(WARNING: This is a long post that includes references to numbers. If you get severe headaches from reading long posts or any post with even the slightest mention of numbers, continue reading at your own risk. The author got a headache while writing this post. He takes no responsibility for your headaches.)
On Friday, I passed along a couple of recommended blog links that I found interesting and thought others might enjoy as well. One of them was Joe Posnanski’s post concerning Home Run trots.
Well Joe has a new post up on his blog and it’s another winner. You should read it.
Now.
I mean it. I intend to rant about the subject of his post and it won’t make much sense if you don’t read Joe’s post first. So go read it. Now.
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Admit it, you didn’t go read it, did you? Your loss.
If you did, then welcome back.
If you read Joe’s post regarding this Forbes.com list, you learned a couple of things. Specifically…
- Even after accounting for revenue sharing, the Yankees bring in revenues about two or three times those of virtually every other team in baseball.
- The line of BS that the Yankees, their fans and members of the media that buy their crapola try to sell us about how the Yankees win because they invest their revenues in their baseball operations while owners who receive revenue sharing pocket it instead of investing in their team is just that… utter fictional BS. Every team (with the possible exception of the Marlins) spends the vast majority of their revenues in their baseball operations. Some just invest very poorly.
- The Yankees $uck.
That’s not to say every Yankee player, employee, and fan $ucks.But those who do $uck, so extreme in their $ucking that it is difficult not to color the entire group with the same brush.
And furthermore, everyone who follows the game but is not a Yankee player, fan or someone who’s livelihood is directly tied to the Yankees KNOWS the Yankees $uck.
But why? It’s one word… arrogance. F’ing Yankee arrogance.
And any time you want to really see an example of that arrogance, bring up the obscene competitive advantage the Yankees have that has directly led to the Yankees being all but guaranteed a playoff spot every. single. year.
Don’t believe me? Ask Brewers owner Mark Attanasio.
Early this season, Attanasio dared to pass along a rather obvious observation to USA Today that his team was struggling to afford an extension for Prince Fielder while the Yankees are paying their infield more than the entire Brewers’ payroll. In typical arrogant Yankees fashion, their president, Randy Levine, told a NY radio station that Attanasio was “whining.” Actually, if he had stopped there, it wouldn’t be such a prime example of Yankee arrogance. But here’s the quote:
“I’m sorry that my friend Mark continues to whine about his running the Brewers. We play by all the rules and there doesn’t seem to be any complaints when teams such as the Brewers receive hundreds of millions of dollars that they get from us in revenue sharing the last few years. Take some of that money that you get from us and use that to sign your players. The question that should be asked is: Where has the hundreds of millions of dollars in revenue sharing gone?”
See… this is the standard line of garbage that Yankee fans hurl back in response to even a suggestion that there might be some reason other than just an inherent right or superior organizational talent (did you know Brian Cashman is a baseball genius?) that has resulted in the Yankees being granted an automatic berth in MLB’s playoffs for most of the past two decades.
“We play within the rules”. “We give other teams millions of dollars in revenue sharing.” “Other owners pocket the money instead of using it to pay for players.”
Well guess what? If you dig a little deeper in to that Forbes.com article, they specifically mention two organizations that got the most bang for the buck in 2009. According to Forbes, for six of the past seven years, those whining Milwaukee Brewers, “have had a wins-to-player cost ratio of 110 or higher, meaning they have generated at least 10% more victories per dollar spent on players than the average team.” By the way, the team Forbes tagged as the “best in baseball” in that category (with a ratio above 120 in eight out of the past 10 seasons) was yourrrrrrrrrr Minnesota Twins!
So, apparently the Brewers (and the Twins) are putting those millions of F’ing Yankee dollars to good use.
But what about the rest of the league? Aren’t teams like the Royals pocketing those revenue sharing dollars while fielding minor league quality products and trying to pass them off as MLB teams on the field? Well yes and no.
The Royals, and a few other teams, have certainly trotted out some incredibly bad baseball players dressed in their teams’ colors over the past couple of decades.
But despite what Yankee fans (and apparently, their president) would have you believe, it’s not because they aren’t spending the money they’re taking in while the Yankees are pouring all their revenue back in to the baseball operation.
In 2009, even AFTER the F’ing Yankees ponied up a few million dollars in revenue sharing, they realized NET revenues of $441 million. They invested 94% of that back in to their operation, with the remaining 6% constituting their “profit”.
What about those miserly Royals? Well, as Posnanski mentions in his post, the Royals also invested 94% of their revenues (including their share of the revenue sharing pie) back in to their operation and showed the same 6% profit the Yankees did (though the Royals profit was less than $9 million, while the Yankees’ nearly hit the $25 million mark in profits). By the way, the whining Brewers had a nearly identical 94%/6% split. Take that, Randy Levine.
So, it appears the Royals aren’t trying to game the revenue sharing system to make vasts amounts of money. They just really suck at assembling a baseball team.
As we all know, the Twins are swimming in revenue now that Target Field has opened. In fact, Forbes estimates that the Twins will see revenues jump by $30 million dollars over 2009’s numbers. (Say… isn’t that about the same amount that the Twins’ payroll went up from 2009 to 2010? Yeah? Probably just a coincidence.)
But before any of us starts assuming this means the Twins will able to start competing for the next round of superstar free agents, keep this little fact in mind: If you took the new 2010 revenue levels and DOUBLED them, that would still be $50 million LESS than what the Yankees collected in 2009 (even after paying in their revenue sharing dollars).
The Yankee apologists are correct about one thing, though. The Yankees are following the rules. King George and his boys, Hank and Hal, have gamed the system perfectly. They pretty much just print the money they need, toss the rest of the teams what amounts to little more than “tip money”, and go on about the business of throwing obscene amounts of cash at every superstar free agent who hits the market.
They do it because it’s what MLB rules allow today. That doesn’t mean the rules shouldn’t change.
But how? How do you create a more evenly competitive environment when there is so much disparity in revenue opportunities?
A salary cap that prevents the Yankees from spending more on payroll than other teams? All that would accomplish would be putting more money in to the Steinbrenner family trust fund and it would never get the needed support of the MLB Players Association.
A salary floor that would require every team to spend something closer to what the Yankees do on players? The Yankees spent more on payroll than over half of the teams collected in TOTAL revenue (including revenue sharing dollars) in 2009. Are you going to force half the teams to operate at a net loss?
No, the issue is not payroll size. The Forbes lists demonstrate that every team (except possibly the Marlins) is reinvesting most of their revenues in to their baseball operations. Some invest in their farm systems and scouting operations and some invest in aging, incompetent free agents who are past their prime or never had a prime. (It does make you wonder, though, how Jermaine Dye hasn’t ended up back in a Royals uniform, doesn’t it?)
The only way competitive balance can be reached is with a redistribution of revenues. You simply can not have one team with two or three times the financial resources available to them than any other team has and expect competitive “fairness”.
But how to redistribute the wealth? It’s not that difficult, really. It just takes a Commissioner with some intestinal fortitude and integrity (of course, MLB has Bud Selig instead) and 29 other owners willing to stand up to the Steinbrenners (instead of just Mr. Attanasio and 28 other owners without the guts to back him up).
So here’s what Baseball Commissioner Jim Crikket would do.
I would tell the Yankee owners that the issue is in their hands. I’d give them six months to come up with a plan that assures that no team (read: the Yankees) will ever have more than twice the revenues from which to operate their franchise than any other team. If the Yankees had revenues of $350 million and every other team fell somewhere between $175 – $350 million, I believe you would have competitive balance.
I’d also tell the Yankees that if they fail to come up with a workable plan within that six month period, we’re going to announce that MLB is expanding by two teams (to finally have two balanced leagues of 16 teams). I’d tell the Steinbrenners that one of those teams would be locating in Hartford and that the other would be setting up shop in Newark or, better yet, Brooklyn.
Oh, and by the way, I’d also tell the Yankees that the owner of that new team in their backyard market would be Mark Cuban. (After his bid to buy the Cubs failed, he’s reportedly now interested in the Dodgers.)
Then I’d tell them that all local broadcast rights for every team will be going up for auction and all such fees will be paid to MLB and distributed equally among all teams. If the Yankee-owned YES network wishes to bid for the rights to Yankee games, let them do so. But they get no special deals and they pay market prices… to Major League Baseball.
Then we sit back and find out just how smart Brian Cashman really is… and how much whining Randy Levine does.
Can I get an ‘Amen, Brother’?
Oh…if level-headed, fair-minded people such as yourself were in charge. **Sigh.**
Something needs to be done, I agree, but I like the salary imbalance to a certain extent. It’s interesting years in which the Yankees spend outrageously and still don’t win. Yet, it’s a little extreme right now with what the Yankees can buy that other teams can’t. Without Target Field, there’s really little chance that Mornau, Mauer, and Cuddyer are all in the Twins line-up in 2011, and certainly Hudson is not added to the team in 2010. It’s not because the Twins wouldn’t have wanted them, but rather that they couldn’t afford them.
I don’t see very much to disagree with in the above article, other than the notion of intentionally stifling a team’s revenue (force them to make less money? charge less for sponsorships? I don’t really follow the rationale — if the Pirates draw 2500 people a game the Yankees can only sell 7500 tickets a game?). That being said, there is a competetive imbalance that stems from the revenue that the Yankees (and others) are able to generate. The new stadium and its corporate sponsorships demand a higher pricetag than can be demanded by other teams and other stadia as well.
I believe there is room to debate the chicken/egg of the situation, however. The Yankees are able to put a great product on the field because of their vast revenue, then enjoy vast revenue because of the great product on the field. That is to say, of course selling out even Target field for every game will not bring the revenues that selling out Yankee Stadium receives (side note: on the Target Field opening day telecast we found out you could get a luxury box for $90k for the season — 15 seats per game. If I could get that in Yankee Stadium, I’d be all over it — $75/seat IN A LUXURY BOX — get 20 people together and go to 4 games each, throw a party for 15 closest friends, not to mention the resale value…and when the playoffs roll around? But I digress…). Nevertheless, time and time again we see teams (Twins, Rays, White Sox, Angels, Astros, Braves) that sell out their stadia when the team is playing well, and draw 10,000 fans when the team is not.
Shouldn’t the task at hand for teams be formulated to read “We need to increase revenues!”? I have never heard a team come out and say “We are committed to spending 94% of revenue on baseball operations (or better yet, 85% [or whatever the number comes out to be] on player salaries). It is up to the fans to support the revenue stream and we will take it from there.” You want to resign Prince Fielder? It’ll take 4,000 more people per game and we’ll do it. Support the team and the team will reward the fans with premier players.
Of course, I don’t intend the above statements to take away from the points made in the original blog post. Even considering the outcome of the above suggestion, the Yankees (along with the Red Sox, Mets, and Cubs) will have a tremendous revenue advantage all things being equal. But there is a feeling of betrayal by fans of certain teams (even the Mets) who feel as though the team is content to make its 6% ($9M) rather than make the team more competetive. Those fans, at the very least, would be the ones to add to the revenue stream if their team “made that extra effort.”
One note — I want to credit JimCrikket for also pointing out that while the Yankees spend more (by far) than any other team, they also tend to spend that money wisely, while some other teams do not. I suspect the greatest advantage a team like the Yankees has is to cover up its mistakes. Carl Pavano, while pitching well now, was one of those mistakes for the Yankees — other teams might have choked on the wasted $40M, but the Yankees just went out and spent more.
All in all, I think that the “true” answer lies somewhere in the middle. For certain, the revenue stream (and potential revenue stream) for teams such as the Yankees results in a competitive imbalance that far too often impacts the standings come playoff time. However, I believe that if the Indians had held onto Lee and Sabathia (and put them with Carmona) the revenue in Cleveland would be vastly higher at the end of the 2009 and 2010 seasons — would 94% of that increased revenue cover the salaries for Lee and Sabathia (including playoffs and potential World Series)? I have no idea. But I believe it’s something worth thinking about.
YF is a prime example of why I say not all Yankee fans are totally corrupted by their loyalties to the Evil Empire.
For the record, I’m not suggesting anyone stifle revenue generation. But as the NFL has figured out, someone has to provide an opponent for the big-market teams and those opponents deserve an equitable (not necessarily equal) share of revenues that they help generate. Sharing ALL television revenues equitably would be a good start.
I honestly don’t even really blame the Yankee ownership nearly as much as I blame Bud Selig and the rest of the owners who (with too few exceptions) are too gutless to stand up and tell Bud and the Steinbrenners, “this is wrong and we won’t continue to do it this way.”
The reason is clear. Having the Yankees in the playoffs every year is what the TV networks want. If the owners decided to make things “fairer” with the result being that the Yankees might only be in the playoffs 50% of the time (and perhaps stand less of a chances of advancing in the playoffs than they have now), the owners are afraid they may not make as much money from the national networks.
In other words, most owners are more concerned about upsetting the TV networks than they are about creating anything approaching competitive balance. Until more owners are willing to speak up, like Attanasio did, and back up their voices with votes at owners’ meetings, nothing will change. But I’d really love to see Mark Cuban own a mid-market team and then sit back and wait to see how long it took before he started making waves.
Thank you for your kind words — I have always believed that to br true to sports fandom, one must always be a fan of the sport first and a team second. I understand why certain fans get painted with a broad brush and hardly ever take offense to being lumped in with others.
It is true that the television markets are controlled by the NFL and not by MLB, and the problem may be that that the ship may have long sailed with regard to the television contracts. In fact, when George Steinbrenner announced he would not renew the Yankees television contract with the Madison Square Garden Network, and planned to create an entire television network based solely on the Yankees, it was largely laughed at if I recall correctly. The idea of basing an entire network around a part time sport was thought to be folly, and several television networks refused to carry the station at its inception. Perhaps revenues would be better realized if each team owner maximized the television possibilities by creating a network and filling the time with appropriate programming. Admittedly, I am not sure how MLB controls or licenses the broadcast rights, but even if it had the power to equally distribute television revenue, it would be unfair to those who took the risk of creating a network to maximize television revenue to now unilaterally declare those rights revoked.
The issue might be the number of games (MLB has about 10x the regular season games that NFL has). Of course, the 240 or so NFL games can be proscribed for on national television and the revenue shared among all parties involved. Trying that with the 2430 or so MLB games would be a logistical nightmare.
That being said, there was an old Nintendo baseball game (MLB Stars maybe?) that rated its players in terms of popularity such that the draw of the crowd for its games would increase regardless of on-field performance. So for a game between A and B, the crowd would be proportional to the “star power” (for lack of the actual word used) and the total gate was then split between the two teams involved. This might be a potential solution along the lines that you proposed.
That is, when the Yanks play the Royals (home or away), the television revenue for that day from both local markets is pooled and split between the two teams. This would ensure that the Yankees retain more of the revenue that they cause, but may provide an increase in the revenue for the teams that they play. After all, a game features two teams and the Royals should receive some of the television revenue that their game generates. It also feels a little more “fair” than simply asking a team to give away a portion of their earned revenue for an altruistic reason (e.g., “for the good of the game”).
Note that the example is Yankee-centric due to the post, but the Red Sox (among others) would also provide those benefits in the American League, and the Mets, Cubs, etc. would have the same effect in the National League.
The revenue problems that teams like the Royals, Pirates, Rays, Brewers, et al. have aren’t merely lack-of-attendance. The reason the luxury boxes in Minnesota are such a great deal is because hardly anyone (or any businesses) in Minnesota can afford Yankee luxury prices. The cost of living in smaller markets is significantly lower than it is in New York, Boston, and L.A., but the resultant smaller salaries/wages of the small-market citizens mean their disposable income is significantly less than the equivalent citizen in the larger markets.
The most expensive seats in the new Kauffman Stadium in KC are about 200 dollars. And there are like 40 of them. If they sold out all 81 home games next year, they’d still probably take in less than half of what the Yankees do in ticket sales.
I agree, and I believe my post referencing the Target Field pricing takes that into account. The point is not that KC could equal the Yankee revenue if it sold out Kauffman, rather that KC could afford to spend more in player salaries if they did — and if they spent more in player salaries they would likely sell more seats. The team might have to be the one to initiate the chicken-and-egg cycle.
The ideas that Jim Crikket threw out, along with those in my second post would enable smaller market teams to spend more on player salaries, which would hopefully spur more fans to buy tickets, which would increase revenues, and so on. The idea is growing on me, as it would provide subsidies to small market teams without the “handout” mentality.
It’s not enough to say “the Yankees generate tremendous revenue, it’s not fair!” Every team can increase revenue (albeit not to the $400M extent that the Yankees bring in) and to help the situation, the focus should be on increasing teams’ revenues — it’s inarguably good for baseball.
Clearly, there’s no “simple solution” and even those I mentioned in the original post are over-simplified. But then, that’s why you don’t want to overlook my PRIMARY suggestion, which was to to give the Yankees themselves the first shot at constructing a solution. Why? Not only because they stand to “lose” the most through almost every proposal you read about, but because the Yankees have become experts at maximizing revenue.
If there is to be a financially acceptable solution, it’s going to have to come not through giving some of the pieces of the Yankee share of the pie to other teams, but from making the pie bigger! (You’re seeing this dynamic at work in the discussions about increasing the size of the Big 10 conference.)
The solution isn’t really to tell the Yankees, “you can’t bring in $400 million in revenue any more.” The solution has to be telling them, “It’s fine if you bring in $400 million in revenue… but you need to help us find a way to make sure everyone else brings in AT LEAST $200 million.” After all, if the reason the Yankees are so successfuls is because their ownership/management is so great at maximizing revenues, shouldn’t they be able to come up with ideas to help the Royals do the same thing?
As Ethan points out, that additional revenue is not likely to come from the Royals selling out their stadium (though maybe there are some ideas that could get them closer to doing so). My suggestion of making all local broadcasts part of the MLB broadcast rights package seems like the most likely way to increase the size of the overall revenue “pie”, but it’s not the only one, I’m sure.
In fact, I have another idea that would allow most, if not all, teams to increase their revenues (and some of them substantially).
But I’m saving that for another blog post. 🙂
In any event, we keep hearing that MLB has never been more popular than it is now. If that’s the case, there has to be a way to cash in on that popularity in ALL markets, not just New York and Boston.
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