Will Parity Ever Be Reached?

It’s no secret that baseball’s economic system has failed.  To succeed in this sport you only need one element and one basic philosophy, get money and buy players, the rest takes care of itself.   Money buys good players, good players win games, winning games attracts fans, fans buy tickets, tickets generate more money.  It’s that simple, but the problem is generating the start up cash needed to compete in the open market where the most talented players demand up to $30 million a season.  

Bud Selig tried to germinate a level of parity when he began a revenue sharing system in 1998, but it has done little to quell the problems that have plagued baseball over the last twenty years.  The teams from the four big markets, Boston, New York, Los Angeles, and Chicago, have continued to reign over the sport by appearing in all but one World Series since the system’s inception.  Meanwhile teams in smaller markets have struggled to find firm ground.

The Rockies found their way to the World Series with a $54 million payroll, but it is unlikely they will enjoy sustained success unless they start bringing out fans in record numbers.  They have a plethora of talent, but eventually each of them will price out of their market in search of greener pastures, or wallets, that can be found in places such as Boston.   The fans know this, which makes it hard for them to support their team during the bad times because there are few players they have truly built an intimate relationship with.  They don’t understand that if they stick with them during the bad times, like when they were nine games under .500 during May, there will be more good times like their unprecedented September run.   The $15 million they received from the revenue sharing poll helped them assemble the talent that got them to the Series, but it certainly won’t be enough to pay Matt Holliday’s annual salary when his contract expires.  Hopefully this run generated enough fan interest to bring them to the park next year so they don’t have to worry about these issues when they arise, but in the past success hasn’t equated into dollars for other small market teams.

Given the financial freedom that Brian Cashman enjoys with the Yankees, Billy Beane could have built a dynasty in Oakland.  With a cast of misfits that others deemed unfit, and an average annual team salary below $45 million, Beane’s boys made the playoffs four straight years from 2000-2003.  This could be viewed as either a blessing or a curse, or both at the same time depending how you look at it.  Obviously it was a great success for the organization to reach the pinnacle of its sport, and it validated Beane as one of the game’s most brilliant minds, but the secret was out. 

Over the next five years teams would follow his formula for success while reducing costs, thus leveling the playing field among the little guys, but it didn’t stop there, the bug spread all the way out to Boston, sending the nation into a sabrmetric frenzy.  That wasn’t the worst of it though, now everyone wanted his players.  Just as quickly as the team was constructed, it fell apart.  Jermaine Dye, Miguel Tejada, Tim Hudson, Jason Giambi, Barry Zito, Mark Mulder, Jason Isringhausen, and many others either left or were farmed out for younger, cheaper, pieces. 

Now the same is about to happen in Minnesota.  The have also pieced together talented young rosters throughout the revenue sharing era by outsmarting their opposition while constructing their roster, but it has only allowed them marginal success.  The Twins are certain to lose the face of their franchise, Torri Hunter, due to a lack of finances, and Johan Santana will likely follow next winter.  This is only the top of the iceberg through, over the next five years Joe Mauer, Joe Nathan, Michael Cuddyer, and last year’s MVP, Justin Morneau, will follow them to bright lights of the big city. 

Revenue sharing is a step in the right direction, and it gives the league a solid foundation to build upon, but by no means should it end here.  The ideals are there, but the system still needs some tweaking and tinkering. 

Unfortunately I don’t see it happening.  In the past baseball has been complacent while dealing with other issues, and with the steroid scandal on the tip of everyones tounge it is unlikely they will get around to this for a quite some time.  Which is too bad because the whole system has been a disaster thus-far.  For every Minnesota and Oakland that craves to be successful, there are teams like Tampa Bay that would rather stick the money in their pockets instead of investing in their product.  In 2006 the Devil Rays had a payroll of $35 million, $42 million less than the league average.  They won 38 percent of their games and, coincidentally, they sold the about the same percentage of tickets for their home games.  Yet, after receiving $30 million from the poll, for some reason they cut nearly half of their payroll.  Maybe it was to clear a few spots for their talented young cast, but if they recieved more money through the poll than they are spening on players, something is wrong here.  I can located a few spots where they could improve, such as their pitching staff and bullpen.

Why should they spend the money on players?  With the way that the system is set-up they have no reason to succeed.  As long as the fans stay away they will be rewarded through the poll because payments are based on local revenue. This makes sense on paper, but in reality it isn’t working.  If an organization improves while they a part of baseball’s welface system they will lose some of their benefits.  This all makes sense on a year to year basis, but it’s not going to level the playing field.  The Pirates got $25 million for selling 60% of its seats.  After they pay the players they already have and take care of some of their overhead, there’s little left to spend on the open market. Teams like New York and Boston are wealthy, they have money stashed away from 1980’s that they can tap into if need be, but the San Diego Padres’ of the world depend on these payments, and more importantly they are trying to improve.  They should be rewarded for their efforts more-so than those that have displayed complacency.  The playing field will never be leveled under these conditions.

Dr. Michael Lewis devised a plan to achieve this goal but I think he missed the boat.  In this article he states that teams like the Devil Rays should be punished for cutting costs, which I agree with, but after that we take different paths.  He writes that to create a more balanced playing field, revenue-sharing payments should be increased for teams that attract more fans.  To do this he devised a system that analyzes and takes payrolls, winning percentages and attendance into account.  It also looks at the size of local population, to acknowledge that teams in places like New York and Chicago have greater financial incentives to invest in players than teams in Milwaukee and Kansas City do.

Here’s how it works:

“Here’s how my formula would have affected the revenue-sharing payments to the Pittsburgh Pirates, which last year filled only 60 percent of its seats but received $25 million in revenue sharing. If the team could have increased its attendance rate to 70 percent, its payments would have grown to $29 million, and if attendance had gone up to 80 percent, the payments would have reached $33 million. My formula would have had even more significant consequences for the Devil Rays. Based on the team’s 38-percent attendance rate, its revenue-sharing payments would have been reduced from $33 million to $13.5 million.”

With this line of reasoning he is saying that Milwaukee and Kansas City don’t deserve to field winning teams, or have no reason to because they won’t return as much on their investments, is this really parity?  It seems more like a parody of bad joke if you ask me.  Having successful teams in larger cities would be better for the business side of things, but from a fan’s standpoint this is what is ruining the game.  I thought the whole point of revenue sharing was to equal things out so that the little guys have a chance to succeed.  He refers to this as the cure to ‘baseball’s losing system,’ but I believe that if this method was adopted it would only acerbate the problems.

The goal here is to allow everyone the same chance to succeed.  The way to cure the problems is to follow the model that the NFL has already laid out which requires teams to split the revenue from the gates 60/40.  They would then have to identify which teams need to improve and demand that a certain percentage is invested back into the product on the field.  At first the returns would be lopsided, but through time things would level out.  You can have all the gimmicks you want to attract fans, but the best way will always be by winning games.  No one wants to support a loser.