graphic
graphic  
graphic
Commentary > SportsBiz
graphic
Owners' demands won't level field
Baseball owners' demand for luxury tax and revenue sharing won't help small, poorly-run teams.
August 16, 2002: 4:18 PM EDT
A weekly column by Chris Isidore, CNN/Money Staff Writer

NEW YORK (CNN/Money) - It's too soon to say if baseball will avoid its sixth midseason work stoppage, though Friday's decision by players to impose an Aug. 30 strike deadline looks ominous enough. And it's too soon to say whether the owners or players will come out on top, though history suggests betting on the guys swinging the bats.

But it's not too soon to say what won't happen: the competitive balance of the sport will not be changed -- even if the owners get what they want.

Management likes to portray its demand for more sharing of ticket sales money and local broadcast fees between large revenue and small revenue teams, as well as a so-called luxury tax that penalizes teams with the largest payrolls, as the key to allowing small market teams a chance at the World Series.

Low revenue teams like the Kansas City Royals or Tampa Bay Devil Rays won't be competitive even if the owners get what they want from the players union.  
Low revenue teams like the Kansas City Royals or Tampa Bay Devil Rays won't be competitive even if the owners get what they want from the players union.

Those demands are really about cutting salaries and increasing profits. If the richer teams have to share more money, they won't be able to offer as much to top players, and salaries that now average $2.4 million will stagnate or fall. Management negotiator Rob Manfred, in a surprisingly candid moment this week, referred to the luxury tax proposal as "salary regulation."

But don't think that regulation will lead to a Milwaukee Brewers-Tampa Bay Devil Rays World Series showdown anytime soon.

The fact is that baseball is already sharing more than $500 million among large and small market teams under the current labor agreement -- about 20 percent of all local revenue, with the smaller market teams getting more of the pie. Yet there are cries from sports writers and fans that the playing field has never been more tilted against the little guys.

A big part of that perception is that the poster child for large-market wealth, the New York Yankees, have played in five of the last seven World Series and have won four.

But that's due in part to the increased number of teams that participate in baseball's post-season since 1995. If baseball hadn't expanded the playoffs, the Yankees, with only a second-place record, would have sat out two Octobers -- 1996 and 2000 -- in which they won the championship.

  graphic  SportsBiz  
  
Click here for SportsBiz column archive
Click here to email Chris Isidore
Click here for CNNSI.com coverage
  

No one seriously argues that having fewer teams in the playoffs will restore balance, but neither will the owners' "salary regulation." The truth is there has never really been competitive balance -- some badly-run teams in smaller markets have always had trouble competing. In fact, small market is often just baseball code for poorly-run.

The doormats of the American League, the Tampa Bay Devil Rays, take in $15.5 million in local broadcast revenue. That's more than either the St. Louis Cardinals or world champion Arizona Diamondbacks get.

  graphic  Related stories  
  
Baseball players set strike date
No strike call by players union
Baseball payroll struggles
  

At the other end of the scale consider the Seattle Mariners. The team was on the verge of leaving the city in 1995 and has lost three future hall of fame players it couldn't afford to pay. Now the franchise may be the most profitable in baseball and won an American League record 116 games last year.

The fact that the Yanks beat the Mariners in the playoffs is proof that anything can happen in a short series, not of some predetermined competitive imbalance. And getting the union to agree to greater penalties on well-run franchises won't make the people who run bad teams any smarter.  Top of page




  More on COMMENTARY
Yes Virginia, there is a Santa Claus rally
Thanks for nothing, Corporate America
It's not just the economy, stupid
  TODAY'S TOP STORIES
It's not over: Airbag recall could expand
The Ebola stocks: Effect of an outbreak
Icahn to casino workers: Give up health care




graphic graphic

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer.

Morningstar: © 2014 Morningstar, Inc. All Rights Reserved.

Factset: FactSet Research Systems Inc. 2014. All rights reserved.

Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved.

Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor’s Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2014 and/or its affiliates.

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer.

Morningstar: © 2014 Morningstar, Inc. All Rights Reserved.

Factset: FactSet Research Systems Inc. 2014. All rights reserved.

Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved.

Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor’s Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2014 and/or its affiliates.