Welcome to the Sunday 7…

Greetings from my old home of Green Bay, Wisconsin, where I’m headed to a sparkling game between the Texans and Packers today before I head to Madison for a speaking engagement tomorrow (link at the bottom). Today’s newsletter examines Moneyball issues in baseball, a couple of trades for star wide receivers in the NFL with vastly different financial compensation, the delicate dance of Tom Brady buying a piece of the Raiders, and a renowned college basketball coach choosing to opt out of the changing landscape.

 Settle in and learn…

1. What I’m thinking about the payrolls of baseball’s final four teams…

As I talk about and teach to my students, a salary cap is a collectively bargained mechanism to (1) promote competitive balance between teams by leveling the playing field financially, and (2) protect owners from themselves. Three of the four major sports leagues — NFL, NHL, and NBA — have salary caps; the lone league without one is Major League Baseball. And, at least this year, the results reflect that.

 The Mets ($332 million), Yankees ($311 million), and Dodgers ($266 million) have the top three payrolls in baseball with the fourth team, the Guardians ($109 million), as the outlier, coming in at 23rd in the league. We know from so many examples — the Mets last year being one — that spending does not equate to winning, but it certainly helps and allows for much more margin of error.

 Baseball does have another three-letter word that ostensibly promotes competitive balance; that is “tax.” The competitive balance tax (CBT) levies penalties to deter high-spending teams but does not stop the spending. To billionaire owners, however, the tax is merely a nuisance.

 Many ask why baseball does not have a cap, and the answer is pretty simple: because they’ve never had one. The MLB Players’ Association has successfully fought off a cap at every turn, and owners don’t even try for one anymore. Would a cap help baseball? Well, it would provide for a floor in addition to the ceiling, forcing low-spending teams like the A’s and Pirates to spend more on players. However, the MLBPA’s position has been clear: They would rather allow for unfettered spending from teams like the ones in the LCS than worry about the non-spenders meeting any kind of minimums.

Baseball’s ratings and popularity are high with these marquee teams still playing, so no one is complaining about all the player spending right now. But, for better or worse, this disparity in payrolls could never happen in salary-cap leagues.

2. What I’m thinking of the Davante Adams trade from the Raiders to the Jets…

The power of Aaron Rodgers in the Jets’ organization strikes again with the acquisition of his preferred target back from his days with the Packers. It comes after a week where the Jets lost two games, fired their head coach, demoted their offensive coordinator, and are still unable to get their newly acquired pass rusher (Haason Reddick) to show up.

 Adams was acquired from the Packers by the Raiders for first- and second-round picks; he now is traded to the Jets for a third-round pick. The Raiders bought high and sold low, although, despite some leftover cap accounting, they do delete almost $85 million in cash obligation to Adams.

 As to those cash obligations, the Jets inherit 2025 and 2026 salaries that are puffed-up numbers that are not guaranteed ($35 million each year); they’re not paying those amounts. Thus, they either re-work those numbers or potentially lose Adams after giving up a third-round pick for 11 games of action. And the Jets will probably eat the $10 million they gave to Mike Williams, who is now replaced by Adams.

Perhaps the Rodgers-to-Adams connection still has its magic, but the bottom line here is that the Jets now are trying the quick-fix solution to their receiving woes that the Raiders tried two years ago. Meanwhile, the Packers — the team that traded away Rodgers and Adams — have young and ascending assets from the trades that will keep on giving for years to come. Yes, I am biased, but to me, slow and steady beats quick fixes every time.

3. What I’m thinking about the Amari Cooper trade from the Browns to the Bills…

 As readers know, I had predicted that Adams would be traded to the Bills; I had the wrong receiver going to them. Cooper now leaves the sinking ship that the Browns have become to move to the contending Bills, acquired for the same compensation as Adams: a third-round pick. The Bills, however, got a better deal than the Jets, no matter how you compare the two players.

The Jets inherited over $11 million in 2024 salary for Adams; the Bills only inherited $800,000 in 2024 salary for Cooper. The Browns, as they have done with several of their highest-paid players such as Deshaun Watson, converted all but the minimum salary on Cooper’s contract into a signing bonus, reducing his 2024 cap charge significantly. The Browns had and have plenty of cap room, but have a strategy to keep pushing it out to the future.

 The Adams and Cooper trades point out a fact I have tried to stress before: Trades must be evaluated not only for the talent side but also for the financial side. These are both trades of wide receivers for third-round picks but with vastly different financial consequences. The Bills are acquiring Cooper for the rest of the season for less than the Jets will pay Adams for one week. Price matters.

4. What I’m thinking about Tom Brady buying a stake in the Raiders…

This sale of a minority interest in the Raiders to Brady — a 10% stake split between him and his partner — had been held up for over a year due to lack of approval by 24 of the 32 NFL owners, due to (1) the fact Brady is a broadcaster of league games, and (2) the discount factor on his purchase was too steep. That was then; this is now.

 On the broadcast issue, there are guardrails placed on Brady. He cannot attend broadcast production meetings before games or visit other teams’ facilities, usually staples for broadcasters. To me, this seems kind of silly. What is Brady going to tell the Raiders about what other teams have said that gives the Raiders an advantage? Do they play a lot of zone coverage? Further, wouldn’t his colleagues on his FOX broadcast team tell him what they hear anyway?

As to the valuation, there is definitely a celebrity discount here, Brady is not paying retail. If the Raiders are valued at $5 billion, Brady and his partner — Knighthead Capital co-founder Tom Wagner — are not paying $500 million. My guess? More like $250 million, or a 50% discount rate to have Tom Brady join ownership ranks in the league. It is also reported that Brady’s shares are not subject to a right of first refusal from other Raiders’ investors, as other shares are, meaning no one can get the discount prices that Brady is getting. Whatever the discount rate is, it will now be a precedent for other former star players who want to buy small pieces of franchises.

 I am still a bit confused as to why it is the Raiders for Brady. Of course he was courted by owner Mark Davis but with Robert Kraft saying he loves him like a son, why not the Patriots??

5. What I’m thinking of Virginia basketball coach Tony Bennett retiring…

 Bennett has been a highly successful college coach, following in the footsteps of his father, and won the NCAA championship in 2019. He is 55, still young for a head coach but, in his mind, too old to deal with the chaos of high-level college basketball.

 As discussed here often, the pendulum has swung heavily away from the NCAA and the control that college teams and coaches have had over players. Now top college football and basketball players have unfettered free agency every year through the transfer portal, bidding for their services disguised as NIL, agents, and no salary cap. Due to lawyers and court rulings, there are no rules, and the college teams — with many having hired general managers to deal with this — are now on the weaker side of the leverage game. This is the reality for a while, at least until some semblance of order arrives with final approval of the House settlement.

 Bennett saw this and decided to do what my friend Jay Wright did, what Mike Krzyzewski did, and what Nick Saban did: They got out. Obviously the timing for Bennett was not good, and the Virginia players, per more transfer rules benefiting players, have a 30-day window to transfer. But better now than when the season has started, and a top assistant will replace him.

 The Wild West of college sports has claimed another casualty.

6. My tweet of the week:

7. Quote I wish I said:

My Podcast…

 I went behind the curtain on the trade of Davante Adams to the Jets, with questions as to how that team is being run. Simply, I am not a fan:

And if you’re around Madison, Wisconsin tomorrow morning, come say hi:

https://www.visitmadison.com/masc/events/good-morning-sports/

 Thanks for your continuing support; please send me any feedback or questions (answered here); they are always welcome, send to [email protected].

 Have a great week…

 Andrew