MLB News: Fall 2000

Year in review:

Salaries: Up 13.82%, based on August 31 rosters, to an average of $1,789,556. The median rose from $500,000 to $550,000.

Attendance: Up 3.7%, to an average of 30,099/game and a total of 72,748,970.

TV ratings: Down, down, down. Down 10% for FOX during the regular season; down 15% on ESPN and ESPN2; down 16% for ESPN's divisional series games; down over 20% for NBC and FOX's divisional series games; down 32% for the LCS (albeit with a Presidential debate airing opposite one game), down 22.5% for the World Series. FOX subsequently claimed a $70 million loss on the postseason.

FOX pays $2.5 billion for 2001-06 TV rights. The new package (signed before the postseason ratings debacle noted above) includes telecasts which aired on five separate broadcast and cable networks during the 2000 season: renewal of FOX's regular-season Saturday afternoon games plus half of the postseason; NBC's half of the postseason; ESPN's divisional playoff games; and renewal of the weekly FOX Sports and fX cablecasts. ESPN's regular-season telecasts are not affected. The contract, valued at $417 million/year, gives MLB 44% more than the $290 million/year it received for these same rights under the contracts which ran from 1996-2000. It also allows MLB to receive its money even if games are canceled due to a strike or lockout; if that happens, FOX will receive extra games to telecast once the dispute ends.

Umpires approve new five-year contract. The new deal, ratified by a vote of 40-2, gives the umpires raises of roughly 15%. Depending on seniority, arbiters will earn between $104,704 and $324,545 in 2000, between $108,716 and $404,705 in 2004. (These figures include a $23,000 bonus in any year in which the postseason is played, plus bonuses of up to $37,500 for working the postseason and serving as a crew chief.) Umpires will also receive $300/day for expenses on the road, up from $240, and for the first time will be given cars by MLB. Those retiring in 2000 or thereafter will receive substantial pension increases - those retiring at age 55 get a 52% boost, to $72,746.

In other issues, umpires will now receive tenure after three years (down from five); will for the first time have a seat on the official Playing Rules Committee; and will receive up to 91 days' pay in the event of a labor stoppage, up from 75 days under the old plan. The owners must consult with the umpires before implementing any new policies or directive, such as the size of the strike zone or ways to speed up the game. Although the umps lost their bid for an independent arbitrator to hear grievances, they won a partial concession: grievances will be processed by an independent fact-finder, who will then present his findings to the Commissioner for action. During negotiations, MLB offered to rehire 13 of the 22 umpires terminated last year, but the 22, still represented by Richie Phillips, opted instead to pursue their grievance. (With the players' CBA due to expire after the 2001 season, the owners may want to offer the players cash bonuses to replace Donald Fehr with Phillips. Think of the savings if every disastrous free agent signee could be induced to breach his contract in midseason...)

Games longer than ever. The average nine-inning regular season game lasted 2:58, up five minutes from 1999 and four minutes longer than the previous record, set in 1994. The postseason was even worse: the average nine-inning World Series game ran 3:30, and in Game 5 of the ALCS, the Yankees and Mariners took 4:14 to play an 8-1/2-inning game in which eight runs were scored.

World Series ticket prices raised $10. Box seats to the Subway Series cost $160 or $130; reserved seats $110 or $95; bleachers and general admission $50. These represent a $10 across-the-board increase from the prices which prevailed in 1998 and 1999.

Around the Majors

Red Sox to be sold for the first time since 1933. In apparent recognition that the club can't afford its share of a proposed $665 million new stadium, the Jean R. Yawkey Trust, controlled by Sox CEO John Harrington, has put its controlling 53% interest in the Red Sox up for sale. Dozens of prospective bidders have contacted the club, including one quixotic attempt to raise a nine-figure sum through pledges from interested fans. Several local legislators, noting that Harrington never suggested a sale was imminent when lobbying the government for the stadium project, suggest they'll try to hold up the project until the new owner has been identified.

Mets owners split on new stadium. Although Fred Wilpon has long been touting a "new Ebbets Field" in the form of a retractable-domed park to be built in the Shea Stadium parking lot, Nelson Doubleday, who owns the other 50% of the club, doesn't "see a great deal of taxpayer money to build the New York Mets a stadium" and would prefer to renovate Shea. Soon thereafter Mayor Rudy Giuliani proposed that the city, New York State and the team each pay one-third of the cost. (When the issue of public subsidies for sports stadia came up in a New York Senate debate, Rick Lazio favored them, while Senator-elect Hillary Rodham Clinton opposed them.)

Yankees, MSG renew for one year as litigation continues. After the courts enjoined the Yankees from creating their own cable network in violation of MSG's contractual right of first refusal, the Yankees offered to renew the MSG deal for 10 years - at a price of $1.3 billion up front or $2.4 billion over 10 years. MSG returned to court, terming the proposal "ludicrous, inflated, based on erroneous financial assumptions." The Yankees responded by offering a one-year renewal for $52 million - just $1.3 million more than MSG paid in 2000 - but without the right-of-first-refusal clause found in the previous contract. MSG accepted the offer, but reserved its right to challenge the removal of the right-of-first-refusal clause.

Athletics and Giants continue to spar over territory. According to Murray Chass's column in the October 8 New York Times, the Major League Constitution defines Oakland's territory as Alameda and Contra Costa Counties, on the east side of San Francisco Bay, while the Giants control Marin, San Francisco, Santa Clara, San Mateo, Monterey and Santa Cruz Counties. (By contrast, the Constitution gives both teams in the other two-team markets the same territory, specifying that it be shared.) The owners of the Athletics have talked about moving the team, or selling it to someone who would move the team, to Silicon Valley, but the Giants have made clear they will oppose any such move. Changing the Constitution to allow the Athletics to move over the Giants' objections would require a three-fourths vote of all 30 owners.

Phillies may finally get their new stadium. In the same vote, the Pennsylvania legislature approved funds for new ballparks in both Philadelphia and Pittsburgh. While the Pirates move into their new home next spring, the Phillies have yet to break ground. Philadelphia has finally decided upon a site, though: the same ugly warehouse district in which Veterans Stadium is situated. The Phillies will pay $172 million of the estimated $346 million cost, with the state and city to fund the remainder. The team is responsible for stadium cost overruns, while the city must pay for any increase in land acquisition costs. The Phillies will be responsible for maintenance expenses and must pay $1.375 million/year into a city fund - but in return will receive all income from the facility, including parking, concessions and naming rights. The new park, projected to open in 2004, will have 45,000 seats and 75 luxury suites.

Padres claim $87 million in losses since 1995. Club president Larry Lucchino said the Padres have been "spending beyond our means in an effort to keep the team competitive." In fact, they spent more than the division-winning Giants, with four players (Trevor Hoffman, Randy Myers, Sterling Hitchcock and the aging shell of Tony Gwynn) earning more than the $6 million the Giants paid league MVP Jeff Kent. Can you say "self-inflicted wound"? Meanwhile, construction on the Padres' new park was halted, in an apparent attempt to force the city to implement the promised permanent bond funding.

Canada's largest cable operator buys the Blue Jays. Rogers Communications, owner of Canada's largest cable TV system as well as other radio and TV interests, will buy 80% of the Jays for $112 million. Interbrew S.A., which acquired a majority interest when it purchased Labatt's, will retain 20%, with the Canadian Imperial Bank of Commerce selling the 10% it has owned since the team's founding in 1977.

Copyright © 2000 Doug Pappas. All rights reserved.
Originally published in the Fall 2000 issue of Outside the Lines, the SABR Business of Baseball Committee newsletter.