David Pinto has an interesting idea for solving MLB’s financial woes:
I’ve felt for a long time that what baseball needs is a competitive form of revenue sharing. Teams would be paid for their road games based on how many people they brought in, not just in the stadium, but for the TV and radio audiences as well. This would encourage teams to sign an Alex Rodriguez, since they would make money from the fans he would draw on the road.
Chris Lawrence essentially agrees.
Some variation on this plan makes sense to me, as well. Now, before you accuse me of embracing Communism, let me argue that MLB is, in my view, a single business with 30 franchises rather than 30 individual firms. MLB competes for the public’s entertainment dollar with other sports, movies, music, and so forth. But the intra-MLB competition should be relegated to who can best put together and manage a baseball operation.
The NFL–easily the most profitable of the American professional leagues–has long understood this and has created a system whereby the Green Bay Packers and New York Giants can compete on an equal footing. MLB has created a bizarre system where George Steinbrenner, by virtue of being able to exploit the largest media market on the planet as well as the long winning tradition of his franchise (itself largely purchased through the advantages of the NYC market), can essentially spend whatever he wants to pursue players. Only a handful of teams can even stay within $50 million or so.
The current rules make little sense. For example, the Braves and the Cubs both have the ability to generate substantial revenue from putting their games on television stations, WTBS and WGN, owned by the teams’ parent companies, Time-Warner and the Tribune Company. But, because those are considered “national” networks, those revenues go into a pot to be shared with the other owners. The Yankees, meanwhile, own their own network but, because it’s considered “regional,” they get to keep and spend the money. I don’t blame Steinbrenner for exploiting the rules; but the rules aren’t good for the game. Indeed, there are more owners who are anti-Steinbrenners, essentially putting Triple-A teams on the field in order to keep costs down and make a profit. That’s more harmful to the game than the rich teams trying to buy championships.
The ideal situation would be NFL-style revenue sharing, a salary cap, and a salary floor. Such a system would reward teams would good farm systems, good scouts, and good managers rather than those with deep pockets.