Fixing baseball's revenue-sharing problem

[Brock Beauchamp]

A good piece from Jake McKibbin:

https://brewerfanatic.com/news-rumors/milwaukee-brewers/mlbs-revenue-sharing-model-has-two-big-problems-how-can-they-be-fixed-r3929/ 

[Mike Sixel]

Well written!

 

[SteveLV]

Thanks for sharing this.  I was not aware of all the financial shenanigans that came about during the prior Dodger owner's divorce.

This is part of the problem that needs to be addressed, but certainly only a small part of the overall problem plaguing and threatening this great sport.

[DJL44]

I still think teams should 100% share the media money and 0% share the attendance/concessions/parking money. TV money is something teams get simply for existing in a market. Attendance is related to wins and losses better than any other revenue stream.

[jaimedude]

22 minutes ago, DJL44 said:

I still think teams should 100% share the media money and 0% share the attendance/concessions/parking money. TV money is something teams get simply for existing in a market. Attendance is related to wins and losses better than any other revenue stream.

Agreed, media rights sharing at least a percentage of it, should be shared by all the teams. Doing that would restore some competitive balance. As part of sharing media rights, owners should have a floor on payroll, they should not be allowed to just picket this, like revenue sharing, their should be a floor on payroll budgets for minimum spending levels and it should be adjusted yearly. 

[Linus]

Interesting article. Here is a weird way to help level the playing field. All players need to be subject to the draft. Ohtani wants to play in the bigs - he goes in the draft. Same thing with Latin players. Not going to solve the problem but it’s going to have to be a bunch of answers because the huge market franchises aren’t going to share their TV money. 

[Brock Beauchamp]

16 minutes ago, Linus said:

Interesting article. Here is a weird way to help level the playing field. All players need to be subject to the draft. Ohtani wants to play in the bigs - he goes in the draft. Same thing with Latin players. Not going to solve the problem but it’s going to have to be a bunch of answers because the huge market franchises aren’t going to share their TV money. 

I think a worldwide draft is coming. We almost got there at the last CBA, I think it will be one of the first concessions this time around. 

[DocBauer]

Phenomenal article. Thanks for sharing. I was not privy to the information regarding loopholes several teams can manipulate to their financial benefit. Those have to be closed for the good of the game and it's future. 

But billionaire owners also shouldn't be paying other billionaire owners to make no attempt at a viable product and merely pocket the shared venue $ as a form of billionaire welfare.

The NFL has more balanced revenue sharing and a cap. But they don't have a hars floor. Teams must have a payroll floor based on a % of the cap itself, but it's fluid over...IIRC...a 3 year period. Something along the lines of a 75% minimum but you can spend less for a 2yr period. This is intended for teams that suddenly get old or lose players to FA and need to re-build. At least in theory.

MLB needs to close ridiculous loopholes as presented in the article. They need a more balanced revenue sharing, which should be easier with said loopholes closed. After that, they either need a cap, or higher tax penalties for those "super spending" teams.

But they also need some sort of mandated floor or incentive based plan for those bottom feeding, welfare teams to spend.  Absolutely ridiculous billionaire owners are being forced to subsidize other billionaires to the detriment of MLB as a whole.

The TOP teams won't like part of this. The BOTTOM teams won't like part of this. SOME of the TOP players might make a little less with these changes. But the lower and middle class players across the league will probably see an actual increase in their income. Fans will have a greater interest as more teams will have a better, more balanced playing field on which to compete. The game will be stronger as a whole. That should also lead to growth. More fan interest and more growth means more $ coming in for teams and the league collectively.

I've been saying almost these exact same things for a couple years now, though I'm no expert on the details of how to put this all together. But for the good and growth of the game, the solution is very obvious. 

Unfortunately,  what seems "obvious" for both sides is an attempt to "beat" the other side versus doing what's best overall for everyone.

[Mike Sixel]

3 hours ago, Linus said:

Interesting article. Here is a weird way to help level the playing field. All players need to be subject to the draft. Ohtani wants to play in the bigs - he goes in the draft. Same thing with Latin players. Not going to solve the problem but it’s going to have to be a bunch of answers because the huge market franchises aren’t going to share their TV money. 

Drive down pay for players! Good plan. 

[Linus]

4 hours ago, Mike Sixel said:

Drive down pay for players! Good plan. 

What’s your plan?

[Mike Sixel]

7 minutes ago, Linus said:

What’s your plan?

The draft is not the issue. Paying players less is not the issue. So any plan that relies on that is not my plan. Billionaire owners do nothing, take zero risk. Pay the players. 

[Linus]

24 minutes ago, Mike Sixel said:

The draft is not the issue. Paying players less is not the issue. So any plan that relies on that is not my plan. Billionaire owners do nothing, take zero risk. Pay the players. 

I agree that I would rather have the owners pay. What I really want is some semblance of an even playing field. So again, what is your plan?

[Mike Sixel]

8 minutes ago, Linus said:

I agree that I would rather have the owners pay. What I really want is some semblance of an even playing field. So again, what is your plan?

I don't have one that I've given any thought. But they should definitely split money better and count all the money as a start. The NFL is the model....

[ashbury]

I'm in favor of tying revenue sharing to some measure of "success", to keep owners from pocketing those funds instead of making the team better.  But, one of my periodic refrains is that "success" needs to be defined carefully.  It shouldn't be simply Win/Loss records, because that's a zero sum game among all the teams.  Much more important to me is the health of the game, which is not zero-sum among franchises. 

What if filling ballparks to near-capacity every day was one of the criteria?  That's inherently good for the game, even if you have to drop the price of the bleacher seats to $5 for a few years until families get back in the habit, and even if it requires financial subsidy by the bigger teams who can charge more per ticket in their wealthier markets.  The pricing of tickets at Target Field looks pretty accurately set for maximizing total revenue - but that's short-sighted, and if instead prices were lowered to entice fans to come have a good time, in conjunction with (for example) short pre-game concerts by local bands, in the long run the price of the seats will drift upward because you now have a solidly viable product and repeat customers.

I don't know how the formula should look that achieves this - special cases like sad-sack Tampa and Athletics will be nettlesome because they could lower their price to $0.01 and perhaps still not sell out - also the differences in ballparks have to be taken into account (e.g. Target Field was purposely built small to keep prices high).  But I'm happy to see the Pirates owner get a nice payday at the end of each year if he just succeeds in filling his ballpark, and I begrudge him his money when he doesn't - ditto for low-attendance ballparks in Kansas City, Cincinnati, Cleveland, and yes Minneapolis..  Sure, putting a winning product on the field every now and then should be rewarded too.

[tony&rodney]

He put out this same basic article last January.

Does the MLB Revenue-Sharing Model Require Adaptation?

By Jake McKibbin                                                     January 30

I linked to it in a discussion of the CBA after next season. I'm afraid that only a small number of owners are willing to lean on the big market teams. The changes will be largely incremental in nature or more of the same; minor changes.

The owners will huff and puff and work hard to sway those who don't educate themselves on the issues. The players will be painted as the bad guys. It will be like the bad script followed by our government in the shutdown. Only little people will get hurt.

McKibbin does a great job of laying out the data. All baseball fans should read it.