Friday, April 28, 2006
Angels, Dodgers Expected To Join Industry Calls To End Revenue Sharing
In recent weeks, the principal owners of the two biggest sharers -- the New York Yankees, who contributed $76 million in 2005, and the Boston Red Sox, who paid $52 million -- have denounced what they're forced to pay. "I'd like to see everybody competing, but we're not a socialist state," Yankees principal owner George Steinbrenner told USA Today during spring training. Through a spokesman, Mr. Steinbrenner declined to comment for this article.The situation is exacerbated by what some big market clubs call "stealth sharing", or the tacit acknowledgement by ESPN and Fox national broadcast scheduling that more people are interested in watching a Yankees or Cubs game than a Devil Rays game.
To help prepare for the coming debate, the Red Sox are gathering data about revenue sharing in baseball compared with other sports, baseball executives say. Other big-market clubs -- including the Chicago Cubs, the New York Mets, the Los Angeles Dodgers and the Los Angeles Angels -- are expected to join Boston and New York in blunting calls for increasing the amount of revenue sharing, which is included in baseball's labor agreement. The issue is so contentious that MLB Commissioner Bud Selig recently told teams not to discuss it in the media.
Despite the disagreements, the clubs aren't nearly as economically and philosophically bifurcated as in the 1990s. "Clubs accept the structure that we're in," MLB President Bob DuPuy says. "It's a matter of refining the structure rather than an all-out assault on the structure."
The big clubs say some teams simply shouldn't get money. The most frequently cited example: the Philadelphia Phillies, who play in a new stadium in a major media market but received $4 million last year. High-revenue clubs also argue that teams such as the Tampa Bay Devil Rays, Florida Marlins and Kansas City Royals -- who cashed checks for more than $30 million apiece last season -- haven't adequately demonstrated they are using the revenue-sharing money to improve themselves. "How much more do you need?" one high-revenue club executive says.
Despite being outnumbered, big market teams will nonetheless fight moves to increase revenue sharing, and push for additional controls on the existing revenue sharing structure, such as requiring that such funds be spent on baseball operations. An accompanying table to the article indicates the Dodgers paid out $20 million in revenue sharing last year, and the Angels $11 million.
And maybe some day the baseball lords will have to admit that some cities are just too small to support MLB on an ongoing basis. Kansas City and Milwaukee are by far the smallest metro areas in the majors. Why not move one team to northern New Jersey and the other to the Inland Empire, thus creating 3-team markets in the 2 largest ones?
I don't see a problem with keeping teams like KC and Milwaukee where they are. Both have been successful in the past (they were two of the better teams in the 80s). Once both teams become successful, the fans will show up again. Also, Milwaukee is an extremely beloved team here in Wisconsin, I think it would be unfortunate to deprive them of a team, especially after they just built a pretty stadium. Especially when it looks like they will soon be successful again. I can understand moving teams like Florida, Tampa Bay, or Oakland where it appears that fans just are uninterested, even when successful (ok, TB hasn't been successful, but their support appears to be pretty low). Also, I think placing a team in Oklahoma City would work out well: they have proven that they will go watch major sports with the New Orleans Hornets actually having better attendance there than in NO. Its not the size of the market, its how you use it.
John Henry states that the Red Sox have to take in $2 for every dollar they spend just to break even.
Where his evidence for this statement can be found is unclear.
Major League Baseball added franchises primarily to get the revenue boost from awarding new franchises. They'll go to 32 when they think they need another cash infusion, you'll see.