Pinch-Hitting Stint at LoHud

Pete Abraham, the beat writer and blogger at The Amsterdam Journal News, was good enough to grant me a spot in his winter pinch-hitting lineup.  Here is the post. Many thanks to Pete for the opportunity.

Below is a slightly expanded version of that post, with some financial details and statistical information added here that would have bumped the post at LoHud over the 500 word limit.  The original was 497 words and, as the regular readers here know, brevity is not my strong suit.  Tough decisions ensued, so I figured I’d omit some figures and include them here.  Otherwise, it’s essentially the same.

The post:

This off-season, the Yankees have come under fire for their high-priced, free agent acquisitions. After they signed Mark Teixeira, Peter Gammons compared them to Wal-Mart, braying “Wal-Mart eats up small-family businesses.  The Yankees eat up the Brewers and the Indians.” After they acquired Sabathia, Burnett, and Teixeira, some, including Astros owner Drayton McLane, clamored for baseball to adopt a salary cap. While I object to the Yankees’ receiving city-sponsored tax-exempt bonds and their new stadium’s cost overruns, I disagree with both Gammons’s misguided portrayal of the Yankees’ financial relationship to other teams, and with knee-jerk cries for a salary cap.

First, it’s ironic that Gammons compared the big-spending Yankees to a corporation that recently settled for over $600 million various class-action lawsuits for stealing overtime from employees and forcing them to work through lunch and breaks periods–for underpaying employees through threats, coercion, and stealth. Do the Yankees financially “eat” teams such as Milwaukee and Cleveland? Revenue-sharing figures suggest otherwise. In 2005, Milwaukee received $24 million in revenue-sharing money and Cleveland $6 million, with the Yankees contributing $76 million of roughly $312 million that thirteen teams paid the other seventeen.

The purpose of revenue sharing is to improve the competitiveness of small-market teams through earnings redistribution from larger-market teams. Yet teams often accept such largess to offset payroll without re-investing in new talent or keeping their own. The $24 million paid to Milwaukee represented just over sixty percent of its $39,934,833 payroll that year. Florida received $31 million in revenue sharing for 2005, yet refused to re-invest that money. In fact, that $31 million represented nearly half Florida’s combined payroll for the 2006-2008 seasons, $67,317,000, aided by its 2005 trade of Josh Beckett and Mike Lowell to Boston.

What many small-market teams have done, and what the current revenue-sharing system rewards, is to profit as the team struggles and fans fish for reasons to attend games. The Marlins and Royals are prime culprits, profiting from low payrolls and with low attendance figures (each at or near the bottom in attendance every year from 2004-2008). Florida has occasionally competed for the playoffs since winning the 2003 World Series, while the Royals are perennially a profitable laughingstock far more valuable now than eight years ago.  Yet they have nonetheless been in the black, with Florida earning $43.3 million in 2006–tops in baseball– with a payroll just under $14 million, and the Royals earning $8.4 million in 2006 and $7.4 in 2007.  The Pirates were also profitable, pulling in $23.9 million in 2006, good for 3rd most profitable in baseball, and $17.6 million in 2007, 18th most profitable.  Yet they won a scant 67 and 68 games in 2006 and 2007 respectively, were 15th in attendance in the NL each year, and cut payroll from $46.7 million in 2006 to $38.5 million in 2007 (Plunkett’s Sports Industry Almanac 2008 and 2009; Salary Database).  Poor win-loss records do not necessarily equal destitution.

Even as the small-market, low payroll Rays reached the World Series last year, others caterwaul for a salary cap. Yet will this achieve either on-field parity or greater profits for small-market teams? Not necessarily. Despite having half the teams in the playoffs that the other three major North American sports leagues do, baseball has already had twenty-three different teams make the playoffs since 2001, with seven different champions. Moreover, the NFL, NBA, and NHL not only have salary caps but salary minimums, pegging mandatory payroll spending to their respective salary caps (86.4% for football, 75% for basketball, roughly 72% for hockey). Should baseball adopt a salary cap after the 2011 season, it may come with such spending minimums. Based on its 2008 payroll of $21,836,500 Florida would have to increase its spending by roughly $68 million just to reach the league average.

Would baseball’s small-market teams accept this structure when mediocrity or worse has been profitable? That would require payroll investments and accountability to fans that many franchises abhor. Critics should neither pity the Yankees their riches, nor criticize them and their recent re-investments without examining profitably unsuccessful teams too often indifferent to making such improvements.

Published in: on January 27, 2009 at 11:21 pm  Comments (19)  

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19 CommentsLeave a comment

  1. Jason
    Hard to do justice to a topic like this in a limited amount of words, but good job. Of course almost all Yankee fans see it your way, Yankee haters another…
    The unsuccessful despise the successful.

    Can you send a similar post to the tax and spenders and bailout proponents in DC who don’t seem to understand the history of America and economics?
    “So, what are you going to do with a History degree?” Answer: Oh, I don’t know, maybe save the country…

  2. Great post Jason! I enjoyed it! Have never read your blog but am going to start. I live in Indy and just moved here from Quincy, IL but grew up in Chicago. Die hard Illini, Bears, and Yankee fan so it’s nice to see another I’ll keep on reading! Great work!

  3. […] thanks to Jason at Heartland Pinstripes, I have more figures to share with anyone else who wants to argue the salary cap. Jason’s […]

  4. Excellent job Jason! Ah yes Wal-Mart. Always low prices. My party really needs a new economic plan.

  5. I was so excited to see your guest post on Pete’s blog this morning. Great job, Jason. You really made your case. I may just print it out and hang it on my wall!

  6. Good job, Jason! I went over and read it, good responses to from the regular readers.

  7. Thanks a lot for the kind words everyone, and welcome to The Heartland, Brad Pitt’s better-looking brother and AJ. I’m all for fiscal stimulus to get the economy in better working order, but am also for accountability with any bailout money. It’s easy to blame Bush for how TARP money has and hasn’t been used, and he deserves a lot of criticism. So do Democrats for not insisting on terms when this money has been doled out by the billions to failed financial giants with virtually no strings, when we don’t know to whom and how much in many instances, and when lending is still stagnant despite promises to resume lending to consumers big and small.

    Indy, AJ? I plan to attend at least one game when SWB rides into Indianapolis, so we should be in touch before then. My son loves the Bears (I’m a Bills fan originally from Western New York, my cross to bear), and am fond of the Illini. The hoops team has bounced back nicely with steady contributions from Davis, Tisdale, and McCamey, and they’ve recruited very well. I love their D, but they need to follow up their road win at Purdue with more of the same on the road.

    Tim, your comment the other day matter-of-factly stating your intent to burn things just cracked me up. I couldn’t help imagining a big bonfire pit in a yard, with you chucking old chairs and other spare combustibles saved for just such a purpose lit ablaze, with you calmly sipping a cold drink, easing back. Your comment had me rolling.

    Thanks Jane and Joe. I expected a rougher go at LoHud, but found them all very well informed and engaging. I’ve read Pete’s post with frequency, but just haven’t commented much at all there or read many comments. Very interesting group.

    Come back anytime, Brad Pitt’s better-looking brother and AJ.

  8. I just saw the post. I’ve just realized my complete lack of commenting on your blog for a while. I forget much because I’m used to just hitting up the blogs on MLBlogs. Sorry J… and great post. I’m psyched for the HDLR’s again.
    P.S. I think I’ve decided to keep posting over at MLBlogs.. there are certain things you can’t do with wordpress and the traffic there still can’t be beat..
    – V

  9. Hey V! Thanks for the kind words. How have you been? What colleges are on your radar? I’ll be sure look for you at MLBlogs. Some things have improved there, including their addition of Steven Goldman’s blog–which I should add soon.

    I haven’t exactly been a good blog-mate lately, so don’t worry about not having been around.

  10. I’ve only applied to NY city and state schools.. can’t really afford private schools, and don’t want to go that far. I’ve already been accepted to SUNY Purchase. I hoping to get into SUNY Oneonta, but I’m not sure my g.p.a. is good enough. We’ll see.
    And yes, MLBlogs is slowly but surely improving. There’s a really cool community growing there.
    How have you been??

  11. V? Remember remember the Fifth of November. The gun powder treason and plot. I can think of no reason why the gun powder treason should ever be forgot.

    I am sorry but I could not resist. How have you been Vanessa?

    Jason, you being the PHD student, can correct me on this. Weren’t the gun powder conspirators all Catholics? Blowing up Parliament was just their way of screwing the Protestants.

  12. All has been well V, busy but well. Wherever you end up, you’ll do just fine. Is there a particular major you’re considering?

    Tim, I believe you’re right with the notion that they were all Catholic. Well done on that, The Wiz. They were trying to wipe out the Protestant leadership, Parliament, and initiate a revolt that they hoped would result in a Catholic king.

  13. Tim, LOL, you never cease to make that V for Vendetta reference. I’ve been pretty good. And yourself?

    J, I still have no clue.. but I’m sure I’ll figure it out lol. 🙂

  14. Haha indeed Vanessa. I am not a fan of the movie but I like some of the lines. “Who is but the form following the function of what. And what I am is a man in a mask”. Life here has been pretty good. I am just dying for Spring Training to start. The days between the Superbowl and the start of spring training is Hell. All that is on tv is the NBA, ah kill me.

    Jason, my knowledge of British History starts around the English Civil War. It was never my favorite subject. I am infinitely more fascinated by Antebellum America. Particularly the fear of northern attempts to subvert slavery that drove the South towards the suicide of secession and Civil War. How fear and chaos impact people’s decisions is endlessly fascinating. Though I must say that Gods and Generals is by far the worst movie I have ever seen.

  15. The Wiz, too bad you’re not a hoops fan–the second great American game in my opinion, a beautiful game that at its best is like a Coltrane riff–dynamic, elegant, brawny, structured and unhinged all at once. I love basketball–and the Celtics are on a roll, having won their tenth straight over the Pistons, who foolishly traded for Iverson. Serves them right.

    I’ve never seen “Gods and Generals,” Tim, but I heard it was a bore. “Gettysburg,” on the other hand, was quite well done.

  16. Tim, how about this one, “Voilà! In view, a humble vaudevillian veteran, cast vicariously as both victim and villain by the vicissitudes of Fate. This visage, no mere veneer of vanity, is a vestige of the vox populi, now vacant, vanished. However, this valorous visitation of a by-gone vexation, stands vivified and has vowed to vanquish these venal and virulent vermin van-guarding vice and vouchsafing the violently vicious and voracious violation of volition. The only verdict is vengeance; a vendetta, held as a votive, not in vain, for the value and veracity of such shall one day vindicate the vigilant and the virtuous. Verily, this vichyssoise of verbiage veers most verbose, so let me simply add that it’s my very good honor to meet you and you may call me V.”
    Maybe that should be how I introduce myself lolz.
    I, too, am dreading the wait till March.. for two reasons actually.. baseball, and I turn 18 [oh yes].
    I don’t know why, but I don’t really watch basketball that much. I love playing it and when I do watch it, on the rare occasion, I like to watch.. but I guess I never am really in the mood to otherwise lol. All I care about is baseball. Damn, I want this season to start.

  17. Though I love hoops, I’d be lying if I said I didn’t have a serious baseball itch right now. I’ve been thinking about great games including those in recent years, and how enjoyable the times were listening to or watching baseball on a nice day, late at night, rooting for and getting a comeback, watching a pitchers’ duel.

    Yeah, I miss it too.

  18. Haha nice Vanessa. That is a great introduction however it is only 2nd best. The Joker’s introduction in The Dark Knight takes the cake. He robs a bank in broad daylight, kills off his accomplices, and then says “I believe whatever doesn’t kill you simply makes you stranger” RIP Heath Ledger.

    The Yankees report in two weeks. It is almost here. *Tries not to flip out*.

  19. Ahh, don’t get me started on The Dark Knight. The Oscars seriously robbed the hell out of it.
    R.I.P. Heath.

    Exactly 25 days till the first spring training game.. *heart palpitates*.

    And yeah J.. I think MLB Network is making me miss it more..
    Also, Jason, do you do Superbowl HDLR’s?.. Cuz that sounds like it would be fun lol.

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