Why the MLBPA is suspicious about the Marlins’ and Pirates’ revenue-sharing practices

In a recent Yahoo Sports piece about the ongoing offseason standoff between players and owners, which seems like it’s never going to end, Jeff Passan includes lots of interesting details about the state of the league and the outlook of the players on various issues.

One throwaway detail, buried near the end as a side note to everything else, is that the union is reportedly looking into whether or not the Marlins and Pirates are operating correctly as revenue-sharing recipients.

The Pirates have traded away Gerrit Cole and Andrew McCutchen this offseason, which, when balanced with the players they got back in those deals, has lowered their projected salary for the 2018 season about $19 million. Over in Miami, the Marlins have jettisoned pretty much every player who could reasonably help them win games this season and bottomed out their payroll completely.

While Passan’s piece doesn’t get into the specifics of any MLBPA investigation currently happening, the reasoning behind it is that the Marlins or Pirates might not be using their revenue-sharing money — which they receive because they are classified as small-market teams under the most recent CBA — to improve their team’s performance.

Under the current CBA’s Article XXIV, Section B, Paragraph (2), teams must use revenue sharing money they receive to:

...improve scouting, player development, and player payroll or their long-term strategy for improving competitiveness. Should any grievance make it to an arbitration panel the panel will consider whether both of those purposes have been met as well as the overall financial position of the team in question and how the team has spent their revenue sharing money in the past.

Which is all to say that the burden of proof is on the team to show that it used the funds received from big market teams to actively improve its chances of winning in one way or another.

In line with Article XXIV, Section A, Paragraph (1) of the CBA, teams that receive revenue-sharing money also must fill out a Financial Information Questionnaire each year along with providing audited financial statements, detailing how they spent the money and at some points may be required to submit a supplementary questionnaire if more information is required about their financial activity.

Because the union, rather than the Office of the Commissioner, is initiating a potential investigation into these teams’ activities, the most important piece of the CBA in this case seems to be Article XXIV, Section B, Paragraph 5(a) which outlines the ways in which teams can specifically not use revenue-sharing money. That includes:

...debt-related payments “unrelated to past or future efforts to improve performance on the field,” payments to people that are not on-field personnel or player development personnel or who do not have “a direct role in improving on-field performance,” or any ownership payments not specifically meant to “offset tax obligations resulting from Club operations.”

Which can be summed up as “heyyyyy, guys, we just want to check and make sure you’re not trading all these players just so you can make more off that sweet, sweet revenue-sharing cash and lining your own pockets, m’kay?”

To figure that out, the MLBPA would have to petition the commissioner to start an official inquiry in accordance with the CBA guidelines referenced above. So at this point the union is just suspicious about these trade shenanigans and is adding that suspicion to its long list of hunches this offseason.

Pirates president Frank Coonelly originally told the Pittsburgh Post-Gazette that he only knew about any sort of investigation from the same Yahoo story that everyone else is reading and positing about. He later released a more comprehensive statement saying the Pirates are not being investigated and that they have supplied the league with more than enough information to see that they are in line with all CBA requirements when it comes to revenue sharing.

According to the Miami Herald, MLBPA spokesman Greg Bouris said:

“We have raised our concerns regarding both Miami and Pittsburgh with the Commissioner, as is the protocol under the collective bargaining agreement and its revenue-sharing provisions. We are waiting to have further dialogue and that will dictate our next steps.”

Which leaves us to speculate about whether or not there’s any case to dig into here since it’s still in the complaint phase. But if any two teams seem like they might be skirting revenue-sharing rules to help their bottom lines this year, it’s these two. Be a little less obvious next time.