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Show Me The Money

MFS62 Dec 23 2006 09:13 AM

Many of us have commented this off season about the contracts being signed by free agents. Its like they're playing with Monopoly money. Two years ago, Selig was before Congress pleading poverty - saying that most of the teams were losing money. (There was a supporting spreadsheet printed in USA Today - but I haven't been able to locate it since then.) Where did all the new money come from? The new tv contract? They had it all along in a little tin box? Or have they just said "I don't care about the luxury tax?" Thoughts? Later

Frayed Knot Dec 23 2006 09:58 AM

I thought it was more than two years ago that Selig was up in front of Congress (at least on this issue). It was before the prior CBA was signed (the one that just ran out) when his cry-wolf act was truly in high gear. Since then; * revenues are markedly up, some 50% over the last 5 years I believe I recently read. Money from MLB media in particular (internet sales, internet radio, 'Extra-Innings' TV packages, etc.) has boomed over the last few years. Then there's that new TV deal, plus several new stadiums and record attendance. * the lux-tax penalties plus the increased levels or revenue sharing have spread that money out a bit better. Before, even if you believe that the league as a whole was losing money (questionable), those losses were largely concentrated on a handful of teams while the big profits belonged to a handful of others. Not quite so lopsided these days. What you have to remember also is that the reason Selig was up in front of the lawmakers was that he was looking for sympathy in order to get increased power over the Player's Association as a way to stem the cost side of the business on their backs because the owners couldn't solve it on their own. Those labor wars throughout the '90s were often as much a dispute between owners as it was between the owners & the PA. Once the post-9/11 labor agreement got P.A. agreement for the rev-sharing & lux-tax increases the owners themselves were more on the same page. And part of this is simply cyclical in the same way that financial & real estate markets flucuate. The dot-com era salary boom caused a bunch of teams to pull back after many of them got burned with diminishing returns. So, while the contracts from this winter are high, they're really only large when compared to the last few years and we may see another pull-back depending on how these deals look in 3-4 years from now. But even the bigger ones today like Soriano & Wells are still below the per-year numbers from those signed 6 - 8 years ago when Jeter, ARod, Giambi, Manny, Delgado, et al, all inked deals netting them north of $19mil/per. IOW; much higher revenue compared to 2000, NOT much higher contracts. Don't cry for them Arte Moreno!

MFS62 Dec 23 2006 10:09 AM

Yes, I recall that was the reason he was testifying. At that time, the spreadsheet showed that each team made over $42 million per year just in shared TV and royalties revenues. That's why those teams with $15 million payrolls pleading poverty has seemed so rediculous to me. Later

DocTee Dec 23 2006 01:56 PM

But I remember reading somewhere that baseball was dead??

Frayed Knot Dec 24 2006 10:31 AM

It is. Increasing revenues and attendence are considered inadmissable evidence in this case. Only the decline of network TV ratings during a time when TV ratings are declining everywhere can be cited as proof.

patona314 Dec 25 2006 11:35 PM

TV ratings? could care less... I'm watching. Money? it is monopoly money because it's not mine..

Edgy DC Dec 26 2006 12:08 AM

Baseball, to be fair, was intimated to be dying, not dead. Tom Hicks recently reported that baseball lost $500,000,000 five years ago, and made $500,000,000 this year. Not that I think he has an interest in telling the whole story, but even a claim of a billion-dollar turnaround is impressive. Reportedly, web reveues have been huge and there has even been talk about selling futures on MLB's web domain profits. Of course, he could just be talking up the product before the IPO. But it was six years ago that Selig pushed his spreadsheets before Congress. I didn't buy his claims either, but things have certainly changed since then. Squeezing Minneapolis for a new stadium? Wow.

attgig Dec 26 2006 01:29 PM

is a lockout necessary to put a salary cap on baseball?

Centerfield Dec 26 2006 02:27 PM

HAIL!

ScarletKnight41 Dec 26 2006 02:31 PM

metsguyinmichigan Dec 26 2006 02:45 PM

HAIL!!! My friend used to look that these claims and note that the Dodgers and Cubs owned their stadiums and one has its own network. Then he'd say: "Which is worse, that these guys think we're stupid enough to think they're losing money, or that they are horrible enough businessmen to be actually losing money, in which case they should be handed a spatula and told to flip burgers."

Frayed Knot Dec 26 2006 03:25 PM

HAIL! attgig wrote: is a lockout necessary to put a salary cap on baseball? There's no reason to think a lockout would would be a smart or successful step towards a salary cap. And, on a slightly seperate note, is there any reason to think that a salary cap would be a boon for the sport.

Edgy DC Dec 26 2006 03:31 PM

Contageous insanity is necessary for the owners to try to institute a salary cap.

Nymr83 Dec 26 2006 04:50 PM

it would probably take 2 years of labor strife and drive fans away in droves, hardly a good idea with record profits and attendance.