Gee... what an idiot - Tilted Forum Project Discussion Community

pan6467 · 02-17-2006, 06:49 AM

Ok. So let's say I own a smaller market MLB, say the Indians, Reds, Tigers, whatever. My base is pretty limited, what I can charge for tickets is pretty limited, what I get for television revenue is pretty limited and so on. So what I can pay for F/A to compete is limited. Also, unless I compete my income doesn't reach full potential and it becomes a downward spiral.

Even in the Indians at their height in the 90's lost money if they didn't go to the playoffs. DIck Jacobs said if the Indians weren't the #1 merchandised team (he was smart enough to own the team stores) and they didn't make the playoffs, the Indians would lose big money. Even the past few years when they gutted salary, they barely made profit because of the spiral effect.

The Red Sox, Yankees, and so on do not have this problem. They have HUGE market bases, can charge whatever they want for tickets and sell out almost every night.

So revenue sharing is needed. Why? Because we are all subsidiaries of the same company MLB. If the small market clubs go bankrupt it hurts the overall industry. Think of it this way, MLB is GM and each team is Pontiac, Chevy, GMC trucks, etc.

Also the tax is needed because some teams like the Yankees and Bosox will go out and buy whomever they want and if the player tanks, they can go out and buy another guy.

So my answer to the Bosox owner crying over revenue sharing and the tax is this...... Don't like it, make a sal cap or don't pay F/A so much money.

Teams like the Marlins don't NEED a new stadium or to move, they need new ownership and a chance to compete that allows the team to make money and not go heavily indebt.

But as long as King George rules baseball and MLB treats each team as it's own business, not a subsidiary.... the sport will continue to have problems and teams near bankruptcy that will never be able to compete.

Quote:

Red Sox owner bothered by baseball's revenue-sharing system

February 16, 2006

BOSTON (AP) -- Major league baseball's current revenue-sharing system, even while bettering the game, is too burdensome on the wealthiest clubs which are substantially subsidizing some of their opponents, according to Boston Red Sox principal owner John Henry.

Team ownership must bring in roughly $2 on every $1 invested in order to break even, Henry was quoted as saying in Thursday's editions of the Boston Herald. The Herald said his comments came in an exchange of e-mails with the newspaper over the past week.

"Baseball has to address the disincentives created by large-scale transfers of revenue from successful clubs to less successful clubs," Henry said. "At high enough tax levels, the incentive is to invest somewhere other than in baseball."

He said the disincentives are just as powerful for lower-revenue clubs as for the higher-revenue clubs.

"The Red Sox have taken an aggressive stance in investing in all aspects of the franchise," he said. "But one has to wonder how many teams will do so when the financial risks often outweigh the potential financial benefits."

About $50 million to $60 million of the Red Sox money is flowing per year to less successful clubs, Henry said.

"The commissioner and the union have radically altered the game of baseball for the better over the last few years by transferring enormous amounts of dollars," he said. "But as with all taxes, there is a point at which taxation discourages effort and investment to the point that baseball clubs one by one come to the same, unfortunate conclusion."

Boston sells out every game and has been aggressively expanding Fenway Park. Henry leads the investment group that bought the Red Sox and the New England Sports Network cable television station from the Yawkey Trust four years ago for $660 million.

"The Red Sox have lost money and NESN has made money," Henry said. "The continuing investments in Fenway Park help revenues but are not cheap. It is not a coincidence that the teams paying a lot of money in revenue sharing are investing substantial sums in ballparks because that is the only deduction available."

Henry said commissioner Bud Selig has done a good job in reducing the debt ratio allowed by individual clubs.

"(Selig) may have, in fact, saved the industry from itself by acting to limit debt," Henry said.

Most teams have large and growing debts, Henry said. He said he knew some owners who have lost more than $100 million over the last 10 years. In his three years as owner of the Florida Marlins, he said he lost about $50 million.

Link: http://sports.yahoo.com/mlb/news?slu...v=ap&type=lgns

Jimellow · 02-17-2006, 07:55 AM

In a sense I agree. I mean, if teams that are at the bottom of the barrel, and don't improve over time, despite getting added funding as a result of this, why should these teams continue to suck revenue?

I'm of the mindset that there should be a hard salary cap (ala NFL) or no cap at all. I don't think the big spenders should give $50-60 million to the scrub teams that seem to make no real effort at improving. Examples include: Devil Rays, Royals, Reds, and Rockies. These teams should be contracted, not encouraged by payouts of "free money" that is granted at the expense of teams that are successful and able to spend more as a result of their success.

kutulu · 02-17-2006, 08:25 AM

John Henry: You can suck it. Your luxury tax payment was only $4,156,476. If you don't like paying luxury tax here is a simple solution: don't let payroll exceed $136.5M. 28 other teams found a way to do that last year and 6 of them made the playoffs. You don't need to spend over 100M to win.

Florida is a totally different story. They've won two WS and the city hasn't done shit to say thanks. They were 28th in attendance in 2003 (1.3M tickets) and their big boost for the next season was to go up to 26th (1.7M tickets). That city doesn't deserve an MLB franchise.

kutulu · 02-17-2006, 08:40 AM

I think the revenue sharing model works fine. The luxury tax model is worthless though. With the 2006 cap at 136.5M it doesn't do a damn thing. The threshold shoul dbe closer to 100-110M. Instead of having a fixed percentage based on how many times hte team exceeds the cap, it should be an escalating %. If the threshold is 100M, then it could follow this:

10% on the first 10M
20% on the second 10M
30% on the third 10M
40% on anything else

Last year, only NYY and BOS paid luxury taxes. They paid 34M and 4M respectively. If it was done the way I proposed above it would work out like this:

Code:

NYY	 $213.10 	 $39.24 
BOS	 $141.90 	 $10.76 
NYM	 $119.20 	 $2.84 
LAA	 $115.90 	 $2.18 
SEA	 $111.90 	 $1.38

One other thing. In order to prevent parasitic teams from just taking the revenue sharing money and running. If a team's salary does not equal 1.5x the money they got via revenue sharing (averaged over like 5 years to account for rebuilding) they lose revenue sharing elibility for the next five years.

/I didn't know Seattle spent so much money last season. Ouch!

DDDDave · 02-17-2006, 10:22 AM

At the root of this argument is the fact that MLB does not have a real commissioner. Bud Selig is the owners' 'boy'.

The game needs a commissioner to do what is right for the league, not just for the owners. In any real negotiation, nobody gets what they ask for. I agree that the game needs a salary cap ala the NFL, but the players don't want that. OK, if you have a cap then you should have a floor too. I think this was discussed but Selig didn't have the cahones to stand up to the owners. I am a Rays fan. Most of you fans know that Vince (Do you know who I am?) Naimoli no longer owns the team. A young guy named Stuart Sternberg now owns the team. He is committed to trying to win. That is really all fans can ask for. We will never compete for the pennant in the AL east against NYY, BOS, TOR, and BAL. Naimoli was what was wrong with baseball. He 'wanted' to win, but made no real effort to. The Rays had the second lowest payroll, and were the second most profitable team. WTF? They received +/- $25MM in luxury tax money and their profit was $ +/- $23MM. He took the luxury tax $$ and put it in his pocket. The fans hated him for it. I used to have season tickets and then stopped buying them just because of this.

If the league had a real commissioner who would make an owner 'do the right thing', IMO the league would be so much better off. As has been said, it doesn't take the largest payroll to make the playoffs or even go .500. Baseball needs to understand that they are in the entertainment business. People come to watch a competition. Americans like to root for an underdog. A Yankee friend of mine says 'so what if we have the best team and you always don"t?' . Because this is not a game of world domination, it is not a war, it is a baseball league. They have rules against monopolies don't they.

Sorry to go off on a rant there but I played baseball for close to twenty years and love the game but after the steroid scandal they better do something to get the fans back on their side or baseball as we know it may disappear in the next 10-15 years.

02-17-2006, 07:55 AM	#2 (permalink)
Jimellow Junkie	In a sense I agree. I mean, if teams that are at the bottom of the barrel, and don't improve over time, despite getting added funding as a result of this, why should these teams continue to suck revenue? I'm of the mindset that there should be a hard salary cap (ala NFL) or no cap at all. I don't think the big spenders should give $50-60 million to the scrub teams that seem to make no real effort at improving. Examples include: Devil Rays, Royals, Reds, and Rockies. These teams should be contracted, not encouraged by payouts of "free money" that is granted at the expense of teams that are successful and able to spend more as a result of their success. __________________ Desperation is no excuse for lowering one's standards.

02-17-2006, 08:40 AM	#4 (permalink)
kutulu Junkie	I think the revenue sharing model works fine. The luxury tax model is worthless though. With the 2006 cap at 136.5M it doesn't do a damn thing. The threshold shoul dbe closer to 100-110M. Instead of having a fixed percentage based on how many times hte team exceeds the cap, it should be an escalating %. If the threshold is 100M, then it could follow this: 10% on the first 10M 20% on the second 10M 30% on the third 10M 40% on anything else Last year, only NYY and BOS paid luxury taxes. They paid 34M and 4M respectively. If it was done the way I proposed above it would work out like this: Code: NYY $213.10 $39.24 BOS $141.90 $10.76 NYM $119.20 $2.84 LAA $115.90 $2.18 SEA $111.90 $1.38 One other thing. In order to prevent parasitic teams from just taking the revenue sharing money and running. If a team's salary does not equal 1.5x the money they got via revenue sharing (averaged over like 5 years to account for rebuilding) they lose revenue sharing elibility for the next five years. /I didn't know Seattle spent so much money last season. Ouch! Last edited by kutulu; 02-17-2006 at 08:43 AM..

02-17-2006, 10:22 AM	#5 (permalink)
DDDDave Addict Location: Sarasota	At the root of this argument is the fact that MLB does not have a real commissioner. Bud Selig is the owners' 'boy'. The game needs a commissioner to do what is right for the league, not just for the owners. In any real negotiation, nobody gets what they ask for. I agree that the game needs a salary cap ala the NFL, but the players don't want that. OK, if you have a cap then you should have a floor too. I think this was discussed but Selig didn't have the cahones to stand up to the owners. I am a Rays fan. Most of you fans know that Vince (Do you know who I am?) Naimoli no longer owns the team. A young guy named Stuart Sternberg now owns the team. He is committed to trying to win. That is really all fans can ask for. We will never compete for the pennant in the AL east against NYY, BOS, TOR, and BAL. Naimoli was what was wrong with baseball. He 'wanted' to win, but made no real effort to. The Rays had the second lowest payroll, and were the second most profitable team. WTF? They received +/- $25MM in luxury tax money and their profit was $ +/- $23MM. He took the luxury tax $$ and put it in his pocket. The fans hated him for it. I used to have season tickets and then stopped buying them just because of this. If the league had a real commissioner who would make an owner 'do the right thing', IMO the league would be so much better off. As has been said, it doesn't take the largest payroll to make the playoffs or even go .500. Baseball needs to understand that they are in the entertainment business. People come to watch a competition. Americans like to root for an underdog. A Yankee friend of mine says 'so what if we have the best team and you always don"t?' . Because this is not a game of world domination, it is not a war, it is a baseball league. They have rules against monopolies don't they. Sorry to go off on a rant there but I played baseball for close to twenty years and love the game but after the steroid scandal they better do something to get the fans back on their side or baseball as we know it may disappear in the next 10-15 years. __________________ I am just a simple man trying to make my way in the universe... "Go confidently in the direction of your dreams. Live the life you have imagined." - Thoreau "Nothing great was ever accomplished without enthusiasm" - Emerson

02-17-2006, 08:25 AM	#3 (permalink)
kutulu Junkie	John Henry: You can suck it. Your luxury tax payment was only $4,156,476. If you don't like paying luxury tax here is a simple solution: don't let payroll exceed $136.5M. 28 other teams found a way to do that last year and 6 of them made the playoffs. You don't need to spend over 100M to win. Florida is a totally different story. They've won two WS and the city hasn't done shit to say thanks. They were 28th in attendance in 2003 (1.3M tickets) and their big boost for the next season was to go up to 26th (1.7M tickets). That city doesn't deserve an MLB franchise.