First, if you haven’t read it before, please read this post: click here. It contains my thoughts on why MLB fans are always in search of more competitive balance and why mechanisms like a salary cap or hard slotting are not the answer. It makes a number of the points that the Pirates have now helped me prove….
Today’s post is where I get to say, “I told you so!” Thank you Pittsburgh Pirates. Put simply, just because a team is in a smaller market and not winning does NOT mean that Major League Baseball needs a cap or hard slotting in the draft or anything else to improve competitive balance. The current system is actually pretty great (see here for how MLB compares with the other pro sports in terms of competitive balance), and MLB as a whole is doing exceedingly well. In fact, as it turns out, at least one of the “poorer” clubs isn’t doing so poorly after all.
The real thanks goes to the Associated Press, who obtained financial data for the Pirates from 2007, 2008 and 2009. Not surpringly (at least not to me), it shows the Pirates have turned a profit. While losing.
The Pirates eighteen-season losing streak is the longest in professional sports history. In the years covered by the financial statements, the Pirates received just slightly less than half its income from MLB in the form of revenue sharing, national television revenue, MLB.com and MLB merchandise sales. Meanwhile, their payroll lingered at the bottom in the Majors. In fact, their 2010 payroll is only $2 million more than their 1992 payroll.
Nevertheless, MLB officials say the Pirates are complying with revenue sharing rules. I’m sure they probably are. So, what’s wrong with the Pirates making money at being a perennial loser?
I’ve said it quite a few times…baseball is a business. Owners face decisions about where best to allocate their resources, and the answer is not always club payroll. Sometimes they have to placate investors. Other times they have another business venture that produces a greater return for their dollar. There are hundreds of reasons an owner might not choose to pour money into payroll, or into the club in general. It’s his/her/its prerogative as the owner of a business.
Perhaps the problem isn’t with the Pirates or even with baseball. Maybe it’s simply a paradox created by the relationship between teams and fans. Here’s what I’ve said before on this (and still whole-heartedly believe):
I’ve thought about it, and here’s an analogy that illustrates the problem. If your favorite grocery store in town wasn’t giving you what you wanted in terms of stocking your favorite items or keeping the prices competitive, you would simply start shopping in another grocery store. You could abandon the one you originally preferred with little thought or remorse. You can’t do that in baseball though.
I’ll use myself as an example. I’m a Braves fan. If the Braves were a club who spent less on payroll than they received in revenue sharing, I would be irritated. But would I stop going to games or stop being a Braves fan? Probably not. See, there’s not another team in town, so I can’t just go watch another MLB team play on Saturday. And even if there was, I have an emotional attachment to the Braves. I remember going to games in the late 80s with my dad when the Braves were bottom-dwellers and no one was in the stands. Then I remember the worst-to-first miracle and all of the postseason games I went to for 14 straight years. I’ve lived all over the country, and I’ve rooted for several teams, but I’ve never felt about a team like I do about the Braves, because I don’t have the history with the others. So, even if the Braves owners were spending less on payroll than they received in revenue sharing, I’d probably still be a Braves fan. That’s why clubs like the Royals still have fans and can still increase in value every year.
I don’t think there is an answer, there’s only a problem we can’t solve as fans. Baseball is a business, but it’s one we approach with emotion and history. That’s why there are so many books and blogs and analysts. Fans want a salary cap even though MLB players make a smaller percentage of league revenue than players in leagues with a salary cap. Why? It’s because you want your team to be competitive, because you’re not willing to switch allegiances to another team. You want a payroll floor for the same reason.
The problem isn’t with baseball, it’s with fans. Baseball has seen eight different World Series champions in the last ten years, with fourteen different teams playing in the series. So, almost half of all teams have made a World Series appearance just in the past decade. By comparison, the NBA has only had five different champions in the past decade, and only eleven different teams played in the championship. The NFL has had seven different Super Bowl champions, with fourteen different teams playing in the series. Yet, MLB fans cry out about competitive imbalance far more than fans of the other leagues.
The bottom line is that MLB players share less in the league revenue than the other leagues (without a salary cap) and the championship series has seen just as many, or more, teams compete in the last decade as the other leagues. I think revenue sharing and the luxury tax have been a part of improving competitive balance over the past decade, as has the Wild Card. Remember that competitive balance is not perfect balance.
So, what do you think about the information that has come to light with regards to the Pirates? Are you mad? Do you think MLB should find a way to keep owners of losing teams from making money? Is revenue sharing a mistake?
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