Wednesday, Jul 9, 2008
The solution to baseball's revenue-sharing "problem" is for the teams to share the revenue.
Jun 16, 2000 | If there is a dramatic resurgence of socialism in the early part of the new millennium, future historians may well trace it to the 2000 Major League Baseball season. Everywhere the talk is of "revenue sharing"; it's likely that at no time in world history have so many multimillionaires been advocating socialism. In the recent words of Florida Marlins owner John Henry, "Revenue sharing is virtually all our commissioner talks about."
Well, at least commissioner Bud Selig is finally getting the message. Now let's see if he can communicate it to Ted Turner, Rupert Murdoch, George Steinbrenner and Jerry Reinsdorf. I think there is a very good chance that he can. I do. I also believe that I'll hear a knock on my door tonight, and that when I open it I'll see Salma Hayek with a bottle of wine in her hand and mischief in her warm brown eyes ...
But I digress. Everyone agrees that baseball's biggest problem ... well, actually baseball doesn't have a big problem right now. Attendance, both per game and total, is at an all-time high, new marketing techniques have put the game's young stars back on national magazine covers and more people are watching baseball on TV than ever before.
That last item is the one that's causing the problem -- or at least the one that everyone around baseball wants to call a problem. Other major sports make most of their revenue through national TV ratings and distribute it evenly. With baseball, the pyramid is reversed; hardly anybody watches baseball on national TV; on any given night during the season, baseball is a regional sport divided into 30 or so markets, some bigger than others.
Which is the problem: The Yankees get $55 million from local TV, the Royals $5.5 million. And the Royals' contract looks pretty good to the Montreal Expos: They don't get any TV money, in dollars or francs. This has created an enormous disparity in revenue between so-called big-market teams and small-market teams.
Actually, considering the money all these teams are making, it should be "huge market" and "very big market," but let that pass. The important thing is that this is what is supposed to destroy baseball because fans will lose interest when so many teams have so little chance to win. Or as Philadelphia GM Ed Wade says, "Used to be, everybody felt they had a chance in March. Now teams don't even feel they have a chance in January."
Of course, there are several possible comebacks to this. One is that Wade's team, the Phillies, is in the biggest single-team market in baseball and might, if managed properly, be a platinum mine of economic opportunity instead of a small-revenue producing franchise. Another is that if baseball owners want to preserve the game under its current revenue structure they ought to consider that maybe they've expanded too far and drop a couple of the existing franchises. (Would the game suffer that much if Montreal went back to being a Triple A minor league team?) And still another is that it used to be, before TV money became bigger than live gate, that the same couple of big-market teams, mostly the Yankees and Dodgers, won nearly every year, and fans didn't lose interest. But let all of that pass, too. Let's assume for a moment that everyone's right about this revenue-sharing thing.
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