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Archive for April 2010


Rome Braves Improve to 4-0

April 11th, 2010 | 1 comment »

Earlier today I told you the Rome Braves were off to a 3-0 start and were sending highly regarded prospect Arodys Vizcaino to the mound to go for the sweep of the Kannapolis Intimidators.  Well, I’m happy to report they are now 4-0 after sweeping the Intimidators with a 10-4 win today! 

Vizcaino wasn’t exactly lights out, but he walks away with his first W of the season.  He went for five innings and gave up eight hits, two walks and four earned runs while striking out five.  The relief corp of Julio Surinach and Thomas Berryhill combined for four scoreless innings.  Surinach struck three in his three innings, allowing only two runs, and Berryhill had a strikeout and gave up a hit in the ninth.

The offense was the story today though, as it has been most of this series.  The one through eight hitters each tallied up at least one hit today, combining for sixteen hits and ten runs.  Centerfielder Kyle Rose had another big day, going 4 for 6 with an RBI.  He’s now batting .588 for the season with a .588 OBP and 1.176 OPS.

Designated Hitter Christian Bethancourt had another big day at the plate as well.  He was a perfect 4 for 4 with 2 RBIs.  Third baseman Jordan Kreke had the other multi-hit game, going 2 for 6 with an RBI, although he struck out three times.  Riaan Spanger-Furstenburg and Braeden Schlehuber each had a double, and Ramon Flores had a two-run homerun.  Mycal Jones, Matt Weaver and LV Ware each contributed a single as well.

The Rome Braves are the only 4-0 team in the South Atlantic League.  They now head to Greenville, South Carolina to take on the 1-3 Greenville Drive in a four-game series before heading back to open at home against the Savannah Sand Gnats on Friday.

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Rome Braves Off to 3-0 Start

April 11th, 2010 | 14 comments »

Braves fans who live in Atlanta are lucky enough to be able to see not one, not two, but three Braves teams play in and around the metro Atlanta area. As much as I love to go see the Atlanta Braves, I also enjoy spending a warm summer evening in the smaller confines of Coolray Field, where the Gwinnett Braves (AAA) play, or State Mutual Stadium, where the Rome Braves (A) play.

This year I have added interest in the Rome Braves, because I’ve gotten to know several of the players on the team: Chris Masters, LV Ware and Mycal Jones. Accordingly, I’ve been checking the box score every day during their series in Kannapolis, and boy have they been hot! If the Rome Braves are any indication, the Atlanta Braves have some incredible talent in the pipeline.

Going into Sunday, the Rome Braves are undefeated, having beaten the Kannapolis Intimidators 4-0, 1-0, and 6-3.

The number three prospect in the Braves organization, Julio Teheran, toed the rubber for the first game and went six strong innings where he only gave up two hits and one walk while striking out seven batters. My friend, Chris Masters, shut down the side in the seventh inning with three strikeouts. The Rome Braves were hot at the plate too. Outfielders Kyle Rose and Cory Harrilchak, and third baseman Jordan Kreke each contributed a pair of hits. Both of Kreke’s hits were doubles and one gave him his first RBI of the season. The number six prospect in the Braves pipeline, catcher Christian Bethancourt had his first homerun of the season and contributed the other three RBIs of the game. My friend, LV Ware, had his first hit of the season as well, giving the Rome Braves eight hits in the game. Because the game was the first of a double-header forced by a rainout the night before, the game was shortened to seven innings, and the Rome Braves walked away with a 4-0 win.

In the second game of the night on Friday, the Braves bested the Intimidators 1-0 in seven innings on another eight hits. Playing second, Ryan Barba contributed a pair of hits, with outfielders Kyle Rose and Ramon Flores, shortstop Mycal Jones, DH Riann Spanjer-Furstenburg (can’t wait to see if that fits on a jersey!), third baseman Jordan Kreke and catcher Braeden Schlehuber each contributing a hit. I’d say they’ve got a lineup that can hit top to bottom, no matter who on the roster is playing! They had another strong pitching performance as well, this time by Ryan Weber. He went 4 and 1/3, allowing only one hit while striking out three. He was followed by Luis Avilan for an inning and two-thirds and Tyrelle Harris for an inning, who each had a pair of strikeouts while holding the Intimidators hitless.

Game three of the four-game series was last night and saw the Braves win 6-3 on eleven hits. Again, the lineup produced from top to bottom. The number one and two hitters had a big day. Kyle Rose was in at DH as the leadoff man and went 3 for 4, while Mycal Jones followed in the two hole and went 2 for 4 with two doubles and two RBIs. Harrilchack, Kreke, Bethancourt, Flores, Weaver and Ware each contributed hits, and Spanjer-Furstenburg had a pair of walks. You couldn’t ask for a more productive lineup! The pitching gave up more runs than in the first two games, but were still tallying up strikeouts. Starter Brett Oberholtzer went four and gave up five hits and a walk and struck out one. Then Paul Clemens and Robinson Lopez each pitched a pair of innings and each racked up a pair of striekouts. Clemens allowed two runs on two hits and a walk, and Lopez gave up one run on one hit when his throwing error allowed a man on base just in time to be driven in by the one hit allowed. Cory Rasmus closed out the game, allowing only one hit while striking out two.

Today at 5:05 p.m. the Rome Braves will go for the sweep in the fourth and final game of the series.  Arodys Vizcaino, the top prospect gained by the Braves in the Javier Vazquez trade with the Yankees, is taking the mound today.  Listen live at Rome Braves!

Let’s review….the Rome Braves have pitching. The Rome Braves have hitting from top to bottom. The Rome Braves are the real thing! So, if you’re in the Atlanta area, make the drive up to Rome. Their home opener is next Friday, April 16th at 7:00 p.m., and legendary Braves broadcaster Pete van Wieren will be throwing out the first pitch.

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Checking In with CJ Bressoud (4/9/10)

April 9th, 2010 | 3 comments »

Between attending home openers for the Atlanta Braves and Gwinnett Braves, educating you all on the difference between revenue sharing and the competitive balance tax, and my day job (whew!), I’ve gotten behind on our “Checking In” segment!  So, I bring you two updates from our friend, CJ Bressoud…

The first update is from this past weekend as CJ broke camp:

Camp is basically over.  All that’s left is a 9am show-and-go where I’ll pack up the locker and catch a flight to Cedar Rapids, Iowa. This is gonna be my 3rd time going to Cedar Rapids, but my first time as a part of the bullpen. I’m excited to get out there and compete. I feel good about my overall spring, I went from “your on the outside looking in” to earning a spot in the pen. It also feels good to have staff and other players tell you they’re proud or that you deserve it, or “I was rooting for you.” That’s what’s its all about to me, working hard to see a better outcome. Whether it be personally or as a team you have to try to win every day. And comments like that along with support from family, friends and fans make the daily preassures a little easier.

I really feel confident in this team. We have about five 1st rounders or supplemental round guys on our roster. Our pitching staff is tough, and our pen should be solid along with 2 of the RAWest outfielders in you’ve ever seen. Cedar Rapids…here we come!

The Cedar Rapids Kernels had their home opener last night, and our friend CJ came into the game and pitched the eighth and ninth innings!  Here’s what he had to say about their first game:

Opening night last night was a blast besides it being 30 degrees and only 1,300 people in the stands. We opened up the Midwest League this year against the Beloit Snappers. Our starter, Garrett Richards, went 5 scoreless innings, then Buddy Boshers went a noisy 2 scoreless innings.  Then I got the rock for the 8th and 9th.

I punched out my first 2 batters then proceeded to have a 7-pitch at bat to their leadoff guy, a pesky lefty who kept fouling off my fastball. I finally won the battle against him making him fly out weakly to right field.

Going into the 9th we had 1 out and the bases loaded but due to a baserunning blunder they doubbled us up on a line drive to center, plus our runner on second took off as soon as the ball was hit so he was dead meat and it was the end of our inning.

So I toe the hill in the 9th freezing from head to toe. I strike out the first 2 batters again then a 2-out 4-pitch walk, where I might add every pitch was borderline. The very next pitch we caught the runner stealing, and I’m out of my innings unscathed and perfect. We ended up loosing in extra innings due to an error, but that’s gonna happen. It just sucks because it was such a well played game all night untill 2 blunders on our behalf really late in the ballgame. Overall I felt good for the weather conditions, my mom and dad were also in attendence so that was really special. We host Beliot again tonight and plan on taking the next 2 games in the series for sure!”

So, in summary, our friend CJ had a terrific first outing!  He pitched two hitless innings where he struck out four batters and only walked one!  Not bad for the first game back in 30 degree weather…in fact, it’s pretty darn great for any outing.  It’s great to see CJ starting the year out strong!  Can’t wait to hear about his next outing, and wishing him all the best of luck going forward!

For love of the game,

Kristi

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Understanding Revenue Sharing vs Competitive Balance Tax

April 7th, 2010 | 4 comments »

I’ve spent the past four years studying, writing and guest lecturing on revenue sharing and internal taxation in Major League Baseball.  Accordingly, I’m fascinated by the debate raging in the media between Randy Levine, President of the Yankees, and Mark Attanasio, the owner of the Brewers.  What really caught my eye though was the confusion between revenue sharing and the competitive balance tax.  As I’ve guest lectured on these topics over the past four years, I’ve found that even your most avid baseball fan doesn’t generally know or understand the difference.

So, before I explain the difference, let me set the stage for you…

It all started with this comment to USA Today by Mark Attanasio, owner of the Milwaukee Brewers:

“We’re struggling to sign Prince Fielder, and the Yankees infield is making more than our team.”

Enter Randy Levine, President of the Yankees, who said this to ESPNNewYork.com:

“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?”

Ok, I’m on board so far.  It’s the same old David versus the Yankees story as always in baseball.  The real problem comes in how the story has been framed by many media outlets. 

Gabe Lacques, who wrote the USA Today piece, wrote this in his article:

“According to the Biz of Baseball, the Yankees have accounted for $175 million – or 92% – of all revenue-sharing payments since revenue sharing was instituted.”

Andrew Marchand, who wrote the ESPNNewYork.com story, similarly stated:

“In the initial seven years of the luxury tax, the Yankees have paid teams nearly $175 million in revenue sharing, according to the BizofBaseball.com. That is 92 percent of the total revenue sharing that has been doled out.”

Enter confusion, stage right.  Revenue sharing and the luxury tax (which, by the way, was renamed the “competitive balance tax” in the 2002 CBA, which covered 2003-2006) are two completely separate concepts.  Aside from the Yankees having to pay both, they have very little in common.

Revenue Sharing

Revenue sharing was first approved by the owners in 1994 and included in the 1996-2000 Collective Bargaining Agreement, presumably as an alternative to a salary cap, which was ruled out by the MLBPA.  Revenue sharing is based on a club’s Net Local Revenue for a given year.  Understanding what Net Local Revenue is takes the reading of no less than five definitions in the CBA, but I’m going to provide you the overly simplified version.  Net Local Revenue is Local Revenue (gross revenue from all revenue areas like ticket sales, concessions, etc. minus Central Revenue, which is national television and radio, etc.) minus Actual Stadium Expense (which is exactly what it sounds like, the actual monies paid out by a club for its stadium). 

The 1996-2000 CBA phased in revenue sharing with the use of three different plans:

Split Pool Plan: each club put in 20% of their Net Local Revenue.  Those monies were then divided 75/25, with 75% being split evenly amongst all clubs and 25% being split only between those clubs with a Net Local Revenue below the mean for all clubs.  The 25% was not split evenly between those clubs below the mean, but based on their distance from the mean.

Straight Pool Plan: each club put in 39% of their Net Local Revenue and it was split evenly with all clubs.

Hybrid Plan: evaluated the result each club would have under each of the above plans and then assigned the plan that was better for that club as a payor/payee.  So, if the Yankees would pay out less under the Split Pool Plan, they were assigned that plan.  If the Royals would receive more under the Straight Pool Plan, they were assigned that plan.

Then, to make it even more confusing, the plan was implemented on a percentage basis:

1996: 60% Hybrid Plan

1997: 60% Hybrid Plan

1998: 80% Split Pool Plan

1999: 85% Split Pool Plan

2000: 100% Split Pool Plan

So, in 1996, a club received or paid 60% of the total result under the Hybrid Plan.  The result was that $50 million was moved around in 1996.  By 2002, that number would be $169 million.

In 2002, revenue sharing was simplified under the next CBA.  The Straight Pool Plan was in effect for the length of the CBA at a rate of 34%.  So, each club put in 34% of their Net Local Revenue each year, and then the pool was divided evenly between all of the clubs.  A Central Fund component was added, which called for 41.066% of the total amount transferred from payor clubs to payee clubs to be pulled from baseball’s Central Fund and divided between payee clubs whose average Net Local Revenue over the past three years fell below the average for all clubs over that same time period.  The amount distributed was to be deduced from distributions to be made to payor clubs at the end of the season.  There’s a very specific mathematical formula for this in the CBA, but I won’t go into it here.

I know you’ve all heard the grumblings about teams receiving more in revenue sharing than the spend (*cough* Marlins *cough*).  An example I use in my lectures is the 2005 Florida Marlins.  Payroll was cut by nearly 75% to a league-leading low of $14,998,500, more than $20 million below the next lowest payroll.  Meanwhile, their cut of revenue sharing was reported to be $31 million, leaving them $16 million for other “baseball-related” activities.  That’s the only parameter given in the CBA for spending revenue sharing dollars, by the way: that it be used for “baseball-related activities.”

The 2006 CBA contained a revenue sharing provision very similar to the 2002 CBA.  The percentage was decreased from 34% to 31% because of increased revenues league-wide.  The Central Fund Component was changed as well.  Under the current CBA, the stated goal is to transfer the same amount of money as would be transferred under a 48% straight pool plan.  Thus, the Central Fund Component’s tranfer value is equal to the number that when added to the Base Plan’s transfer value equals the result under a 48% straight pool plan.  To determine each club’s amount paid in or received, you multiply the net transfer value of the Central Fund Component by the club’s Performance Factors.  Performance Factors are found in Attachment 26 to the CBA, which assigns negative factors to payee clubs and positive factors to payor clubs.  Thus, the Central Fund Component still has the effect of redistributing wealth from higher revenue clubs to lower revenue clubs in relation to their relative wealth or lack thereof. 

Time for another example I use in my lectures.  The Royals revenue sharing receipts doubled from 2002-2007, but payroll only rose by 6%.  Meanwhile, the team value has risen from $96m to $282m.  Just food for thought.

Need dessert to go with that?  Consider this quote by Mr. Attanasio:

“We do get a piece of revenue sharing, and we appreciate it, and we need it, and we use it.  We put it to use.  It’s a matter of record that we use our revenue sharing dollars pretty much every year in our budget.”

First off, I’m bothered by the use of “pretty much,” which makes me wonder why not always?  Second, when he says it’s a matter of record, don’t be fooled into thinking it’s a matter of public record.  It’s not.  Every club in MLB guards its numbers very closely, and you will never see the Brewers budget and be able to ascertain for yourself just where that revenue sharing money is going. 

As if that weren’t enough, another issue with revenue sharing is the Net Local Revenue calculation, which is easily manipulated.  Picture this…Club A’s owner is also the owner of ABC, Corp., which provides concession services.  Club A hires ABC, Corp to provide concessions at its ballpark.  Club A’s owner overpays ABC, Corp in order to decrease Club A’s Net Local Revenue number, thus increasing Club A’s share of revenue sharing distributions.

Haven’t had enough yet?  Another example…Club B’s owner also owns XYZ Media, Inc., which airs Club B’s games locally.  Club B negotiates a contract with XYZ Media, Inc. where XYZ Media, Inc. underpays for its contract to air Club B’s games locally, thus lowering its Net Local Revenue number and increasing its share of revenue sharing distributions.

Oh, and if you’re still feeling bad for the Brewers and the other small market teams, consider this: in 2002 three teams were sold and bought.  The Red Sox, who are obviously in a large market, sold for $380m (taking on about $40m in debt).  The New York Mets, another large market team, sold for $391m.  The Marlins, the poster child for small market teams, sold for $158m.  Ever heard you get what you pay for? 

Luxury Tax

After the infamous strike of 1994, the owners also managed to introduced the luxury tax after being defeated on the salary cap by the MLBPA.  Most people think it was aimed directly at Steinbrenner and his seemingly endless wallet, and most people are right. 

The only thing the luxury tax has in common with revenue sharing, aside from hitting the Yankees wallet the hardest, is that they made it way too complicated in the 1996 CBA.  The luxury tax was only implemented under that CBA for 1997, 1998 and 1999.  Thresholds were set and any team who exceed the threshold paid the tax:

1997: $51 million threshold (35% tax on amount over threshold)

1998: $55 million threshold (35% tax on amount over threshold)

1999: $58.9 million threshold (34% tax on amount over threshold)

Simple, right?  Yep, so they had to make it a little more complex.  Enter the “floating threshold” concept.  At the end of each season, if the midpoint between the fifth and sixth highest payrolls was more than the threshold, then that became the new threshold.  Then, the threshold for the next year would be adjusted based on that number. 

Now even if you can grasp all that, the definition of Actual Club Payroll is sneaking in at stage left to really complicate matters.  Actual Club Payroll is 1/28th (there were only 28 clubs then) of player benefit costs, player salaries and other amounts like bonuses and deferred compensation.  Throw in that some players are only with the team for part of the year, or have a contract that doesn’t specify amounts for each individual year, and you really have a mess on your hands. 

Requests can be made within MLB or by the MLBPA with regards to how the acquisition of a player might affect a club’s payroll total.  This was meant to make the luxury tax figure into a club’s decision to sign a player.  It was assumed most clubs would try to avoid the penalty.  However, the floating threshold concept got in the way in the beginning.  The very first year the tax was in effect, 13 clubs were over the midpoint between the fifth and sixth highest payroll and were hit with the tax. 

Before I get into how the tax has evolved, I should clarify where the money goes.  Under the 1996 CBA, the first $10m went to compensate for any issues with the revenus sharing plan (such as running short under the Hybrid Plan), the next $7m went to the 5 AL clubs and 5 NL clubs with the lowest Local Revenue, the next $3m went to the Industry Growth Fund (which funds training camps and other baseball development activities domestically and internationally), and the next $2.5m went to fund a reserve for any overpayments made into the system.  In the end, $30.9m was collected under the 1996 CBA.

The 2002 CBA saw the luxury tax become the competitive balance tax and introduced a somewhat new system.  Much higher thresholds were set for 2003-2006:

2003: $117m

2004: $120.5m

2005: $128m

2006: $136.5m

Increasing penalties for repeats offenders was also introduced, making it clear that the tax was meant as a deterrent and a penalty:

2002 First-Time Offenders: 17.5%

2003 First-Time Offenders: 22.5%

Second-Time Offenders: 30%

Third-Time Offenders: 40%

The distribution of funds also evolved, no longer providing for funding to low revenue clubs, thus distinguishing it entirely from revenue sharing.  The first $5m would go to refund for any miscalculaations, then 50% would go to player benefits, 25% to the Industry Growth Fund, and 25% to developing baseball in countries without high school programs.

The 2006 CBA kept the basic model of the 2002 CBA with adjustments for thresholds and taxation amounts:

2007: $148m

2008: $155m

2009: $162m

2010: $170m

2011: $178m

Penalties also increased:

First-Time Offenders: 22.5%

Second-Time Offenders: 30%

Third-Time Offenders: 40%

Distributions remain roughly the same and continued the trend towards funding player benefits with the tax money.  The first $2.5m is set aside for refunds, then 75% for player benefits and 25% to the Industry Growth Fund.  Thus, the tax is not distributed to low revenue clubs.

Now back to the statements by Mr. Lacques and Mr. Marchand.  The Yankees have not paid 92% of the total amount of revenue sharing distributed.  They have, however, paid 92% of the luxury/competitive balance tax over the years.  They are the only club to have paid the tax each and every year since its inception.

If you want to understand more about these provisions and how they evolved, you can check out my article in the University of Denver Sports and Entertainment Law Journal here.  I’m also covering all of this in my book, which is coming soon!

For love of the game,

Kristi

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Hello Baseball!

April 4th, 2010 | 2 comments »

Opening Day is to baseball fans what Christmas is to children.  We wait in anticipation for its arrival, certain that it will be even better than last year.  We open shiny catalogs by Baseball America and stare in wonder at all the new things we might get this year.  We countdown the days with unabashed anticipation.  We just know if we wish and hope and pray, we’ll get everything we want! 

Well, baseball fans, Opening Day is finally here.  Are you prepared? 

I’ve set “Centerfield” as my ringtone.  I’ve purchased MLB At Bat 2010 for my new iPod Touch.  I’ve udpated my nearly expired billing information on XM Radio so I can listen to any game all season.  I have plans to attend the home openers for the Atlanta Braves, Gwinnett Braves and Rome Braves.  Baseball is finally here, and I’m feeling alive!

Opening Day in baseball is so much bigger than the season opener in any other American sport.  Maybe because it represents the true beginning of spring.  Maybe because so many of us can remember an Opening Day we spent in the stands.  I remember one at Atlanta-Fulton County Stadium with my dad and aunt where the wind was howling and we nearly froze.  Then there was last year when tornado warnings delayed the game for hours and we got trapped under the upper deck roof at Turner Field with hail pounding the metal roof overhead.  As you can imagine, I’m looking forward to the 80+ degree sunny weather forecasted for tomorrow’s home opener at The Ted.

Before I hit up the Braves home opener tomorrow, however, I plan to relax on the couch to watch the Red Sox take on the Yankees.  The league’s oldest rivals playing in the league’s oldest ballpark.  Early favorites this year (and every year in recent memory) for the AL East and AL Wild Card playoff berths, it’s only fitting that these two kick off the season.  It’s sure to be a matchup that will be anything but disappointing.

Since Opening Day is when hopes springs eternal for every single fan from all thirty clubs though, I want to share with you my playoff predictions:

AL East:  Red Sox

AL Central:  Twins

AL West:  Mariners

AL Wild Card:  Yankees

NL East:  Braves

NL Central:  Cardinals

NL West:  Rockies

NL Wild Card:  Phillies

2010 World Series Matchup?  I’m calling both my nightmare and my dream…Braves vs. Red Sox!  Although my prized possession is an interleague hat I found last year with both teams logos, I’ll have to pull for the Braves in this situation.  I’m also going to have to win the lottery and buy tickets for every game in Atlanta and Boston.  I’m heading to the corner store to buy my scratch-offs now in preparation!

For love of the game,

Kristi

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