The LoHud Yankees Blog

A New York Yankees blog by Chad Jennings and the staff of The Journal News


Pinch hitting: Heartland Pinstripes

Posted by: Peter Abraham - Posted in Misc on Jan 28, 2009 Print This Post Print This Post | Email This Post Email This Post

January is traditionally a slow month for baseball news. So for the second year in a row, we will showcase other blogs with a series of pinch hitters.

Next up is Jason from Heartland Pinstripes.

Jason is a doctoral student in History at the University of Illinois, and has maintained his blog for nearly two years. His favorite player is Mariano Rivera.

Here’s his post:

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This off-season, the Yankees have come under fire for their high-priced, free agent acquisitions. After they signed Mark Teixeira, Peter Gammons compared them to Wal-Mart braying, “Wal-Mart eats up small-family businesses. The Yankees eat up the Brewers and the Indians.” After they acquired CC Sabathia, A.J. Burnett, and Teixeira, some, including Astros owner Drayton McLane, clamored for baseball to adopt a salary cap. While I object to the Yankees’ receiving city-sponsored tax-exempt bonds and their new stadium’s cost overruns, I disagree with both Gammons’s misguided portrayal of the Yankees’ financial relationship to other teams, and with knee-jerk cries for a salary cap.

Do the Yankees financially “eat up” teams such as Milwaukee and Cleveland? Revenue-sharing figures suggest otherwise. In 2005, Milwaukee received $24 million in revenue-sharing money and Cleveland $6 million, with the Yankees contributing $76 million of roughly $312 million that 13 teams paid the other 17.

The purpose of revenue sharing is to improve the competitiveness of small-market teams through earnings redistribution from larger-market teams. Yet teams often accept such largess to offset payroll without re-investing in new talent or keeping their own. The $24 million paid to Milwaukee represented just over 60 percent of its $39,934,833 payroll that year. Florida received $31 million in revenue sharing for 2005, yet refused to re-invest that money. In fact, that $31 million represented nearly half Florida’s combined payroll for the 2006-2008 seasons, $67,317,000, aided by its 2005 trade of Josh Beckett and Mike Lowell to Boston.

What many small-market teams have done, and what the current revenue-sharing system rewards, is to profit as the team struggles and fans fish for reasons to attend games. The Marlins and Royals are prime culprits, profiting from low payrolls and with low attendance figures (each at or near the bottom in attendance every year from 2004-2008). Florida has occasionally competed for the playoffs since winning the 2003 World Series, while the Royals are perennially a profitable laughingstock far more valuable now than eight years ago. Poor win-loss records do not necessarily equal destitution.

Even as the small-market, low-payroll Rays reached the World Series last year, others caterwaul for a salary cap. Yet will this achieve either on-field parity or greater profits for small-market teams? Not necessarily. The NFL, NBA, and NHL not only have salary caps but salary minimums, pegging mandatory payroll spending to their respective salary caps (86.4% for football, 75% for basketball, roughly 72% for hockey). Should baseball adopt a salary cap after the 2011 season, it may come with such spending minimums. Based on its 2008 payroll of $21,836,500 Florida would have to increase its spending by roughly $68 million just to reach the league average.

Would baseball’s small-market teams accept this structure when mediocrity or worse has been profitable? That would require payroll investments and accountability to fans that many franchises abhor. Critics should neither pity the Yankees their riches, nor criticize them and their recent re-investments without examining profitably unsuccessful teams too often indifferent to making such improvements.

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Thanks, Jason, you made some good points. Coming tomorrow: Jeremy from the Blog of Champions.

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