As the minute hand approached midnight on the East Coast on Dec. 13, ESPN baseball reporter Jeff Passan, one of the top news breakers in the industry, tweeted a scoop about one of Major League Baseball’s best free agents, shortstop Carlos Correa.
BREAKING: Shortstop Carlos Correa and the San Francisco Giants are in agreement on a 13-year, $350 million contract, a source familiar with the deal tells ESPN.
— Jeff Passan (@JeffPassan) December 14, 2022
Needless to say, fans of the San Francisco Giants started celebrating, but the news also reached an audience interested less for emotional reasons than for financial reasons. Undoubtedly, some sharp bettors perusing Twitter late at night jumped into the Giants’ futures markets, hoping to snag a quick advantage before the odds fell.
The Giants finished .500 in 2022, but now they had just landed a player who one oft-cited baseball statistic, Wins Above Replacement (WAR), implies is worth about five extra wins per season all by himself. The Giants had opened as longshots to win it all, +3500 (or 35-to-1) at many mobile sportsbooks, so the value was hard to pass up with new information coming to light.
Six days later, however, it all fell apart. The Giants, noting a metal plate in Correa’s ankle from surgery after an old injury in the minors, sought to renegotiate his deal following the physical exam, going so far as to cancel a press conference scheduled for Dec. 20. Correa’s agent, Scott Boras, let it be known to the rest of the league that the shortstop was back on the market.
The next day, another MLB insider, the New York Post’s Jon Heyman, tweeted that Correa had agreed to a 12-year contract with the New York Mets worth $35 million less than the deal he’d agreed to in San Francisco. In a matter of minutes, the Mets’ World Series odds moved significantly, going from +900 at BetMGM to +650.
Odds change dramatically as saga continues
By now, most baseball fans know the rest of the story. Three days later, word leaked that the Mets, too, had asked to renegotiate after their doctors examined Correa’s medical information. Nearly two weeks later, he agreed to return to the Minnesota Twins on a six-year, $200 million deal.
All the while, each of the teams involved saw their World Series odds whipsaw all over the place even though it would be weeks before any of them convened for spring training. The Mets’ price moved to +750 at BetMGM after the deal fell apart and the Twins went from +6600 to +5000. At DraftKings, the Giants’ World Series odds jumped from +3500 to +5000 after that deal fell apart and the Mets’ odds went from +700 to +750 after they, too, pulled out.
“Our handling of the news was probably as you’d expect. We’re always stuck in a bit of a reactionary position with free agency, so as any new information became available via reputable sources, we shifted our prices,” DraftKings Director of Race and Sportsbook Johnny Avello said. “We were less aggressive with the Mets’ situation, knowing there was a possibility of further issues, as he had already failed the physical with the Giants.”
BetMGM issued the following statement after Sports Handle asked about its policy of monitoring national reporters’ tweets: “In general, the BetMGM trading team is paying attention to multiple sources of information to adjust future odds as needed.”
No doubt, some bettors found themselves feeling aggrieved with all of the false starts in Correa’s free agency, but it’s the world we live in now. Information travels at the speed of light and reporters are often competing for exclusivity that might only last for minutes or even seconds.
Savvy sports bettors would be wise to note the various gradations of reporting in such situations. If a reputable reporter tweets that a deal is “close,” it just means that the sides are moving toward agreement, but it’s still far from done. The next stage is “agreed to,” meaning the two sides have come to terms and are simply waiting for the final contingencies — such as a physical — to be completed.
However, no reporting — no matter who it comes from — is entirely bankable until the team gets league approval to announce the deal, a process that often takes weeks. The lesson, of course, is that if you’re going to play the arbitrage game, do so at your own risk.
Bally’s Sports channels facing bankruptcy?
The largest owner of regional sports networks in the U.S. is heading toward a complex $8.6 million debt restructuring in bankruptcy court that could imperil payments the company makes to several sports teams and, thus, impact those teams’ bottom lines and even competitiveness.
Bloomberg was the first to report that Diamond Sports Group LLC, which bought the network properties from the Walt Disney Co. in 2019 and sold the naming rights to Bally’s, was under financial duress due to lagging cable TV subscriptions, spurring the talks with creditors.
Teams potentially impacted include the St. Louis Cardinals, Detroit Pistons, Phoenix Coyotes, and San Diego Padres. Bloomberg reports that Sinclair Broadcast Group Inc., which owns Diamond Sports, will likely skip the $140 million in interest payments due in mid-February, starting a 30-day grace period.
If Diamond winds up filing for bankruptcy, it would have the option of ending contracts with teams, potentially cutting off a crucial revenue stream for those franchises.
There is, in fact, evidence that those teams already have taken the company’s financial distress into consideration, though none has publicly stated as much. At the start of the offseason, the Cardinals’ president of baseball operations, John Mozeliak, announced that the team’s payroll would rise significantly. But after signing catcher Willson Contreras to a five-year, $87.5 million deal in early December, the team has had a quiet hot-stove season in the wake of superstars Albert Pujols and Yadier Molina retiring.
“Let’s start with the question, ‘Will payroll go up?’ And I answered yes,” Mozeliak told reporters. “Has payroll gone up? Yes. Did it go up as high as your expectations? That’s in the eye of the beholder.”
NBCUniversal extends deal with PointsBet
Axios broke the news this week that NBCUniversal had extended the five-year sports betting partnership it agreed to in 2020 with the Australian sportsbook operator PointsBet for another two years. It also amended the amount of advertising dollars PointsBet is required to commit to NBCU properties, allowing the operator to concentrate its efforts in the 14 U.S. states where it accepts wagers.
PointsBet has been trying to expand its U.S. presence since launching in New Jersey in 2019. The initial deal was worth $500 million and gave NBCU an equity stake in PointsBet. It also gives PointsBet exclusive game-day integrations across NBC’s regional sports networks.
Axios reports that PointsBet will be required to spend $58 million per year on marketing with the NBCU channels. Initially, the operator had agreed to spend roughly $90 million per year, so the reduction fits into an industry-wide pattern of cutting marketing spend.