Archive for the 'Business of Baseball' Category

Angelos: Protesters have “no comprehension” of baseball costs

After a few months’ hiatus, Talking Baseball is back in action. Bookmark the site, add the RSS feed to your favorite feed reader, check back often and comment. We’ll start with everyone’s favorite owner: Peter Angelos.

Today, over one thousand Orioles fans walked out of the Orioles-Tigers game at 5:08 p.m. to protest what they viewed as Peter Angelos’ inept management of the team. Angelos disagreed.

“Whoever joins that protest has no comprehension of what it costs to run a baseball team,” Angelos said in an interview with the AP. “When you get down to facts, putting together a team that can compete in the AL East means having a payroll between $100-$110 million. That money comes from the consumer, and I have chosen to keep ticket prices to a minimum.”

I that is, to mince words, a load of crap. Let’s look at some payroll numbers.

The Orioles have a payroll, according to ESPN, of $72,585,712. That is 15th among all 30 clubs and 7th highest in the American League.

Of the seven AL teams that pay their players less overall than the Orioles, five of them have better records. The other two are the Royals and the Devil Rays.

I don’t know what Angelos’ finances look like, but from this very rudimentary study, I can tell you that he is full of it. The Blue Jays, with a $71 million payroll, were fairly competitive in the AL East throughout most of the summer. The A’s, with a payroll of $62 million, are just three games worse than the Yankees.

As much as Angelos doesn’t want to admit it, it’s not about the costs of running a baseball team. It’s about putting good people in the front office who know how to use their limited resources to put a competitive product on the field, and it’s about putting your faith in those people and letting them do their jobs. As long as Angelos continues to spout of rhetoric about the costs of running an MLB team instead of addressing his team’s shortcomings, these Orioles’ protesters’ actions will be for naught.

Stadium deal a “win-win” for the Yanks and no one else

The Yankees’ season may have started with a West Coast whimper, but back home, George Steinbrenner finally secured the elusive stadium deal he has always wanted.

On Wednesday, the New York City Council overwhelming approved the Yankees’ construction plans for a new stadium just north of the current Yankee Stadium. With this vote, old historic Yankee Stadium is destined for the junkyard while a new McStadium will take its place.

As a lifelong die-hard Yankee fan, I cannot be more disappointed. What’s wrong with Yankee Stadium? Nothing. Sure, it may not have wide concourses or enough luxury boxes to line King George’s pockets with gold, but it is a great place to see a game. It doesn’t need kids’ play areas, special food gimmicks, or trains in the outfield to draw in fans. In fact, a record-setting four million fans agree with me here.

People go to Yankee Stadium to see the outfield where Ruth played, where Mantle played, where the Yankees won World Series and captured American League pennats. It may not be the fatest stadium to get out of after a game, but it’s Yankee Stadium. Nothing can ever replace it. Ask Cubs and Red Sox fans how they feel about their stadiums. It is this same sense of history.

So while I am outraged over a definite lack of Yankee fan uproar over these plans to destroy the House that Ruth Built, I’d like to step back and look at the finances behind this deal…

MLB pulls a fast one on District of Columbia

Washington, D.C., is a city of extremes. Dwarfed by the Federal Government and monuments honoring this country’s founders, it’s easy for the millions of tourists that pass through the city to ignore the deep-seated social problems.

The District is one of the most racially segregated urban areas in the nation. It contains some of the fanciest neighborhoods, home to the wealthiest, most powerful men in America, just a short walk away from the most neglected slums in the country. While some of the most prestigious private schools in the nation call D.C. home, the public education system in the Nation’s Capital is routinely underfunded, and the public library system is in shambles.

Enter Major League Baseball. After the 2004 season, Major League Baseball decided to move the struggling Montreal Expos out of Canada and back to the United States. One of the cities vying for the honor of its own Major League Baseball team was the District of Columbia. The District, which last played host to a Major League game in 1971, was chomping at the bit for a baseball team. Little did the residents realize what landing the team would mean.

In their relocation efforts, Major League Baseball, the once and current owners of the Washington Nationals née Montreal Expos, clearly had the upper hand. With four areas competing for a team, the big wigs in charge of relocation could demand certain terms from the city that ultimately won the team. If the city failed to make good on the deal, well, three other areas are still interested in landing their very own Major League Baseball team.

For Major League Baseball, one of the key terms of the deal was a publicly-funded stadium. Never mind that Major League Baseball would be awash in cash from the sale of Washington Nationals. Remember, MLB bought the Expos for $120 million and could sell the Nationals for upwards of $450 million. Never mind that a potential buyer may be willing to split the costs of the stadium.

No, for those running the show at Major League Baseball, the relocation of the Nationals presented these executives with an opportunity to flex their political muscles by demanding that the city to which they graciously award a team foots the bill for the new stadium this team requires. When MLB picked Washington, D.C., MLB executives were put to the test. Could they manipulate the City Council under the shadow of the federal government into paying for a pricey stadium that most economists agree would not return tangible economic benefits to the city?

Boy, were those executives ever up to the task. Originally, Major League Baseball negotiated the agreement with Mayor Anthony Williams. Mayor Williams agreed to the ridiculous condition that the District of Columbia would pick up the entire cost for building a stadium priced at $535 million along with nearly $20 million in renovations to the Metro stop that would service this new stadium. Major League Baseball, the organization that stands to net over $300 million when they finally sell the Nationals, would contribute zero, zilch, nada to this plan.

Well, surprise, surprise, the City Council, um, actually agreed to this deal. Then, a few of the pro-stadium council members were voted out of office, and the stadium negotiations devolved into the soap opera that has played itself out over the last year.

On Sunday, just hours before this stadium case could have gone to arbitration, Major League Baseball signed the latest iteration of the lease. On Monday, the Mayor signed the lease, and on Tuesday, the council, which seems to be receptive to this deal, will vote on the lease. Groundbreaking on the [Insert Corporate Name] Stadium could begin right around Opening Day 2006.

So after all of that political wrangling and back-and-forth between the Council and Major League Baseball, it’s reasonable to assume that maybe the Council worked out a better deal. Maybe Major League Baseball is going to help defray the costs of the stadium construction so that the Council can focus on pooring money into its school system or sagging infrastructure. Right? Right? No, sorry, you’re wrong.

In the latest version of the deal, Major League Baseball is completely and utterly screwing over the District of Columbia. The new lease limits public spending on the project to $611 million. Major League Baseball has offered to throw in a whopping $20 million to aid the project. Meanwhile, MLB was firm on its point that the new owner would not be asked to contribute to the project. Who cares if the new ownership group is willing to help pay? Don’t even think about it, says Major League Baseball.

In another twist, Bob DuPuy, the number two guy in Major League Baseball, asked the council to agree to a provision requiring the city not to enact any legislation that violates the term of the lease. When asked to elaborate, DuPuy could not.

Notably, the lease terms do call for contributions if the project costs more than $611 million. At that point, Major League Baseball or the new Nationals owners or someone else will step in with the money. You can bet that MLB will be putting full pressure on the architects to keep the cost of the stadium under that spending cap. Heaven forbid MLB spend its millions to build its own facilities.

So in the end, Major League Baseball gets its sweet deal. They get their publicly-funded stadium from a city that certainly could use the money for nearly anything else. The owners stand to profit handsomely from the deal, and the jury is still out as to whether or not this new stadium will revitalize an area sorely in need of revitalization.

In my opinion, this saga should have been more of a scandal. While it garnered its fair share of headlines, Major League Baseball was busy dealing with the steroid scandal, and the media glossed over the stadium debate. With this sad chapter in the business of baseball fading into the past, hopefully, Major League Baseball can now get to work on finding an ownership group with pockets deep enough to rebuild the Washington Nationals into a contending baseball team by the time the new stadium opens up in 2008. For $611 million in taxpayer money, the District of Columbia certainly better get a winner and soon.

The lowdown on contraction

On Friday, I spoke briefly about a bullet point in Peter Gammons’ blog. According to the ESPN writer, contraction may be back on the table.

In 2001, the plan was to contract two teams. At the time, baseball owners claimed they were losing money. A threat by the Players’ Union, a decent revenue sharing system, lucrative TV deals, and a rise in attendance over the last four seasons has shown that to be a bit of an exaggeration. But now Selig and Co. may be targeting four teams for contraction.

As long as the Players’ Union retains its clout, contraction is about as likely as the Royals winning the 2006 World Series. Let’s look at the teams that could be on MLB’s contraction draft anyway.

Florida Marlins

Why They Will Be Contracted: The Marlins are a team in trouble. In a few seasons, they will be out on the street as their agreement with Wayne Huizenga for the use of Pro-Player Stadium expires. Florida has failed to guarantee funding for a new stadium, and the team has announced its intentions to explore relocation. Portland, San Antonio and Las Vegas are trying to court the team.

Furthermore, the attendance figures for what was a young and exciting team are disappointing. In 2004, the defending World Champions ranked 26th in attendance, drawing just 22,090 fans per game. In 2005, the Marlins, in the Wild Card hunt until the middle of September, drew just 22,792 fans per game, good for 28th overall. While South Floridians are disappointed their team may leave, the fans have hardly come out in droves to see them.

This winter, the Marlins had to sell off their assets, and their 2006 payroll will be around $16 million. Alex Rodriguez, Manny Ramirez, and Derek Jeter will all make more individually than the entire Marlins roster. This is a sad state of affairs for a team that is just a few years removed from a World Series title and has captured two championships in its short existence.

Why They Won’t Be Contracted: Despite their uncertain geographical future, the Marlins have arguably the most potential of any baseball team. GM Larry Beinfest turned their collection of Major League talent into an awesome collection of Minor League talent. With power arms and top position prospects filling out their farm system, it’s not a stretch to say that the Portland or San Antonio Marlins could be the team to beat as early as 2008 or 2009. Would Major League Baseball really give up on a team with such a promising future?

Kansas City Royals

Why They Will Be Contracted: To put it nicely, the Royals are awful. The team has had one season above .500 since 1993 and haven’t made the playoffs since I was two in 1985. They are averaging 97 losses a season over the last four years.

Worse yet, they have no plan. The Royals in 2005 were the 28th ranked organization. Early reports have them at the bottom of the charts again. As Baseball America put it:

That time period corresponds directly with the tenure of Allard Baird as general manager, which began in June 2000. While Baird has played his part, David Glass also must assume culpability. The former Wal-Mart president and CEO became Royals chairman of the board of directors in 1993. He stepped down from his Wal-Mart duties in 2000 before becoming Royals owner. The Royals have topped the .500 mark only once since his affiliation with the club began (an 83-79 finish in 2003) while the team has operated much like a discount store. Glass allowed Baird $22 million to spend on free agents this off-season, but retreads Paul Bako, Elmer Dessens, Scott Elarton, Mark Grudzielanek, Joe Mays, Doug Mientkiewicz and Reggie Sanders aren’t going to reverse Kansas City’s fortunes.

Meanwhile, attendance numbers for the Royals are nearly as bad as the team itself. They ranked 29th overall last year, averaging just over 17,000 a game. While the Royals need some creative General Management and a generous owner, the current leadership isn’t working.

Why They Won’t Be Contracted: Because contraction won’t happen. Period. While recent negotiations in Kansas City have given the Chiefs and the Royals hope for extensive stadium renovations, the Royals do not have much in their corner. The fans are gone; the organization is in shambles. If contraction were to happen, the Royals would be the first to go.

Washington Nationals

Why They Will Be Contracted: No owner. No Minor League system. A tenuous stadium deal.

The way Major League Baseball has handled the Nationals/Expos debacle should be a huge scandal. To briefly summarize, the 29 MLB owners bought the Expos from Jeffrey Loria a few years ago and announced a move to DC. Once in DC, they have tried to force the District to foot the entire bill for a stadium that will cost over $600 million.

In the meantime, MLB has constrained the Nationals’ payroll to such an extent that a good draft class is nearly impossible and high profile free agent signings are out of the question. They have two second basemen and numerous questions surrounding the team on and off the field. Contracting the Nationals would solve a lot of problems for Major League Baseball.

Why They Won’t Be Contracted: While it would be a convenient way for MLB to sweep their problem under the rug, the Nationals won’t be contracted. Let’s see why.

1. Money. Major League Baseball will sell the Nationals for over $400 million. After buying the team for $120 million, the 29 owners will all make a handsome profit over the deal. They won’t give up this money.

2. Stadium Deals. As of this evening, Major League Baseball has agreed to a lease deal with the District of Columbia. All that remains is for the city council to sign off on a few key provisions, and it seems unlikely that they will delay the deal any more. MLB is getting its publicly-funded stadium once and for all.

3. Politics. If MLB were to move the Expos to the Nation’s Capital and then fold the Nationals a few years later, it would be a huge political debacle for a sport already under Congressional scrutiny for its shady dealings with steroids. Major League Baseball does not want to encourage any more ill will from Congress.

So this team is safe.

Other Contenders

After these three teams, there are no really obvious candidates for contraction. But let’s speculate.

Colorado Rockies The Colorado Rockies are an experiment in baseball at high altitudes. So far, it’s failed. They have never won more than 83 games, and it may be time for this experiment to end. Considering the seemingly secure future for the Nationals, I would put the Rockies as the darkhorse candidate on a contraction list.

Minnesota Twins The Twins suffer from poor attendance but they have a devoted fan base. Furthermore, they were one of the original America League teams. While their hopes for a new stadium have stalled, it’s hard to see the Twins being contracted even though they were the subject of original contraction rumors.

Tampa Bay Devil Rays The Devil Rays are a team with bad attendance and no historical success. They have yet to cross the 71-win barrier in their existence. But a new ownership group seems to have a plan. They’ve built up a solid young core of players and a vibrant Minor League system. While they could use a new stadium, Tropicana Field is probably there to stay.

Summing Up Contraction
While it’s tempting to speculate on contraction, in the end, I don’t think contraction will happen.

First, the Players’ Union won’t allow it. If four teams were to be contracted, 100 Major League players would be out of jobs and countless Minor Leaguers would be organizational-less. While this contraction would help strengthen the talent pool, it’s hard to see the Players’ Union agreeing to this deal. Owners are unlikely to agree to the 28-man regular season rosters that would help recapture these lost jobs. The Union is just too strong for MLB to strong-arm a four-team contraction plan.

Second, the owners won’t like the monetary aspect of this plan. For Major League Baseball to contract four teams, the rest of the owners will have to buy the four teams from the current owners. These transactions would cost Major League Baseball owners literally hundreds of millions of dollars. No owner is going to want to spend this to buy the teams in addition to the millions it will cost to expand the rosters to accommodate the anticipated demands of the Players’ Union. Contraction simply costs too much money.

So in the end, Gammons’ source may be right. Major League Baseball may have a contraction plan in place. But in the end, it’s doomed to fail. While teams may move, I think Major League Baseball is stuck with 30 teams for better or for worse.

Gammons: Wisps of contraction floating around MLB

No time for a long post tonight. Sorry. I’ll be writing more on this topic on Monday though.

One of the central tenets of journalism is don’t bury the lead. The other – unless you happen to work for the New York Post – is to avoid sensationalizing stories. In Peter Gammons’ latest blog post (Insider only. Sorry.), the esteemed ESPN writer may be trying to do the later at the expense of the former.

Gammons’ post is ostensibly a scouting overview of Spring Training so far. He focuses on the Indians and their chances for this season. After the main meat of his post, he gets to the good stuff: the notes from training camps. Halfway down the notes section is this tidbit:

One National League owner is telling employees that MLB has a plan to contract four teams, with a contraction draft already drafted.

To me, that screams out BIG STORY. This is the first time anyone has mentioned contraction in serious terms since before the latest round of bargaining in 2002. Contraction was off the table, and while the owners always had the potential to bring it up again this year, most baseball analysts assumed they wouldn’t for fears of risking a long-term war with the players’ union.

While this is still just a rumor from an anonymous source, Gammons tends to be among the more reliable writers on the net. My early take is that this contraction plan will be waved around and possibly even bantered around during the talks this year, but it is unlikely to pass.

On Monday, I’ll tackle the potential candidates for contraction. If I had to guess now, I would tag the Kansas City Royals and the Florida Marlins as two teams that could be headed for extinction.

AT&T Park the latest in no-name stadiums

It’s time for an Official Talking Baseball Quiz.

1. Where is Ameriquest Field?

2. What does the Great American Insurance Company have to do with baseball?

3. What is the name of the stadium in which the Oakland Athletics play baseball?

If you are like the average baseball fan, I would imagine your answers were something like this: I have no idea, nothing, and the Oakland Coliseum.

Sadly, in this era of corporate naming rights, you would completely wrong. (For the real answers, just keep reading.) Non-descript corporate sponsorship names have taken over once-great stadium names, and in my opinion – my stuffy, traditionalist opinion – it’s getting to be a bit ridiculous.

At the end of last week, the San Francisco Giants announced that they would now be playing their home games in AT&T Park.

Now, just a second, you might say. Didn’t the Giants just get a new stadium in 2000? Why do they need a new one? Well, it is the same one, but this is actually its third name.

In 2000, the Giants opened up SBC Park to replace Candlestick Park. Their old park, named for its geographical location on Candlestick Point, was no longer an adequate facility for a team competing in the 21st century. And four years before opening the stadium, the Giants had finalized a $53 million agreement with the Pacific Telesis Group to name the new stadium Pacific Bell Park through 2019. SBC Communications, Inc., purchased PTG, and in 2004, the new stadium became SBC Park.

Last year, SBC merged with AT&T, and in less than a month, the stadium will be rechristened again. This time, it will be known as AT&T Park. Six years, three names. At this rate, the Giants will have to change the name nine times before the end of the original contract. Sprint PCS Field, anyone?

As a baseball traditionalist, at least when it comes to stadium names, this ridiculous name-changing symbolizing everything that is wrong with the way stadiums are named today. The Texas Rangers play in Ameriquest Field. What that has to do with Texas or the Rangers is beyond me. While the Ballpark in Arlington had a great ring to it, I guess the Rangers though a 30-year, $75-million contract was better.

In Cincinnati, the Reds play in Great American Ball Park. That’s a great name until you realize that Great American is an insurance company paying $2.5 million a year to Cincinnati for 30 years. Hey, that’s nearly one-third of Eric Milton’s contract!

Meanwhile, back in California across the Bay from San Francisco, the A’s no longer play in the Oakland-Alameda County Coliseum. Rather, they play in McAfee Coliseum which was recently called Network Associates Coliseum until another telecommunications merger eliminated Network Associates.

In my mind, this corporate naming lessens the impact of the ballpark. It’s not the same to check out a game in McAfee Coliseum as it is to go to Fenway Park. In 15 years, when the A’s are playing in AOL.com Coliseum but the Red Sox are still playing in Fenway – named for the fens that used to dot the area around the stadium – it’s clear that the Red Sox can still lay a claim to their stadium’s history. But when fans don’t know which corporation will name their stadium this season, it divorces the team from the stadium and the fans from the stadium.

Now, it’s quite easy to argue against my history/tradition defense of stadium names. First, corporate sponsorship of baseball stadiums is nothing new. Wrigley Field, built by Charlie Weeghman, was originally called Weeghman Field. When the Wrigley family acquired the team, they changed the name of the stadium to Cubs Park. In 1926, it was named Wrigley Field, and the name has become a part of Cubs lore since then.

This, in my mind, isn’t the same as the current naming craze. For 12 years, the stadium wasn’t Wrigley Field, but now that names has stuck. In 30 years, the Reds will sell the naming rights to Great American Ball Park to another company. They won’t stick with it for tradition’s sake, and thirty years of naming association with disappear into history as soon as the ink on the new contract is dried.

While historical naming rights seem acceptable, one aspect of the naming system about which I cannot complain is the money. In an era of economic disparity in Major League Baseball (coincidentally, a topic for an upcoming post), the money that Reds make each year on the stadium names provides them with an additional source of revenue that they are hopefully using to improve the team. Had these teams stuck with, say, Riverfront Stadium or the Ballpark in Arlington, these millions wouldn’t be flowing in.

In the end, I know it is important for these teams to maximize their revenue potential. The difference, especially for teams such as the A’s and Brewers who do not enjoy the financial windfall of the Yankees or Red Sox, is significant. It could be the difference between fielding a competitive team under a tight budget or a non-competitive team with a very low payroll.

However, at the same time, it would be great if Major League Baseball could figure out a way to avoid anymore two-and-out names or Enron Field debacles. I may recognize the need for corporate sponsorship of baseball stadiums, but that doesn’t mean I have to like it.

Sources

All Ballpark naming information, including history and contract details, comes from the excellent Ballparks.com.

A query on equality

As a precursor to something I’m working on, tonight’s post is simply a question. I recognize that sometimes people respond to these queries and sometimes they do not. I would appreciate it if you my readers could chime in here. Pretty please!

The question is this: How would you define parity in Major League Baseball?


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