"Change is needed and that is reflected by the fact that over a billion dollars have been paid to seven chronically uncompetitive teams, five of whom have had baseball’s highest operating profits," Henry responded in an e-mail. "Who, except these teams, can think this is a good idea?"
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I wish the owners would release the actual details regarding how much money
is being shifted around. I would love to be all riled up about the fact that Glass caps the Royals’ payroll at $70M, or $75M, etc., but takes in $80M in revenue sharing each year before he even sells a ticket, hot dog or hat. The problem is that I don’t know that such a statement is actually a fact or not. These numbers aren’t nuclear launch codes, let’s see them. I would say the main reason we haven’t seen them is because Bud is protecting the miserly owners, such as (probably) Glass, from an enormous fan backlash.
Only having some limited and vague information about the details of the current system, I applaud Henry (I think) for saying it’s broken. I just don’t know that a simple MLB-level payroll tax would work.
"Now…put that in your [BLEEP]ing pipe and smoke it." -Hal McRae
"I was doing this when BJ was in his father's nutsack." -Renzo Gracie
A salary floor would be a good start
Forget the cap, there should be a minimum that a team has to spend (although that has a ton of problems too, including that young teams aren’t highly paid, and mediocre free agents would get overpaid by bad teams, though it would tend to spread talent around a little better than the current Yankee-centric system).
Looking at Henry’s quote:
$1 Billion / 7 teams = $143M per team
If that’s a per year figure, we are getting hosed. If it’s not, I wonder about the period.
MLB should open its books, but something tells me that they’d be embarrassed about the riches we’d find, and players would demand even more money.
I can't believe there's any way that's a per year figure.
How long has revenue sharing been around?
I used to work with an old man that told me. Son, every workplace has a dumbass, if you don't have one where you work, then I'm afraid you're it.
It could be a total since revenue sharing was instituted
If it started in 2000, that would be 10 total years of revenue sharing with the 2010 season being the 11th. So divide by 10 and the number is less impressive. Just $14.3M per year. Now we know what allowed us to sign Jose Guillen!
Lessee.
If the Royals average 20K a game (which is just a little higher than reality) at $20 a ticket (which is also just a little higher than reality), that’s $400K a game, or $32.4M a season in ticket revenues.
They get $22.6M a year from the national TV deal, near as I can tell; that brings us to $55M.
I don’t know how much they get from the local TV and radio network deals, or from parking, or from concessions and merch. But it’s probably not tons of money.
So, when taking into account expenses over and above payroll (including draft bonuses, which aren’t included when the payroll figures are announced, and taxes)…
I don’t think it can fairly be said that Glass is just pocketing his revenue sharing dollars, since the payroll almost certainly exceeds all the above revenue sources. He’s dipping into the revenue sharing pie to cover expenses. If he’s not spending all of it, well, the team does exist to make some sort of profit.
And the Royals’ cut of revenue sharing in 2006 was around $32M, for the record.
This space for rent.
I forgot lots of other expenses
which we should at least consider:
1) road trips: transportation and lodging and per diems (not included in payroll figures)
2) whatever we’ve got to pay out to the affiliates to support them
3) Surprise costs us some money
4) We surrender 31% of our own local broadcast revenues to the revenue sharing pie, which is technically an expense
5) Taxes
6) The water bill at Kauffman is not insignificant
7) There’s payroll above and beyond the players, but I have no idea how many employees the team has or what they make
8) Benefits for those employees can cost the company far more than you might imagine
In short, while I don’t disagree that we’d all be happier if the books were open, I also think way too many people who have no actual idea how businesses are run simply compare tickets+rights+merch to payroll and start screaming about how teams are making a (gasp) profit. There’s way more to it than that.
This space for rent.
Yeah, I know there are other expenses.
And for the record, I don’t think Glass is pocketing huge profits anymore, probably just a small one (business exists to profit, otherwise, why bother?). But when Sweeney signed here, Glass used it as a smokescreen to dump payroll and was probably raking in money with revenue sharing. For example, you say the Royals got $32M in 2006, and their payroll was only $47.3M. If that had a subsidization effect on payroll, then we can assume without it, payroll would have been a lot lower. Knowing what they received and how much was spent on players from that money seems ridiculously low.
Yeah.
I just think we, as fans, apply silly notions based on flimsy evidence. I mean, seriously, sometimes it’s like looking at your salary and your rent/mortgage and deciding how much free cash you should have floating around without considering all your other expenses.
This space for rent.
I would love to apply some silly notions to solid evidence
Unfortunately, since they won’t let me see any of that solid evidence I will just have to use the flimsy stuff.
"Now…put that in your [BLEEP]ing pipe and smoke it." -Hal McRae
"I was doing this when BJ was in his father's nutsack." -Renzo Gracie
by Sweep_the_Leg on Dec 2, 2009 1:39 PM EST up reply actions
"6) The water bill at Kauffman is not insignificant"
I don’t know why but this line makes me laugh out loud every time I read it.
"And the Royals’ cut of revenue sharing in 2006 was around $32M, for the record."
According to who? No one but the owners, union and Bud Selig really knows since they won’t open the books.
Relive Royals History at royalsretro.blogspot.com
Yeah, I'll just bet the Red Sox owner
would love to return to knowing he can confortably outspend everyone but the Yankees, Mets, Angels and Dodgers. I’m sure he didn’t enjoy seeing the Rays and Rockies in the recent World Series, the Brewers and Marlins making playoff noise.
Or maybe this is just his way of saying “sour grapes” to the Commissioner for telling the Red Sox that he’ll keep his promise of the 2012 All-Star Game to the Royals rather than obediently roll over when the BoSox decide they want it for Fenway’s 100th Anniversary.
Chaim Mattis Keller New York City's # 1 Royals fan!
by cmkeller on Dec 1, 2009 3:54 PM EST reply actions 1 recs
I can't get the Red Sox story straight
is the problem that the rich “teams” (i.e., only the Yankees) have too much of an advantage, or this new one, that the low revenue teams are getting too much in revenue sharing?
I'm not a sabermetrician, but I do play one at FanGraphs.
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by Matt Klaassen on Dec 1, 2009 4:09 PM EST reply actions 1 recs
neither
it’s that the system of revenue sharing fails to achieve its goal—to restore competitive balance on the field. sure, money changes hands, but the yankees are still outspending everyone and getting the best free agents every year, and the royals never seem to figure out how to make the extra money show up on the field. i think the argument in this article is that the current revenue sharing system moves money from one owner’s pocket to another owner’s pocket, when what we really want is to even out is the amount teams spend on acquiring talent. i think his idea of instituting a luxury tax and a salary floor is a great idea that would address the competitive imbalances a lot more directly.
I thought he was just reading from the "Spoiled rich teams gripes playbook"
Lord knows I’ve heard what he’s said often enough from others and it just sounds like a bunch of non-sequiturs thrown together.
While acknowledging that Henry surely has a selfish agenda of his own,
I wanna echo the sentiments of Sweep the Leg.
Heh, Glass? Wanna bitch about revenue sharing being inadequate? Open up your books!
Heh, Henry? Wanna bitch about insincere use of revenue sharing funds by small market teams? Open up your books!
Heh, Selig? Wanna leave a lasting legacy and erase some of the stench from your administration? Have an open and honest relationship with the players, including full and honest disclosure of all pertinent financial statistics. Trust the public to understand your take on revenue sharing, assuming it truly is in the best interest of growing the game. Trust the players to embrace a true partnership-like relationship with the teams, one in which both parties benefit equally from growing the sport TOGETHER.
Mr Glass, this is a pro sports team, not a retail store - run it like one!
by loyal2sdad on Dec 1, 2009 5:53 PM EST reply actions 1 recs
+Whatever number in revenue sharing dollars Glass gets each year
(Which I assume has to be at least 1)
"Now…put that in your [BLEEP]ing pipe and smoke it." -Hal McRae
"I was doing this when BJ was in his father's nutsack." -Renzo Gracie
by Sweep_the_Leg on Dec 1, 2009 9:12 PM EST up reply actions
And I HAVE to think that the Players Association certainly isn't as in the dark about this
as the general public is. They’ve got to be armed with some pretty detailed, current information about revenue if they are going to represent the players’ interests adequately. And to be prepared to threaten a strike and renegotiate the CBA if they feel strongly that the players are getting screwed. I mean, that’s pretty much the MLBPA’s job, to figure out how much of the pie there actually is so that they can try to get the players as much of its as possible.
"Now…put that in your [BLEEP]ing pipe and smoke it." -Hal McRae
"I was doing this when BJ was in his father's nutsack." -Renzo Gracie
by Sweep_the_Leg on Dec 1, 2009 9:18 PM EST up reply actions
(glib) Nah, if I was the MLBPA
I’d be prepared to go on strike just because I know I’d win every concession because my opposition were riddled with morons and dissension.
So basically a large market owner wants to starve out the small market teams
Without that revenue sharing money, I think 5-7 teams die within the next 30 years. Losing baseball fans in that many areas of the country is not good for a national sport/business. The NFL shares a hell of a lot more revenue than MLB does and they have made it work very well. That kind of revenue sharing has given every team a shot, and so the NFL has NO chronically uncompetitive teams. That’s what MLB needs.
The immoderate moderator
Sure, you are right on
But Henry does have a point, in that it is all very well giving the small teams huge slabs of cash, but it’s pointless if they don’t actually use it to improve their baseball team.
Revenue sharing is great, and necessary. But there has to be some compulsion to actually use it on baseball if it is to make a blind bit of difference.
I'd be happy to have a payroll floor combined with greater revenue sharing
The immoderate moderator
by Scott McKinney on Dec 1, 2009 9:38 PM EST up reply actions
"the NFL has NO chronically uncompetitive teams"
Bengals, Lions, and probably Chiefs fans would disagree ;) But point taken.
I don’t think he’s talking about starving small market teams, he’s talking about starving small market teams that don’t invest their free money into payroll.
An idea I think might be a good idea I read on BTF today is possibly using the payroll tax funds to allow small market teams to re-sign players – kind of like the “Larry Bird Rule” in the NBA. It couldn’t be used directly to help the Royals spend money on Jose Guillen, but it could help the Twins keep a guy like Joe Mauer.
Relive Royals History at royalsretro.blogspot.com
I don’t think he’s talking about starving small market teams, he’s talking about starving small market teams that don’t invest their free money into payroll.
I think he wants more money for his team, period. And so he’s using a disingenuous argument about supposed small market profits. BTW, does he really have proof that five of these teams had baseball’s highest operating profits? If the books aren’t open, how does Henry know? Or is he just assuming. If so, that is a weak argument.
And how much spending is enough? Clearly the Marlins tiny payroll isn’t enough. That owner is pocketing too much money and not spending enough. But is $70M enough of a payroll for a team in a relatively tiny market? I guess that depends on the team’s financial situation. Is the team in question operating at a loss, or at a minimal profit, or a moderate profit or a huge profit? So I really don’t know what the Royals (or A’s, or Marlins or Pirates) floor should be.
The immoderate moderator
by Scott McKinney on Dec 1, 2009 9:51 PM EST up reply actions
I think the owners are privvy to the books
I’m sure he does want more money, but he also realizes the tide is moving towards more revenue sharing, so he wants to at least see revenue sharing used towards what its supposed to be used for. Regardless, we now have someone on the side of the owners (Henry) and someone on the side of the players (Boras) that claims the small market teams are simply pocketing the money. That doesn’t mean they are, but the small market owners are hiding behind the books too. We don’t know that Henry’s argument is disingenous.
I would guess the minimum payroll would be some formula based on the percentage of revenues they allocate towards player.
Relive Royals History at royalsretro.blogspot.com
I wonder if the owners are privy to the books of other teams
I really don’t know, but I doubt that every team’s books is open to every other team. I think MLB (commish’s office) has access to all of the numbers from every team, but I doubt those books are open for all owners to see every other team’s books.
he also realizes the tide is moving towards more revenue sharing, so he wants to at least see revenue sharing used towards what its supposed to be used for.
That sounds like an altruistic motive. I don’t believe Mr. Henry has an altruistic motive here. He’s not interested in seeing small market teams spend more money on payroll so that they can be more competitive. He’s interested in getting more money for his team, period. He’s about his own team’s bottom line (wins and profits) first and last.
We don’t know that Henry’s argument is disingenous.
Well, we certainly don’t know the facts about which teams are making and losing money and by how much. Unfortunately, I see a lot of arguments assuming that the Royals, A’s, Pirates, etc. are raking in big profits and therefore… But is that really true? Are these small market teams making big profits? I need more than Henry’s word on it. I need more than Forbes’s guesswork. I need more than Boras’s entirely selfish motives (he lies for the benefit of his clients every day of the week).
The immoderate moderator
by Scott McKinney on Dec 1, 2009 10:50 PM EST up reply actions
Not altruistic at all. Just realistic
If I’m against health care reform, but I realize the odds are stacked against me, I still want the health care reform to work as best as possible, even if I don’t support it. Same with Henry and reform in MLB.
I’m not saying I for sure believe Henry, but I think its silly to absolutely say he’s being disingenous when we have very little information to go on either way. Its basically he said (Boras, Henry), he said (Glass). Who ya gonna believe among all those lying millionaires?
Relive Royals History at royalsretro.blogspot.com
Is there really a movement towards more revenue sharing?
I see more complaining about revenue sharing in the media than serious calls for greater revenue sharing. I don’t think the odds are stacked against Henry and the large market teams at all. I think Henry cares about what is best for the Red Sox and he’s complaining about current revenue sharing either to decrease it or help prevent any increase in revenue sharing.
The immoderate moderator
by Scott McKinney on Dec 2, 2009 12:07 PM EST up reply actions
Yea, I think so
There are a lot of grumblings about the current system, with even mid-market teams complaining about the Yankees. Couple that with the recession and an outgoing commish who used to own a small market team who wants to put a stamp on his legacy and I see a lot of signs that reform is coming.
Relive Royals History at royalsretro.blogspot.com
I was thinking a floor might be best if it was based off of fan support, a regional population component, and inflation
Force most of these small teams to spend more out of the gate with the floor, watch fan support rise steadily hopefully, so the floor goes up year to year with inflation and more support, and then at some point cap the floor. Hopefully the numbers never let that team go back under the capped floor.
I like that idea
Every market has different revenue potentials and different revenue realities. So a single floor for every team (regardless of the number) would be very unfair to some teams. Somehow I think Mr. Henry wouldn’t have a problem with that kind of unfairness. And, of course, it would be difficult to come up with these floors and make then genuinely fair for everyone.
The immoderate moderator
by Scott McKinney on Dec 2, 2009 11:13 AM EST up reply actions
Makes sense
But how do you compute that? How do you tally St. Louis’ regional market vs. Kansas City’s regional market? The territorial rights map MLB has is absurd.
Relive Royals History at royalsretro.blogspot.com
It would take a serious effort
(and MLB would probably never take such a thing seriously - they are more likely to set a flat payroll floor of $X, no matter how little sense that makes)
But back when he wrote for Baseball Prospectus, Nate Silver did an excellent multi-variant analysis which he published as a three-part article which broke down the relative size of every MLB market. He or someone else could put together something like to to compute a reasonable market size analysis and appropriate payroll floor for each team.
The immoderate moderator
by Scott McKinney on Dec 2, 2009 12:09 PM EST up reply actions
I saw that
He did a good job, although I question the TV Market analysis where the Red Sox are 8th, barely larger than Oakland’s.
The influence ratings seem much more reflective of reality:
http://www.baseballprospectus.com/article.php?articleid=6182
Relive Royals History at royalsretro.blogspot.com
I'm sure it could be improved upon
The immoderate moderator
by Scott McKinney on Dec 2, 2009 1:12 PM EST up reply actions
That map is pretty ridiculous
We could see a concrete wall being erected right in the middle of Grass Creek.
“Ich bin ein Grasscreeker.”
"Now…put that in your [BLEEP]ing pipe and smoke it." -Hal McRae
"I was doing this when BJ was in his father's nutsack." -Renzo Gracie
by Sweep_the_Leg on Dec 2, 2009 12:11 PM EST up reply actions 2 recs
Wow- I don't know what it takes to get a rec around these parts any more
If "Ich bin ein Grasscreeker." doesn’t ;)
Mr. Z, Tear
Down this wall!
I used to be an A's fan until they left town and got good.
by philofthenorth on Dec 2, 2009 9:21 PM EST up reply actions
But baseball needs its large markets to survive!
Baseball is stronger because it biases the playing field towards the large markets
Every sport should do this as I have never heard of Peyton Manning, Brett Favre, Ben Roethlisberger (hell, Troy Polamalu’s a damn defensive player and I can’t watch a game without seeing a Head and Shoulders commercial), Ladainian Tomlinson, LeBron James, Dwayne Wade, and Dwight Howard because they play in such small markets.
Question about using it on payroll,
would the draft and minor league payroll count? Would signing bonuses and international signings count towards a floor or as using it for payroll?
I used to work with an old man that told me. Son, every workplace has a dumbass, if you don't have one where you work, then I'm afraid you're it.
All stuff
That would have to be negotiated among the owners and with the union.
Relive Royals History at royalsretro.blogspot.com
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