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Doug's Business of
Baseball Weblog:
July 2003 July 31, 2003: D.C. Ponders Alternative for Financing Ballpark. LINK D.C.'s chief financial officer says that most of the District's $339 million subsidy towards a new stadium could be obtained by refinancing the bonds outstanding on Washington's convention center. The plan calls for the District to borrow $1.1 billion, including $400 million for a new hotel adjacent to the convention center, and to redirect money from rooms and meals taxes, which are currently dedicated to the convention center, toward the stadium. This would likely be the most politically palatable way of raising the necessary funds. July 31, 2003: Union Unlikely to Approve Expos' Split Schedule. LINK Player representative Brian Schneider said the Expos "want to play 81 games in one city." According to Gene Orza of the MLBPA, "[t]he players feel very strongly that the way that they were fit into the schedule substantially affected their competitive integrity." The MLBPA has already granted MLB one extension on the 2004 schedule, a draft which was supposed to be provided to the players by July 1. Although MLB still wants to defer any decision on the Expos until the end of September, the players could force a decision on the 2004 season long before then. July 30, 2003: Arlington Debate Takes Fowl Turn. LINK Frustrated supporters of Virginia's bid for the Expos picketed an Arlington County Board meeting with a new mascot, "NIMBY The County Board Chicken." Meanwhile, stadium opponents prepared to lobby the state legislature to eliminate the Virginia Baseball Stadium Authority. Hey, guys: if you don't spend $300 million on your own stadium, the Expos will likely wind up less than five miles away, in a park built with someone else's tax dollars. That's a win-win outcome. July 30, 2003: Bucs Owner Glazer Reaches Deal to Buy Dodgers. Or Maybe Not. LINK Scott Miller of Sportsline says it's a done deal; the Los Angeles Times disagrees. The sticking point in the bid by Tampa Bay Buccaneers owner Malcolm Glazer remains the NFL's cross-ownership rules. The NFL forbids its owners from using their franchises as collateral for loans, or from operating franchises in other sports unless both franchises are in the same city. Sportsline suggests that Glazer may agree to sell the Buccaneers in return for rights to a future NFL team in Los Angeles, while the Times says that MLB and the NFL have already rejected more than one proposal from Glazer. Stay tuned... July 30, 2003: Fed Up with Big Contracts. LINK Some of baseball's worst signings: the players who have to be paid to go away. For the 10 players in the table at the end of the article, their signing clubs remained on the hook for a collective $88 million when they were traded or released -- and after this article appeared, the Angels set a new record by releasing Kevin Appier with over $15 million remaining on his contract. July 25, 2003: Va. Stadium Authority to Defy Arlington Request. LINK The Virginia Baseball Stadium Authority isn't taking Arlington County's No for an answer. Neither is Kevin Appel, president of Virginians for Baseball, who called Arlington's decision "an act of political cowardice" and vowed to make Arlington County Board chairman Paul Ferguson "eat his letter" withdrawing the county from the list of potential sites for a northern Virginia ballpark. Appel and the Stadium Authority can bluster all they want, but unless they can get Arlington County to reverse its decision, Virginia's bid for the Expos is doomed. Somehow I doubt that threats and strong-arm tactics are the best ways to accomplish this goal. July 25, 2003: Cubs' Impossible Balancing Act. LINK Greg Couch of the Chicago Sun-Times, recently named the city's best new sports columnist by Chicago Magazine, gets two executives of small-market clubs to complain, albeit anonymously, that the Cubs seem to be getting away with hiding revenue. One small-market CEO asks, "I'd like to know whether they're reporting fair-market prices from WGN for their TV contract." A second echoes, "I've been wanting to know that for years. Nobody can find out. I can't find out." MLB President/Selig attorney Bob DuPuy responds, "I really find it hard to understand how any CEO of a club would so misunderstand or mischaracterize a process they're fully aware of and participate in." Are the Cubs hiding TV money? Here's what we know from publicly available sources. According to the 2001 Broadcasting & Cable overview of baseball telecasts, that year the Cubs aired 70 games on WGN, a national superstation owned by the Cubs' parent, the Tribune Company; 8 on WCIU, a local station; and 72 on Fox Sports Net, a local cable outlet. The White Sox aired 29 on WGN, 24 on WCIU and 99 on Fox Sports Net. More than twice as many Cubs games are televised to a national cable audience, and according to the October 15, 2001 Street & Smith's Sports Business Journal, even on Fox Sports Net the Cubs drew significantly higher ratings than the White Sox. The Cubs TV deal is clearly more valuable than the White Sox package. Nonetheless, in the disclosures accompanying the 2001 Blue Ribbon Panel Supplement, the Cubs reported local media revenues of $23,559,000 in 2001, compared to $30,092,000 for the White Sox. The White Sox thus received about 25% more than the Cubs, for a less valuable package. The White Sox' contracts resulted from arms-length negotiations; the Cubs' contracts (for both radio and TV) were "negotiated" with a sister company. Draw your own conclusions. One of the anonymous small-market CEOs said he hadn't complained to Commissioner Selig about the Cubs' chicanery because "Major League Baseball is a very closed club. There are those in the in-group, and those trying to work their way into the in-group." What good would complaining do when the man at the top uses (or ignores) the rules to reward his allies? July 23, 2003: Ex-Umpire Supervisor Alleges MLB Foul Play with Questec System. LINK According to the Boston Herald, Phil Janssen, former MLB supervisor of umpires, has submitted an affidavit to the National Labor Relations Board which asserts that on July 19, 2002, the day when the umpires' challenge to QuesTec was announced, former MLB vice president Ralph Nelson shredded documents showing that MLB was manipulating QuesTec umpire evaluations. Nelson denies the charges, calling Janssen "a disgruntled employee that I let go." An NLRB investigator told the Herald that the umpires' union withdrew its claim based on the shredding before a finding could be made. This hasn't been a good week for QuesTec. Yale physicist Dr. Robert Adair is prepared to testify on behalf of the umpires that while QuesTec's problems may be solvable, "I don't think they have been solved," and the company is on the brink of insolvency. July 23, 2003: Thirty Years of Salary Arbitration. LINK My July 2003 column for Boston Baseball. July 22, 2003: Bad Management Has Pirates Bleeding Money. LINK A nice summary of Pittsburgh's problems. The Pirates have the only genuinely intimate new ballpark, with a great location and phenomenal views of downtown, but (a) they got greedy, and (b) they were foolish enough to entrust their newly enhanced revenue stream to Cam Bonifay. Bonifay gave Jason Kendall a six-year, $60 million contract that still has four years and $42 million to run. He signed replacement-level veterans Kevin Young, Pat Meares and Derek Bell to multiyear deals at free agent prices. Surely no other club would be foolish enough to give Bonifay a position of authority? Oh. That figures... July 22, 2003: Cardtoons v. Major League Baseball Players Association, No. 02-5134 (10th Cir. July 14, 2003) LINK I thought this case had died long ago. It began in 1992, when a group including Mike Sowell, author of several fine baseball books including The Pitch That Killed and July 2, 1903, decided to publish a line of comic baseball cards mocking Those Greedy Players. The MLBPA sued, claiming that the use of the players' actual names and images on these unlicensed parodies would divert sales from licensed products. The MLBPA won in the district court, but this ruling was overturned after the Supreme Court recognized a First Amendment "right of parody" in Campbell v. Acuff-Rose Music, Inc. That gave Cardtoons the right to market its cards. Cardtoons spent the next six years seeking damages from the MLBPA for so aggressively asserting its rights. This decision, which affirms the grant of summary judgment to the MLBPA, puts the final nail in that coffin. July 22, 2003: Yankees Only Team Projected to Pay Luxury Tax LINK The tax affects only clubs with payrolls, as computed for luxury tax purposes, in excess of $117 million. The #2 Mets are at $116,253,000 after trading Armando Benitez to the Yankees. The Yankees have a luxury tax payroll of $180 million, a mere $63 million over the tax threshold, for an estimated tax bill of $10.8 million. The Yankees' actual cash payroll is "only" $154.7 million, but for luxury tax purposes all long-term contracts are counted at their average annual value. If the season ended today, the eight playoff berths would go to the clubs ranked #1, #5, #6, #8, #9, #11, #14 and #27 in luxury tax payroll. The six last-place clubs rank #2, #4, #23, #25, #28 and #30. Three of the five clubs with the lowest luxury tax payrolls also have winning records. July 21, 2003: All-Star Game Has Higher Ratings in Japan LINK Last week's All-Star Game drew a 9.5 rating in the United States, but a 9.8 rating in Japan, where it started at 9:30 AM local time. Taking the hint, MLB is opening an office in Tokyo to oversee TV, sponsorship and licensing deals. What took so long? It already had regional offices in England and Australia, but Japan has a far more distinguished baseball history than either of these nations, including a two-major-league structure dating to 1950. Long before that, a U.S. tour after the 1934 season saw crowds of Japanese mob Babe Ruth, hail Lou Gehrig and Connie Mack, acknowledge the presence of my great-uncle, and ignore Moe Berg while he took spy photos. Japan should have been home to the first overseas office of MLB, not the third. July 21, 2003: Boston Owners Thank Connecticut LINK Red Sox owners John Henry and Tom Werner traveled to Hartford, Connecticut, where the mayor proclaimed Red Sox Day, Senator Chris Dodd pledged allegiance to the Sox, and Babe Ruth's granddaughter gave her blessings. This is known as "expanding one's market." See how easy it can be? July 20, 2003: Coors Field photos now online LINK I've added photos from SABR's July 11 Coors Field outing to my ballparks photo pages. July 18, 2003: Arlington Repudiates Stadium LINK In a major blow to Northern Virginia's efforts to land the Expos, the Arlington County Board has told Virginia baseball authorities to remove the county from the list of potential sites for a ballpark in Virginia. This would eliminate three of the five candidates. A fourth, near Springfield, is also opposed by Fairfax County officials, leaving a location near Dulles Airport that's almost certainly too far from downtown to satisfy MLB. The stadium authority says it has the power to override the local officials, but that would be an expensive and nasty mess MLB would avoid if at all possible. A county study found that a conference center, hotel and retail complex on the Arlington site found most desirable for a ballpark would generate $10 million/year in income to the county, compared to $3 million from a stadium. This should signal MLB that it's running out of options, and encourage the Relocation Committee to make a deal with Washington as soon as possible. Put the Expos out of their wandering misery already. July 18, 2003: Top Seats Will Cost More for '04 Phils LINK Infield seats in Citizens Bank Park, especially field boxes, will cost more than their Veterans Stadium counterparts, while seats in the outfield will actually be cheaper. General admission tickets have been eliminated, though up to 5,000 seats will be discounted for day-of-game sale if not sold in advance. All in all, these changes look pretty reasonable. The Phillies will have only 43,500 seats to sell, down from over 60,000 at the Vet, and it's hard to imagine that the new park could be any uglier. July 17, 2003: On the Mendoza Line (BaseballProspectus.com) LINK I write a number of uncomplimentary things about this USA Today article, even more about this one. July 16, 2003: TV Ratings Same as Last Season/ All-Star Game Viewership Rises LINK Compare and contrast AP's and MLB.com's reporting of the same story, the 2003 All-Star Game's Nielsen ratings. Notwithstanding the publicity over awarding home-field advantage to the winner, the 2003 All-Star Game drew a 9.5 rating and a 17 share -- exactly the same as the 2002 ASG. But because the total audience increases from year to year, more people were watching the game. Fox had forecast a 10% increase in ASG ratings. That didn't happen. Indeed, a closer look at the ratings suggests that only the closeness of the game kept them from falling below 2002's ratings. Between 1998 and 2002, the ASG lost, on average, 23% of its viewers from the first half hour to the last. In 2003 the ratings actually rose 12% over this period. July 16, 2003: Rapping with the Commissioner LINK Yes, that's the actual headline atop the MLB.com account of MC Bud Lyte's annual All-Star Internet chat with fans. The complete transcript is here. Executive summary: "Baseball used to have a lot of problems. Thanks to me, it's now well on the road to solving all of them." Mr. Selig is truly a visionary leader. July 15, 2003: Boone Blasts Selig LINK Today's guest commentary comes from Seattle Mariners second baseman Bret Boone, at an All-Star Game press conference: "The commissioner shouldn't be the owner of a team. Oh, I'm sorry, it's in his daughter's name. Yeah, right. That's the No. 1 thing wrong with the game. "I don't want somebody that's going to do what's best for the players. I don't want somebody that's going to do what's best for the owners. I want somebody to make the decisions based on what's best for the game of baseball." Predictably, Selig lapdog Bob DuPuy rushed to his master's defense. "His comments show a very unfortunate lack of understanding as to what the game is all about. To impugn the efforts of the commissioner over the last 11 years is ludicrous. We're trying to market the game to fans, and his comments show ignorance." Ignorance of what? Owning one club while ostensibly managing the industry in the best interest of all clubs is a clear conflict of interest. Selig has had that conflict of interest since the day he became Acting Commissioner. Indeed, DePuy's employment as President of MLB only underscores that conflict of interest, inasmuch as his principal qualification for the job is years of service as Selig's personal lawyer. In fact, if no one at MLB feels troubled by Selig's conflict of interest, MLB might as well reinstate Pete Rose. Conflict of interest rules, like the rule against betting on one's own team, are prophylactic measures intended to protect MLB against even the suspicion that someone might place his personal interests ahead of the game. If Selig's blithe assurance that of course he's acting in the best interests of the game is enough to foreclose all questioning of the propriety of his serving as Commissioner, then why should Rose be banned absent proof that his betting affected his managing? Better yet, throw Bud overboard, too. He can join Pete at autograph shows: two mournful faces, cast out of the game they love because they believed they were above the rules. July 15, 2003: Baseball Stadium Opponents Take Offensive, As Delay Looms LINK A northern Virginia weekly summarizes the state of the local stadium proposal. The biggest news: a local Congressman has come out against a stadium in Arlington, the preferred site for a northern Virginia ballpark. (Thanks to Neil deMause's Field of Schemes News.) July 15, 2003: Labor Day New Target for Ruling on Expos LINK What a surprise. Meanwhile, in MLB's incessant pursuit of the short-term dollar, President Robert DuPuy says that if the Expos aren't moved for 2004, they may play most or all of their games in San Juan. July 15, 2003: Bud Saved Baseball. Just Ask Him! LINK The All-Star break gives local baseball writers an excuse to opine on The State of The Game, or to let Bud Selig do so for them. The Commissioner is happy to do so -- and right now, he's happy with himself. From the Philadelphia Inquirer: "The game was sort of stuck in neutral because we hadn't faced our problems, maybe for three or four decades. By the time the next [collective-bargaining] agreement rolled around, it was far worse. If the game was going to have a renaissance, it needed to be changed. Change is painful. "Did I like the messages I had to deliver? No. But today, all that's gone. "This year, $300 million in revenue will be shared, we have a tax and debt service, a whole different landscape. Did you have to go through unmitigated hell to get there? No question. But I could not live with myself if we hadn't done the things we did. It was difficult personally and professionally. But when I hear people say 19 clubs have a chance to win, I feel good." Think about those sentences. If MLB "hadn't faced its problems for three or four decades," then (a) those problems predated free agency, and (b) Commissioners Kuhn, Ueberroth, Giamatti and Vincent did nothing to address them, even though Selig was on the Executive Council through much of this period. The only changes during the period of the last CBA were (a) residual public hostility resulting from a labor stoppage provoked by the hard-line owners; (b) more new stadia, all of which were constructed in lower-revenue markets and which should therefore have improved matters; (c) greater revenue sharing, the same remedy Selig now credits for improving the game; and (d) more fiscal chicanery by large-market clubs which now had more reason to hide revenue. If more fans now believe their local club is competitive, that's almost entirely because Selig has stopped whining about how so many clubs aren't competitive. Bud continues: "The owners have been great, even when it's not in their best self-interest. The thing I always preach is: 'Do what's in the best interest of the game. Don't let your own myopic self-interests dictate. If you act in the best interests of the game, it will help your franchise.'" This from the man who had a fundamental conflict of interest from the moment he began to serve simultaneously as owner and Acting Commissioner; who finally relinquished control of the Brewers by turning them over to his daughter; who flagrantly violated MLB rules by borrowing money from Twins owner Carl Pohlad without first disclosing the loan and obtaining the approval of the other owners; who ignored the recommendations of his hand-picked Blue Ribbon Economic Panel when he tried to kill the Expos and Twins; who ran his own franchise into near-bankruptcy; and who bad-mouthed the game at every opportunity until he could take credit for a new CBA. That Selig truly believes he's a strategic visionary and the Last Best Hope for Baseball only confirms his limitless capacity for self-delusion. If Selig truly cared about "the best interests of the game," he would have turned over the Commissionership to someone else long ago. July 14, 2003: Dodger Bidder Would Raze Stadium, Put One Downtown LINK The bidder, Alan Casden, is an apartment developer who dreams of moving the Dodgers to a new park in downtown Los Angeles, near the Staples Center, so he can fill Chavez Ravine with housing. He's not seen as one of the favorites in the bidding for the Dodgers. July 14, 2003: Miami Stadium Rumors Heat Up LINK On July 10, the Miami Herald reported that Marlins president David Samson (owner Jeffrey Loria's son-in-law) had told Miami city manager Joe Arriola that the Marlins were willing to pay $100 million toward a domed stadium in downtown Miami. Arriola claims that a domed stadium in downtown Miami can be built for $325 million. I doubt it. The Marlins do need a new park to escape the acquisitive tentacles of Wayne Huizenga, who still bleeds millions from the team every year from the sweetheart stadium, concessions and media deals he "negotiated" with himself after becoming its original owner, but local officials would be foolish to trust Samson or Loria until they have a signed financing agreement in hand. July 14, 2003: Back from SABR. LINK There's a lot to catch up on, but first the convention report. Some highlights, from a business of baseball perspective:
July 11, 2003: No Word on Expos Likely Soon LINK The Washington Post reports that Czar Bud's not ready to hear from MLB's relocation committee. One anonymous member of the Committee said, "We'll meet when the commissioner summons us." In related stories, Thomas Boswell sees recent developments as the beginning of the endgame which could finally result in a decision, while the owner of the land in Arlington which is viewed as Virginia's most attractive potential home for the Expos has launched a public relations campaign against the use of the site for that purpose, vowing to challenge any attempt to take the property through eminent domain. July 10, 2003: Off to the SABR convention! LINK From July 10-13 I'll be presiding over the Business of Baseball Committee meeting; moderating a panel on Publicly Funded Stadia and Local Economic Development; and attending several more panels, at least three more research committee meetings, eight to ten research presentations, a trivia competition, a banquet, and a Rockies-Dodgers game. In between I'll be talking baseball in the hotel lobby, dining room, elevators, and corridors. (Here's a .PDF of the convention program.) Hope to see a few readers there! July 9, 2003: Life with the Mets: How to Survive the Summer at Shea Stadium. LINK Writing in Slate, Josh Levin comes up with the line of the year: "If rooting for the Yankees is like rooting for General Motors, then rooting for this year's Mets is like rooting for a used Oldsmobile with a persistent urine smell. Maybe it used to have flash and run well, but my God, what the hell happened in there?" On the other hand, the Mets' future is not as dismal as Levin suggests. For all the short-term moves which blew up in former GM Steve Phillips' face (good thing he wasn't around when Billy Traber, one of the prospects traded to Cleveland for Roberto Alomar, one-hit the Yankees yesterday), the Mets have hope because of the moves Phillips didn't make. Having finally developed a string of blue-chip prospects at various levels of the organization, the Mets refused to trade them for more veterans. Indeed, when dumping Alomar on the White Sox, the Mets obtained three minor leaguers (though only one is a real prospect) in return for picking up the rest of Alomar's salary. As a Mets fan, I'm hoping this trend continues. The Mets have money and can afford to pay it to players who are no longer wearing their uniform. What they need, and what money alone can't buy, is good young prospects. The new issue of Sports Weekly ranks the Mets' farm system as the majors' second best -- that may be a stretch, but the trend is certainly positive. The same can't be said for their crosstown rivals, who have gutted their farm system (ranked 30th by Sports Weekly) for short-term fixes. It's no coincidence that the foundation of the recent Yankee dynasty was laid while George Steinbrenner was under suspension: had he been running the early-90s Yankees the way he ran the mid-80s club, Bernie Williams, Andy Pettitte, Jorge Posada and Derek Jeter would have been traded for middle relievers or 35-year-old DHes while still in AA. Who can forget Willie McGee for Bob Sykes, Jay Buhner for Ken Phelps, Fred McGriff and cash for Dale Murray, or Doug Drabek for Rick Rhoden? Now Steinbrenner's growing impatient again. The Yankees have two 40-year-old starting pitchers, no help coming anytime soon from the farm system, and Jason Giambi, Derek Jeter and Mike Mussina due huge raises. By 2005 they'll be a third-place club. July 8, 2003: Southwest Sports Is In Technical Default. LINK According to the Dallas Morning News (note: registration required), Southwest Sports Group, Inc., owner of the Texas Rangers and NHL Dallas Stars, has defaulted on a loan covenant related to financial performance. The company is current on all its payments, so this probably means that the Rangers' expenses are too high. They don't need a banker to tell them that. The Rangers opened the 2003 season with the majors' fifth highest payroll, over $103 million. And no, Alex Rodriguez's $22 million was not the problem. This was:
Of these six, Park is worthless, Van Poppel has always been worthless, Greer and Zimmerman have been injured all season and would have been overpaid even if healthy, Urbina is grossly overpaid for pitching 65 innings/year, and Juan Gonzalez, the most overrated player ever to win two MVPs, vetoed a trade which would have allowed Texas to play a prospect who could well outhit him right now. If all six were replaced by minimum-salaried rookies, the Rangers would trim $40 million from the payroll without losing a thing on the field. July 6, 2003: Comptroller: Mets Owe City More Than $4.5 Million. LINK Having earlier found a $373,000 shortfall in the Staten Island Yankees' obligations to New York City, city Comptroller William C. Thompson Jr. now turns to the New York Mets. His audit contends that the Mets owe the city $1.2 million for 2001, on top of almost $3.4 million in arrears for earlier seasons. The audit revealed a number of minor, almost certainly innocent, accounting discrepancies, but also a recurring pattern of overstating their revenue sharing payments to MLB by millions of dollars per year. Other than this, the issues raised by this audit are much less serious than those found by an earlier audit, covering 1996-2000, which concluded that the Mets had failed to report over $13 million in stadium advertising revenue and almost $5 million of concessions revenue during this period. (The full audits also include a handy summary of the Mets' lease terms. They're paying a lot more to use decrepit Shea Stadium than many other clubs pay for new facilities.) July 5, 2003: Beer Big Business at Ballparks. LINK Phil Mushnick of the New York Post explains just how big. He gets some of the numbers wrong -- according to Team Marketing Report, the Yankees charge $5.75 for a 16-ounce beer, the Mets $6.25 for a 21-ouncer -- but even after that adjustment, it's clear that both clubs charge fans over 20x what they pay for the brew. July 5, 2003: Baseball Consultant Is Paid with D.C. Funds. LINK Since October 2001, the D.C. Sports and Entertainment Commission has paid Bavasi Sports Partners LLP $10,000/month, plus expenses, to help attract a team. For the money, D.C. gets the consulting services of a family whose ties to MLB go back more than half a century. Buzzie learned the business from Branch Rickey and Walter O'Malley (and remains active in his late 80s, occasionally posting to SABR-L); Peter built the Blue Jays from scratch and served on MLB's Executive Council while running the Indians; Bill served as Angels GM and now runs the Dodgers' farm system; and Bob has extensive experience as a minor league executive. The no-bid nature of the contract isn't really an issue, given the nature of the specialized expertise required here. But D.C. residents have a right to know (a) why the District, rather than a local ownership group, is footing the bill (the leading D.C. bidders didn't even know of the Bavasi contract until a few weeks ago), and (b) why, under the circumstances, the D.C. Commission also needs a $275,000/year executive director. For residents of D.C., as opposed to its politicians, the difference between a ballpark in the District and one a few Metro stops away in northern Virginia isn't remotely worth the $338 million of subsidies the District is offering. But once that decision was made, spending less than 0.1% of this money on well-connected insiders makes considerable sense, given the incestuous nature of MLB decisionmaking. (Note that another insider, Gabe Paul Jr., heads the Virginia bid.) If forced to choose, the District should keep the Bavasis and dump the executive director. July 1, 2003: New Expos Suitor Rises to Top of Order. LINK Meet Mark Broxmeyer, a Long Island real estate developer who wants to buy the Expos. He's willing to take in local investors, and to pay part of the cost of a stadium in either Washington or Virginia. Broxmeyer's unlikely to get the Expos, but as the only prospective bidder willing to locate in either D.C. or northern Virginia, he can be used as leverage against both of the established local groups. Jerry Reinsdorf, head of MLB's All otherwise-uncredited content on this page is
copyright © 2003 by Doug Pappas. All rights reserved.
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