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Baseball, Holland, Five Billion Dollars discussed on Morgan Stanley Ideas Podcast

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Services but if you don't like what those teams are providing there really aren't any other options so that monop cine generally worked out pretty well for free agents over the nas four decades it works because the team owners traditionally wanted establish players on were willing to pay them higher salaries but those team owners all the only buyer on the market when they changed the minds about what they wanna buy that changes the whole system remember when mostly talking about a market for the best players in baseball a by and large over the loss forty years best salaries have gone up and up an up just two years ago in two thousand fifteen in two thousand sixteen team spent a total of two point five billion dollars on free agents there were seven different players who were promised contracts of more than one hundred million dollars each then something happened last year they spent one point five billion dollars so it's a billion dollar different zilly span of one season so why the drop if baseball's overall revenue was decreasing than shoal teams might figure we've got to cut spending somewhere that spend less on players but that's not the case because baseball revenues they're up so a player might say hey major league baseball revenues increased by seven percent last year i should expect free agent salaries for player of my caliber to be maybe seven percent higher maybe expected to be fine percent higher but baseball may be thinking internally what do i wanna pay this player more money what's happening is this teams across the board making more money yes but that also getting a much more sophisticated understanding of what makes a team successful from sources that ought steeped in traditional baseball wisdom and those sources telling them that spending a bunch of money to bring in big stars might not be the smartest move i'm not an expert on baseball you know having grown up in holland where baseball is not a big sport i being to a few games i've seen movie money will but i think the parallels between what's happening in baseball with what's happening out outer industries including financial services.

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