Doug's Business of Baseball Weblog:

February 23-March 31, 2003

To April 2003 Entries

March 31, 2003: As Seen in the New York Times Magazine (, subscribers only) LINK

The backup for my conclusions about the Athletics' efficiency, as quoted in Michael Lewis's article.

March 30, 2003: Historic MLB Documents Posted LINK

Just in time for Opening Day, I've added these documents to the site:

March 30, 2003: The Trading Desk LINK

A lengthy excerpt from Michael Lewis's forthcoming Moneyball: The Art of Winning an Unfair Game, about how the Oakland Athletics keep winning despite a tiny payroll. The rest of the book is just as good, though it's unlikely to make Beane any friends within the baseball community.

March 29, 2003: New policy created for autographs LINK

Eight Diamondbacks will sign autographs for 10 minutes before each home night game, and a separate, private autograph session for children will be held before each Sunday home game.

This could actually work better than Jerry Colangelo's original proposal to have all players except the starting pitcher sign before each game. Eight signatures per game should satisfy most attendees, and if Johnson, Schilling and Gonzalez are put in different groups, they'll be back for more. The autograph session will end 90 minutes before game time, which should mean plenty of extra business for the BOB's concessionaires.

March 28, 2003: Ticket Price Spreadsheets Updated LINK

Now that Team Marketing Report has released its 2003 ticket price and Fan Cost Index survey, I've updated my data files to incorporate the new information. Follow the links below for:

March 28, 2003: YES Network, Cablevision Break Off Talks LINK

The parties were expected to sign a formal agreement today, but couldn't agree about what they had agreed to. Cablevision's Charles Dolan said: "They want a whole lot more money and they really don't want to go to arbitration. But if they do agree to go to arbitration, they don't want anybody to see how much money they are making." YES responded, "There is not a single change we were asked to make that we have not made."

Oh, well. Good thing I'm a Mets fan.

March 28, 2003: Portland, D.C. To Tax Players to Pay for Stadia LINK

On March 26, non-voting Representative Eleanor Holmes Norton introduced a bill to amend the District of Columbia Home Rule Act to allow the District to impose an income tax on non-residents -- but only "to the extent that the income is derived from services rendered within the District as a member of a professional baseball team."

The same day, an Oregon legislator introduced a bill to finance $150 million in stadium bonds with revenues from an income tax to be imposed only on "members of a professional athletic team if the compensation the athlete or other individual receives in a tax year exceeds $100,000."

From the players' perspective, keeping the Expos in Montreal is starting to look awfully good...

March 27, 2003: MLB Fans Can Expect Only Minor Increases at the Ballpark LINK

Here's the press release announcing Team Marketing Report's annual ticket price and Fan Cost Index report. (Here's the 2003 FCI data.)

MLB's average ticket price rose 2.8% for 2003, to $18.69. This compares to an average of $50.02 for the NFL, $43.65 for the NBA and $41.56 for the NHL. The Boston Red Sox remain far and away the most expensive ticket -- their $42.34 average is fully 70% higher than the second-place Yankees -- while at an average of $9.00 U.S., the Montreal Expos remain MLB's best bargain. The Angels and Twins, who met in the ALCS, posted the largest price increases, 35.5% for Anaheim and 22.2% for Minnesota, though both clubs still remain well below the MLB average.

March 27, 2003: Ballpark Financing Emerges LINK

Here's how Virginia proposes to finance $285 million of stadium bonds:
  • $8.3 million/year from sales and income taxes at stadium, including a special levy on the salaries of players and club officials
  • $8.3 million/year from an admissions tax
  • $1.5 million/year from rental of retail space at the stadium
  • $0.5 million/year from renting stadium for other events
  • $1.5 million/year from hotel tax in Alexandria and Arlington and Fairfax Counties.
Note that the admissions tax alone would run about $3/ticket.

March 26, 2003: Virginia ballpark estimated to cost $400 million LINK

Although the estimated cost of a Virginia ballpark has risen $100 million since the late 1990s, the chairman of the Virginia House Appropriations Committee insists that all but $1-$2 million/year of the cost can be covered by "taxes on tickets, concessions, player salaries and other revenue generated by baseball."

If this works, I plan to seek investors to finance my construction of a $400,000 house. As collateral, I'll pledge $2,000/year of my income, plus an assignment of all monies I may earn from renting billboards on my rooftop, painting a sponsor's logo on the side of the house facing the street, and leasing the front lawn to a concessionaire for use as a parking lot.

March 26, 2003: World of Change for All-Star Game LINK

Today's New York Daily News reports that the MLBPA is prepared to approve MLB's proposal to give home-field advantage in the World Series to the league which wins the All-Star Game -- but only for two years, after which home field in the World Series would go to the participating club with the better regular season record.

At that time the players have an even bigger change in mind for the All-Star Game: a radical alteration of the format from AL vs. NL into an NHL-style exhibition matching American-born players against foreign-born players. If adopted, this format could build viewer interest in the U.S. and abroad in a way that doesn't affect the integrity of the postseason. From roster selection to in-game strategy, the All-Star Game is an exhibition, and home field advantage in the World Series should not be tied to the results of an exhibition game.

March 23, 2003: Angelos Still Threatens Proposals from D.C., Northern Virginia for Expos LINK

As this article notes, Peter Angelos' concern about a team in Washington, D.C. or northern Virginia is motivated less by threats to the Orioles' attendance than by threats to Baltimore's cable TV contracts. With no team in the Washington, D.C. area, the Orioles are the de facto home team for cable systems far from Camden Yards.

Tough. If not for MLB's de facto antitrust exemption, its restrictions on franchise location and broadcasting would be ripe for challenge as unreasonable restraints of trade. Yielding to Angelos' threats would make matters even worse by, in effect, extending each franchise's territory from the defined limits in MLB's governing documents to the outer limits of its media reach.

March 21, 2003: Cognitive Dissonance: Exposing Baseball's Contraction Plan (, subscribers only) LINK

My article for today's edition of Baseball Prospectus contrasts the recent revelations about MLB's contraction plans with Commissioner Selig's rhetorical odes to baseball's cherished place in American society, as well as to Selig's behavior when his own home town lost a team.

March 20, 2003: Follow the Money LINK

Darren Rovell of notes how some clubs, notably the Padres, Royals, Devil Rays and Brewers, have slashed their already-low payrolls for 2003 despite increased revenue sharing money. The Commissioner saw no problem with this practice:

"I keep reading in certain newspapers that clubs weren't spending that money on players. That's just sheer nonsense. We went through and traced every single revenue-sharing dollar and couldn't find one club or one dollar that hadn't been spent on player development of a team."

For those unfamiliar with the arcane world of baseball economics, Bud means that the owners of the Twins, Expos and Royals were probably writing payroll checks on the same account into which the revenue-sharing money was deposited, and pocketing millions from other club accounts. Form over substance, that's all that matters...

Later in the article, Bud says, "If we don't have revenue sharing from 1996 on, (the Anaheim Angels) never make it and they never put their team together. "It was the first thing that bore fruit from our revenue sharing deal." After all, how else could a team located in the nation's second largest market and owned by one of the world's largest entertainment companies hope to compete without multimillion- dollar subsidies from the Colorado Rockies and Cleveland Indians?

March 19, 2003: Baseball Booster Favors Stadium in Pentagon City LINK

The Pentagon City site is in Arlington, Virginia, just south of the District of Columbia. Unlike D.C., Virginia already has pledged $150 million toward a new ballpark and is prepared to come up with $90 million more.

March 19, 2003: Baseball Awaits Money Pitch LINK

When informed that Washington, D.C.'s stadium financing plan called for a mix of 2/3 public money to 1/3 private money, Jerry Reinsdorf responded, "Two-thirds/one-third is fine, but three thirds/no thirds is more of what we had in mind."

As the owner of the Montreal Expos, thanks to Bud Selig's rigging of the sale of the Red Sox last year, MLB intends to extract every possible dollar from the Expos' ultimate purchaser. And Jerry Reinsdorf, who extorted a new stadium in Chicago by signing a lease to move the White Sox to Tampa unless the Illinois legislature agreed by June 30, 1988 to build him a new ballpark, is just the man to get it. So far as Reinsdorf is concerned, every cent a prospective owner contributes to the cost of a new park is money being taken from his own pocket.

March 19, 2003: Cubs just may end being put on block LINK

Barry Rozner reports that the Tribune Company may sell the Cubs and let a new owner decide whether to risk the PR disaster of moving, or threatening to move, from Wrigley Field.

This would make a lot of sense from the Tribune Company's perspective. The Cubs' greatest value is as a source of cheap programming, which could be locked up in long-term radio and TV deals before a sale. From Cub fans' perspective, though, a sale on these terms could prove disastrous. For an example of what can happen when a club's former owner locks in sweetheart contracts before he sells, just look at the Florida Marlins, where John Henry paid handsomely for the privilege of playing in former owner Wayne Huizenga's stadium, using Huizenga's concessionaires and airing Marlins games over Huizenga's cable network.

March 18, 2003: MLB reschedules opening series LINK

Sadly, not a surprise -- the Athletics and Mariners are staying home.

This would never have happened if George W. Bush had been Commissioner.

March 17, 2003: Baseball free agents forced to take their cuts
When the lead anecdote involves Dave Mlicki, it's hard to be too sympathetic. The 34-year-old Mlicki missed two months of the 2002 season with an injury and finished with a 5.34 ERA and a 4-10 record in just 86 innings. No conspiracy theory is needed to explain why his salary would plummet from $6.2 million in 2002 (the last season of a ridiculous multiyear deal) to $750,000 in 2003.

Earlier this year, Nate Silver of Baseball Prospectus analyzed the 2002-03 free agent market and found no evidence of collusion. There's certainly no evidence of 1980s-style collusion, in which many of the game's best players found no market at all for their services. This year, the second- and third-tier players have taken the biggest hit, as more teams apparently realize that proven mediocrities aren't worth a 500% premium over prospects or six-year minor league free agents who are likely to perform about as well if given a chance.

The market for free agents has also been affected by external factors, such as the economy and insurers' increasing reluctance to cover injury risks. Still, I can't help remaining at least somewhat skeptical of any explanation that relies on every team suddenly and independently getting smart at the same time.

March 17, 2003: Baseball officials consider Europe for in-season games LINK

Better international marketing is an important medium- to long-range goal for MLB. It's also a step toward greater competitive balance: since all overseas rights are controlled by MLB, any monies generated from European or Asian markets are shared equally among all 30 clubs.

Scheduling is the tricky part of international play, since the extra travel means the players need more time to adjust. This is relatively simple when the international games are scheduled for the start of the season -- this year the Mariners and Athletics will play in Japan on March 25 and 26, then take five days off before playing one another again on April 1 in Oakland -- but much more difficult for the midseason games contemplated for Europe.

The only natural place to put such games is immediately before or immediately after the All-Star Game. I think the latter makes more sense. A three-game series from Thursday through Saturday of All-Star week, between clubs playing on the East Coast before and after the break, would allow most players to arrive three days before the first game and enjoy a two-day rest after the series before resuming their regular schedule. All-Stars might have a tougher time, though: the 2004 All-Star Game will be played in Houston, which is at least 12 hours by air from any city likely to host the games.

March 16, 2003: Selig: Oakland Needs New Ballpark Soon LINK

That didn't take long.

But let's look at the facts. While the Athletics -- and owner Steve Schott -- would certainly benefit from a new stadium, it's hard to credit Selig's prophesies of doom. The Athletics have made the playoffs three years in a row despite:
  • Playing on the "wrong side" of MLB's smallest two-club market;
  • Playing in a division where every other club has a new or heavily renovated park;
  • Playing in the same market as a club with a brand new stadium and Barry Bonds; and
  • Playing with a payroll far below any of their rivals.
The Athletics have overcome all of these disadvantages, none of which are getting any worse. Moreover, as the Commissioner is happy to point out in every other context, the increased revenue sharing under the new CBA will give Oakland a multimillion-dollar boost vis-a-vis its divisional rivals, and the luxury tax will limit the Mariners' and Rangers' spending.

In reality, Oakland keeps winning because its management is smarter than anyone else's. So long as Billy Beane's team remains largely intact, the Athletics will continue to contend notwithstanding their relative financial disadvantage. (For those interested in a peek inside the Oakland system, I highly recommend Michael Lewis's forthcoming Moneyball: The Art of Winning an Unfair Game.)

March 16, 2003: Commissioner: Baseball No Longer on Life Support LINK

Write down this quote from Commissioner Selig for reference in 2006:

"My life and the life of the game is much different since Aug. 30. When we see each other in the course of the next couple years, you'll see it will get better and better and better. I believe that our new system has dealt directly with all of the problems and will give everybody, to use one of my favorite phrases, hope and faith."

March 15, 2003: Schott: A's Won't Re-Sign Tejada LINK

Steve Schott: "The system is broken down when only two or three teams can pick up a player of Miguel's caliber and sign him to an eight- to 10-year contract and pay him the money he deserves. This small-market team with the system we have just can't afford him."

Even if Oakland had the Yankees' resources, signing Tejada to an 8- to 10-year contract would be insane. The Alex Rodriguez deal was a special case: a durable, good-fielding shortstop who was also the league's best hitter, who became eligible for free agency at age 25. The 2002 AL MVP vote notwithstanding, Tejada doesn't do anything as well as Rodriguez, who outhit and outfielded him at the same position and who has now been screwed out of at least three AL MVP awards. After adjusting for the difference in ballparks, Rodriguez has posted six seasons better than Tejada's 2002.

Oakland lost reigning AL MVP Jason Giambi to the Yankees after the 2001 season. They won more games in 2002. In 2007 and 2008, the Yankees will be paying Giambi $21 million to DH. Given Billy Beane's track record of developing prospects, regardless of MLB's economics Oakland would be much better off allowing someone else -- Los Angeles or Baltimore, perhaps? -- to overpay for Tejada.

March 13, 2003: Cablevision and YES Settle Dispute LINK

Against all odds, the yearlong battle ended with a creative deal that has already been hailed by Sen. John McCain as a model for the industry.

When the Yankees launched the YES cable network in 2002, they demanded that local New York cable systems carry YES as a basic cable channel at a rate of $2/month. Every system but one agreed. Unfortunately that one was Cablevision, the region's largest cable operator...which also controlled YES's direct competitors, the MSG Network and Fox Sports New York. Cablevision offered to carry YES as a premium channel, or on the same basis it carried MSG and FSNY. When YES refused and countered with an antitrust suit, the resulting stalemate kept the Yankees out of millions of New York homes. (Including mine -- but I'm a Mets fan.)

Under the new agreement, YES, MSG and FSNY will all move to a regional sports tier, included for customers with premium packages and otherwise available for $1.95/month each or $4.95 for all three. Basic customers who don't want sports programming won't have to pay for it. With cable bills continuing to rise far faster than inflation, Sen. McCain urged other cable operators to give their customers similar rights to opt out of receiving expensive channels they don't watch.

March 13, 2003: Selig at World Congress of Sports LINK

I'll have more to say about the substance of his remarks elsewhere -- but notice the tone.

This was the Commissioner's speech at Sports Business Journal's "World Congress of Sports" -- essentially a trade convention of industry insiders and experts. This talk could have been delivered to a monthly meeting of the West Allis Rotarians.

March 12, 2003: Angels Were MLB Contraction Target LINK

MLB documents disclosed this week reveal that in July 2001, MLB officials identified the Angels, along with the Devil Rays, Twins and Expos, as possible contraction targets. The plan called for contracting the Angels and moving the Oakland Athletics to Anaheim.

This can be called the semifinal list of contraction candidates. The quarterfinal list, prepared in December 2000, contained eight names: the four clubs above plus Arizona, Florida, Kansas City and San Diego. With the Diamondbacks and Angels both winning the World Series one year after being targeted for possible elimination, the Twins and Expos are hoping the pattern repeats itself.

If the performance of the targeted teams isn't enough to dispel any residual doubt about MLB's bad faith and transparent lies in announcing and defending contraction, the process through which the teams were selected makes abundantly clear that MLB's only concern was minimizing the legal and political fallout from its planned abuse of monopoly power. (If any teams had truly been failing, each of the remaining owners could have saved at least $5 million per club by simply letting them fail.)

MLB settled the contraction lawsuit in Minnesota rather than produce documents like these. The next time Congress reviews MLB's antitrust exemption -- and so long as Bud Selig remains Commissioner, there will be a next time -- they should make very interesting reading.

March 11, 2003: Bud: Landmarking Wrigley Could Force Cubs to Move LINK

Never one to miss a new chance to proclaim that the sky will soon be falling, the Commissioner wrote the Chicago landmarks commission to back the Cubs' opposition to according landmark status to parts of Wrigley Field. Selig warned that a landmark designation "will likely precipitate the loss of Wrigley Field" and would be "the first step toward the ultimate loss of the ballpark."

Nonsense. First of all, the landmark status would not permanently freeze Wrigley Field in its current configuration. As this article recognizes, the proposed designation would apply only to the ivy-covered brick walls; the scoreboard; the marquee sign at Clark and Addison; and the "open nature and sweep" of the grandstand and bleachers. Landmark status would not prevent the club from modernizing amenities and concessions. In this context, note also that Wrigley Field sits in the middle of a residential neighborhood whose residents were able to block the installation of lights for years. With or without a landmark designation, the Cubs will never be able to expand the footprint of the park or significantly increase its capacity, so if club management decides that 45,000 seats and 200 luxury boxes are essential for the Cubs to contend, Wrigley is doomed either way.

Fortunately, there is no reason to believe that Wrigley won't remain economically viable for decades to come. For most of the past 50 years, Wrigley Field itself has been a better draw than the Cubs teams which play there. In fact, some have argued that the park is too much of a draw: when even a bad club plays to almost 90% of capacity, Cubs management has little incentive to spend more on players. (The Red Sox, who play in the only comparable park, avoid this problem by charging sky-high ticket prices; the Cubs, who had MLB's second-highest average ticket price in 2002, appear to be moving in this direction, too.)

Finally, Selig warned that landmark status would hold stadium changes hostage to the "subjective tastes and individual notions of designers, preservationists and community leaders who cannot be expected to understand the competitive nuances of professional baseball." Fans of a club which hasn't played in a World Series since 1945 and hasn't won one since 1908 may well wonder if the designers and community leaders could do much worse.

March 10, 2003: Here is my analysis of the 2003 Hall of Fame Veterans Committee voting on the Composite Ballot for managers, umpires and front-office executives, written for the Winter 2003 SABR Business of Baseball Committee newsletter. LINK

February 23, 2003: Fay Vincent: "If it hadn't been for Bud Selig, George W. Bush wouldn't be president of the United States."
Vincent's autobiography, The Last Commissioner, elaborates on this point. Vincent says that shortly after he left baseball, George W. Bush called him to say, "Selig tells me that he would love to have me be Commissioner and he tells me that he can deliver it." Vincent warned him that Selig wanted the job for himself, but Bush took Bud at his word. We know how that turned out.

If the rest of the world ever learns that George W. Bush would never have entered electoral politics if Selig hadn't screwed him over, Bud could become the first Commissioner to be burned in effigy in dozens of countries that don't even play baseball.

February 23, 2003: I've posted a spreadsheet with 1920-50 team profit and selected payroll data, from Congressional hearings held in the early 1950s. LINK

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