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New Agreement Offers Incentive for Bad Teams to Get Better

Mike SteffanosTuesday, October 31, 2006
By Mike Steffanos

One thing that we heard repeatedly was that the previous version of revenue-sharing in major league baseball actually discouraged struggling small-market teams like the woeful Pittsburgh Pirates from trying to become more competitive. Large-market teams such as the Mets watched as their revenue-sharing dollars were pocketed by the ownership of clubs like Pittsburgh, Tampa Bay and Kansas City with no appreciable effect on the product they put on the field. It was a given that a revised version of this system would have to give these teams more incentive to take this money and spend it where it was intended.

At CNNMoney.com, Chris Isidore writes that the new agreement finally does indeed removes the disincentive for small market teams to use revenue-sharing dollars to actually improve their franchise:

In the past few labor agreements, teams had to put a share of their ticket sales and local broadcast deals into a pool to be split with the other teams. What that did was reduce teams' incentive to go out and spend money that might be needed to improve the team's popularity, and hence, its revenue.

Now, according to Rob Manfred, the owners' chief labor negotiator, teams that generate better revenue growth than the rest of the league will get to keep all of that additional money - the most powerful incentive possible to bring fans, and their dollars, into the game.

On The Biz of Baseball web site, Maury Brown goes into this further:

... if you're a club, and you're better at growing your revenues than the league, then the tax hurts less. On the other hand, if you're sucking wind compared to the other clubs in terms of revenue growth, then the tax eats up a larger percentage of your revenue. It's a chance for you to not only keep up with the Joneses, but it incentivizes you to work to kick their rears in the revenue growth department.

Yes, you still will have to pay a 31% tax on marginal income, but if you're outpacing the league in revenue growth, then your split-pool contribution should become less and less of a factor. Yes, your straight pool tax goes up, but it goes up by a lot less than it did before. Plus, under the previous system you'd get hit with more taxes for making more money on your split-pool component.

What these changes from the prior revenue sharing plan to the new should do is establish healthier incentives to encourage clubs that are receiving revenue sharing to spend them on growing revenue. As part of growing revenues, you would place hiring better players to increase your winning percentage at the top of your list. With clubs investing in themselves this way, you should theoretically promote competitive balance. At least, that's the plan. With this many moving parts, there are bound to be places where unintended consequences will arise.

As a fan of a team in a large market, my concern has been and will continue to be that I don't feel it is fair to ask me to pay higher prices in order to subsidize baseball in smaller markets. Although to an extent this in inevitable under any revenue-sharing system, the new system seems to do a better job of forcing some of the have-nots to at least make an effort to generate more local income. We'll keep an eye on it to see if it has the desired effect. As Brown points out, anything as complicate as this agreement is bound to have unintended consequences.

Hot Stove Tidbits:

Newsday: Lobbying for a bigger payday
Although it's generally known that Jason Schmidt would like to stay on the west coast, his agent tells Ken Davidoff:

I think it's real accurate to say that geography is not going to eliminate anybody. That's a safe thing to say. We talked to [Schmidt] about it. Just because a team is in a location is not going to take them out of the race.

I would imagine at least that it would take a more money and possibly an extra year to get Schmidt to come here. I see him as a pitcher on the decline, and I'd be very leery of giving him too much.

New York Post: Adam Kennedy
Speaking of lobbying, Adam Kennedy's agent tells the Post's Mark Hale tha this client has "definite interest" in signing with the Mets. I know I don't get a vote, but I'd pass. Kennedy is just okay both offensively and defensively. I'd rather see the Mets find a decent right-handed 2B to platoon with Jose Valentin.

Hale also mentions Rich Aurilia, who is a much more attractive offensive player, but at 35-years-old would be very risky to sign for more than 1 year. Julio Lugo would be interesting, although after seeing him in the division series against the Dodgers it's painfully obvious he has a lot of work to do to become a decent 2B.

New York Times: Sounds like a plan
Ben Shpigel does a good job of presenting an overview of the off-season.

Hot Foot: Soriano
Hot Foot cites a Washington Post article that Alfonso Soriano is seeking a contract similar to the 7-year, $119 million one that Beltran signed. This is pretty much what I expected, and why I consider the chances of Soriano wearing a Mets uniform next year extremely remote.

ESPN: Daisuke Matsuzaka
Sean McAdam profiles the Japanese pitcher, and tells us that he may not sign with any US team this season.

More Mets Stories:
SportsSpyder Mets

Continuous Mets Coverage:
Hot Foot

Comments (10)

The thing about Lugo is that since the deadline for the Dodgers he played LF, RF, CF, 2nd base, 3rd base, SS. That with inconsistant playing time messed him up.
I really like him and wouldn't mind him for a 3 year deal.
He has good speed, decent pop, can hit the ball, and can actually take a walk. On defense he's pretty good at SS but I dunno about 2nd base. I would assume it shouldn't be that hard for him.

Hi folks;

a. Say No to Lugo. As per normal teams are using Omar to jack up their price. Lugo's PLUMMETTED as he lost his 'place' to Jeff Kent. There is a glut of 2B (I am noting) and luis Castillo is another. He AND Jose would be lightning. On the same note...Eckstein (the MVP) may be more a clone we seek. Valentin was overated as a defensive player...but was very productive especially given the slowness to cut Kaz. If castillo is not out there..or not pursued, I lobied for a Jeff Kent deal since the previous deadline..I wanted someone with some rbi prowess. I'd offer Jose arbitration, especially knowing Ahern, Lamblin, or Gotay could step up.

b. Wright needs some Winterball.

c. If Glavine leaves, Mulder or Zito are strong possibles. Pelfrey has the #5 slot. But we have a glut of near readies including Pinango, Collazzo, Bannister and a 'malcontent' in Heilman. I can imagine a deal that some allude to with Heilman as a piece...Rich Harden, Eric Beddard are names that come to mind.


benny - I think he can be a decent 2B, but it might take him a while. He was very mechanical on the DP turns. Still, he's a more attractive player than Adam freaking Kennedy.
Ed - "Malcontent"? He wants to start. We need starters. He already knows how to pitch in NY. How about giving Heilman a chance to start?

Agreed, Mike-- it's time for Heilman to start. His stuff is nasty, and it's all he's ever wanted to do. If Glavine or El Duque comes back at a reasonable price, we've got one of them anchoring a rotation with Heilman, Maine, Perez and Pelfrey in that order. With Pinango and Bannister waiting in the wings, I like my chances.

Truthfully though, the thing I look forward to the most in terms of prospects is the coming of our real young farmhands. Carp, Martinez, Gomez and Guerra look like they will be studs, but it's still too early to make a serious forecast.

I would vote no for Adam Kennedy. I'd rather have Eric Aybar or Howie Kendrick, and I'm guessing one of them might be had. Or Dallas MacPherson; think David Wright would care to try his hand at second base? J/K

Thing is, I don't want this year's Rich Aurila. I want next year's Hanley Ramirez. Teams get down on their prospects sometimes (as the Angels seem to have with Dallas, which is the only reason I mentioned him); it happens all the time and it represents opportunity for the rest of the league.

I would resign Valentin and seek out a hotshot prospect whose expiration date is approaching. You could strike gold, or you could have to put up with another year of Jose, and I enjoyed the last year with Jose, myself.

Kendrick is a dream, probably, only why did the Angels have him playing first base last year?

This Matsuzaka, sounds like a "can't miss" Matsuai(I am not sure how to spell our can't miss s/s-2nd base player)thing. I would be scared to spend big bucks on this guy.

Trust me -- you don't want Alfonso Soriano on your team. Don't get me wrong, he's an impact player who will win your team another ten games by his power and ability to drive in runs (95 from the leadoff slot is remarkable). That said, he also will cost your team 10-15 games. Sooooo many times, Sori came to the plate with a runner on third with less than two outs -- down by a run -- and he struck out on three pitched balls. He doesn't bunt. He doesn't go the opposite way. He doesn't do anything other than swing as hard as he can and hope for the best.

I followed him the entire season on my Nats' blog and I feel certain that his poor September was the real Soriano -- the guy who's likely to hit .265-33-80 next year. Those numbers don't sound deserving of a 7 year/$119 million dollar deal, do they?

Surely the Mets can use those dollars to better the pitching staff. The offense is certainly good enough.

Matt - I think they're probably going to want to throw one more veteran pitcher into the mix. Not necessarily a Zito, but someone who they could be fairly comfortable will give them 180-200 innings.
dd - It's an interesting thought. I've read Valentin is looking for a team that will guarantee him a starting role, so he might be a little tough to keep.
Rev - He sounds like the real deal from what I read, but I think after Kaz, we've all become somewhat leery of "can't miss" Japanese prospects.
Farid - You're preaching to the choir here. On top of what you said, I've always had some questions about Soriano's motivation to play hard. Last year he was playing for a contract. Once he gets one, I'm not at all convinced he won't slack off as he did his last year in Texas.

My nightmare, if we don't sign him he turns out to be a Tom Seaver, if we do sign him he turns out to be a Kas Matsuai.

It seems like they'll take a run at signing him, Rev. There are a lot of other teams chasing him, too, so who knows?

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