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Jordan Kobritz Article Archive
Written by Jordan Kobritz   
Tuesday, 15 March 2011 14:35

The Biz of Baseball“Dreams are my reality…”
Dreams Are My Reality, by Richard Sanderson


No, you aren’t dreaming, but someone obviously is.

The Poobahs of Major League Baseball played the C-card - contraction - once before to no avail. In case you don’t remember, MLB tried to contract two teams – the Minnesota Twins and the Washington Nationals, nee the Montreal Expos – after the 2001 season. The move was based on a report submitted by the commissioner’s hand-picked Blue Ribbon Commission that confirmed what we all knew: That some clubs were generating more revenue than others and the lower revenue clubs were having difficulty competing with the higher revenue clubs; i.e., competitive balance was an issue.

The Commission’s report proved to be the impetus behind revenue sharing which was implemented as part of the 2002 Collective Bargaining Agreement. In the decade since, MLB has arguably had more parity than any of the big four team sports if you look at the number of different teams in the playoffs and the number of league champions. And the obstacles to contraction that kept the Twins and Expos/Nationals alive still exist today – the MLBPA, Congress, and the legal system that protects cities, taxpayers and fans who have invested money in a team’s stadium.

The concept of contraction has surfaced periodically since 2001, mostly in response to two things: The inability of teams to strong-arm the public into paying for a new facility and revenue sharing. High revenue teams, such as the Yankees and the Red Sox, are understandably loath to contribute to revenue sharing. Between the two, they contribute approximately half the MLB revenue sharing kitty (a total of $433 million changed hands in 2009 according to Maury Brown of the Biz of Baseball). A number of recipients pocket the money rather than use it to strengthen their team, either at the Major League or Minor League level. John Henry of the Red Sox and Hank Steinbrenner of the Yankees have been outspoken critics of revenue sharing and Henry recently revealed he was fined $500,000 for his comments in 2009.

Recently, New York Daily News columnist Bill Madden, a notorious mouthpiece for MLB management, wrote an article describing the “growing sentiment…throughout baseball” to contract two teams. To support his statement, Madden cited “three anonymous baseball execs” who targeted the Tampa Bay Rays and Oakland A’s as likely candidates, given their stadium situations.

To further bolster his “growing sentiment” allegation, Madden interviewed Baltimore Orioles manager Buck Showalter who, last I checked, has never made anyone’s list of the 1,000 most powerful people in baseball. Unfazed, Showalter nonetheless told Madden he “stays up nights configuring realignment scenarios that would solve a lot of baseball’s problems.” While Showalter wouldn’t address contraction directly, he made it clear that “in his dreams,” MLB consists of seven divisions with four teams each – for a total of 28 - which of course would necessitate the contraction of two teams. Given that the Orioles haven’t won the World Series since 1983, and haven’t made the playoffs since 1997 - which not so coincidentally is the last season in which the team had a winning record – you’d think Showalter would have other reasons to stay awake at night.

If contraction is in fact on the table, count MLBPA Executive Director Michael Weiner and MLB Commissioner Bud Selig among the uninformed. Weiner has said on a number of occasions that he “doesn’t see any major obstacles in the way” of a new CBA to take the place of the current one, which is set to expire at the end of the year. Selig told MLB.com that despite speculation to the contrary, “contraction of franchises is not on the table for these negotiations. Nobody ever talks about it to me.” Which must come as a surprise to Madden – and Showalter.

While MLB may have the right to contract clubs under the CBA, what happens to the players on the 40-man rosters of those teams is a matter that must be negotiated with the union. And the quid-pro-quo the union might exact in return for agreeing to a dispersal formula could cost the teams more than continuing to subsidize the existing clubs through revenue sharing.

Contraction may appeal to a number of owners, but like Sanderson’s song suggests, the only reality is in their dreams.


Jordan Kobritz is a staff member of the Business of Sports Network. He is a former attorney, CPA, and Minor League Baseball team owner. He is an Assistant Professor of Sport Management at Eastern New Mexico University and teaches the Business of Sports at the University of Wyoming. He looks forward to your comments and can be contracted, here.

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