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Major League Franchises Need to Be in Major League Cities

Mike SteffanosSaturday, January 14, 2006
By Mike Steffanos

Due to a visit to celebrate my Aunt's 70th birthday, I will not be posting this weekend. I leave you with this somewhat long opinion piece.

In Tough to stay competitive, an article on ESPN Insider, Peter Gammons makes some interesting points regarding the effect of expansion on the game of baseball:

Expansion was one of those ideas that sounded great at the time but left the game in six feet of snow. It's all been hashed and rehashed, but the last two expansions dramatically drove up the salary structure on the major-league level, fueled an unimaginable inflation of amateur draft dollars, left many teams unarmed by eliminating the threat of places to move, and eventually left the game with an aborted contraction attempt and the messes that remain in Florida and Washington.

Gammons goes on to profile the ups and downs of the last 4 expansion teams: Florida, Arizona, Tampa Bay and Colorado. Since you are supposed to pay for an ESPN Insider account to read the articles, I'm not going to rip a ton of quotes out of it, but it's a good read if you are a subscriber. What follows below is my opinion on expansion and revenue sharing, not Peter Gammons'.

Expansion is major sports is one of my pet peeves, simply for the reason that they are expanding into too many markets that aren't "major-league" markets. We hear a lot of talk that Portland, Oregon is possibly next in line for a major-league team, either by moving an existing team (Marlins), or via expansion. I can see it now. A team is in place and everything is great for a couple of years. Then the excitement dies down a little, and the next thing you hear is, "How can Portland compete revenue-wise with [insert large market team name here]? We need a salary cap. We need more revenue sharing. It's NOT FAIR.

I read a good piece by Fox Sports' Dayn Perry titled MLB revenue distribution needs an overhaul. Perry feels that to be equitable, revenue sharing needs to increase from the current level of 34% to 50% of all local revenues. Of course, Perry realizes that you have to ensure that this money is actually used to improve the product:

When you give money to teams with no sense of accountability, you inevitably get reprobates like Carl Pohlad, the billionaire owner of the Minnesota Twins, who have a history of gleefully pocketing shared revenues rather than reinvesting them into the team.

The answer really isn't forcing teams to boost payroll -- that's a scenario that lends itself to late-hour, asinine contracts doled out solely for the sake of meeting a salary floor. Rather, teams should be held to account to ensure they're plowing these revenues back into the team in some form. Whether that's by retaining a home-grown free agent who otherwise would've signed elsewhere, increasing the scouting and development budget or keeping a talented front office in place, it doesn't really matter -- so long as the money is being spent to improve the organization.

Now I understand where he is coming from here, but I would go further than simply trying to account for how the money is spent. You can't compare MLB to NFL football, which has a national following. If two great teams like the Colts and the Patriots are playing, there is interest nationally in watching this game. When two great baseball teams are playing, with the rare exception of Yankees/Red Sox, almost all of the interest in the game is local. That's why FOX rarely televises a single national game, and the NFL national tv contract is worth much more than the MLB national contract.

Because of this, almost all of the revenue in baseball is locally generated. There is simply more value to having a team in a location that supports it. We've seen this with minor-league baseball where I live in Connecticut. If teams can't thrive in a town, the owner will make a deal somewhere else and move the operation lock, stock and barrel. The local New Haven, CT, Double-A franchise moved to greener fields in New Hampshire a few years ago, and a lesser unaffiliated league team took its place. It was a simple business decision.

So, while I believe that revenue sharing should increase, I would insert a caveat. When you add up all the revenue eligible for sharing from the 30 major league franchises, you would divide that number by 30. In a perfect world, each team would contribute 1/30 of the total, 3.3%. Obviously, this won't be the case. I would set a minimum percentage of the total revenue that any franchise would have to meet, maybe 2%. Exceptions could be made for bad years, but consistent failure to generate local revenues that meet a minimum requirement would result in a penalty where a team loses revenue sharing dollars.

Moreover, a team that fails to meet the minimum over a substantial period of time, say a decade, would be moved or contracted. Let's end this fallacy that true democracy demands a major-league franchise in every burg that has a sewer system and a fire department. There are no major-league franchises in my state, and I do not believe we should have one. We just can't support it.

I don't believe this game will be served by diluting the talent further and expanding to 50 teams in lots of what are, in fact, minor-league markets; only to have these new teams holding their hands out, looking for established teams to bail out what was essentially a bad business decision in the first place. I believe in revenue sharing and a more level playing field for all, but let's be fair. If your city isn't a major-league caliber city, you shouldn't have a major-league franchise.

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