Friday, April 16, 2004
MLB Celebrates Jackie Robinson Day
Yesterday was Major League Baseball's first annual "Jackie Robinson Day," to be held annually on April 15. Barry Bloom of MLB.com recounts Commissioner Selig's "emotional day" as he joined Rachel Robinson for commemorative ceremonies at Shea Stadium.
The Commissioner has often talked about traveling down from Milwaukee to Chicago in 1947 to see Robinson play. If the owners of the other 15 major league clubs had had their way, Bud never would have gotten the opportunity. One year before Robinson's major league debut, while he was already tearing up the International League, a committee consisting of four owners and the two league presidents were still making excuses why blacks couldn't or shouldn't play in the majors.
(A footnote: notorious Birmingham sheriff Eugene "Bull" Connor, best known for encouraging police dogs to attack civil rights demonstrators, first came to the community's notice as a minor league baseball announcer. The January 25, 1932 Sporting News profiled Connor, whose “homely but vivid accounts of games over Station WBRC have won him an army of followers." A much better army than the collection of human vermin he would lead a quarter-century later...)
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Yesterday was Major League Baseball's first annual "Jackie Robinson Day," to be held annually on April 15. Barry Bloom of MLB.com recounts Commissioner Selig's "emotional day" as he joined Rachel Robinson for commemorative ceremonies at Shea Stadium.
The Commissioner has often talked about traveling down from Milwaukee to Chicago in 1947 to see Robinson play. If the owners of the other 15 major league clubs had had their way, Bud never would have gotten the opportunity. One year before Robinson's major league debut, while he was already tearing up the International League, a committee consisting of four owners and the two league presidents were still making excuses why blacks couldn't or shouldn't play in the majors.
(A footnote: notorious Birmingham sheriff Eugene "Bull" Connor, best known for encouraging police dogs to attack civil rights demonstrators, first came to the community's notice as a minor league baseball announcer. The January 25, 1932 Sporting News profiled Connor, whose “homely but vivid accounts of games over Station WBRC have won him an army of followers." A much better army than the collection of human vermin he would lead a quarter-century later...)
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To Raise Money, Baseball Tries New Squeeze Play
Richard Sandomir of the New York Times discusses how the owners of MLB's two oldest ballparks have found ways to cram more fans into their facilities. The Boston Red Sox will generate an additional $4-$6 million in revenue from the seats atop Fenway Park's Green Monster and right-field roof, while in Wrigley Field the Cubs moved the backstop 10 feet closer to home plate to add 213 premium seats.
The Cubs have also effectively expanded Wrigley Field through revenue-sharing deals with the owners of 13 buildings across the street who sell rooftop seats. Cubs executive vice president Mark McGuire says, "Now, they're truly our partners, and we're promoting them and steering business to them. They're like an extension of the stadium."
Newer facilities are also getting into the act. The Baltimore Orioles added two rows of seats behind the plate and down the lines, while in Seattle, the Mariners have converted part of their press box into the park's most expensive luxury suite, renting for $5,500-$9,000/game.
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Richard Sandomir of the New York Times discusses how the owners of MLB's two oldest ballparks have found ways to cram more fans into their facilities. The Boston Red Sox will generate an additional $4-$6 million in revenue from the seats atop Fenway Park's Green Monster and right-field roof, while in Wrigley Field the Cubs moved the backstop 10 feet closer to home plate to add 213 premium seats.
The Cubs have also effectively expanded Wrigley Field through revenue-sharing deals with the owners of 13 buildings across the street who sell rooftop seats. Cubs executive vice president Mark McGuire says, "Now, they're truly our partners, and we're promoting them and steering business to them. They're like an extension of the stadium."
Newer facilities are also getting into the act. The Baltimore Orioles added two rows of seats behind the plate and down the lines, while in Seattle, the Mariners have converted part of their press box into the park's most expensive luxury suite, renting for $5,500-$9,000/game.
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Thursday, April 15, 2004
Want to Buy a Billionaire a Stadium?
From Neil deMause's Field of Schemes mailing list, here's a decidedly negative view of the Twins' proposed stadium from the Minneapolis-St.Paul alternative paper Pulse of the Twin Cities. Author Lydia Howell notes that while the state debates public funding to subsidize facilities for a baseball team owned by the nation's 88th wealthiest man (Carl Pohlad, $2.1 million) and a football team owned by the 224th wealthiest (Red McCombs, $1.1 billion),
"Minnesota has a $4.7 billion state budget deficit which is cited by Gov. Tim Pawlenty as the reason for spending cuts of $2.8 billion. The cuts include a 20 percent cut from Jobs and Economic Development, 49 percent from transportation, and 50 percent from funding for battered women and homeless shelters."
The Twins are also claiming, with no apparent explanation or justification, that a one-year delay in funding a ballpark would increase costs by $106 million, a two-year delay by $179 million.
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From Neil deMause's Field of Schemes mailing list, here's a decidedly negative view of the Twins' proposed stadium from the Minneapolis-St.Paul alternative paper Pulse of the Twin Cities. Author Lydia Howell notes that while the state debates public funding to subsidize facilities for a baseball team owned by the nation's 88th wealthiest man (Carl Pohlad, $2.1 million) and a football team owned by the 224th wealthiest (Red McCombs, $1.1 billion),
"Minnesota has a $4.7 billion state budget deficit which is cited by Gov. Tim Pawlenty as the reason for spending cuts of $2.8 billion. The cuts include a 20 percent cut from Jobs and Economic Development, 49 percent from transportation, and 50 percent from funding for battered women and homeless shelters."
The Twins are also claiming, with no apparent explanation or justification, that a one-year delay in funding a ballpark would increase costs by $106 million, a two-year delay by $179 million.
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New Owners' Tax Break Losing Value
On Income Tax Day, Darren Rovell of ESPN.com explains why the tax advantages of owning a pro sports franchise have declined in recent years. Although owners can still allocate up to 50% of the purchase price of a club to intangible assets such as player contracts, the IRS has become more aggressive at challenging the club's valuations. The new owners are also wealthier, as a class, than the owners they're replacing.
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On Income Tax Day, Darren Rovell of ESPN.com explains why the tax advantages of owning a pro sports franchise have declined in recent years. Although owners can still allocate up to 50% of the purchase price of a club to intangible assets such as player contracts, the IRS has become more aggressive at challenging the club's valuations. The new owners are also wealthier, as a class, than the owners they're replacing.
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House Weighs Help for Team
The Miami Herald reports that a legislator in the Florida House of Representatives has snuck a provision into a broader bill which would allow the Marlins to claim the same $60 million subsidy ($2 million/year for 30 years) already used to build or retrofit seven other Florida stadiums.
The Herald also notes that one of these subsidies went to former Marlins owner/present Marlins leech Wayne Huizenga to retrofit Pro Player Stadium for baseball. He spent only $10 million for this purpose and has retained the subsidy even after selling the team.
Even if it passes the House, the subsidy is expected to die in the Senate, whose leadership has already said it's too late in the session to consider a stadium bill this year. Miami Republican Alex Villalobos says, "The Marlins have a better shot winning the Lotto."
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The Miami Herald reports that a legislator in the Florida House of Representatives has snuck a provision into a broader bill which would allow the Marlins to claim the same $60 million subsidy ($2 million/year for 30 years) already used to build or retrofit seven other Florida stadiums.
The Herald also notes that one of these subsidies went to former Marlins owner/present Marlins leech Wayne Huizenga to retrofit Pro Player Stadium for baseball. He spent only $10 million for this purpose and has retained the subsidy even after selling the team.
Even if it passes the House, the subsidy is expected to die in the Senate, whose leadership has already said it's too late in the session to consider a stadium bill this year. Miami Republican Alex Villalobos says, "The Marlins have a better shot winning the Lotto."
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Wednesday, April 14, 2004
The Baseball Stat You Don't Want to See
The Christian Science Monitor, which really ought to know better, publishes the annual Baseball Economics Article I Don't Want to See: a piece that uses Team Marketing Report's Fan Cost Index to lament how MLB is pricing itself out of the reach of families.
I'm working on a series of articles for Baseball Prospectus about the problems with the FCI and what more meaningful team-by-team cost estimates would look like. For now, suffice to say that when the Monitor writes:
"On average, a family of four will spend $155.52 for a day at big-league ballparks this year,"
what it's actually saying is: "a family of four that buys four average-priced tickets, two small draft beers, four small soft drinks, four regular hot dogs, two programs, and two of the least expensive adult-sized adjustable caps, and parks in the stadium lot, will pay an average of $155.52 for the privilege."
The Monitor also quotes one Peter Roby, president of the Center for the Study of Sports in Society at Northeastern University, who insists, "We are pricing the poorer population of America out of the national game." To support his point, Roby doesn't cite evidence about actual attendance at major league games, instead noting that participation in baseball has been declining for years. Roby also projects a number of his own issues onto the general populace:
"Players used to live in the same neighborhoods as their fans. Now we have the alienation gap with fans increasingly resenting astronomic salaries, performance-enhancing drugs, and socially aberrant behavior by players."
Players haven't "lived in the same neighborhoods as their fans" since their wages began approaching the market value of their services, some thirty years ago. And how does this alleged "alienation gap" affect baseball more than the other major team sports -- all of which started out, and remain, far more expensive to attend?
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The Christian Science Monitor, which really ought to know better, publishes the annual Baseball Economics Article I Don't Want to See: a piece that uses Team Marketing Report's Fan Cost Index to lament how MLB is pricing itself out of the reach of families.
I'm working on a series of articles for Baseball Prospectus about the problems with the FCI and what more meaningful team-by-team cost estimates would look like. For now, suffice to say that when the Monitor writes:
"On average, a family of four will spend $155.52 for a day at big-league ballparks this year,"
what it's actually saying is: "a family of four that buys four average-priced tickets, two small draft beers, four small soft drinks, four regular hot dogs, two programs, and two of the least expensive adult-sized adjustable caps, and parks in the stadium lot, will pay an average of $155.52 for the privilege."
The Monitor also quotes one Peter Roby, president of the Center for the Study of Sports in Society at Northeastern University, who insists, "We are pricing the poorer population of America out of the national game." To support his point, Roby doesn't cite evidence about actual attendance at major league games, instead noting that participation in baseball has been declining for years. Roby also projects a number of his own issues onto the general populace:
"Players used to live in the same neighborhoods as their fans. Now we have the alienation gap with fans increasingly resenting astronomic salaries, performance-enhancing drugs, and socially aberrant behavior by players."
Players haven't "lived in the same neighborhoods as their fans" since their wages began approaching the market value of their services, some thirty years ago. And how does this alleged "alienation gap" affect baseball more than the other major team sports -- all of which started out, and remain, far more expensive to attend?
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Meadowlands Hopes for an Amazing Catch
George Zoffinger of the New Jersey Sports and Exposition Authority has breathlessly told the Newark Star Ledger that his recent discussions with Jerry Reinsdorf leave him optimistic that MLB might consider placing a franchise in the Meadowlands.
"It's gone from something I didn't think was possible to something that actually could happen. Jerry Reinsdorf told me that baseball is interested in the Meadowlands because we are building a family entertainment center and bringing mass transit to the site."
Mr. Zoffinger has a better chance of locating Jimmy Hoffa's body under the Giants Stadium parking lot. The Meadowlands complex lacks a baseball stadium, and the State of New Jersey has made clear that it won't subsidize one. Zoffinger's estimate that a suitable park could be built for $200 to $300 million borders on the delusional, inasmuch as Philadelphia's new park cost over $450 million.
Then there's the little matter of indemnifying the Yankees and Mets for invading their territory. With Forbes estimating that these clubs are worth a combined $1.274 billion, fair indemnification payments would equal the cost of the stadium.
Update: MLB President Bob DuPuy says New Jersey is not being considered as a potential home for the Expos, and Randy Levine of the Yankees vows, "we will vigorously object and exercise all our rights if any attempts are made to put any major league team there." You got your headline, Mr. Zoffinger -- time to move on...
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George Zoffinger of the New Jersey Sports and Exposition Authority has breathlessly told the Newark Star Ledger that his recent discussions with Jerry Reinsdorf leave him optimistic that MLB might consider placing a franchise in the Meadowlands.
"It's gone from something I didn't think was possible to something that actually could happen. Jerry Reinsdorf told me that baseball is interested in the Meadowlands because we are building a family entertainment center and bringing mass transit to the site."
Mr. Zoffinger has a better chance of locating Jimmy Hoffa's body under the Giants Stadium parking lot. The Meadowlands complex lacks a baseball stadium, and the State of New Jersey has made clear that it won't subsidize one. Zoffinger's estimate that a suitable park could be built for $200 to $300 million borders on the delusional, inasmuch as Philadelphia's new park cost over $450 million.
Then there's the little matter of indemnifying the Yankees and Mets for invading their territory. With Forbes estimating that these clubs are worth a combined $1.274 billion, fair indemnification payments would equal the cost of the stadium.
Update: MLB President Bob DuPuy says New Jersey is not being considered as a potential home for the Expos, and Randy Levine of the Yankees vows, "we will vigorously object and exercise all our rights if any attempts are made to put any major league team there." You got your headline, Mr. Zoffinger -- time to move on...
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Union Files Grievance Over Marlins' Release of Banks
The South Florida Sun-Sentinel reports that the MLBPA has filed a grievance against the Florida Marlins over the club's release of outfielder Brian Banks. Banks was released on March 31, two days after an MRI revealed "loose bodies" in his right knee. He underwent surgery, but should be ready to play by late May.
Banks' non-guaranteed major league contract called for him to receive $400,000 this season. He has since signed a minor league deal with the Marlins. The club is expected to respond that Banks would have been released anyway, regardless of the knee injury.
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The South Florida Sun-Sentinel reports that the MLBPA has filed a grievance against the Florida Marlins over the club's release of outfielder Brian Banks. Banks was released on March 31, two days after an MRI revealed "loose bodies" in his right knee. He underwent surgery, but should be ready to play by late May.
Banks' non-guaranteed major league contract called for him to receive $400,000 this season. He has since signed a minor league deal with the Marlins. The club is expected to respond that Banks would have been released anyway, regardless of the knee injury.
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Owners Have Not Acted to Stop Use of Steroids
Murray Chass of the New York Times observes that for all their tough talk about banishing steroids from the game, the owners have not sought the testing of a single player under the "reasonable cause" testing provision of the CBA. Nor have any of the players who have spoken out against steroids reported one of their peers.
This highlights a major problem with the current system. The players, who are clearly in the best position to know who's been taking steroids, aren't about to inform on one another. Nor is any owner or GM likely to turn in one of his own players -- especially not the very high-profile All-Star players who have come under the most scrutiny.
Meanwhile, Rob Manfred, MLB's representative on the committee charged with determining whether reasonable cause exists, explains what standard any allegations of steroid use must meet:
"The agreement does not say suspicion. It says reasonable cause. I think it's fair to say that reasonable cause, the legal standard of reasonable cause, requires more than suspicion that somebody has done something. You have to have some concrete evidence."
Manfred clearly doesn't have what it takes to be a newspaper columnist or call-in show host...
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Murray Chass of the New York Times observes that for all their tough talk about banishing steroids from the game, the owners have not sought the testing of a single player under the "reasonable cause" testing provision of the CBA. Nor have any of the players who have spoken out against steroids reported one of their peers.
This highlights a major problem with the current system. The players, who are clearly in the best position to know who's been taking steroids, aren't about to inform on one another. Nor is any owner or GM likely to turn in one of his own players -- especially not the very high-profile All-Star players who have come under the most scrutiny.
Meanwhile, Rob Manfred, MLB's representative on the committee charged with determining whether reasonable cause exists, explains what standard any allegations of steroid use must meet:
"The agreement does not say suspicion. It says reasonable cause. I think it's fair to say that reasonable cause, the legal standard of reasonable cause, requires more than suspicion that somebody has done something. You have to have some concrete evidence."
Manfred clearly doesn't have what it takes to be a newspaper columnist or call-in show host...
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Mayor's Ballpark Plan Has Issues
Among those issues: the site that would be cheapest for the District of Columbia's proposed new stadium is also the least desirable from the prospective owners' perspective. According to Eric Fisher of the Washington Times, a ballpark built near RFK Stadium would cost taxpayers $340 million. One at any of the other three locations -- M Street Southeast, New York Avenue Northeast and Benjamin Banneker Park -- would cost $385 million. Fisher notes that even this figure sounds low, since both Philadelphia and San Diego spent over $450 million on their new facilities.
Meanwhile William Collins, leader of the bid to bring baseball to northern Virginia, says that local opposition has caused him basically to give up on Arlington County, the most desirable potential location. Any other site would be further from the District, and probably also further from public transportation.
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Among those issues: the site that would be cheapest for the District of Columbia's proposed new stadium is also the least desirable from the prospective owners' perspective. According to Eric Fisher of the Washington Times, a ballpark built near RFK Stadium would cost taxpayers $340 million. One at any of the other three locations -- M Street Southeast, New York Avenue Northeast and Benjamin Banneker Park -- would cost $385 million. Fisher notes that even this figure sounds low, since both Philadelphia and San Diego spent over $450 million on their new facilities.
Meanwhile William Collins, leader of the bid to bring baseball to northern Virginia, says that local opposition has caused him basically to give up on Arlington County, the most desirable potential location. Any other site would be further from the District, and probably also further from public transportation.
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New-Look Cellular Stands Out
Chicago Tribune architecture critic Blair Kamin reviews the newly-truncated U.S. Cellular Field. The park opened in 1991 -- significantly, one year before Camden Yards rewrote the book on baseball stadium design -- and has already received $69 million in renovations to make it "more like the ballpark it always should have been." As Kamin says:
"Never before has a stadium so young been so drastically redone. It's an unspoken admission from the White Sox and the Sports Facilities Authority that the original design was a flop."
The latest renovations, Phase 4 of a 5-part project, eliminated the top eight rows of the upper deck (and 6,600 seats) and lowered the stadium's roof. The park doesn't dominate its surroundings to the degree it did before.
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Chicago Tribune architecture critic Blair Kamin reviews the newly-truncated U.S. Cellular Field. The park opened in 1991 -- significantly, one year before Camden Yards rewrote the book on baseball stadium design -- and has already received $69 million in renovations to make it "more like the ballpark it always should have been." As Kamin says:
"Never before has a stadium so young been so drastically redone. It's an unspoken admission from the White Sox and the Sports Facilities Authority that the original design was a flop."
The latest renovations, Phase 4 of a 5-part project, eliminated the top eight rows of the upper deck (and 6,600 seats) and lowered the stadium's roof. The park doesn't dominate its surroundings to the degree it did before.
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Tuesday, April 13, 2004
2004 Salaries, 1985-2004 Salary Database Now Available
I've just added the 2004 Opening Day salaries to the collection of downloadable data accessible here. In addition, I've collected salaries from 1985 through 2004 into a single ZIPped .CSV database.
For alphabetical lists of player salaries from each season since 1985, click here. To download the database, right-click here and save the file to your hard drive.
Note for those who have downloaded an earlier version of this database: I've done a lot of cleanup work, standardizing player names, fixing errors, adding players who were on the Opening Day roster but not the August 31 roster or vice versa, and adding earned bonuses where known. Salaries from 1985-89 are now as accurate and complete as I can make them, but I'm still working on the later seasons.
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I've just added the 2004 Opening Day salaries to the collection of downloadable data accessible here. In addition, I've collected salaries from 1985 through 2004 into a single ZIPped .CSV database.
For alphabetical lists of player salaries from each season since 1985, click here. To download the database, right-click here and save the file to your hard drive.
Note for those who have downloaded an earlier version of this database: I've done a lot of cleanup work, standardizing player names, fixing errors, adding players who were on the Opening Day roster but not the August 31 roster or vice versa, and adding earned bonuses where known. Salaries from 1985-89 are now as accurate and complete as I can make them, but I'm still working on the later seasons.
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Selig: Reds Fans Should Be Patient
Addressing a subject about which he is unquestionably an expert, Bud Selig told the Cincinnati Enquirer that Reds fans can't expect their new stadium to bring an immediate turnaround in the team's fortunes:
"If you made questionable baseball decisions for years leading up to the park, it's not going to change that in a year."
Addressing a subject about which he is apparently less of an expert, stadium finance, Bud delivered the quote of the year to date:
"I was raised in a family of economists, and I would argue the economics. At worst, a new ballpark is a break-even proposition. What other public expenditure can you say that about?"
Got that, taxpayers? If the local team needs a ballpark, build one! Don't waste your money on losing investments like schools, fire departments and infrastructure!
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Addressing a subject about which he is unquestionably an expert, Bud Selig told the Cincinnati Enquirer that Reds fans can't expect their new stadium to bring an immediate turnaround in the team's fortunes:
"If you made questionable baseball decisions for years leading up to the park, it's not going to change that in a year."
Addressing a subject about which he is apparently less of an expert, stadium finance, Bud delivered the quote of the year to date:
"I was raised in a family of economists, and I would argue the economics. At worst, a new ballpark is a break-even proposition. What other public expenditure can you say that about?"
Got that, taxpayers? If the local team needs a ballpark, build one! Don't waste your money on losing investments like schools, fire departments and infrastructure!
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Wrigley Is Tough Ticket This Season
According to the Chicago Tribune, the Chicago Cubs have already sold out the 2004 season, except for obstructed-view seats. Season ticket sales are up 37%.
"We didn't have a supply of tickets to meet the demand," said Frank Maloney, director of ticket operations for the Cubs. "We feel sorry for the people who have been coming for years. But we can't apologize for the demand."
What the Cubs don't say, however, is how many of those tickets were diverted to their in-house scalping operation, Wrigley Field Premium Ticket Services. Late last year WFPTS was unaccountably cleared of charges that it violated the Illinois anti-scalping laws, though the case is on appeal. I suspect we'll be hearing from the Sun-Times' Greg Couch again about this sometime soon...
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According to the Chicago Tribune, the Chicago Cubs have already sold out the 2004 season, except for obstructed-view seats. Season ticket sales are up 37%.
"We didn't have a supply of tickets to meet the demand," said Frank Maloney, director of ticket operations for the Cubs. "We feel sorry for the people who have been coming for years. But we can't apologize for the demand."
What the Cubs don't say, however, is how many of those tickets were diverted to their in-house scalping operation, Wrigley Field Premium Ticket Services. Late last year WFPTS was unaccountably cleared of charges that it violated the Illinois anti-scalping laws, though the case is on appeal. I suspect we'll be hearing from the Sun-Times' Greg Couch again about this sometime soon...
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Running Them Like Nobody's Business
Bill Shaikin of the Los Angeles Times explains how the Anaheim Angels can afford the majors' third highest Opening Day payroll, behind only the Yankees and Red Sox.
New owner Arte Moreno says he'll lose $15-$20 million this year, but break even in 2005. He expects revenues to rise from $120 million in 2003 to $140 million in 2004, $155 million in 2005, and predicts the club's player payroll will fall by $10-$15 million next year when $30 million worth of contracts (Kevin Appier, Aaron Sele, Troy Percival and Ramon Ortiz) come off the Angels' books.
Moreno, who made his fortune in the advertising business, has already doubled the club's in-stadium advertising revenue. This year he forecasts $62 million in gate receipts, $22 million from local broadcasting, $21 million from concessions and parking, $18.4 million from stadium advertising, and $16.3 million from MLB's national revenues. Longer-term plans include boosting the club's local media revenues to the level of the Dodgers, who currently receive twice as much as the Angels.
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Bill Shaikin of the Los Angeles Times explains how the Anaheim Angels can afford the majors' third highest Opening Day payroll, behind only the Yankees and Red Sox.
New owner Arte Moreno says he'll lose $15-$20 million this year, but break even in 2005. He expects revenues to rise from $120 million in 2003 to $140 million in 2004, $155 million in 2005, and predicts the club's player payroll will fall by $10-$15 million next year when $30 million worth of contracts (Kevin Appier, Aaron Sele, Troy Percival and Ramon Ortiz) come off the Angels' books.
Moreno, who made his fortune in the advertising business, has already doubled the club's in-stadium advertising revenue. This year he forecasts $62 million in gate receipts, $22 million from local broadcasting, $21 million from concessions and parking, $18.4 million from stadium advertising, and $16.3 million from MLB's national revenues. Longer-term plans include boosting the club's local media revenues to the level of the Dodgers, who currently receive twice as much as the Angels.
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Home Runs Up Slightly, Scoring Down, Attendance Soars
First-week attendance was up 11% to an average of 31,252 fans/game, MLB's highest since 1991. The Commissioner was quick to credit his New Economic Order:
"There was a lot of interest in the offseason, the debate about A-Rod. Last year, on Sept. 1, there were 18 teams still in contention. This year, I think it'll be around 20. As I like to say, there's a lot of hope and faith out there."
Especially in those small markets of New York and Boston. The Yankees have already sold 2.98 million tickets for this season, while the Red Sox have sold nearly 2,500,000. As for the two new parks, the Phillies (2.3 million tickets sold) and Padres (2.15 million) have both sold more tickets for 2004 than their total 2003 home attendance.
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First-week attendance was up 11% to an average of 31,252 fans/game, MLB's highest since 1991. The Commissioner was quick to credit his New Economic Order:
"There was a lot of interest in the offseason, the debate about A-Rod. Last year, on Sept. 1, there were 18 teams still in contention. This year, I think it'll be around 20. As I like to say, there's a lot of hope and faith out there."
Especially in those small markets of New York and Boston. The Yankees have already sold 2.98 million tickets for this season, while the Red Sox have sold nearly 2,500,000. As for the two new parks, the Phillies (2.3 million tickets sold) and Padres (2.15 million) have both sold more tickets for 2004 than their total 2003 home attendance.
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This Old House: Red Sox Make the Most of Fenway
The Hartford Courant's Alan Greenberg looks at how the Red Sox have squeezed more revenue out of Fenway Park, and concludes they're not likely to build a replacement any time soon.
Since acquiring the club two years ago, John Henry, Tom Werner and Larry Lucchino have found ways to squeeze 1,300 more people into Fenway. They've increased advertising and concessions revenue. All told, Andrew Zimbalist estimates the Sox have boosted their take by $40-$70 million/year. Sounds great...but unfortunately for them, the Yankees' revenues have jumped by around $100 million over the same period, due largely to their new YES Network.
Steve Wojnar, chairman of Save Fenway Park!, praises the new owners' attitude toward Fenway.
"There is nothing Mr. Henry has done that the previous ownership couldn't have done 20 years ago. The big thing he has done differently is care. He became one of us in a hurry. ... Now we have (Mayor Tom Menino) saying Fenway Park is one of Boston's greatest treasures, whereas four years ago he was saying Fenway Park couldn't be saved."
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The Hartford Courant's Alan Greenberg looks at how the Red Sox have squeezed more revenue out of Fenway Park, and concludes they're not likely to build a replacement any time soon.
Since acquiring the club two years ago, John Henry, Tom Werner and Larry Lucchino have found ways to squeeze 1,300 more people into Fenway. They've increased advertising and concessions revenue. All told, Andrew Zimbalist estimates the Sox have boosted their take by $40-$70 million/year. Sounds great...but unfortunately for them, the Yankees' revenues have jumped by around $100 million over the same period, due largely to their new YES Network.
Steve Wojnar, chairman of Save Fenway Park!, praises the new owners' attitude toward Fenway.
"There is nothing Mr. Henry has done that the previous ownership couldn't have done 20 years ago. The big thing he has done differently is care. He became one of us in a hurry. ... Now we have (Mayor Tom Menino) saying Fenway Park is one of Boston's greatest treasures, whereas four years ago he was saying Fenway Park couldn't be saved."
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Can Teams Afford to Pay for Their Own Stadiums?
Jay Weiner of the Minneapolis Star Tribune asks the question. Economists say Yes; club owners and local politicians say No.
Patrick Rische, a St. Louis sports economist, observes, "If there's a city that allows itself to end up paying 50 or 75 percent of a stadium with public money, then they're not being aware of recent events." In St. Louis, the Cardinals are paying 75% of the cost of their new stadium-plus-neighborhood-development. Mark Poitras of the University of Dayton adds, "Teams have been getting these subsidies, not because they need them, but because they can."
In response, Minnesota Vikings Executive Vice President Mike Kelly says the Minneapolis-St. Paul market has too much competition for the sports dollar to generate the revenue needed to make a privately funded stadium feasible. Governor Tim Pawlenty says that since the competitors of Minnesota teams have received huge public subsidies, the locals need similar treatment to be able to compete.
Twins financial consultant Mike Starkey says the club could expect "at least" $40 million more in local revenue from a new park. The club's president, Jerry Bell, warns that asking the Pohlads to invest more than $120 million could "create a potential 'Milwaukee' [Brewers] scenario where the debt burden could impair the club's ability to field a competitive team." He doesn't mention that the Brewers were so deeply in debt before their new park was built that the club couldn't pay the share of construction costs it had agreed to absorb.
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Jay Weiner of the Minneapolis Star Tribune asks the question. Economists say Yes; club owners and local politicians say No.
Patrick Rische, a St. Louis sports economist, observes, "If there's a city that allows itself to end up paying 50 or 75 percent of a stadium with public money, then they're not being aware of recent events." In St. Louis, the Cardinals are paying 75% of the cost of their new stadium-plus-neighborhood-development. Mark Poitras of the University of Dayton adds, "Teams have been getting these subsidies, not because they need them, but because they can."
In response, Minnesota Vikings Executive Vice President Mike Kelly says the Minneapolis-St. Paul market has too much competition for the sports dollar to generate the revenue needed to make a privately funded stadium feasible. Governor Tim Pawlenty says that since the competitors of Minnesota teams have received huge public subsidies, the locals need similar treatment to be able to compete.
Twins financial consultant Mike Starkey says the club could expect "at least" $40 million more in local revenue from a new park. The club's president, Jerry Bell, warns that asking the Pohlads to invest more than $120 million could "create a potential 'Milwaukee' [Brewers] scenario where the debt burden could impair the club's ability to field a competitive team." He doesn't mention that the Brewers were so deeply in debt before their new park was built that the club couldn't pay the share of construction costs it had agreed to absorb.
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Monday, April 12, 2004
Phillies Now Revved for the Revenue Race
On Citizens Bank Park's opening day, Larry Eichel of the Philadelphia Inquirer describes its likely economic impact on the Phillies. Eichel concludes that the new park could be worth $40 million/year:
$30 million at the turnstiles, with more fans attending and paying higher prices to do so.
$10 million at the concession stands, where the city of Philadelphia will no longer collect 18% of the gross.
An unspecified amount from the park's 78 luxury suites and 3,700 club seats.
Millions more from signage, naming rights ($2.3 million/year) and parking.
On the downside, the Phillies will pay <$10 million/year to service their ballpark-related debt, and will be responsible for all operating costs and maintenance-related expenses.
Last year the Phillies received about $10 million from the revenue sharing program. This year, they expect to pay about that much. Since clubs are required to share 34% of their local revenue, these figures suggest that the Phillies' local revenues will rise by $60 million in 2004.
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On Citizens Bank Park's opening day, Larry Eichel of the Philadelphia Inquirer describes its likely economic impact on the Phillies. Eichel concludes that the new park could be worth $40 million/year:
$30 million at the turnstiles, with more fans attending and paying higher prices to do so.
$10 million at the concession stands, where the city of Philadelphia will no longer collect 18% of the gross.
An unspecified amount from the park's 78 luxury suites and 3,700 club seats.
Millions more from signage, naming rights ($2.3 million/year) and parking.
On the downside, the Phillies will pay <$10 million/year to service their ballpark-related debt, and will be responsible for all operating costs and maintenance-related expenses.
Last year the Phillies received about $10 million from the revenue sharing program. This year, they expect to pay about that much. Since clubs are required to share 34% of their local revenue, these figures suggest that the Phillies' local revenues will rise by $60 million in 2004.
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Baseball Players Eyed as Product Placement Surfaces
Advertising Age quotes one anonymous "high-ranking league marketing executive" as estimating that MLB could generate $500 million/year in revenue if it allowed commercial logos on uniforms.
The discussion was spurred by images from the Yankees-Devil Rays trip to Japan, during which both clubs wore 3" x 3" sleeve patches and a batting-helmet logo touting Ricoh, the Japanese office equipment company which paid $10 million to become the official sponsor of the trip. Tim Brosnan, MLB's executive vice president for business, denied that MLB has any plans to sell such ads in the United States, but "on the other side of the coin, never say never."
Even if MLB were so inclined, though, several problems would remain. MLB would insist on leaguewide rather than team-by-team logo deals -- otherwise the Yankees' revenue advantage would grow even larger -- raising the possibility of conflict with existing local sponsorships. Other advertisers might resent baseball's deal with the favored company. And of course, fans would scream bloody murder.
One such fan, Senator Charles Schumer, voiced his concerns directly to the Commissioner. The New York Post reported last week that Selig assured Schumer "he was not going to allow it to happen."
In other words, we have nothing to worry about so long as we trust Bud Selig to keep his word, and trust MLB to listen to fans' concerns. That's reassuring, isn't it?
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Advertising Age quotes one anonymous "high-ranking league marketing executive" as estimating that MLB could generate $500 million/year in revenue if it allowed commercial logos on uniforms.
The discussion was spurred by images from the Yankees-Devil Rays trip to Japan, during which both clubs wore 3" x 3" sleeve patches and a batting-helmet logo touting Ricoh, the Japanese office equipment company which paid $10 million to become the official sponsor of the trip. Tim Brosnan, MLB's executive vice president for business, denied that MLB has any plans to sell such ads in the United States, but "on the other side of the coin, never say never."
Even if MLB were so inclined, though, several problems would remain. MLB would insist on leaguewide rather than team-by-team logo deals -- otherwise the Yankees' revenue advantage would grow even larger -- raising the possibility of conflict with existing local sponsorships. Other advertisers might resent baseball's deal with the favored company. And of course, fans would scream bloody murder.
One such fan, Senator Charles Schumer, voiced his concerns directly to the Commissioner. The New York Post reported last week that Selig assured Schumer "he was not going to allow it to happen."
In other words, we have nothing to worry about so long as we trust Bud Selig to keep his word, and trust MLB to listen to fans' concerns. That's reassuring, isn't it?
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Promoter Wants One-Year Trial for Expos in Puerto Rico
Antonio Munoz, the promoter who brought the Expos to San Juan for 22 games in 2003 and 2004, has offered to host all 81 Expos home games in 2005. If the one-year trial goes well, he says, his group would try to buy the team. If that doesn't work out, he'll solicit other clubs' interest in playing a quarter to a half of their home games in Puerto Rico.
This article ran on Friday, but I waited until after the season's first series in Puerto Rico to post it. The Expos and Mets drew a total of 37,319 fans for their three-game set that included Friday's "home opener." That's an average of 12,440 fans per game. Last year the Expos averaged 12,662 fans per home game. At this rate, Mr. Munoz shouldn't waste a lot of time waiting for his calls to be returned.
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Antonio Munoz, the promoter who brought the Expos to San Juan for 22 games in 2003 and 2004, has offered to host all 81 Expos home games in 2005. If the one-year trial goes well, he says, his group would try to buy the team. If that doesn't work out, he'll solicit other clubs' interest in playing a quarter to a half of their home games in Puerto Rico.
This article ran on Friday, but I waited until after the season's first series in Puerto Rico to post it. The Expos and Mets drew a total of 37,319 fans for their three-game set that included Friday's "home opener." That's an average of 12,440 fans per game. Last year the Expos averaged 12,662 fans per home game. At this rate, Mr. Munoz shouldn't waste a lot of time waiting for his calls to be returned.
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Sunday, April 11, 2004
Runs, Not Victories, Keep Fans in Stands
The Fort Worth Star-Telegram has analyzed MLB's attendance over the past five seasons. The paper examined eight factors: team payroll, winning percentage, playoff appearances, home runs, runs scored, pitchers' earned run averages, ticket prices and Team Marketing Report's Fan Cost Index. The paper's conclusions:
• Every increase of 100 runs scored brought in 273,160 fans.
• Every $10 million increase in payroll brought in 130,000 fans.
• Every $10 increase in the cost of attending a game brought in 51,372 fans.
(Yes, that last sentence is correct, though the way it's phrased obscures that the causation arrow points the other way. Teams that draw more fans have higher prices because the demand for their product is higher.)
Winning percentage did not have a significant effect, probably because the study didn't control for the new-stadium effect. Cincinnati, Detroit, Milwaukee, and Pittsburgh, in particular, combined terrible teams with new facilities, attracting many more fans than were likely to have attended in the old ballpark.
Update: Prof. J.C. Bradbury, proprietor of the Sabernomics blog, has identified what the Star-Telegram did wrong. Since winning percentage is so closely correlated to the ratio of runs scored to runs allowed (Bill James's "Pythagorean Formula"), by including both winning percentage and runs scored/ERA in its model, the paper effectively counted the same factors twice. When runs scored and ERA are dropped from the model, an improvement of 0.100 in winning percentage can be expected to increase attendance by 100,000 fans/season.
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The Fort Worth Star-Telegram has analyzed MLB's attendance over the past five seasons. The paper examined eight factors: team payroll, winning percentage, playoff appearances, home runs, runs scored, pitchers' earned run averages, ticket prices and Team Marketing Report's Fan Cost Index. The paper's conclusions:
• Every increase of 100 runs scored brought in 273,160 fans.
• Every $10 million increase in payroll brought in 130,000 fans.
• Every $10 increase in the cost of attending a game brought in 51,372 fans.
(Yes, that last sentence is correct, though the way it's phrased obscures that the causation arrow points the other way. Teams that draw more fans have higher prices because the demand for their product is higher.)
Winning percentage did not have a significant effect, probably because the study didn't control for the new-stadium effect. Cincinnati, Detroit, Milwaukee, and Pittsburgh, in particular, combined terrible teams with new facilities, attracting many more fans than were likely to have attended in the old ballpark.
Update: Prof. J.C. Bradbury, proprietor of the Sabernomics blog, has identified what the Star-Telegram did wrong. Since winning percentage is so closely correlated to the ratio of runs scored to runs allowed (Bill James's "Pythagorean Formula"), by including both winning percentage and runs scored/ERA in its model, the paper effectively counted the same factors twice. When runs scored and ERA are dropped from the model, an improvement of 0.100 in winning percentage can be expected to increase attendance by 100,000 fans/season.
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Selig Talks About What's On Deck
Bud talks to Jim Salisbury of the Philadelphia Inquirer He says the owners and players are "close" to agreeing on a baseball World Cup to be held during spring training. On the issue of steroids, Bud could be in for a lot of sleepless nights:
"We need to adopt the minor-league program at the major-league level. And until we do, frankly, I will not rest."
The Commissioner also defends the Phillies against charges from people like George Steinbrenner (and me), who have wondered why a club playing in a market larger than Boston [.PDF link] should have received $42 million from the revenue-sharing pool over the past four years:
"That's very unfair. The Phillies were in a tough position. They were in a park that didn't produce enough revenue. Now they are, and they'll pay, and that's the way it should be. I expect them to contribute mightily now. Now they have a ballpark, and they'll spend on players and revenue sharing."
The Commissioner reiterated that the Expos' situation "will be resolved in July," and said that "Las Vegas is a viable consideration. Thirty years ago, we would have automatically eliminated them. It's different now. No decision has been made, but they are being very aggressive."
Entirely aside from the issue of gambling, the problem with baseball in Las Vegas is people As of the 2000 census [.PDF link], the Las Vegas metropolitan area was smaller than any existing major league market -- and unlike any existing major league market, outside the metropolitan area there is essentially zero population within driving distance. The nearest town with as many as 20,000 people is 105 miles away (Kingman, AZ); the nearest with 50,000 is 121 miles away (St. George, UT).
By contrast, the smallest current market, Milwaukee, has Madison (metro population: 426,526), Sheboygan (metro population: 112,646), and all of Chicago's northern suburbs within the same driving-time distance. The second smallest market, Kansas City, can also draw from St. Joseph, MO, and Topeka and Lawrence, KS (combined metro population: 370,000).
A team in Las Vegas could easily sell out its skyboxes and luxury seats to casinos, but would be lucky to draw 15,000 actual paying customers per night. A disproportionate number of the locals work second- and third-shift jobs and can't attend games at 7 PM. The millions of tourists who fill Las Vegas's hotels aren't there for baseball; most would go only if the casinos comped them. Local media rights would be nearly worthless, and MLB's national TV partners would much rather see a team in a larger market where people actually watch TV at night.
Does MLB really want to turn the Expos into a heavily subsidized ward of the Nevada gaming industry?
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Bud talks to Jim Salisbury of the Philadelphia Inquirer He says the owners and players are "close" to agreeing on a baseball World Cup to be held during spring training. On the issue of steroids, Bud could be in for a lot of sleepless nights:
"We need to adopt the minor-league program at the major-league level. And until we do, frankly, I will not rest."
The Commissioner also defends the Phillies against charges from people like George Steinbrenner (and me), who have wondered why a club playing in a market larger than Boston [.PDF link] should have received $42 million from the revenue-sharing pool over the past four years:
"That's very unfair. The Phillies were in a tough position. They were in a park that didn't produce enough revenue. Now they are, and they'll pay, and that's the way it should be. I expect them to contribute mightily now. Now they have a ballpark, and they'll spend on players and revenue sharing."
The Commissioner reiterated that the Expos' situation "will be resolved in July," and said that "Las Vegas is a viable consideration. Thirty years ago, we would have automatically eliminated them. It's different now. No decision has been made, but they are being very aggressive."
Entirely aside from the issue of gambling, the problem with baseball in Las Vegas is people As of the 2000 census [.PDF link], the Las Vegas metropolitan area was smaller than any existing major league market -- and unlike any existing major league market, outside the metropolitan area there is essentially zero population within driving distance. The nearest town with as many as 20,000 people is 105 miles away (Kingman, AZ); the nearest with 50,000 is 121 miles away (St. George, UT).
By contrast, the smallest current market, Milwaukee, has Madison (metro population: 426,526), Sheboygan (metro population: 112,646), and all of Chicago's northern suburbs within the same driving-time distance. The second smallest market, Kansas City, can also draw from St. Joseph, MO, and Topeka and Lawrence, KS (combined metro population: 370,000).
A team in Las Vegas could easily sell out its skyboxes and luxury seats to casinos, but would be lucky to draw 15,000 actual paying customers per night. A disproportionate number of the locals work second- and third-shift jobs and can't attend games at 7 PM. The millions of tourists who fill Las Vegas's hotels aren't there for baseball; most would go only if the casinos comped them. Local media rights would be nearly worthless, and MLB's national TV partners would much rather see a team in a larger market where people actually watch TV at night.
Does MLB really want to turn the Expos into a heavily subsidized ward of the Nevada gaming industry?
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The Give and Go
T.J. Quinn of the New York Daily News looks at political contributions by sports figures, finding "a world of folks who lean toward the conservative side, but are pragmatists at heart."
For example, Don Fehr of the MLBPA has given to Republicans Orrin Hatch and John McCain, who supported MLBPA challenges to baseball's antitrust exemption, while Bud Selig contributes heavily to Democrats. The only two New York baseball players to contribute within the past three election cycles are Al Leiter ($2,000 to Senator/Hall of Famer Jim Bunning) and Alex Rodriguez ($2,000 to George W. Bush). Rafael Palmeiro, Bobby Valentine and Nolan Ryan also contributed to Bush, who got far more money from the sports world than anyone else. Ryan also contributed to the New York Senate campaign of Rick ("I'm the Guy Running Against Hillary Clinton") Lazio.
Only three teams don't contribute to MLB's own PAC: the Braves and Cubs, who are tiny parts of media companies with much broader agendas, and George Steinbrenner's Yankees.
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T.J. Quinn of the New York Daily News looks at political contributions by sports figures, finding "a world of folks who lean toward the conservative side, but are pragmatists at heart."
For example, Don Fehr of the MLBPA has given to Republicans Orrin Hatch and John McCain, who supported MLBPA challenges to baseball's antitrust exemption, while Bud Selig contributes heavily to Democrats. The only two New York baseball players to contribute within the past three election cycles are Al Leiter ($2,000 to Senator/Hall of Famer Jim Bunning) and Alex Rodriguez ($2,000 to George W. Bush). Rafael Palmeiro, Bobby Valentine and Nolan Ryan also contributed to Bush, who got far more money from the sports world than anyone else. Ryan also contributed to the New York Senate campaign of Rick ("I'm the Guy Running Against Hillary Clinton") Lazio.
Only three teams don't contribute to MLB's own PAC: the Braves and Cubs, who are tiny parts of media companies with much broader agendas, and George Steinbrenner's Yankees.
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Urine Samples Are Seized in Balco Case
One day after the MLBPA, with MLB's backing, moved to quash a grand jury subpoena for drug testing urine specimens, IRS agents armed with warrants swooped down on the lab where the collection vials were kept and confiscated a number of samples from players specifically linked to the BALCO investigation.
As an unnamed "lawyer connected to the case" told The New York Times:
"A subpoena is a polite way to get results. A search warrant means war is declared. You don't have the ability to quash a search warrant. You seize the materials and then you litigate."
However, it's not clear just which samples were taken. According to the Times, they "include Barry Bonds; Jason Giambi; his brother Jeremy; Gary Sheffield; Benito Santiago; Armando Rios; Marvin Benard; Bobby Estalella; and Randy Velarde, as well as a handful of other players whose names have not been made public. The total is less than 15." However, the AP has previously reported that most of last year's samples had already been destroyed in the ordinary course of business before the grand jury got involved, with only about 500 remaining. Since each player was tested twice, it's likely that for the majority of players, both of their specimens have been destroyed.
Most likely, the IRS warrant demanded all specimens from the specified players, but the IRS was only able to obtain specimens from the subset of those players whose specimens had not already been destroyed. If so, there's less than a 50% chance that retesting the confiscated specimens will resolve the issues relating to any specific player on the list.
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One day after the MLBPA, with MLB's backing, moved to quash a grand jury subpoena for drug testing urine specimens, IRS agents armed with warrants swooped down on the lab where the collection vials were kept and confiscated a number of samples from players specifically linked to the BALCO investigation.
As an unnamed "lawyer connected to the case" told The New York Times:
"A subpoena is a polite way to get results. A search warrant means war is declared. You don't have the ability to quash a search warrant. You seize the materials and then you litigate."
However, it's not clear just which samples were taken. According to the Times, they "include Barry Bonds; Jason Giambi; his brother Jeremy; Gary Sheffield; Benito Santiago; Armando Rios; Marvin Benard; Bobby Estalella; and Randy Velarde, as well as a handful of other players whose names have not been made public. The total is less than 15." However, the AP has previously reported that most of last year's samples had already been destroyed in the ordinary course of business before the grand jury got involved, with only about 500 remaining. Since each player was tested twice, it's likely that for the majority of players, both of their specimens have been destroyed.
Most likely, the IRS warrant demanded all specimens from the specified players, but the IRS was only able to obtain specimens from the subset of those players whose specimens had not already been destroyed. If so, there's less than a 50% chance that retesting the confiscated specimens will resolve the issues relating to any specific player on the list.
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D.C. Plan for Ballpark Doesn't Sway Angelos
Sun Rises in the East Dept.: Orioles owner Peter Angelos is still opposed to a major league team in Washington, D.C.
"I have said it before and I'll say it again: Two major league franchises within 35 miles of each other spells mediocrity for both."
Mr. Angelos, meet the Oakland Athletics and San Francisco Giants. They play less than 20 miles from one another. Furthermore, according to 2000 Census Bureau data [warning: .PDF link], they play in a market with 600,000 fewer people than the combined Baltimore-Washington metropolitan area, and since they both play at the north end of their region, fans at the southern end have a long trip to either stadium. They seem to be doing okay.
Angelos should concentrate his efforts on lobbying the D.C. City Council, many of whom are already skeptical-to-opposed to spending so much public money on a ballpark. Even Finance and Revenue Committee chair Jack Evans, a stadium supporter, insists that MLB must act first: "I will not agree to spend one dime until baseball commits to coming to D.C."
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Sun Rises in the East Dept.: Orioles owner Peter Angelos is still opposed to a major league team in Washington, D.C.
"I have said it before and I'll say it again: Two major league franchises within 35 miles of each other spells mediocrity for both."
Mr. Angelos, meet the Oakland Athletics and San Francisco Giants. They play less than 20 miles from one another. Furthermore, according to 2000 Census Bureau data [warning: .PDF link], they play in a market with 600,000 fewer people than the combined Baltimore-Washington metropolitan area, and since they both play at the north end of their region, fans at the southern end have a long trip to either stadium. They seem to be doing okay.
Angelos should concentrate his efforts on lobbying the D.C. City Council, many of whom are already skeptical-to-opposed to spending so much public money on a ballpark. Even Finance and Revenue Committee chair Jack Evans, a stadium supporter, insists that MLB must act first: "I will not agree to spend one dime until baseball commits to coming to D.C."
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