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Fixing Baseball without a salary cap

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Postby lesgrant » Mon Feb 16, 2004 3:00 pm

ramble2 wrote:
lesgrant wrote:What it all comes down to is the fact that most owners would rather pocket their profits instead of putting them back onto the field. Then they cry poverty (even though not a single owner is willing to open up their books for an independent audit) and vilify Steinbrenner for spending what they don’t want to spend. And of course fans parrot their owners and the media.

The only way that your team will be able to compete with the Yankees is if your fans stay at home and boycott your franchise until they sign some top tier talent. The Mets’ fans did just that and it resulted in the signing of Piazza (and others), eventually leading to a NL championship. Even though they lost to the Yanks in the WS, their franchise took a huge step forward.


I agree to an extent that some owners don't invest properly in their team. But that only describes a tiny majority of teams. The Yankees are a team that re-invest their money back into payroll and team development. But you are ignoring three facts: 1. Not all teams have equal revenue; 2. Baseball is structured in such a way that local revenue stays with local teams; 3. Local revenue is driven primarily by market size. Oakland's market is a fraction of the Yankees. Even if both teams were run equally efficiently and marketed equally effectively, there will be a huge differential in revenue produced.

I've mentioned this in other posts, but it's worth repeating. If you own a baseball team, it ought to be viewed first as an investment, and only secondly as a source of income. The real (monetary) payoff of owning a baseball team is when you sell it. MLB teams tend to be very good investments. Good owners ought to be willing to put most of their revenue back into the team to increase it's worth. It might even be worth putting in more money than is being generated in revenue, if you can get that money back.

But there is a limit. Very few people, even baseball owners, could afford to pay $20-$30 million more a year than is being generated. The problem is that there is easily this much discrepancy in revenue between teams. Personally, I'd like to see more aggressive sharing of local revenue. Teams with good management and committed owners will be rewarded. The problems of a salary cap are avoided. Large-market teams will still generate higher revenues, but the discrepancy won't be as great. Sharing local revenue is also fair, given that no team can exist without the other teams to play.

Nothing like this is going to happen until Bud is gone. Bud has too many conflicts of interest and not enough trust to make this happen.


I hear your point.

I only object on a couple of details.

First, every market will inevitably be a fraction of the New York market. That will never change. In fact, NYC is an essential market for any sports league because of its size. You need us.

Secondly, most teams that cry poverty are not in what could be considered small markets. The Bay area, for example, is not a small market. It is one of the top ten markets in the country, coming in somewhere around 6 or 7. The notion that you have no ability to compete with the Yankees, because of your pre-ordained market size, is false.

Thirdly, how do you know what your team can afford to spend and what it can’t? You are not privy to the financial ledger for any team in baseball. You only know what your owner tells you to know. You have no way of knowing, truly, what they can afford and what they can’t afford. They like it that way because it provides a built-in excuse and cover for them to pocket their revenues. There is no way for you to substantiate your team’s lack of money, thus its not even a valid position.
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Postby ramble2 » Mon Feb 16, 2004 4:01 pm

lesgrant wrote:I hear your point.

I only object on a couple of details.

First, every market will inevitably be a fraction of the New York market. That will never change. In fact, NYC is an essential market for any sports league because of its size. You need us.


Agreed. In my proposal for more aggressive sharing of local revenue the NY teams still come out ahead. Of course, NY teams can't support a market all by themselves, so it's fair that the revenues are shared.

lesgrant wrote:Secondly, most teams that cry poverty are not in what could be considered small markets. The Bay area, for example, is not a small market. It is one of the top ten markets in the country, coming in somewhere around 6 or 7. The notion that you have no ability to compete with the Yankees, because of your pre-ordained market size, is false.


I don't see this. Leaving aside who's crying poverty (mostly Selig, Pohlad and KC's owner). First of all, even though the Bay Area is a top ten market, there is still a fraction the number of people that there are in NY - you just pointed this out above. TV rights alone are worth a fraction of NY tv rights. The Bay Area may be top ten, but it's still a far cry from NYC.

Second, my point was simply about revenue generation - not competition. Place the same team, with the same skilled management and marketing team in NY vs. Oakland and you will generate a much different revenue. It's a function of population size, plain and simple. As an Oakland fan, I'm well aware that a team with a smaller payroll can compete against the big boys. Again, the point is that revenue should be shared more fairly. Just as the Yankees should be rewarded for drawing fans to the Oakland Coliseum, so too should the A's be rewarded for drawing fans to Yankee Stadium. If local revenue was shared, the difference this year for the A's might have been retaining Foulke instead of signing Rhodes.
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Postby ramble2 » Mon Feb 16, 2004 4:01 pm

lesgrant wrote:Thirdly, how do you know what your team can afford to spend and what it can’t? You are not privy to the financial ledger for any team in baseball. You only know what your owner tells you to know. You have no way of knowing, truly, what they can afford and what they can’t afford. They like it that way because it provides a built-in excuse and cover for them to pocket their revenues. There is no way for you to substantiate your team’s lack of money, thus its not even a valid position.


Again, I agree. I have no idea of knowing how much revenue any MLB team generates. But that actually doesn't matter. All I claimed was the following. Assume that the A's and the Yankees are equally well marketed. The Yankees are going to generate a much higher revenue as a function of geography. Even if both teams reinvest all their revenue, there will be a very large discrepancy in payroll.

What I'm calling for is simple. Share local revenue. There will still be discrepancy in revenue generation, for a variety of reasons, and large market teams will still come out ahead if they have good management. By decreasing the huge revenue discrepancy, well managed teams will be rewarded. It also creates the right kind of incentives for owners and teams. What generates local revenue? Here are two things (1) Winning teams; and (2) improving teams.
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Postby ramble2 » Mon Feb 16, 2004 4:06 pm

There have been other very good suggestions in this thread too. One has been to remove the 'protected markets' that baseball currently has. E.g., allow another team in NYC; let the A's move to San Jose, etc.

If this was done via expansion, I'd be more apt to go along with it (though still a little hesitant). It's not that it wouldn't help level the revenue playing field, but that I think there are other better ways to do it. I like the fact that baseball is in a lot of different cities across N. America. I think it's good for baseball to have a presence in lots of cities. In the long run, I think that will generate more national interest and produce greater MLB revenue. So from a selfish standpoint, I'd like to see a solution that lets baseball survive in as many different areas as possible. If that means that we have an aggressive revenue sharing that amounts to NY teams subsidizing the smaller market teams, then so be it (though I don't think this need be the case). In the long run, it's better for the game and all teams will benefit.
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Postby jbird669 » Mon Feb 16, 2004 5:02 pm

A salary cap is the only way. I don't see why the players are so against it, seeing how successful the NFL is. The NFL has long passed baseball as America's National Pasttime. I am not sure a hard cap will be as good as a soft cap, but something needs to be in place. I think their actions toward a cap shows that the players are more interested in getting paid than their sport thriving.
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Postby GotowarMissAgnes » Mon Feb 16, 2004 6:37 pm

jbird669 wrote:A salary cap is the only way. I don't see why the players are so against it, seeing how successful the NFL is. The NFL has long passed baseball as America's National Pasttime. I am not sure a hard cap will be as good as a soft cap, but something needs to be in place. I think their actions toward a cap shows that the players are more interested in getting paid than their sport thriving.


The question is who is the cap good for:

Average salary in MLB: $2.3 million
Average salary in NFL: $1.2 million

8-10 years ago those average salaries were the same.

Tell me, which sport do you think is going to attract the best athletes if that trend continues?

If you are the QB/SS star of your high school football/baseball team, why would you even bother calling the NFL back?
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Re: expansion instead of contraction

Postby wrveres » Mon Feb 16, 2004 6:48 pm

Arlo wrote:
wrveres wrote:Thoughts so far ?

Great thoughts. ;-D

Just a question: why New Orleans and Las Vegas?


no particular reason ... just simple markets that could easily support a baseball franchise. Both cities are currently under consideration for the Expos and I think it would/could be doable. vegas would be a little harder than New Orleans. just getting away from the gambling, I read somewhere that 1/3 of the population of vegas is working at any given time, another third is sleeping. But the Vegas A's would sure sell im my book. If Las Vegas is truly becoming family oriented. They could build a stadium slash hotel with retratable roof. This hotel must have no gambling though and that might be the hang up. but imagine being able to sit in your hotel room and look out into the stadium. ;-D
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Postby ramble2 » Mon Feb 16, 2004 8:13 pm

jbird669 wrote:A salary cap is the only way. I don't see why the players are so against it, seeing how successful the NFL is. The NFL has long passed baseball as America's National Pasttime. I am not sure a hard cap will be as good as a soft cap, but something needs to be in place. I think their actions toward a cap shows that the players are more interested in getting paid than their sport thriving.


Getting paid and wanting their sport to thrive are not mutually exclusive. Baseball, in fact, is thriving.

And if the money isn't going into player salaries, where do you think it goes? I can guarantee you this: neither the Yankees nor the Rangers were losing money on A Rods contract. Steinbrenner will easily turn a profit on the Yankees this year, as will most MLB teams.
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Postby wrveres » Tue Feb 17, 2004 6:42 pm

apparently nobody liked my "Radical Ideas" that would help save baseball, but I would love to see a few more ... ;-D
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Postby Heimush » Tue Feb 17, 2004 6:43 pm

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