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Cheaters Never Lose, Part 3: A Slap on the Wrist

This is where the story of the Astros turns from a baseball story to a story about a multibillion-dollar business humiliating itself. That is because the punishments meted out by the League were quite lenient. The Astros were fined $5 million, the maximum allowed by the MLB constitution, and forced to forfeit their first- and second-round draft picks in 2020 and 2021. In addition, Luhnow (the general manager of the Astros) and Hinch (the field manager) were each suspended for the entire 2020 season, including the playoffs. The owner of the Astros fired them soon after.

So, even though the punishments were the most severe that the MLB has ever issued against a team for in-game conduct, they still feel very, very light. Part of this has to do with the fact that no players were punished because they had given immunity in exchange for their cooperation with the investigation. So, some managers, who did not seem to be directly involved with the cheating, took the fall, and the players who organised and executed the scheme were let off scot-free. Even the text of the League’s investigative report often seemed like an exercise in “move along, there’s nothing to see here”.

Moreover, $5 million is a laughably small amount for an organisation valued at over $1.8 billion. Their revenue was $368 million in 2018 alone. Thus, a $5 million fine, although the maximum allowable, is effectively a slap on the wrist. And that value is almost laughable when compared to the money made by the organisation for winning a World Series (the organisation’s value rose $142 million in 2019 alone). Considering the MLB’s revenue in 2019 was a record $10.7 billion, this whole “punishment” song a dance routine just seems so superficial.

Protecting the Brand at All Costs

It is no wonder that 52% of Americans surveyed felt that the MLB should take away the Astros’ 2017 World Series title and only 35% said that it should not. But the MLB’s incentives are not focussed on justice. They are not a governing body or a justice system. Their goal is to deal with this scandal quickly and efficiently. In this case, efficiency means putting the entire scandal in the rear-view mirror as quickly as possible. By doing this, they are ensuring that their massive business can continue to reach record revenue in the coming years. From a pure “duty to the shareholders” business standpoint, some might even argue that it is their obligation to do so.

But others argue that MLB’s duty is to protect the sanctity and dignity of the sport. After all, scandals are not new in baseball. Before this year’s sign-stealing controversy, there was a national scandal surrounding performance-enhancing drugs (PEDs). When players took these steroids, they were able to increase their physical performance to historic levels. In the late 90s, home run kings like Barry Bonds, Sammy Sosa, and Mark McGuire were the icons of the sport; these suddenly hulking players smashed record after record. But pretty much every record from the “Steroid Era” has a giant asterisk next to it because of PEDs. I am not exaggerating when I say it was a massive scandal; some of the game’s biggest players were called to testify under oath before the United States Congress in the early 2000s. The Steroid Era was harmful to baseball in many ways, so re-earning public trust has been a paramount issue for baseball ever since.

No matter your opinion on the duties of the League, it is clear that their soft punishments were not enough to regain public trust. Let this be a lesson to any public-facing company: if your self-imposed punishments are too soft, they will not have the intended effect of putting an end to a scandal. It is also possible to overcompensate and punish too hard; Manchester City ended up overturning an overly harsh 2-year ban imposed by UEFA. Thus, to maintain credibility, it is imperative for large, public-facing organisations to take a Goldilocks approach to punishment.

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