Monday, November 14, 2011

The Yankees and the Best Interest of Baseball

Let me start by saying I love Dave Cameron's work. For me, he's in the second tier of great baseball writers currently working (the first tier is a club of one: Joe Poz). I'm really, really picky about whose work I read regularly, but Cameron is one of the few I come back to again and again.

All of this is a way of saying I'm not trying to pick a fight when I think the premise for his most recent anti-Yankee article is surprisingly nuance-less.

To sum up his key points: the Yankees exist in a different monetary universe than the other 29 clubs by virtue of their domination of the largest media market in the country, and this is bad for baseball because "when one organization can simply put aside cost as a significant factor in their evaluation of whether or not they should acquire a player, they’re simply not bound by the same factors as the other franchises."

I'd agree with the final conclusion: even if it's ok for teams to exist in separate payroll strata because of their popularity/ home territory, it's not ok for the top strata to belong exclusively to a single organization.

The Yankees' primary advantage comes from two compounded areas: the population of New York City with it's influence on attendance, and the profitability of the Yankee owned goliath the YES Network. The first factor, population, is close to intractable. The second issue is simply (if inexactly) controllable.

My steps to introducing balance to MLB (notice, I didn't say restoring balance; there's a false narrative floating around that at some mythical past time, the playing field was leveler. In fact, for long stretches of baseball history, the Yankees dominated more easily because there was no revenue sharing, no media deals to create alternatives to box office revenue, and no luxury tax [distinct from revenue sharing] to support small market teams; this reality helped create the Yankee "golden age" including the sale of Babe Ruth and Red Ruffing from Boston, the bonus babies of the '47-'65, and the Kansas City A's pipeline that fed to Yankee Stadium).

1) Make all teams open up their books.
Be transparent. The only reason to keep this information secret is that the books are crooked (I expect that for most teams they are; I suspect that few owners, if any, have ever lost money on their team).

2) Tax revenue instead of payroll.
At the moment, most of MLB's taxes are payroll dependent. This is basically an attempt to force all teams into the "window of opportunity" cycle that small market teams exist in.

3) Tax different revenue streams at different rates.
If the problem is that the Yankees can pour the money from their tv deal back into the team (I don't really think it's a problem per se, but I'll allow that it may be a problem that the Yankees can do this on a scale that the Seattle Mariners can not. For instance, Box Office sales above $X may be taxed at 10% while TV revenue above $X may be taxed at 25% and above $2X be taxed at 35%.

4) Incentivize success.
You want to know why the Yankees spend so much to win? Because it makes them the most money. Want to know why the Pittsburgh Pirates spend so little? Because it makes them the most money.
Create tax credits for successful franchises, and improvement benchmarks for struggling franchises. Don't let the owner of a small or mid-market franchise pocket millions season after season. I'd create a profit ceiling, a level of shareholder profit above which revenue sharing funds are withdrawn. So if I'm the Pirates (who reportedly turned 8 figure profits in '07 and '08), and I'm writing all these checks to shareholders, then I'm obviously not pouring this money back into the team. So I don't need it, and it can go instead to a team trying to win.

1 comment:

  1. I especially like idea #4, even if the first three never happened. If the point of revenue sharing is to give small market teams a chance to compete, then they ought to meet requirements to show they are using that money as intended. Otherwise, the current system is nothing more than baseball welfare.