The Major League Baseball Players Association is looking into the Pirates' use of revenue-sharing money, according to a report by Jeff Passan of Yahoo Sports.
The report comes less than two weeks after the club traded both Andrew McCutchen and Gerrit Cole, shedding roughly $19 million in payroll. According to the report, the players' union is also investigating the Miami Marlins after they traded Giancarlo Stanton, Marcell Ozuna and Christian Yelich this offseason.
In a statement released Friday night, Pirates president Frank Coonelly said the club is not being investigated by MLB and that commissioner Rob Manfred does not have any concerns about the Pirates' spending.
Here's Coonelly's full statement:
"The Pirates are not being investigated by MLB and the commissioner has no concerns whatsoever with the manner in which the Pirates are investing its revenue-sharing receipts into building a winner. The Pirates have and will continue to invest its revenue-sharing receipts in an effort to put a winning team on the field. As required by the Basic Agreement, we share with MLB and the Union each year the detail as to how our revenue-sharing receipts are used to put a winning team on the field. What that detail shows is that while our revenue sharing receipts have decreased for seven consecutive seasons, our major league payroll more than doubled over that same period. Indeed, our revenue-sharing receipts are now just a fraction of what we spend on major league payroll, let alone all of the other dollars that we spend on scouting, player development and other baseball investments, several areas in which we are among the league leaders in spending. Thus, the commissioner is well-equipped to address whatever 'concerns' the Union now purportedly has over the Pirates’ efforts to win."
MLB also released a statement Friday night, confirming the Pirates have received less money in revenue sharing in recent years:
"We do not have concerns about the Pirates' and Marlins' compliance with the Basic Agreement provisions regarding the use of revenue sharing proceeds. The Pirates have increased their payroll over recent years while at the same time decreasing their revenue sharing. ... The Union has not informed us that it intends to file a grievance against either team."
After missing the playoffs for a second consecutive year, the Pirates opted to retool their roster, rather than adding to a core that included McCutchen, Cole, Josh Bell, Starling Marte, Gregory Polanco, Felipe Rivero and three young starting pitchers, including Jameson Taillon.
First, the Pirates dealt Cole for starting pitcher Joe Musgrove, third baseman Colin Moran, relief pitcher Michael Feliz and minor league outfielder Jason Martin. Musgrove, Moran and Feliz are expected to be on the Pirates' 25-man roster, but all make close to the major league minimum.
Buzz of a possible Cole trade began to circulate at the Winter Meetings last month. However, Cole's agent, Scott Boras, told reporters there was no evidence that the starting pitcher was being shopped.
Boras, though, expressed optimism that the Pirates' ownership would try to compete, rather than trade talented players nearing free agency.
“I’m not sure that meeting is happening,” Boras answered. “I’m not sure the Pittsburgh Pirates are talking, ‘Ya know, let’s sit down and talk about what’s best for Gerrit Cole.’ I think they’re talking about what’s best for their franchise and how they can best leverage him, utilize him for their immediate needs and maybe there’s … again, that’s a franchise that their franchise values have quadrupled since they bought it and ownership may decide to take a different tack at being more on the road to ‘Playoffville.’ We’ll see.”
The Pirates decided to deal Cole despite the 27-year-old being under contract for two more years at a bargain price. Additionally, they traded him when his stock was low following a difficult season.
Two days after Cole was traded, the club dealt McCutchen, a former National League MVP and the face of the franchise, to the Giants for relief pitcher Kyle Crick and minor league outfielder Bryan Reynolds. The Pirates included cash considerations — reportedly $2.5 million — in the trade to offset McCutchen's $14.5 million salary for 2018.
Crick, a former top prospect starting pitcher who excelled in the Giants' bullpen this past season, will make the major league minimum.
Although the Pirates signed Rivero to a four-year, $22 million contract extension, they have yet to spend a dollar in free agency. Excluding Jung Ho Kang's salary, the Pirates' payroll is roughly $77 million for 2018.
Josh Harrison, who will make $10.25 million in 2018, could also be traded. According to Forbes, the club’s payroll was $95.8 million on opening day this past season. The Brewers ranked last in Major League Baseball at $60.8 million.
The frustrations of the players' union stems from the sluggish free-agent market. The Brewers made news Thursday night when they signed outfielder Lorenzo Cain to a five-year, $80 million deal — the largest contract signed in free agency.
With spring training only weeks away, many of the top players are still available, including Yu Darvish, Jake Arrieta, Eric Hosmer and J.D. Martinez. According to Passan's report, the players are encouraging each other to remain firm during negotiations with clubs.
Typically, prices for remaining free agents drop closer to the start of spring training. The Pirates benefited from the trend when they signed David Freese to a one-year, $3 million contract in 2016, despite the third baseman having recorded a 2.1 fWAR with the Angels the previous season.
The luxury tax seems to be affecting clubs' willingness to spend. In the past, big-market teams would spend aggressively, however, clubs must now pay a small tax when going over the luxury tax threshold of $197 million. Also, they can have to forfeit draft picks or international signing bonus money.
But players are reportedly frustrated because revenue for teams reached an all-time high and franchise values continue to soar.
The Pirates saved a considerable amount of money in 2017 with the suspension of Marte as well as Kang being unable to enter the country after his third DUI conviction.
Additionally, they saved roughly $600,000 by losing Juan Nicasio on irrevocable waivers at the trade deadline, and Tony Watson was traded to the Dodgers in July.
There also is a considerable amount of revenue on the way, too. Each team is reportedly going to receive $50 million this spring for Disney’s purchase of BAMtech, the streaming media unit created by MLB.
Bob Nutting, the Pirates' controlling owner since 2007, would not elaborate on where the club will allocate that additional revenue:
In MLB's revenue-sharing system, a percentage of local revenue for each club is taken from every team and paid back out. Big-market teams receive less and small-market teams receive more. However, small-market teams have been criticized for how that money is spent.
It's not unusual for MLB to take a closer look at a team's spending of revenue-sharing income. After all, each team submits its receipts to detail how it spends that money on its on-field product.
After Rivero signed his contract extension last week, Neal Huntington said there is "misinformation" circulating about the club's intent to compete in 2018.
“Again, there’s a lot of misinformation and a lot of false narrative out there about when we are looking to compete again,” Huntington said after Rivero signed his contract extension. “We’re looking to compete again this year. We believe this club is a lot closer to the ’11 and ’12 Pirates and ’13 Pirates than we were the ’07, 08, ’09 Pirates. There was enough talent at the major league level, on the verge of the major league level. We’ve added to that group and Felipe, as one of the best young closers in the game, gives us some certainty in the back end of the bullpen, as certain as you can be in the back end of the bullpen.”