Doug's Business of Baseball Weblog:

December 2003

December 30, 2003: Lights Out for Edison Field. LINK

Give new Angels owner Arte Moreno credit for knowing how to put the most positive spin on developments. When Edison International opted out of its naming-rights deal with the Anaheim Angels, the club immediately announced that in 2004, the park will be called Angel Stadium of Anaheim and that this name may remain in future seasons.

Moreno, who made his fortune in outdoor advertising, is trying to increase the value of the "Angels" brand name. In addition to renaming their stadium, he has replaced "Anaheim" with "Angels" on the front of the club's road uniforms. He may conclude that the value of the name "Angel Stadium" exceeds the price another sponsor would be willing to pay for naming rights.

December 30, 2003: Economists: It's Time for Reds to Invest in Talent. LINK

Dave Lance of the Dayton Daily News asks Mark Rosentraub and Andrew Zimbalist to discuss how the Cincinnati Reds have used the increased revenues from their new stadium. They aren't impressed.

December 27, 2003: Yankees Owe $48.8 Million in Revenue Sharing. LINK

Hal Bodley of USA Today reports that the Yankees, who topped the majors with estimated 2003 revenues of $270 million, will pay $48.8 million into the revenue- sharing pool, up from $33.2 million in 2002.

Between the increased revenue sharing and the luxury tax, the new CBA has cost the Yankees approximately $27 million, or a tenth of their total (not local) revenues. Nonetheless, George Steinbrenner said in November that he supports Selig's efforts to increase revenue sharing: "He's brought the game back to life."

December 27, 2003: Yankees to Pay $11.82 Million Luxury Tax. LINK

The $11.82 million luxury tax bill equals 17.5% on the amount of the Yankees' payroll in excess of $117 million, as computed for luxury tax purposes: a luxury tax payroll of $184.5 million. Since no other club exceeded the tax threshold, the Yankees' luxury tax payroll was at least $67,500,000 (57%) higher than anyone else's.

Next year the Yankees' luxury tax will be 30% on the amount of their payroll in excess of $120.5 million. If their 2004 payroll is the same as 2003's, their luxury tax bill will be $19,200,000.

Assuming the Yankees' payroll remains the same through 2006, they would owe $22,600,000 in luxury tax in 2005 (40% on payroll in excess of $128 million) and $19,200,000 in 2006 (40% on payroll in excess of $136.5 million). The four-year luxury tax bill would be approximately $72,800,000.

December 27, 2003: Union Wondering About Owners Again. LINK

The MLBPA reports that the average player salary rose 3.3% in 2003, to an average of $2,372,189.

According to the AP's Ronald Blum, the union has spent a year investigating whether the owners colluded after the 2002 season, and has asked player agents for information. Michael Weiner of the MLBPA reports receiving "several reports of troubling conduct by club officials" during the 2003 offseason, while MLBPA president Bob DuPuy insists, "There is absolutely no evidence or suggestion that there has been any improper communication among clubs."

December 27, 2003: Deal Makes Cards Owners of Stadium. LINK

The Cardinals' $387.5 million ballpark will be financed as follows:
  • $90 million from the Cardinals' owners
  • $200 million from bonds sold by the club, to be repaid over 22 years at the rate of $15.9 million/year
  • $45 million loaned from St. Louis County
  • $30.4 million in state tax credits for infrastructure improvements
  • $12.3 million from the Missouri Department of Transportation to reroute an Interstate ramp.
St. Louis officials have also repealed an entertainment tax on Cardinals tickets, which will give the club about $3.4 million more per year.

Season ticket holders will soon be asked to participate in a "Ballpark Founders Program" similar to personal seat licenses. Participants would enjoy a freeze on season ticket prices through the 2010 season and would be able to transfer or sell their season-ticket rights for as long as the Cardinals occupy the stadium. 10,300 of the 46,000 seats in the new park would be available through these licenses.

The Cardinals will also spend $60 million to develop the first two blocks of a six- block "Ballpark Village" project, to be located roughly on the site of Busch Stadium.

December 27, 2003: Marlins Back in Hunt for Park. LINK

The Miami Herald reports that the Marlins have withdrawn their demand for a retractable-roofed stadium and are now willing to consider playing at a new multipurpose facility on the site of the Orange Bowl. Under the plan, the Orange Bowl, which is already scheduled for major renovations, would be torn down and replaced by a stadium that would be shared by the Marlins and the University of Miami Hurricanes.

As the city of Miami already owns the Orange Bowl, the cost of a new park on the site would fall to about $200 million, which the city would pay for.

Sarah Talalay of the South Florida Sun-Sentinel has a more negative take on the proposal, noting that the "option, often deemed undesirable, has been under consideration for months." The Marlins may be coming back to it because it's the only one still on the table.

As a later Herald article notes, the Orange Bowl is located in the Little Havana neighborhood, "a working-class community bustling with new immigrants from Cuba and Central America." Many of the Central American newcomers favor soccer, not baseball, but as one said, "I don't mind having the Marlins here; we could charge the fans money for parking."

December 20, 2003: Baseball Makes a Mess in Milwaukee. LINK

It's Andrew Zimbalist's turn to pick on the Brewers. His New York Times article notes that Milwaukee's $110 million of debt is about average for a major league team; that the Brewers have reported a $20.24 million operating profit for their three seasons in Miller Park; and that their record in each of those seasons is worse than in any of their last five years at County Stadium.

Zimbalist also notes that during negotiations for the last CBA, Commissioner and principal owner Selig pressed for a new revenue sharing formula that gives proportionately more money to clubs like the Brewers, who "just happen to have increased their net revenue-sharing receipts by more than any other team." As Zimbalist writes:

"The labor agreement is clear that each club must use its receipts 'in an effort to improve its performance on the field' and that the commissioner 'shall enforce this obligation.' Thus, the Brewers appear to be violating their covenants with the people of Wisconsin and with the players' union, as the commissioner seems to be idly standing by."

December 20, 2003: Quirks and Perks Become Part of Baseball Contracts. LINK

The Associated Press surveys some of the more unusual terms in major league contracts, from Kevin Brown's private jets to Mark Grace's golf-club membership to Charlie Kerfeld's classic request for 37 boxes of Jell-O to use for pranks on his Astros teammates.

December 20, 2003: Stadium Plan on the Skids. LINK

According to Sarah Talalay of the South Florida Sun-Sentinel, Miami officials have all but given up on raising the additional public money desired by the Marlins for a new ballpark in downtown Miami. Miami City Manager Joe Arriola wants the club to pay more, and Dade County officials don't want to ask the voters to approve a half-cent sales tax increase for the proposed park.

December 20, 2003: Miller Weighs In On Issue. LINK

In this interview with Bud Collins of the Boston Globe, former MLBPA head Marvin Miller blames the A-Rod mess on Bud Selig's refusal to follow MLB's antitampering rules:

"This should never have gotten started the way it did because the commissioner broke one of the oldest rules by permitting the Red Sox to talk to Rodriguez. That's tampering. That was a baseball rule installed by the owners long before the union existed. Selig had no authority to allow that exception. On the other side, the union was slow to pick up on it. That surprised me. There should have been no talks between the Red Sox and a player under contract. Period."

Indeed, the current argument over givebacks could never have taken place if the rules had been enforced. Texas and Boston would have been negotiating a swap of Rodriguez's contract for Manny Ramirez's and whatever other considerations were required to make the deal balance. (Gary Huckabay compares the players and present-values both contracts here.) Only after the teams had made a deal could Boston have talked to Rodriguez about waiving his no-trade clause. At that time they could have raised the possibility of trading salary for some combination of non-monetary benefits -- but Rodriguez would have been under no pressure to give up more than he was receiving.

Gordon Edes' article in today's Boston Globe summarizes the state of negotiations. Tom Hicks wants $13 million from the Red Sox as part of the trade. Rodriguez, with MLBPA approval, has agreed to reduce his salary by $13 million in return for other consideration from the Red Sox. Rodriguez and Texas are ready to make a deal -- but the Red Sox are demanding that A-Rod reduce his salary by $28 million in return for a signing bonus (unspecified in the article) and the right to opt out after every year of the contract.

The Red Sox want to count the opportunity to play in Boston instead of Texas as a benefit to Rodriguez. But valuing intangible benefits like this is a step neither MLB nor the MLBPA should ever want to take. From the MLBPA's perspective, it would effectively gut the no-reduction rule. Clubs would argue that any reduction a player accepted must have been offset by some intangible benefit, even if that benefit is "the right not to be traded to Tampa Bay, which is where you were headed if you didn't agree to tear up your contract and re-sign for less." MLB officials who keep screaming about competitive balance and protection for small-market clubs should shudder at an interpretation that would actually make trades cheaper for the Yankees and Red Sox than for the Brewers and Pirates.

Free agents already consider a team's likely performance when deciding where to sign. They can protect themselves by signing shorter contracts, or by signing contracts that give them the right to void the remaining years or demand a trade under certain circumstances. But once they sign, they must live with the consequences of that signing, even if one of those consequences is spending more time on a bad club.

December 19, 2003: The A-Rod Negotiations. (BaseballProspectus.com; subscription required.) LINK

I spend about 1,500 words discussing what happened, why it happened and what could happen next.

December 19, 2003: Shayna Sigman, The MLBPA's Strategic Error. LINK

Guest contributor Shayna Sigman of the University of Minnesota Law School explains why she thinks the MLBPA should have approved Alex Rodriguez's original agreement with the Red Sox, even though it had the right to veto the deal.

December 19, 2003: Ball from Cubs Playoff Loss Auctioned for $106,600. LINK

The foul ball deflected by Steve Bartman, which may have kept the Chicago Cubs out of their first World Series since World War II, sold for over $100,000.

The ball was sold by a 33-year-old attorney identified only as "Jim," who had been sitting near Bartman at the time and wound up with the ball after it bounced away. Bartman didn't even get the money, any more than he was compensated for becoming one of Chicago's most popular Halloween disguises.

On the bright side, he's always welcome in Florida and will never have to buy a drink at McNally's on the South Side.

UPDATE: The ball was purchased by the owner of Harry Caray's restaurant, who plans to destroy it on February 26 "as kind of a cathartic effort for the fans." When Halley's Comet has come twice since your last World Series title, catharsis is hard to find.

December 18, 2003: Protecting Millionaires from Themselves. LINK

CNN/Money's Chris Isidore explains why the MLBPA felt it had to intervene in the Alex Rodriguez trade talks:

"The fact is, allowing players to agree to cuts in their own salary is the first step down the road to making their contracts -- both big and relatively small -- as worthless as Red Sox 2003 World Series tickets."

Chris also calls me "one of the biggest Yankee haters I know," a badge I'll wear with pride. (We both attended our first college classes on the day Bucky Dent earned a new middle name at Fenway.)

Here, sports law professors Paul Weiler of Harvard and Stephen Ross of Illinois tell the AP's Jimmy Golen why the MLBPA did the right thing. In Weiler's words, it's "a basic feature of collective bargaining that's to stop the bosses from insisting that one of the workers take less money in order to keep a job." Paul Finkelman of the University of Tulsa School of Law disagrees, calling the MLBPA's actions "outrageous on the part of the union."

December 18, 2003: Expos' Deal to Play in San Juan Finalized. LINK

To close the deal, local promoter Antonio Munoz increased MLB's guaranteed take by over 50%, from $6.6 million to $10 million.

Munoz also proposed San Juan as a permanent home for the Expos, even though the only local stadium seats just 20,000 fans. John McHale Jr., MLB's Executive Vice President for Administration, politely responded, "across baseball there is still some unfamiliarity with the demographics of the San Juan market."

To win the MLBPA's approval, MLB promised to operate the Expos on a slightly higher budget than in 2003, and to allow club officials full discretion to make September callups. (This was a major issue during the 2003 pennant race.)

December 18, 2003: Stadium Wish Lists Shared. LINK

The St. Paul Pioneer-Press reports on what the Twins and Vikings want for Christmas. The Twins want a 42,000-seat, retractable-roofed stadium with lots of luxury suites and more club seats than general admission seats. And they want Santa to bring it to them so that kindly old Mr. Pohlad has more money to leave his children.

December 17, 2003: A-Rod Trade May Fall Through Over Contract Terms. LINK

Alex Rodriguez, the Boston Red Sox and the Texas Rangers have agreed to revise Rodriguez's contract in a way which would allow the parties to trade Rodriguez from Texas to Boston. The MLBPA has objected, saying the proposed revision would violate the collective bargaining agreement.

Under the CBA, the player can only negotiate (1) a salary above the minimum, and (2) special terms which actually or potentially provide additional benefits. Any term inconsistent with these provisions is void even if the club and player agree to it. Here are the key provisions of the CBA:

ARTICLE II-Recognition.

The Clubs recognize the Association as the sole and exclusive collective bargaining agent for all Major League Players, and individuals who may become Major League Players during the term of this Agreement, with regard to all terms and conditions of employment, provided that an individual Player shall be entitled to negotiate in accordance with the provisions set forth in this Agreement (1) an individual salary over and above the minimum requirements established by this Agreement and (2) Special Covenants to be included in an individual Uniform Player's Contract, which actually or potentially provide additional benefits to the Player.

ARTICLE III-Uniform Player's Contract.

The form of the Uniform Player's Contract between a Club and a Player is attached hereto as Schedule A which is incorporated herein by reference and made a part hereof.

During the term of this Agreement, no other form of Uniform Player's Contract will be utilized. Should the provisions of any Contract between any individual Player and any of the Clubs be inconsistent with the terms of this Agreement, the provisions of this Agreement shall govern. Subject to the limitations set forth in Article IV below, nothing herein contained shall limit the right of any Club and Player to enter into Special Covenants in the space provided in a manner not inconsistent with the provisions of this Agreement. The termination of this Agreement shall not impair, limit or terminate the rights and duties of any Club or Player under any Contract between any individual Player and any of the Clubs.

December 16, 2003: San Antonio Expos? I Don't Think So. LINK

The Star-Ledger story suggesting San Antonio as a possible destination for the Expos sure has excited the locals. Too bad they're talking nonsense.

This story from the San Antonio Express-News reports on a local judge's plan to enlarge San Antonio's 6,200-seat minor league stadium to 20,000-25,000 seats, and share the franchise with Monterrey, Mexico. If that's the best local option, MLB would be better off selling the Expos to Monterrey interests.

A local columnist hallucinates that MLB "is asking about $150 million for the Expos, but would likely take as little as $100 million." If that were the case, Washington/northern Virginia interests would have bought the team and financed their own stadium years ago.

The reason MLB is so determined to extract the last dollar from local governments for a taxpayer- funded stadium is to maximize the amount the prospective purchasers can pay MLB for the team. MLB's not desperate to sell; indeed, if it doesn't receive an acceptable offer by 2006, MLB will be able either to contract the Expos (and buy out one other club, most likely the Devil Rays) or else use the threat of contraction to obtain concessions from the MLBPA in the next collective bargaining agreement.

December 16, 2003: Expos May Go to Vegas, But Texas Is Best Bet. LINK

Lawrence Rocca of the Star-Ledger reports that MLB officials, upset that Washington, DC hasn't agreed to build a new stadium even before receiving the Expos, are exploring other potential destinations for the club.

According to Rocca, MLB doesn't consider Portland, Monterrey, Mexico or San Juan, Puerto Rico viable long-term destinations. Instead, MLB is looking at Las Vegas or San Antonio, Texas.

This story looks to me like a trial balloon being launched by someone at MLB to put more pressure on Washington or northern Virginia to approve a new park. In terms of population and disposable income, the DC/northern Virginia area is absurdly superior to Las Vegas or San Antonio.

December 16, 2003: Pirates Lose 5 in Rule 5 Draft. LINK

When five of the first six picks in the annual Rule 5 draft came from the Pittsburgh Pirates' organization, at a time when the major league Pirates just completed their 11th consecutive losing season, the Pirates' front office has some serious roster-construction issues. Robert Dvorchak of the Pittsburgh Post-Gazette thinks so, too.

Here's a complete list of the major league Rule 5 draft picks, with commentary by John Sickels.

December 16, 2003: The Salary Arbitration Primer. LINK

Eugene Freedman provides a nice summary of the theory and practice of MLB's salary arbitration process.

December 15, 2003: MLB May Ask Ops to Play Ball. LINK

Multichannel News reports that MLB may launch its own digital cable service sometime in 2005. The proposed service would rebroadcast old games and carry other baseball-related programming, but would not replace MLB's existing national broadcasting or cable deals.

Of course, with the ESPN contract expiring after the 2005 season and the Fox contract up the following year, the presence of an all-baseball cable channel could increase MLB's leverage in the upcoming negotiations. A Baseball Channel would start life with, at minimum, the same programming currently offered through MLB.com -- and with 30 clubs playing 162 games per season, the video vaults would grow at the rate of roughly 7,500 hours per year.

An all-baseball cable channel isn't a new idea. In 1988, then-Commissioner Peter Ueberroth floated the idea of an advertiser-supported, 24-hour baseball cable channel modeled on ESPN, offering up to four live games per day during the season and live Caribbean winter league coverage during the North American offseason.

December 15, 2003: McCourt Bid Raises Questions. LINK

Frank McCourt's bid to acquire the Los Angeles Dodgers from News Corp. may be in trouble. Ross Newhan and Jason Reid of the Los Angeles Times report that McCourt has borrowed virtually all the money behind his $430 million offer for the Dodgers.

News Corp. is apparently lending McCourt over half the money. Most of the rest comes from between two and four banks and Dodger concessionaire Aramark, with McCourt putting little or no equity into the deal. An article in the December 13 Times quoted two anonymous "baseball officials" as saying that McCourt's paperwork appeared to satisfy MLB's debt/equity rule, but other insiders seem much less sanguine. Another unnamed "high-ranking baseball official" said:

"I think the owners would be reluctant to approve a situation in which the prospective owner isn't putting up a significant financial stake of his own, but there are issues in this that are open to interpretation as to who is technically putting up what."

December 15, 2003: Revenue Sharing Helped Phils Grow. LINK

The Philadelphia Phillies have received $42 million from MLB's revenue sharing pool since 2000, including $9.5 million in 2002 and $8.8 million in 2003. The $9.5 million payment in 2002 equaled the 2003 salary of the club's biggest offseason addition, free agent Jim Thome.

Phillies president David Montgomery defends this system. "In my mind, we're an example of where revenue-sharing has worked. It gave us an opportunity to compete until our new park comes along and hopefully gives us new revenues."

But as I've written elsewhere, there's something fundamentally flawed with a revenue sharing system that looks only at team revenues without adjusting for the size of the club's market:

By focusing entirely on the amount of local revenues a team generates, MLB's revenue sharing formula shortchanges popular, well-run teams in smaller cities while rewarding incompetently managed big-market clubs.

For example, compare the St. Louis Cardinals and the Philadelphia Phillies. Though both play in 30-year-old stadia, the Redbirds generated $50 million more in local revenue despite playing in a market less than half the size of Philadelphia. For their trouble, the Cardinals paid more than $8 million into the revenue sharing pool, while the Phillies collected almost $12 million. Other pairs of similarly-sized markets--Seattle and Miami, Cleveland and Minneapolis-St. Paul--reveal similar inequities.

Of course the Phillies are happy with a system that let them use other clubs' money to sign Jim Thome. Someone should ask the Indians what they think of a system which forced them to subsidize the Phillies' signing of their top free agent, even though metropolitan Philadelphia is more than twice the size of metropolitan Cleveland.

(This is one problem that can't be blamed on the Commissioner: his battered Brewers would benefit more than any other club from a revised revenue sharing formula that took market size into account.)

December 15, 2003: Making Sense of the Brewers' Finances. LINK

The Milwaukee Journal Sentinel asks a number of experts what the executives reviewing the Brewers' books should look for.

Roger Noll of Stanford, Stephen F. Ross of Illinois and Andrew Zimbalist of Smith would focus on general and administrative costs, related-party transactions, and interest expenses, including whether some of the Brewers' debt is owed to board members.

Zimbalist notes further that even if the Brewers' finances are as bad as the club claims, that wouldn't justify slashing payroll to $30 million: "There are certain people in the free-agent market that will bring them more in revenue than they are paying them."

Interestingly, the Brewers' financial results as reported by MLB differ slightly from those reported by the club:

  • 2001 operating revenue: $113.3 million per MLB, $110 million per club financial statements
  • 2001 national revenue: $24.4 million per MLB, $22.3 million per the Brewers
  • 2001 local broadcast revenue: $5.9 million per MLB, $5.8 million per the Brewers
  • 2001 operating income, net of interest: $9 million per MLB, $6.6 million, according to the Brewers.
Brewers CFO Robert Quinn attributes the differences to variances between MLB accounting and generally accepted accounting principles (GAAP) followed by the club. He may be the first club official to admit that MLB's 2000 and 2001 financial disclosures were not based on GAAP.

Here's the Philadelphia Inquirer's take on the Brewers' situation. Prime quotes:

Robert Baade of Lake Forest College: "The people who run the team deserve to be vilified. You need to be improving the product on the field when you bring on a new stadium."

Wisconsin Assembly speaker John Gard: "Bud Selig asked for a partnership with the state. Now we, as his partners, want some answers." Gard added, "there are more and more people who believe there need to be new investors in the team and less control by the Seligs."

December 15, 2003: Murray Chass Wins Spink Award. LINK

The Baseball Writers of America have honored Murray Chass of the New York Times, who practically invented the business of baseball beat, with the J.G. Taylor Spink Award. Chass's name will be added to the roster of distinguished recipients displayed at the Hall of Fame Library.

In even better news, the 65-year-old Chass, who is recovering from a brain tumor and heart attack, expects to return to work in early 2004. I hope his health and desire to work allow him to cover the 2006-07 labor negotiations as ably as he has covered the subject for the past 30 years.

December 12, 2003: In Milwaukee, a Bookkeeping Brouhaha. LINK

The New York Times reports on the anger in Wisconsin over the Brewers' payroll reduction and ouster of CEO Ulice Payne, Jr. Even in his hometown, the Commissioner now hides in his Lexus when he stops to eat at his favorite hot dog stand.

Wisconsin Assembly Speaker John Gard says, "They have a massive credibility problem that will be difficult if they don't come clean with the people who helped build the stadium. ... What is the financial stability long-term of the franchise? There are some people who would suggest D-Day is coming within the next 24 months. What is the future here if attendance continues to decline?"

Milwaukee Mayor John O. Norquist adds, "They just let everybody know they have $110 million in operating debt, and that's why they have to cut back on player salaries. My question is, what caused it? What was it spent on? The Seligs really aren't rich enough to be baseball owners, at least not in this day and age — not if they have to cut player salaries down to the bottom of the league after getting half a billion dollars to build this stadium."

Bud Selig has three years left in his term as Commissioner. Will his family still control the Brewers by then?

December 12, 2003: Rodriguez to Red Sox a Long Shot. LINK

The opening paragraphs of Hal Bodley's column:

It's hard to believe the Boston Red Sox have been given permission to speak directly with Alex Rodriguez before a tentative trade has been agreed upon with the Texas Rangers.

As a matter of fact, it's a wonder some team owners aren't knocking down Bud Selig's door, accusing the commissioner of preferential treatment.

Bodley refers to "the scary economics of baseball now, where governing policies that used to be carved in granite are outdated."

The policies aren't outdated. There's no "really big contract" exception to the anti-tampering rules. MLB is simply being administered like a Third World dictatorship, where the rules are enforced or ignored at the whim of the governing despot.

December 12, 2003: Expos to Play 22 Pre-Break Games in San Juan. LINK

Although a few loose ends remain to be tied up, the Expos have announced that they will play roughly half of their 2004 home games before the All-Star break in San Juan, Puerto Rico. After the All-Star break, Montreal will be their only "home."

The Expos will spend April 9-15 in Puerto Rico hosting the Mets and Marlins; May 18-23 hosting the Brewers and Giants; and July 2-11 hosting the Blue Jays, Braves and Pirates. Note MLB's special genius at work: the Expos' home interleague games against their Canadian rival will be played in Puerto Rico.

The Expos have also raised admission prices for 2004, their third consecutive Positively Last Season in Montreal. In another only-in-MLB gesture, general admission seats will now cost $5 more than bleacher seats. Fans should have no trouble upgrading themselves once inside -- when I visited The Big Owe in 2002, I started the day in the left field bleachers and by the third inning had moved to the field boxes, 15 rows behind first base.

December 9, 2003: Only 25 Free Agents Offered Arbitration. LINK

Here's the list, from USA Today. 141 of the 166 eligible free agents were not offered arbitration, which means their former clubs can't re-sign them until May 1.

This is a sharp contrast from past seasons, when most quality free agents were offered arbitration even if their former club had little or no interest in them. The clubs wanted to lock in the draft pick compensation they would receive if the player signed elsewhere. Now they're more concerned that their players might accept arbitration and possibly receive more money than they would earn in the free agent market. That's a sure sign that salaries are trending downward.

December 9, 2003: Payroll Success: The Reinsdorf Legacy. LINK

This interesting article comes from a White Sox fan site. Using data from 1988 through 2003, it examines the relationship between a club's payroll and its onfield success, witih an emphasis on Jerry Reinsdorf's spending. Author Jim Laffer's conclusion: "the Sox have managed to get good bang for the buck, but unfortunately for Sox fans there haven’t been enough bucks."

The spreadsheet with Laffer's data is here.

December 8, 2003: Stadium Would Have Aided Twins. LINK

Sid Hartman, Official Fossil of the Twin Cities, blames the Minnesota legislature for the Twins' loss of LaTroy Hawkins, A.J. Pierzynski and Eric Milton. If the legislature had only offered to build that nice Mr. Pohlad a new stadium, the Twins would have been able to afford these players.

Of the three, only Hawkins would have been worth keeping even if the Twins had an unlimited budget. Eric Milton was due to make $9 million in 2004. He earned $6 million in 2003 -- roughly $350,000 for each of the 17 innings he pitched. When healthy in 2002, he posted a 4.84 ERA, almost 3/4 of a run higher than the staff average. A.J. Pierzynski was traded because he was blocking the path of Baseball America's 2003 Minor League Player of the Year, hometown boy Joe Mauer.

Even though the Twins have won the AL Central in each of the past two seasons, and even though last year they had the division's highest Opening Day payroll, Hartman insists the Twins need a new stadium to compete. How else can they hope to keep pace with the Detroit Tigers?

December 8, 2003: Boras: Teams Misleading Fans About Financial Losses. LINK

Scott Boras is far from a disinterested observer, but the man the Atlanta Journal-Constitution calls "baseball's most powerful and relentless agent" has a very good idea where MLB's financial bodies are buried. In response to the Atlanta Braves' claim to have sustained eight-figure losses in recent years despite having most of their games cablecast to a national audience, Boras argues that the Braves have been systematically underpaid for their media rights by sister company TBS.

A Turner Sports spokesman replies, "We [Time Warner] are a public company. If we're hiding all these many millions of dollars, someone would have to account for that money." That's true, but irrelevant. The money is accounted for on Time Warner's books -- it just goes into TBS's pocket rather than the Braves'.

Boras estimates that undervalued media deals with related parties subtract $200- $300 million from MLB's annual revenue statements.

December 5, 2003: Tax for Stadium a Strikeout. LINK

Mike Lowell might want to rent instead of buying: a Miami Herald/St. Petersburg Times poll shows that by an overwhelming margin, Floridians oppose using state tax money to build a new stadium for the Marlins.

With public opinion running 80-15 against a taxpayer-financed stadium, the Marlins' best hope for state financing may be a $2 million/year sales tax rebate, similar to that already in place at Pro Player Stadium and other Florida venues. The rebate would generate only about half of the $115 million needed to close the funding gap.

December 4, 2003: Brewers Agree to Open Books to Financial Scrutiny. LINK

Details of the Brewers' finances will be shared with three prominent Milwaukee business executives, as part of a deal brokered by the Metropolitan Milwaukee Association of Commerce.

The State of Wisconsin wants a seat at the auditors' table, but Wendy Selig-Prieb said she'll "beg off" the question of allowing the Brewers' biggest financial benefactor from seeing the numbers.

The auditors are very likely to confirm that the Brewers are in horrid shape. As previously noted, they were in horrid shape before Miller Park was built, to the point that the club couldn't pay its promised share of stadium construction funds because no bank would lend the money.

The Journal Sentinel reports that the Brewers lost $6.2 million in 1990, $6.4 million in 1992, and $15.7 million in 1994, the year their principal owner/Acting Commissioner provoked a strike as part of his cronies' fantasy of breaking the MLBPA. MLB's 2000 Blue Ribbon Panel Report [warning: link is a .PDF] showed almost $43 million of additional losses from 1995-99.

In a related note, three of the five counties which are levying a 0.1% sales tax to finance Miller Park now want to end the tax. In the words of Cedarburg supervisor Gerald Walker, "If the Seligs are going to put a crappy team on the field, then I don't think we should be paying for the stadium." Unfortunately for them, ending the tax wouldn't extinguish the obligation, only shift it to the counties' general fund.

December 3, 2003: Hey! Look Who's Crawling Out of the Sewer!. LINK

Rodale Press claims it has a "mission to enable and inspire people to improve their lives and the world around them." That mission will be sorely tested on January 8, when it publishes My Prison Without Bars, the latest inspirational title from compulsive gambler, convicted felon and all-around horse's ass Pete Rose.

If the self-pitying title is any indication, the book really should be called I'm Bigger Than the Game, or Still in Denial After All These Years. Don't be surprised if the publication date coincides with an announcement from the Commissioner's office that MLB's all-time leader in outs made (over 1,000 more than anyone else) and bets phoned in from the clubhouse has been reinstated.

I'll be rooting for you here, Pete...

December 3, 2003: Mexican Group Left Out in the Cold. LINK

Stephanie Myles of the Montreal Gazette has an interesting article about MLB's refusal seriously to consider Monterrey, Mexico's offer to host the Expos in 2004. She quotes Eric Stern, son of NBA Commissioner David Stern, who negotiated on Monterrey's behalf:

"We told them they could name their price, and name the players' price. We pretty much told them the sky was the limit on the financial offer. They told us money was not the issue, there were other issues that prevented them from being able to extract themselves from their relationship with Puerto Rico. ... There's a feeling in Monterrey that we've been used as leverage."

Welcome to MLB, Eric. It's not your father's professional sports league.

December 3, 2003: Marlins Say They Can Keep Lowell Only If There's a New Ballpark. LINK

If the Florida Marlins don't obtain financing for a new ballpark by November 1, 2004, the final two years of Mike Lowell's new four-year, $32 million contract with the Marlins evaporate, and the second year becomes a $6 million player option.

If Lowell's agent was smart, he negotiated a separate royalty for every time his client's face appears in an advertisement or article about the Marlins' proposed park. For better or for worse Lowell, a popular South Florida native, is now the symbol of the stadium bill.

December 3, 2003: 2003 World Series Shares Announced. LINK

Some of the Florida Marlins will earn more from the postseason than they did during the regular season: each of the 37 men voted a full World Series share received over $306,000.

Barry Bloom of mlb.com provides a little background on the postseason pool.

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December 1, 2003: Baseball Throws Web a Curve. LINK

Rob Bowman, CEO of MLB Advanced Media, reiterates MLB's position that it has the right to prevent unlicensed third parties from providing real-time gamecast updates. As I noted the last time Bowman was quoted to this effect, MLB is unlikely to prevail in court.

December 1, 2003: White Sox Cut Seats, Add Coziness. LINK

New Comiskey...oops, U.S. Cellular Field was the last ballpark constructed before Camden Yards rewrote the rules of stadium design. The White Sox are now retrofitting their park to make it smaller and less imposing.

The $28 million renovation will remove 6,600 seats in the top eight rows of the upper deck, reducing the park's height by 20 feet, and will add a flat, column-supported roof atop most of the upper deck. The money comes from last fall's sale of naming rights.

December 1, 2003: Don Leypoldt, Evaluating the Free Agent Class of 2002 & the Effect of Contract Years. LINK

In this guest contribution, Don Leypoldt uses 2002 and 2003 statistics to examine the "contract year" phenomenon. Do players perform better in their last year before free agency than they do in the first year of a new contract?

December 1, 2003: Review: Robert Baade and Victor Matheson, “The Paradox of Championships: ‘Be Careful What You Wish For’”. LINK

The sixth of Larry Hadley's reviews of recent contributions to the literature of baseball economics.

December 1, 2003: Fall 2003 News Update. LINK

My summary of developments in the business of baseball for September, October and November, 2003, from the Fall 2003 SABR Business of Baseball Committee newsletter. If you've been reading the Weblog, there's nothing new here. If you haven't, enjoy the archives below.

All otherwise-uncredited content on this page is copyright © 2003 by Doug Pappas. All rights reserved.