Baseball Economics for Dummies

The players get it. The big-market owners get it. So why do the small-market owners seem so dense?

Topics: Boxing, Baseball, U.S. Economy, Unemployment, Economics, George Steinbrenner,

So where are we one week before the strike date? Though the media has been slow to grasp this important fact, we are exactly where we were at the end of the 1994 strike: with the owners, lead by commissioner Bud Selig, using public and media pressure to squeeze concessions out of the players. The principal issue — the only issue, as I keep repeating — capable of causing a work stoppage is the so-called luxury tax.

Though the economics-impaired writers and commentators covering the negotiations don’t seem to understand it, so-called revenue sharing is not and never has been Bud Selig’s primary motive. If the owners simply wanted to share more revenue, they’d have gone to the players and said: “Let us share X amount of dollars, and we will guarantee you that that money will go to players’ salaries instead of into our pockets.” But of course they haven’t done that.

The fans and so-called small-market cities have been driven to a fever pitch by the commissioner’s carefully calculated rhetoric regarding revenue sharing. They honestly believe that the selfishness and greed of a few owners (almost all of them it seems, with the name Steinbrenner) are keeping them from a big nest of golden eggs and that Bud’s war against the players is going to get them their share of these golden eggs. They’re right about the first part: The big-market owners are greedy and they are sitting on golden eggs. But the small-market owners are dead wrong if they think Commissioner Bud’s plan is going to get them some of those eggs.

For instance, there was a photo in the New York Times last Tuesday, Aug. 20, which showed a banner from Pittsburgh Pirates fans: “Better a Strike Than Five More Years of Yankee $tranglehold.” One would like to point out that it hasn’t been the Yankees oppressing the Pittsburgh Pirates the last two years, but the leading team in their own league, the Arizona Diamondbacks. One would also like to point out the principal reason the Pirates are a small-market team has to do not with the success of the New York Yankees but with the decline of the U.S. steel industry. No, forget all that. What I’d really like to say to the Pittsburgh fans with the banner is: “We’re sorry in New York that you suck so much,” but let that pass.



The point is that over the last six years, the primary supplier of golden eggs to baseball’s so-called small-market teams has been the New York Yankees, and that’s because the luxury tax has been low enough for the Yankees and a few other teams to continue to give big contracts to their veterans and still purchase an occasional free agent like Jason Giambi. That’s why $674 million has changed hands from the “richer” teams to the “poorer” teams from 1996 to 2001. If the Players’ Association was to suddenly suffer a bout of insanity and approve Bud Selig’s plan of an increase of the tax from 20 percent to 50 percent, who would then offer these contracts to veterans or purchase higher-priced free agents? The answer of course is: nobody.

The players know this, which is why they resist the tax: because it would lower salaries. Most of the big-market owners seem to understand the concept, which is why they are backing Selig. But most of the small-market owners seem to be slow at getting this picture in focus. They don’t seem to realize that if the tax that Selig proposes is too high, it will do what all high taxes have always done: namely, put a choke on spending. And if the big-market teams stop spending, then from where is all of this wonderful revenue in the revenue-sharing plan to come? So, what kind of dummies would support a 50 percent tax on payrolls above a preset limit as a means of creating new revenue? Well, which small-market owners are backing Bud Selig?

One dummy who is, is San Diego Padres’ John Moores. “If the players strike,” he says, “I’ll be prepared to sit out a season. I’m not going to be part of a crazy system where we have to keep raising ticket prices.” Moores is either a dummy or he’s blatantly dishonest. He knows very well that the players’ salaries don’t have a damn thing to do with the price of tickets, a figure that is dictated entirely by supply and demand, and that if the players went back to the salaries of 1976 (the first year of free agency), he wouldn’t lower the price of a ticket to a Padres game by so much as one nickel. (They don’t pay the players in college football or basketball games, but college ticket prices rival those of the pros.)

The reason Moores is a dummy is because he is willing (or at least he says he’s willing) to lose a season to support a plan that, if it succeeds, will almost certainly give him less money than the one in place but will greatly benefit the teams who are economically advantaged, such as his giant neighbor slightly to the north, Rupert Murdoch in Los Angeles. When is it going to occur to owners like Moores that their enemies are not the players but the commissioner and the handful of powerful owners who keep leading them down the path of disaster?

Why, in short, don’t John Moores and his fellow small-market owners threaten to sit out the season if Ted Turner, Rupert Murdoch and a handful of others don’t come up with a fairer system of dividing the revenue before it even reaches the players? In other words, why don’t the small-market owners simply strike against the big-market owners? It’s the biggest mystery in this whole sordid mess, because if the small-market owners are desperate enough to go to war, why not go to a war they can win? The Players’ Association has never been beaten; the commissioner and the big-market owners have been beaten every time out. I know who I’d choose to fight.

- – - – - – - – - – - -

Great sports books are coming from the strangest places nowadays, which is to say that no matter how carefully you look for new things, they seem to sneak up on you. “James J. Corbett: A Biography of the Heavyweight Boxing Champion and Popular Theater Headliner,” by Armond Fields (McFarland Books), is the best boxing book I’ve read in years. Actually, it’s the best boxing book and one of the best books about show business I’ve ever read. As Fields so entertainingly points out, athletes of a century ago made a great deal more money being famous on the touring stage than through athletic competition, and in Corbett’s case, he was an entertainer more than twice as long as he was a boxer. The book is wonderfully illustrated with photos, cartoons, newspaper caricatures, period posters, etc.

Sports Publishing’s “Ted Williams: Pursuit of Perfection” (compiled by Jim Prime and Bill Nowlin) renders almost any other photo book on Ted Williams meaningless. The hundreds of color and black-and-white photos (of everything from family pictures to repros of baseball cards to an entire collection of oddball Teddy memorabilia) are well worth the $39.95, and the tributes and recollections from Curt Gowdy, Dabney Coleman, George Steinbrenner, Bob Costas, Oscar Peterson, Stephen King, Nomar Garciaparra, Billy Crystal and my late friend, baseball artist Mike Schacht, make this a coffee-table book that will spend more time open than closed. The price also includes a terrific CD with interviews and highlights from famous games.

Allen Barra cowrote Marvin Miller's memoirs, A Whole Different Ballgame. His latest book is Mickey and Willie: The Parallel Lives of Baseball's Golden Age.

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