[00:13:26] We'd love to meet up.

[00:13:27] We'd love to come say hey.

[00:13:28] We'd love to talk ball, etc.

[00:13:29] So, a couple of you have already reached out.

[00:13:34] If there's more of you that are going to be there, seriously, please let us know.

[00:13:38] So, we'll talk about some of these.

[00:13:42] It's, I mean, so, yeah, I'm looking forward to it.

[00:13:44] So, please, please reach out to us.

[00:13:46] Send us a DM.

[00:13:47] Add us.

[00:13:47] If you're going to be there in Dallas for winter meetings, that would be awesome.

[00:13:52] I'm looking forward to this conversation with David Sampson, Lyle.

[00:13:54] Really fun.

[00:13:55] Former executive for 16 years with the Marlins under Jeffrey Loria, also a former executive of the Montreal Expos.

[00:14:04] He does a great job of explaining the dynamics between front offices and ownership, which I know is a hot topic this offseason.

[00:14:14] I can't wait to get into it.

[00:14:15] And let us preface it a little bit more here in just a minute.

[00:14:18] Before that, let's take a pause.

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[00:14:25] You guys know, with sports going in full swing, NFL season's getting really exciting.

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[00:14:31] Conference championship games are this week.

[00:14:34] Arizona State's in the Big 12 title game.

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[00:14:37] So, if you want to go watch a bunch of games, basketball, hockey too, head over there.

[00:14:41] You can have some great food, play pool, play darts.

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[00:14:52] So, if you need more of a sales pitch, awesome drinks, fun time with your friends, go watch a bunch of sports,

[00:14:57] all that is over at Pogaccia's Pub 85 in Kirkland.

[00:15:02] Yeah, we wanted to have David on because, yet again, for the second offseason in a row,

[00:15:09] the biggest headline in Mariners' world seems to yet again be ownership and their commitment or lack thereof

[00:15:15] to fielding a successful on-field product that is capable of truly being a contender and a powerhouse.

[00:15:23] That seems to be the overarching headline yet again.

[00:15:26] We talked about it a bunch last offseason.

[00:15:28] The two of us discussed it plenty.

[00:15:30] We had a couple people on, some reporters on last year to help try to contextualize it to some extent.

[00:15:37] But we really wanted to get David on this offseason because he is somebody who's been in front offices,

[00:15:43] been in ownership groups, he's been in these meetings.

[00:15:46] You get a sense of how he thinks and how owners think with this.

[00:15:50] I can guarantee you this.

[00:15:51] I don't think you guys are going to agree with all of it in terms of what he says, but it's fascinating.

[00:15:57] And we didn't agree with all of what he says.

[00:15:59] We were fascinated to listen and we'll react to some of this after the interview.

[00:16:03] But hearing what he said, there were things that were clicking in my head that didn't click before.

[00:16:09] Look, guys, this is going to be a different perspective.

[00:16:12] I just want you guys to gear up for that as you listen to this interview.

[00:16:15] A different perspective from people we have had on in the past to talk about that.

[00:16:20] And that's why I'm not going to hold you guys up any longer.

[00:16:23] Let's get you to that interview with David Sampson.

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[00:16:53] All right, we've got David Sampson on with us, former executive for the Miami Marlins and the Montreal Expos.

[00:17:05] He's also the host of Nothing Personal with David Sampson, part of Metal Ark Media.

[00:17:10] David, thanks so much for taking some time to join us.

[00:17:12] I wanted to start off sort of tying in your old career and your now current career,

[00:17:18] because for some of our listeners who might be unfamiliar with your work,

[00:17:22] you served in a pretty high up level of the Marlins and the Expos organization.

[00:17:27] And now you're just like, kind of like Lala and I, and you do a show every single day.

[00:17:32] So how unique is it for someone that held a position like you held to be doing such a front-facing show like you currently do?

[00:17:41] Well, I was president of the Marlins for 16 seasons.

[00:17:45] And in 2017, when I got fired by a text alert from ESPN that Derek Jeter was firing me,

[00:17:53] I was the second longest tenured president in all of baseball.

[00:17:56] And I would say 24 hours after I was let go, which I knew I was going to be,

[00:18:01] because I had orchestrated the sale of the team to Derek Jeter, so I knew he wasn't going to keep me.

[00:18:07] And when his first box arrived in my office, I knew that something was amiss.

[00:18:11] But I immediately knew that I wanted to get into media because I had been front-facing and sort of the public face of both the Expos for two seasons and then the Marlins for 16.

[00:18:21] And I was ready for the next career.

[00:18:23] And I immediately started with CBS Sports right after early 2018.

[00:18:30] And then I was approached to start a show.

[00:18:33] And I thought of an idea called Nothing Personal.

[00:18:36] And Nothing Personal with David Sampson is a daily show.

[00:18:39] And it really gives people insight into demystifying what goes on in front offices around sports.

[00:18:45] And I tell stories and sort of analyze what's happening when people are talking to the media because I did that for 18 years.

[00:18:53] And I always had an agenda.

[00:18:55] And there was a lot of bait and switch and misleading that I was doing purposefully,

[00:19:00] both to get better players, to get better players cheaper,

[00:19:04] to get our fans to buy tickets as much as they could or would,

[00:19:08] to give hope, however false it may be.

[00:19:10] And so this is a show that's dedicated to just a lot of truth-telling.

[00:19:14] And I'm a pretty forward person.

[00:19:16] And when I got the invite to come on your show, I was happy to do it.

[00:19:20] As you know, it's hard to do a daily show.

[00:19:22] It's hard to do a show of any kind.

[00:19:24] And I've been doing Nothing Personal for five years.

[00:19:26] And it continues to grow.

[00:19:28] And it's a fantastically fun but daily grind.

[00:19:33] The name of it, Nothing Personal, I think ties back to sort of the main subject of,

[00:19:39] I think, what we'll talk about today with the dynamics between ownership and front office and fans.

[00:19:45] But the title itself, Nothing Personal.

[00:19:48] I would imagine the idea behind that is how a lot of teams operate are saying,

[00:19:53] look, it is nothing personal to all of you.

[00:19:56] This is business.

[00:19:57] Is that correct?

[00:19:58] Yeah, I end every show with a line, it's just business.

[00:20:02] This is nothing personal.

[00:20:03] And I use that line a lot during my career.

[00:20:07] You're crushing a lot of dreams as a team president, whether it is fans when you don't win and there's 29 losers every year.

[00:20:14] Or whether it's players who you're releasing or sending back to the minor leagues.

[00:20:18] There's always some negativity that you're associated with.

[00:20:22] But on the other hand, I loved what I did because we were in the memory making business.

[00:20:26] And we did a lot of cool things like winning a World Series and getting in ballpark and hosting an All-Star game.

[00:20:33] So there's all sorts of great dichotomies when you're the president of a team.

[00:20:37] And if you're going to be someone who's front facing, you've got to be there when things are bad and when things are good.

[00:20:43] And that was my specialty through my 18 seasons.

[00:20:46] And that's what I continue to do on the show.

[00:20:47] And that's what we should talk about here today if you want to, that there's so much that goes into making a team.

[00:20:53] And it is hard to be a fan of a sports team because you are signing yourself up for disappointment.

[00:21:01] Because there's only one winner at the end of every season.

[00:21:04] And so when your customers, by definition, are going to be disappointed with your product, but you want them to keep engaging with it.

[00:21:11] And keep spending their money and their time, it's a very interesting relationship that you have with the media and with the fan base and with people really around the country or the world.

[00:21:22] And I like digging into that and talking about that.

[00:21:25] So I want to dig back into something you just said after I ask you this about your show, about the information you've brought to people since joining the media.

[00:21:34] What is something that you've shared that you feel like fans really didn't know about how sports teams franchises are run until you shared the information?

[00:21:44] And people were like, oh, I didn't know that.

[00:21:47] I think a lot of what I do is when there are press conferences and press releases, I translate them and explain to people why teams are saying what they're saying.

[00:21:55] When there are firings of coaches or general managers or the process of signing a player, I was responsible for signing Giancarlo Stanton at the time.

[00:22:04] It was the biggest contract in North American sports.

[00:22:06] And talking through how that process is, how you deal with things throughout the course of a year.

[00:22:11] I had a death.

[00:22:13] You know, Jose Fernandez tragically died.

[00:22:15] And talking through that, there's just really every sort of experience from losing 100 games to winning a World Series,

[00:22:21] from trading away all your players to signing a bunch of the best free agents and explaining how all of those processes work.

[00:22:28] I think it's important for fans and listeners, and it's been borne out by the size of the show.

[00:22:33] People want to hear this.

[00:22:34] They want to hear the stories.

[00:22:35] And I've always told people I'm not curing cancer.

[00:22:38] I'm not splitting the atom.

[00:22:39] I'm merely telling people how things really worked and trying to take some of the mystique away from what people perceive as these very secretive things and brilliance of sports people,

[00:22:51] when in fact, we're really just like everybody else.

[00:22:55] So you mentioned signing up to be a sports fan is extremely hard.

[00:22:59] The two of us could sit here and tell you, absolutely.

[00:23:01] We go through it every day with a team that's never made the World Series.

[00:23:04] But I've wanted to have this question answered for so long, I'd probably sit around and think about it way too often.

[00:23:11] And you feel like somebody that would be a great person to ask it to.

[00:23:14] So here we go.

[00:23:15] Why do owners and these billionaires that own teams decide to get into it?

[00:23:20] And it's a little more of a deep question than that because I'm sure you're going to respond and say, well, money.

[00:23:24] It's super profitable.

[00:23:25] You can make a lot owning a team.

[00:23:27] But these billionaires, well, one, they're rich to begin with.

[00:23:30] And number two, there are a lot of ways post-careers for whatever these guys have done for most of their lives to continue to make money as they go on through life.

[00:23:39] But I guess I've always looked at owning a team as something that was supposed to be a way to give back to the community,

[00:23:46] give back to your fans to try to really invest in something for your city.

[00:23:49] But as we all know, there's a lot of owners in the game that don't really operate like that.

[00:23:55] Yeah, I don't want to burst your bubble, but let me start at the beginning of your question and tell you that many of the owners who got into the game in the 90s and early 2000s,

[00:24:05] they got in at pretty low prices.

[00:24:08] And when you call them billionaires, their assets may be worth billions, but they are not actual liquid at all.

[00:24:14] They've got a lot of their money tied up in teams.

[00:24:17] And the teams, many of them do not make money operationally.

[00:24:20] And they're forced to borrow money or pledge their other assets or use their savings in order to operate teams.

[00:24:28] And of course, you can get it all back when you sell.

[00:24:30] But the reason why very many owners don't sell and they hold for a long time and the main reason they get in was perfectly stated by Steve Ballmer when he bought the Clippers.

[00:24:41] And he had a great story that he told.

[00:24:43] And it is exactly spot on.

[00:24:46] He was one of the founders of Microsoft.

[00:24:48] He was an actual liquid billionaire.

[00:24:51] And he said, I can't get into any restaurants in L.A.

[00:24:56] I bought the Clippers and I can do whatever I want whenever I want to.

[00:25:00] I make a call and say to Steve Ballmer, I want to have dinner at 822.

[00:25:03] And they will open the red carpet and he'll have a table wherever he wants.

[00:25:07] And there is such ego involved because there's so few opportunities to own teams.

[00:25:12] And when you're an owner of a team, you're just treated in a way that you were not treated even if you started or worked in a huge company.

[00:25:21] There was an owner of the Astros.

[00:25:22] His name was Drayton McClain.

[00:25:24] Very successful businessman.

[00:25:25] And he and I would talk often about how funny it was to own a team and how you would try to take the lessons that you basically did to build up your company or to build up your other business and apply them in baseball.

[00:25:42] And it doesn't work.

[00:25:44] And owners get super frustrated by that.

[00:25:47] Ted Lerner of the Nationals, rest in peace, one of my mentors, another great example, a hugely successful real estate man.

[00:25:54] He tried to run the Nationals like his organization and it totally failed.

[00:25:59] And so owners are very interesting creatures.

[00:26:02] And the one adjective I would use to describe almost all of them, they're incredibly thin-skinned.

[00:26:08] They're not used to being in public.

[00:26:10] They don't like being criticized.

[00:26:11] They want all of the accolades.

[00:26:13] They love when their hands are shaking and they're asked for autographs and pictures.

[00:26:18] They don't like reading bad stuff about them.

[00:26:20] They don't like any negativity.

[00:26:22] And they always believe that they're right because they're powerful.

[00:26:25] So it's a very interesting dynamic that happens in ownership and even down to a team president where you're used to getting what you want when you want it.

[00:26:35] And then you realize that the vagaries of the game on the field are totally beyond your control.

[00:26:40] So, and just last thing, the reason why you see managers get fired and GMs get fired is because owners are thinking that there's a fix to everything.

[00:26:49] That there's a logical reason why you lose a game.

[00:26:52] And therefore, if you just fix it, then you won't lose a game.

[00:26:56] And it takes a long time as an executive to understand that there are just certain things that are what they are.

[00:27:03] So then what are the traits of an owner that is largely successful?

[00:27:09] I would say the biggest trait is to let people do their job.

[00:27:13] But I would say that's the trait of a successful CEO of any company.

[00:27:16] And the thing about owners is that you think that your owner meddles.

[00:27:21] And I don't know if you think your owner does meddle.

[00:27:23] But I'll tell you, 30 owners meddle.

[00:27:25] And it may be degrees of meddling.

[00:27:28] But don't kid yourself.

[00:27:30] Every time an owner tells you that, hey, you know, my GM just, I let him do what he wants.

[00:27:35] I give him the payroll and the rest is up to him.

[00:27:37] It's total horse hockey.

[00:27:38] The owner knows everything that's going on, doesn't read anything in the paper about his team,

[00:27:43] and will call up his GM and say, I want to sign this guy, trade that guy, do this,

[00:27:48] call the manager and say, why don't you hit and run?

[00:27:50] And these owners think they're baseball people.

[00:27:52] And the majority of them simply are not.

[00:27:55] You mentioned something in your second, your two answers ago,

[00:28:00] where you mentioned that not all these teams operationally make money.

[00:28:05] I'd like to dive into that a little bit more.

[00:28:07] Where are the shortcomings for some of these franchises that they see their bottom line go into the red?

[00:28:13] Where are they missing out where other franchises aren't?

[00:28:16] So the rule that I was taught my first day by Bud Selig is that if your player payroll is 50% or greater of your revenue,

[00:28:24] you are going to lose money.

[00:28:26] And he was right 25 years ago, and he's right today.

[00:28:31] And that is the general rule of thumb.

[00:28:33] No coincidence that if you look at a salary cap league like the NBA,

[00:28:36] there's a general rule of a 50-50 split for revenue for payroll because that's about as high as you can go.

[00:28:44] But there are owners who go higher.

[00:28:46] I can tell you the New York Mets are a great example.

[00:28:49] They get crushed operationally, crushed.

[00:28:52] And you think that because he's a billionaire, he'll keep doing it forever.

[00:28:56] He won't, number one.

[00:28:57] But number two, his payroll is so high that he doesn't have the revenue to cover it.

[00:29:02] But he's willing to do it because he's a new owner and very much wants to win.

[00:29:07] But what you've been noticing is that there's not a direct correlation between size of your payroll and winning,

[00:29:13] despite the fact that the Yankees and Dodgers were in the World Series recently,

[00:29:17] and they were two of the top three payrolls.

[00:29:19] It really hasn't been like that.

[00:29:21] And so I would just tell you that every owners meeting, we would see on the screen,

[00:29:28] they would just show us the teams, the teams EBITDAs, the industry EBITDAs,

[00:29:34] which means whether a team is making money or losing money,

[00:29:37] and the cash flow of teams, and the overwhelming majority of teams did not make money.

[00:29:43] And Bud Selig would say to us,

[00:29:45] what are you guys doing?

[00:29:47] And we were, it was all men at the time,

[00:29:49] and maybe Pam Gardner of the Astros was the one woman in the room.

[00:29:52] You put yourself through hell for 162 days a year.

[00:29:56] You're going to lose at least 60 games every year if you're the best team.

[00:30:00] And then you're going to lose money at the end of the year?

[00:30:03] What's wrong with you people?

[00:30:04] And he would do it with a little more swearing and a Diet Coke in his hand.

[00:30:08] But his point was always listened to by owners, but never followed.

[00:30:13] Does that mostly, does it mostly come back to TV money?

[00:30:17] Like we've seen the last year plus with some of these RSNs,

[00:30:22] where that gap is where the teams that make money separate themselves?

[00:30:26] Well, not necessarily, because they're teams with great broadcast revenue

[00:30:30] that don't necessarily make money.

[00:30:31] The Yankees are a great example.

[00:30:33] They used to take out a lot of money from the Yes Network,

[00:30:35] and so their team would lose money,

[00:30:37] but the owners would be fine because Yes Network was throwing off so much cash.

[00:30:42] But then they sold off a bunch of Yes Network.

[00:30:44] They took a payment and spent that,

[00:30:46] and they've been running huge payrolls to no avail, as Yankee fans know.

[00:30:51] And so eventually, you just realize that you've got to run a break-even business

[00:30:56] if you've run out of the ability to borrow money,

[00:30:58] and you don't want to put your own money in.

[00:31:00] The disruption of the RSNs is a huge deal

[00:31:03] because your TV revenue is a huge percentage of your overall revenue for all of the teams.

[00:31:09] And when it is in jeopardy the way it is now,

[00:31:12] and when the value of the owned networks goes down,

[00:31:16] like for Yes and Nesson and Masson and SNY,

[00:31:21] it really does eventually impact your team and your team payroll.

[00:31:26] So you mentioned Steve Cohen.

[00:31:28] I have two questions about him and things surrounding him.

[00:31:32] Number one, you sound like you don't think he can operate like this forever,

[00:31:37] which maybe sounds obvious because he spends like crazy,

[00:31:40] but is it as short-term as you're kind of alluding it to be?

[00:31:44] Is it only going to be for another couple years you think that he can do this

[00:31:47] before it catches up to him?

[00:31:48] It depends when he wins,

[00:31:50] but I'll tell you when you buy a team,

[00:31:51] you get five years of amazing tax benefits

[00:31:53] because of amortization and depreciation of the assets that you've purchased.

[00:31:58] It's a technical thing,

[00:31:59] but the bottom line is that you can stand to have losses

[00:32:03] because you can use those losses.

[00:32:06] But when that five years runs out,

[00:32:08] your financials look completely different.

[00:32:11] Steve Cohen very easily with what he spent on the Mets

[00:32:14] could have had in his mind that he was buying them really for 2-7

[00:32:18] and that he was going to lose $600 million

[00:32:20] and just bounce that off as a purchase price, frankly.

[00:32:25] So there will be a limit.

[00:32:27] You just don't know when it is,

[00:32:28] but I would say that it's not this year,

[00:32:31] but I would say I can see it from here.

[00:32:34] How much do owners look at the balance

[00:32:35] between some of the money they lose

[00:32:38] and then how much their team appreciates every year?

[00:32:41] It's a great question.

[00:32:43] So I'll tell you what I did with our owner

[00:32:45] because we lost money every year of my 18 years,

[00:32:47] which isn't a great reflection to me

[00:32:49] except for maybe three of them.

[00:32:51] And what I would say to the owner is,

[00:32:53] why don't you reallocate your assets,

[00:32:55] sell one of your pieces of art,

[00:32:56] borrow money, use your cash

[00:32:58] because if we lose $20 million by having a payroll

[00:33:02] where we have it,

[00:33:04] I promise you your team is going to go up in value

[00:33:06] by more than $20 million.

[00:33:07] So if you can handle the short-term cash loss,

[00:33:12] then it's worth it

[00:33:13] because you'll get it back on appreciation.

[00:33:15] And for our owner, that made sense

[00:33:17] because his entry price was low enough

[00:33:20] that he was making money on a sale

[00:33:22] whenever that would come,

[00:33:23] even if it would come with his estate after death.

[00:33:26] Which it didn't turn out.

[00:33:28] He sold the team in 17 after Jose Fernandez died.

[00:33:31] But for many of these teams,

[00:33:34] their entry price now,

[00:33:35] take a look at the recent deals

[00:33:37] where the price is higher.

[00:33:40] Like Bruce Sherman of the Marlins paid $1.2 billion.

[00:33:43] He's been losing money since 2017

[00:33:45] and he's not seen a return on that money at all

[00:33:49] because the team isn't worth more than $1.2.

[00:33:52] As a matter of fact,

[00:33:53] he'd sell it today at $1.2,

[00:33:55] but no one would give him that.

[00:33:56] So it depends what your entry price is.

[00:33:59] Are these teams just compiling up outstanding debt

[00:34:01] with like banks?

[00:34:04] Or like you said,

[00:34:05] borrowing against other assets they own?

[00:34:07] Like for the Mariners,

[00:34:08] if this was the case for them,

[00:34:10] it would be Root Sports, I would imagine.

[00:34:12] Yeah, there's several places where you get debt.

[00:34:14] The first is there's industry debt,

[00:34:16] which is a line of credit

[00:34:17] or a borrowing that Major League Baseball does

[00:34:20] and uses its national TV deals as collateral

[00:34:23] and allows each team to borrow an amount of money

[00:34:26] based on that as collateral.

[00:34:27] Then you've got owners who borrow money

[00:34:30] with the team as collateral.

[00:34:32] Then you've got owners who borrow money

[00:34:34] with their other assets as collateral.

[00:34:36] And then you have a cap.

[00:34:38] There's something called the debt service rule

[00:34:40] in Major League Baseball,

[00:34:41] which limits the amount of debt

[00:34:43] that you can have on your team.

[00:34:45] And if you're in violation of it,

[00:34:47] you've got to put money into your team.

[00:34:49] And baseball has many teams in violation

[00:34:53] and it forces owners to adjust.

[00:34:56] So let me give you the best example.

[00:34:58] The Padres,

[00:34:59] total violation of the debt service rule,

[00:35:01] a totally irresponsible payroll.

[00:35:03] And guess what?

[00:35:04] Their payroll went down significantly

[00:35:06] from two years ago to last year.

[00:35:09] And I would bet you it goes down again

[00:35:11] because while they sell out

[00:35:13] and they have a waiting list for season tickets,

[00:35:14] they're not making money.

[00:35:16] They're bleeding money.

[00:35:17] And so you have to adjust your payroll.

[00:35:21] By the way, one more thing.

[00:35:22] Sorry, look at the Phillies.

[00:35:24] John Middleton just sold

[00:35:26] maybe 10% of the team.

[00:35:29] You can sell your shares in the team

[00:35:31] to bring in money.

[00:35:32] And it's not being used to get Juan Soto.

[00:35:35] It's being used to pay down debt

[00:35:37] in order to get your balance sheet in order.

[00:35:39] So that's another way

[00:35:41] that owners can raise money for their team.

[00:35:43] If you own 80%,

[00:35:44] you can sell 10%.

[00:35:45] But you'd be shocked

[00:35:47] at the number of owners

[00:35:48] and the faces and names that you know

[00:35:51] and how much of the team they actually own.

[00:35:53] Hmm.

[00:35:54] This is all really interesting.

[00:35:55] Speaking of ownership stake,

[00:35:57] the other Steve Cohen question

[00:35:58] I wanted to circle back to

[00:35:59] is when it comes to decision making

[00:36:02] by an ownership group.

[00:36:03] How much easier is it

[00:36:06] when you are a large, large majority owner

[00:36:11] like Steve Cohen is

[00:36:12] where he owns roughly 95% of the New York Nets

[00:36:14] compared to the Mariners

[00:36:16] where there's roughly 14 to 18 people

[00:36:19] on this ownership group.

[00:36:20] And I would imagine,

[00:36:22] I'm not a fly on the wall in there,

[00:36:24] but I would imagine it's hard to make decisions

[00:36:26] and to get 18 people

[00:36:27] to come together on an agreement.

[00:36:28] So how much harder is it

[00:36:29] when it's one person versus a group?

[00:36:31] Yeah, there's nothing so limited

[00:36:32] as being a limited partner in a baseball team.

[00:36:34] You're not getting any say

[00:36:36] over signings, trades, anything.

[00:36:38] You may get a few board meetings a year.

[00:36:39] You may get a little nosh

[00:36:41] and you may get a, you know, a Mariners cap.

[00:36:43] But there is a control person

[00:36:45] and that control person is in charge of the team

[00:36:48] and every decision the team makes.

[00:36:49] And the control person gets his power

[00:36:52] from his partnership agreement

[00:36:54] with his other partners,

[00:36:55] with the other owners.

[00:36:56] So you do, you never,

[00:36:58] and every partnership agreement

[00:37:00] may be different.

[00:37:01] So there could be a partnership agreement

[00:37:02] where there's a clause that says

[00:37:04] you can't sign a free agent

[00:37:06] for over $500 million

[00:37:07] without permission

[00:37:09] of a majority of the partners.

[00:37:11] So there can be examples,

[00:37:13] but the overwhelming majority of decisions

[00:37:15] are made simply by the control person

[00:37:17] and the team.

[00:37:19] Why is a team like the Dodgers

[00:37:21] able to be such an anomaly

[00:37:23] when it comes to spending habits?

[00:37:25] And it just,

[00:37:26] it feels more sustainable

[00:37:28] with what they're doing.

[00:37:29] Well, the number one thing is

[00:37:31] when Mark Walter bought the team,

[00:37:34] something happened.

[00:37:35] Remember, they bought the team

[00:37:36] from Frank McCourt

[00:37:37] who had to sell the team

[00:37:38] because of a divorce.

[00:37:40] And it was a very interesting sale process.

[00:37:43] It was an auction,

[00:37:44] but it was fixed

[00:37:45] and it was going to Guggenheim Partners,

[00:37:46] Mark Walter.

[00:37:47] And what they did

[00:37:48] to get the sale price up,

[00:37:50] and if you recall,

[00:37:51] way back when they bought it,

[00:37:53] it was a record at the time,

[00:37:54] but it was really an inflated number

[00:37:56] because what baseball did

[00:37:59] is they had a prearranged deal

[00:38:01] for a new TV deal

[00:38:02] with Comcast

[00:38:04] that gives them hundreds of millions

[00:38:06] of dollars a year

[00:38:07] in broadcast revenue

[00:38:08] that other teams simply don't have.

[00:38:10] And when you have that amount of revenue

[00:38:13] in your local TV deal,

[00:38:14] it enables you to be separate from the pack.

[00:38:17] And that's what the Dodgers are.

[00:38:19] They're well run,

[00:38:20] don't get me wrong,

[00:38:21] but they have a huge revenue advantage

[00:38:23] that was given to them.

[00:38:24] They had a huge revenue sharing advantage

[00:38:26] that was given to them

[00:38:27] in a last minute deal as well

[00:38:29] in terms of what would count

[00:38:31] for revenue sharing

[00:38:32] and what wouldn't.

[00:38:32] And all of it was so

[00:38:34] the Dodgers sale price would be higher

[00:38:36] so that Bud Selig could say,

[00:38:38] hey, look, we're a healthy league.

[00:38:40] Our teams are selling for a lot of money.

[00:38:43] Since you've had direct experience

[00:38:45] with something like this,

[00:38:46] I want to run it by you

[00:38:48] because a lot of Mariners fans

[00:38:49] think Mariners ownership should sell

[00:38:51] and think that would solve the problems

[00:38:53] when it comes to how the Mariners spend,

[00:38:56] how they operate, all these things.

[00:38:58] So as Lyle mentioned,

[00:38:59] the ownership group is large.

[00:39:02] How complicated of a process would that be

[00:39:04] for the Mariners to truly be sold?

[00:39:07] Not at all.

[00:39:08] There's tag-along rights,

[00:39:09] which means that the general partner

[00:39:10] has the right to sell the partnership

[00:39:12] and the other partners would come with him.

[00:39:15] But I guess I would ask you to go back

[00:39:17] to when I first got in the game.

[00:39:18] Can you think of,

[00:39:20] and I'll ask you this question,

[00:39:21] who the richest owner was

[00:39:23] when I joined the game on December 9th of 1999?

[00:39:27] Who was the richest owner at that time?

[00:39:30] Was it George Steinbrenner?

[00:39:32] Nope.

[00:39:33] It was Carl Polad.

[00:39:35] He was the owner of the Minnesota Twins.

[00:39:37] The Minnesota Twins were up for contraction.

[00:39:40] They couldn't get a ballpark done.

[00:39:42] Wayne Huizinga, hugely rich man,

[00:39:45] when he owned the Marlins,

[00:39:46] couldn't get a ballpark deal done,

[00:39:48] cut his payroll, did a fire sale.

[00:39:49] There really is no direct correlation

[00:39:51] other than Steve Cohen right now

[00:39:53] to wealth and how your team is operated.

[00:39:56] So that is one of those things

[00:39:59] that people believe the grass is always greener.

[00:40:01] Believe me, people in Miami know about it.

[00:40:04] When our owners sold to Bruce Sherman

[00:40:05] and Derek Jeter,

[00:40:06] they thought they had gotten a gift from heaven

[00:40:09] and now it's like they want us back or something.

[00:40:13] So these teams that you talked about do spend a lot

[00:40:17] and we talked about Steve Cohen for a bit already

[00:40:19] but you mentioned the Phillies,

[00:40:20] you mentioned the Padres.

[00:40:21] If it's so financially irresponsible,

[00:40:24] do you have a take on why they continue to do it?

[00:40:27] Oh, because they want to win.

[00:40:29] Because they have an agent who says,

[00:40:31] hey, you're an octogenarian,

[00:40:32] you have no ring.

[00:40:33] It's super fun to win a ring.

[00:40:35] And you know what's more fun than winning one ring?

[00:40:37] It's winning two rings.

[00:40:38] And so even once you win your first,

[00:40:40] like we did in 03,

[00:40:42] we spent the next 14 years chasing Amy,

[00:40:45] trying to get the second ring.

[00:40:46] And it makes you do weird things

[00:40:49] because you feel like that you're invincible

[00:40:51] when you're a world champion.

[00:40:53] It's the greatest feeling in the world.

[00:40:54] And once you're a world champion,

[00:40:56] you're always a world champion.

[00:40:57] And then it becomes sort of a contest

[00:41:00] in the owners meeting.

[00:41:01] These owners are very competitive with each other.

[00:41:04] Don't kid yourself.

[00:41:05] And when you have a bunch,

[00:41:06] I'll tell you one funny thing.

[00:41:08] Lon Trost, I love him.

[00:41:09] He's the COO of the Yankees.

[00:41:10] Long time.

[00:41:11] He went to owners meetings

[00:41:12] wearing every one of his Yankee rings.

[00:41:15] He had them on every finger.

[00:41:17] And he'd walk into the meeting room like that.

[00:41:20] And that just sort of exemplifies

[00:41:22] the sort of competition.

[00:41:23] So owners want to get rings if they can,

[00:41:27] but they realize that it's way harder

[00:41:29] than they thought.

[00:41:32] Fans want team.

[00:41:34] I think fans across the league

[00:41:36] want teams to spend more money.

[00:41:37] And if we're talking about teams

[00:41:39] across the league losing money,

[00:41:41] how are they going to,

[00:41:41] how do in this day

[00:41:43] with RSNs falling through,

[00:41:45] how are they going to start generating

[00:41:47] more revenue here for the future?

[00:41:48] So hopefully some of the fans

[00:41:50] can get what they want.

[00:41:51] Well, you're seeing what MLB is trying to do

[00:41:53] with nationalizing the digital rights

[00:41:55] in order to share more revenue

[00:41:56] and take some away from the larger markets

[00:41:59] and give it to the smaller markets.

[00:42:00] But again, I would say to fans,

[00:42:03] would you, and I've asked fans this,

[00:42:05] so I'll ask you guys,

[00:42:07] do you like Stephen Ross owns the Dolphins?

[00:42:10] Spends money hand over fist.

[00:42:12] They haven't won a playoff game since 2000.

[00:42:15] Does he get a pass for that level of incompetence?

[00:42:19] It's not like the Mariners never spend money.

[00:42:22] It's not like they don't sign free agents.

[00:42:24] It's just that they haven't been hugely successful.

[00:42:27] So is it that you want to win

[00:42:30] or do you want to win

[00:42:32] with some sort of weird notion

[00:42:34] of spending more money and more money?

[00:42:36] I've always found that confusing.

[00:42:38] I would think you just want to win.

[00:42:39] Would you trade places with the Tampa Bay Rays,

[00:42:42] low payroll, no attendance,

[00:42:44] but they're in the World Series

[00:42:45] or in the playoffs almost every year?

[00:42:47] I take the results.

[00:42:49] I think if I would speak for Mariner fans currently,

[00:42:53] the state they're in

[00:42:54] is that they have tried almost everything else

[00:42:56] except spending and it hasn't worked.

[00:42:59] So how do you take that next step forward?

[00:43:02] Yeah, and I'll give some context to it, David.

[00:43:05] You're absolutely right.

[00:43:06] The Mariners over the last 20 years at points

[00:43:08] have spent on free agents.

[00:43:09] Cano, Beltre, Richie, Sexton, there's others.

[00:43:12] Since the new ownership group took over,

[00:43:15] they gave Julio Rodriguez the big extension.

[00:43:17] But when you look at position player free agents,

[00:43:21] which have been a glaring need

[00:43:23] in terms of offense for this team

[00:43:24] over the last few years,

[00:43:25] the biggest contract they've ever handed out

[00:43:27] in free agency was two years and $24 million.

[00:43:30] And that surpassed a one-year $7 million contract.

[00:43:34] So over the last few years,

[00:43:36] they're not exactly investing in their bats.

[00:43:39] You know, it's interesting you say that

[00:43:41] because I am not a big fan.

[00:43:43] You know, would you rather be

[00:43:45] a San Francisco Giants fan

[00:43:46] and they had the dynasty in 10, 12, and 14,

[00:43:48] but they spend money hand over fist.

[00:43:51] Matt Chapman, they extended him

[00:43:53] and brought in Blake Snell and Solaire.

[00:43:56] And it just doesn't always work.

[00:43:58] And the thing about bats and players in general,

[00:44:02] if I'm Jerry DiPoto,

[00:44:03] I don't want to be asked to sign Soto

[00:44:07] or to sign Bregman

[00:44:09] because I'm not in that market

[00:44:11] and I don't add value with those signings.

[00:44:14] Whoever gets Soto, Bregman,

[00:44:16] you know, Christian Walker,

[00:44:17] who'd be a good fit for Seattle,

[00:44:19] but I want my GM to find the next Seth Lugo.

[00:44:22] I don't want him signing Robinson Cano.

[00:44:24] Find me a guy, give him 45 over three

[00:44:27] who no one wants

[00:44:28] and let him be a Cy Young finalist.

[00:44:30] Find me a bat

[00:44:31] who's going to be a return on the investment

[00:44:35] who will outperform his contract

[00:44:36] that nobody else wants

[00:44:38] because we've got the best baseball people.

[00:44:40] And so what a lot of owners are doing

[00:44:42] is now spending a lot of money

[00:44:44] on their analytics

[00:44:45] and on how they evaluate players,

[00:44:47] but it's gone too far.

[00:44:49] And now you're losing out

[00:44:51] on the ability of baseball people

[00:44:53] to identify value.

[00:44:56] Now it's just computers identifying the value

[00:44:58] and you don't really win

[00:45:00] with just doing that.

[00:45:01] So to me, it's a combination.

[00:45:03] And, you know, free agent spending,

[00:45:06] man, you guys got Cano.

[00:45:07] You don't think that still hurts?

[00:45:09] Even though he's a new owner,

[00:45:11] that sort of signing

[00:45:12] where there's all this excitement

[00:45:14] during the offseason

[00:45:15] and it ends up being crap,

[00:45:17] I would know.

[00:45:18] I've won an offseason or two

[00:45:19] and ended up being a crappy team.

[00:45:22] It's fun to win the offseason,

[00:45:23] but I'd rather win the season.

[00:45:26] Yeah, if they...

[00:45:27] I was just going to quickly say,

[00:45:29] if the Mariners won

[00:45:29] with a $15 million payroll

[00:45:31] and they won the World Series,

[00:45:31] I wouldn't say a word.

[00:45:32] It's all about winning.

[00:45:33] There you go.

[00:45:34] Yeah, like TJ said,

[00:45:36] what does it have to...

[00:45:37] What do they have to do

[00:45:38] to take the next steps?

[00:45:39] Anyway, go ahead.

[00:45:40] They have to make better decisions.

[00:45:41] Yeah.

[00:45:42] It's not that they're not spending money.

[00:45:43] If you look at what they did last year,

[00:45:45] they signed players

[00:45:46] that if they hit,

[00:45:47] he'd be a genius.

[00:45:48] You'd be calling for the extension.

[00:45:51] They just didn't hit.

[00:45:52] And that's part of the game.

[00:45:54] It is impossible.

[00:45:55] People say that their own team has...

[00:45:57] They draft terribly.

[00:45:58] No one ever makes it.

[00:45:59] They get screwed on trades.

[00:46:01] And look at how good the players are

[00:46:02] when they're traded away.

[00:46:03] And then they come here

[00:46:04] and they regress.

[00:46:05] All 30 fan bases say that same thing.

[00:46:08] Mm-hmm.

[00:46:09] David, this has been awesome.

[00:46:10] We appreciate you sharing

[00:46:12] some of your insight here with us.

[00:46:13] It has really been an eye-opening experience

[00:46:16] here for us today.

[00:46:17] And we hope some of our listeners

[00:46:19] learned along as well.

[00:46:20] Thank you so much.

[00:46:21] I appreciate it.

[00:46:22] Have a great day.

[00:46:24] Well, that interview was certainly interesting.

[00:46:27] We learned a lot.

[00:46:28] I'm sure you learned a lot.

[00:46:29] We're going to spend a few minutes here

[00:46:30] reacting to it

[00:46:31] before we wrap up the podcast.

[00:46:32] So your biggest takeaway was what?

[00:46:36] As I said before,

[00:46:38] it is a different perspective.

[00:46:39] It comes from someone

[00:46:41] who is in ownership meetings,

[00:46:43] who's seen books before,

[00:46:45] who's seen how these teams

[00:46:47] work operationally,

[00:46:48] where the cash goes

[00:46:49] and apparently where it doesn't go

[00:46:51] when the teams,

[00:46:52] as he said,

[00:46:53] don't make as much money as you think.

[00:46:56] And lots of them actually lose money.

[00:46:58] But let's pick the simplest thing

[00:47:00] I would say to react to

[00:47:01] because there are some

[00:47:02] complicated things he brought up

[00:47:04] where he referenced

[00:47:06] Steve Cohen, for example,

[00:47:07] who gets these big tax breaks

[00:47:09] as an owner for the first five years.

[00:47:11] I'm not going to sit here on this podcast

[00:47:12] and explain tax code.

[00:47:14] If you want to go back

[00:47:15] and listen a little bit closer

[00:47:16] and do some Googling

[00:47:17] and see what exactly he gets from that

[00:47:20] and the benefits new owners get,

[00:47:21] feel free to go do that.

[00:47:23] I think it would be

[00:47:24] a little monotone for us to do that.

[00:47:26] But let's focus on one thing.

[00:47:27] Let's pick a simple number.

[00:47:29] David said,

[00:47:31] the easy number to look at

[00:47:32] when it comes to baseball teams

[00:47:33] and if they're profitable or not

[00:47:36] is the comparison of revenue and payroll.

[00:47:39] That player payroll should be 50%

[00:47:42] of your operating revenue.

[00:47:43] If it is more than that,

[00:47:45] you're losing money.

[00:47:46] If it's less than that,

[00:47:47] you're making a profit.

[00:47:48] Now that stuck out to me

[00:47:49] because there's been this chart

[00:47:50] floating around about 2023 revenue

[00:47:54] and then 2024 payroll.

[00:47:57] We'll use that example on Twitter

[00:48:00] from all the teams in baseball.

[00:48:02] And I don't know.

[00:48:03] I will just clarify.

[00:48:05] I don't know how accurate

[00:48:06] all these revenue numbers are,

[00:48:08] if they're accurate to the number,

[00:48:10] if there's a margin of error or whatever

[00:48:12] because these teams aren't very transparent

[00:48:14] with these numbers.

[00:48:15] Right.

[00:48:15] But these are the numbers

[00:48:17] that we have.

[00:48:18] It's what we have access to.

[00:48:20] Right.

[00:48:20] Right.

[00:48:21] So there's some numbers out here

[00:48:22] of these teams

[00:48:24] where we can take a look

[00:48:25] and use the information

[00:48:26] David gave us

[00:48:27] to contextualize this.

[00:48:32] What do you now contextualize from this?

[00:48:36] So when you crunch those numbers

[00:48:39] from the graph

[00:48:39] based on the Mariners earnings

[00:48:43] and how much should be spent on payroll

[00:48:45] if it's 50% like David said,

[00:48:47] wow, that means the Mariners payroll

[00:48:49] should be $190 million.

[00:48:52] I have that right?

[00:48:53] Correct?

[00:48:54] Yes.

[00:48:55] I say yes as TJ's coughing

[00:48:57] and turned his mic off.

[00:48:58] So what a shot.

[00:48:59] Anyway, let me keep going.

[00:49:00] Yes, you're right.

[00:49:01] It's about $190 million

[00:49:02] because it says...

[00:49:04] Okay.

[00:49:04] So let me keep going here.

[00:49:06] Just to put that into perspective,

[00:49:08] if the Mariners were going to own up to that

[00:49:10] and actually do that,

[00:49:11] what could they do with that this offseason?

[00:49:14] Well, they could sign Juan Soto,

[00:49:15] but you know what?

[00:49:16] We'll put that one to the side.

[00:49:17] Even that one aside.

[00:49:19] They could go sign Willie Adamas.

[00:49:20] They could go sign Christian Walker.

[00:49:22] And they could go trade for Devin Williams

[00:49:25] and be within the budget.

[00:49:27] And you could trade for Nico Horner too.

[00:49:29] Great.

[00:49:30] That sounds like an awesome offseason.

[00:49:32] And they're not going to do that

[00:49:33] because, oh no,

[00:49:34] we only have $15 million spent.

[00:49:36] Only $15 million spent.

[00:49:39] So what this chart does,

[00:49:40] if we want to look at it a little bit closer

[00:49:42] to contextualize what you're saying.

[00:49:43] So you said it should be about $190,

[00:49:45] maybe a little bit higher

[00:49:46] for what the Mariners should be

[00:49:47] based off of that number David gave us.

[00:49:49] Because this list tells us,

[00:49:50] and it ranks teams

[00:49:52] in terms of percentage of revenue spent.

[00:49:55] The lowest team is the Rays.

[00:49:57] The top team is the Mets.

[00:49:58] That should surprise absolutely nobody.

[00:49:59] It says the Mariners here

[00:50:01] generated $396 million of revenue in 2023.

[00:50:05] And their payroll for 2024,

[00:50:09] they say $160 million.

[00:50:12] And that equates to about 40%

[00:50:15] or 23rd in baseball

[00:50:17] in terms of percentage spent.

[00:50:20] Meaning they have about 10% to work with

[00:50:23] before they start actually losing money.

[00:50:25] So if that number is true, Lyle,

[00:50:27] they have like a 10% profit margin.

[00:50:32] Also, it still reigns true

[00:50:34] that even if you get close to that 50% mark,

[00:50:38] the better product you put on the field,

[00:50:40] more money you'll make,

[00:50:42] and then the numbers go up.

[00:50:43] You make more money.

[00:50:46] Crazy.

[00:50:47] Pretty sad to look at.

[00:50:48] And I will...

[00:50:50] So if we're looking at this,

[00:50:52] so according to David,

[00:50:53] 12 teams lose money.

[00:50:55] Rockies, Braves, Cardinals,

[00:50:59] Giants, Phillies, Astros, Rangers, Dodgers,

[00:51:03] Padres, Diamondbacks, Blue Jays, Mets.

[00:51:06] God, I'm looking at the Mets.

[00:51:07] They are such an outlier.

[00:51:08] 87% is what they are.

[00:51:11] Payroll to revenue.

[00:51:15] So this chart isn't too hard to find.

[00:51:19] If you go look,

[00:51:20] just look up revenue and percentage

[00:51:23] and take a look at it for yourself

[00:51:24] and think about what David said

[00:51:25] when it comes to those teams

[00:51:27] and which teams are willing to take risks

[00:51:29] when it comes to losing money

[00:51:31] versus which teams are not.

[00:51:33] The Mariners, in not shocking fashion,

[00:51:35] are not willing to take a risk losing money.

[00:51:38] It's how they've operated for years and years and years.

[00:51:41] However, they could operate with the goal

[00:51:48] and blueprint of not losing money

[00:51:52] but still spend a lot more.

[00:51:55] So having David on,

[00:51:57] it's very clear that his thinking,

[00:52:00] well thought out, sound,

[00:52:02] there's real perspective to it

[00:52:03] and he has been in those walls

[00:52:05] more than just about anybody listening to this podcast,

[00:52:08] certainly more than us.

[00:52:09] But it's very clear that that thinking

[00:52:12] is very much along the lines

[00:52:15] of how Mariners' ownership probably thinks.

[00:52:18] This is probably how a lot of the dialogue

[00:52:20] goes in their meetings.

[00:52:22] Similar to what David said to us,

[00:52:24] looking at the teams that lose money,

[00:52:26] it correlates with the teams that spend the most money,

[00:52:28] at least according to David.

[00:52:30] Not wanting to get up against the budget,

[00:52:32] not wanting to take risks.

[00:52:35] A lot of this and what David said to us

[00:52:38] lines up with the Mariners.

[00:52:40] So we, like,

[00:52:42] obviously we don't agree

[00:52:43] with what the Mariners are doing.

[00:52:44] I haven't heard one person, period,

[00:52:47] saying,

[00:52:48] I love what this ownership group's done.

[00:52:50] I have not heard a single person say that.

[00:52:53] But,

[00:52:54] if you want perspective

[00:52:55] from how they think,

[00:52:57] I think David gave us a decent example

[00:53:00] and a decent simulation

[00:53:01] and replica

[00:53:02] of what that looks like.

[00:53:04] Mm-hmm.

[00:53:06] So we're just going to have to see.

[00:53:07] And I'll say my last thing on this

[00:53:10] is that

[00:53:11] what David is saying

[00:53:13] in terms of 50%,

[00:53:14] and he used other leagues

[00:53:15] as examples of this

[00:53:16] for being true.

[00:53:17] In other CBAs that have

[00:53:20] straight rev shares

[00:53:22] and have salary caps

[00:53:23] and all this,

[00:53:24] the split is 50-50

[00:53:26] between players and owners

[00:53:27] because that's the profitability point

[00:53:29] for a lot of these franchises.

[00:53:31] 50%.

[00:53:33] And Major League Baseball

[00:53:34] has a different structure

[00:53:35] with not having a salary cap

[00:53:36] and not having a salary floor.

[00:53:38] So there's a little bit more

[00:53:39] of a fluctuation with this.

[00:53:40] But even if the owners

[00:53:41] really are losing money,

[00:53:43] I'm just going to note this.

[00:53:45] Fans don't care

[00:53:48] because they want to win

[00:53:50] and they want to see the team

[00:53:52] and the community brought together

[00:53:54] with a good product on the field.

[00:53:56] Whether or not the people

[00:53:57] who are 1% or 1%

[00:54:00] lose some money

[00:54:01] on their business.

[00:54:03] But then time is a flat circle

[00:54:06] because fans don't care

[00:54:07] about owners and billionaires

[00:54:08] losing money,

[00:54:10] but the owners don't care

[00:54:12] about the fans getting mad.

[00:54:14] So time's a flat circle.

[00:54:16] Fans want the owners to care

[00:54:17] and don't care

[00:54:18] if they lose money.

[00:54:20] Owners don't care

[00:54:20] if the fans are unhappy.

[00:54:22] They just want people

[00:54:23] in the ballpark

[00:54:24] and buying their product.

[00:54:25] Yeah.

[00:54:27] What a dynamic, dog.

[00:54:29] What a dynamic.

[00:54:30] I'm glad we had David on, though,

[00:54:31] because it is as different

[00:54:32] a perspective

[00:54:33] as we've had on this topic

[00:54:34] as the almost two years

[00:54:37] of this podcast

[00:54:37] that we've done.

[00:54:40] Very, very...

[00:54:41] It was good to have it on.

[00:54:43] Extremely interesting.

[00:54:44] I am going to guess

[00:54:45] a lot of you got to learn

[00:54:47] more than you ever knew

[00:54:49] about ownerships

[00:54:50] and how they operate

[00:54:51] before listening to this

[00:54:52] or after listening

[00:54:53] to this interview

[00:54:54] because I know that we did.

[00:54:55] Again, I said it

[00:54:56] before the start of the interview.

[00:54:57] There were things

[00:54:58] that did not click in my head

[00:54:59] that David helped us

[00:55:01] contextualize and say,

[00:55:02] oh, okay,

[00:55:03] we might not agree with this,

[00:55:04] but this is why

[00:55:06] sometimes they do what they do.

[00:55:07] Now, I'm sure

[00:55:08] there's very smart people out there

[00:55:09] that have the exact

[00:55:10] opposite opinion about this.

[00:55:11] We'll have to try

[00:55:12] to get some of those people on

[00:55:13] in the future, too,

[00:55:14] if we can find them.

[00:55:15] But, yeah,

[00:55:16] extremely interesting.

[00:55:18] If stuff comes up again

[00:55:20] about the Mariners

[00:55:21] and their ownership,

[00:55:21] which I'm sure it will,

[00:55:24] I'd be fascinated

[00:55:25] to have David back on again

[00:55:26] because most of the questions

[00:55:28] we had,

[00:55:29] he answered.

[00:55:30] And he had a well-thought-out

[00:55:32] reasoning behind it all,

[00:55:33] even if you don't agree.

[00:55:34] So I'm hoping he can be

[00:55:35] kind of a springboard for us

[00:55:36] moving forward

[00:55:37] in terms of if we have

[00:55:38] more questions.

[00:55:38] Oh, by the way,

[00:55:39] last quick thing.

[00:55:40] He mentioned the Robinson Cano

[00:55:42] contract being a bad contract.

[00:55:44] We were up against the clock

[00:55:45] with David a little bit

[00:55:46] because he's a busy guy.

[00:55:47] He only had X amount of time.

[00:55:50] So I didn't get the chance

[00:55:51] to say, well,

[00:55:51] we thought that was

[00:55:52] a good contract.

[00:55:52] We did not think

[00:55:53] that was a bad contract

[00:55:53] in any way.

[00:55:54] But I guess that goes back

[00:55:55] to what we've been talking about

[00:55:56] where our perspective

[00:55:57] is going to be different

[00:55:58] than his, right?

[00:55:59] Yeah, I mean,

[00:55:59] the question just is,

[00:56:01] based on all the winning

[00:56:02] that you had

[00:56:03] and the increased attendance

[00:56:05] you got from Robinson Cano,

[00:56:06] why was that a bad contract?

[00:56:08] Right.

[00:56:09] Exactly.

[00:56:09] Again,

[00:56:10] we didn't quite have the chance

[00:56:11] to ask him that

[00:56:12] because he had been nice enough

[00:56:13] to already give us

[00:56:14] a nice chunk of his time.

[00:56:16] And, again,

[00:56:17] he's a busy guy,

[00:56:18] but maybe next time

[00:56:18] that'll be something

[00:56:19] we have to circle back to.

[00:56:20] All right.

[00:56:21] That'll just about wrap up

[00:56:22] this edition of the

[00:56:23] Marine Layer Podcast.

[00:56:24] You guys know the drill.

[00:56:25] You want to listen

[00:56:25] to the full-form podcast,

[00:56:26] you can do so

[00:56:27] wherever you get

[00:56:28] your audio pods.

[00:56:29] Make sure to download,

[00:56:30] make sure to rate and review,

[00:56:31] leave a five-star review.

[00:56:33] You're really helping us out

[00:56:33] if you do.

[00:56:34] If you're watching on YouTube,

[00:56:36] like, comment,

[00:56:37] and please hit that

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[00:56:39] It really helps

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[00:56:48] Blue Sky,

[00:56:48] at Marine Layer Pod.

[00:56:50] That's TJ,

[00:56:51] I'm Lyle.

[00:56:51] As always,

[00:56:52] we thank you guys

[00:56:52] for tuning in.

[00:56:53] We'll talk to you soon.

[00:56:54] We're going to talk to you soon.