Open Thread: Henry wants MLB to overhaul revenue sharing systemBy
One of the rights of the offseason is talk about how unfair baseball is with respect to big market clubs vs. small market clubs, and every so often some executive from a small market team will bemoan the fact that they can’t compete financially with the Yankees. For the most part, the other side of the coin – all of the big market teams that forfeit millions to smaller market teams – never gets talked about, however Red Sox owner John Henry came out and said the revenue sharing system needs an overhaul.
Allow me to quote:
“Change is needed and that is reflected by the fact that over a billion dollars have been paid to seven chronically uncompetitive teams, five of whom have had baseball’s highest operating profits,” Henry responded in an e-mail. “Who, except these teams, can think this is a good idea?”
Henry added, “While the Red Sox are in the 16th largest media market we’ve found a way to be very competitive even though we are funding other teams. At the end of the day, the small market clubs still cannot begin to compete with the Yankees and have a very hard time competing with the teams that are struggling to pay them so much. Consequently, a system that directly impacts competition has to replace the current system, that hoped to, but ultimately did not cure competitive imbalances.”
The Red Sox principal owner reiterated that baseball’s free market system should continue and that teams should be able to operate as they please but that those who spend a lot will pay a lot of payroll taxes. “If the Yankees and the Mets spend a billion dollars plus of their investment dollars to build new ballparks, they should be allowed to keep their revenues from that,” Henry wrote. “But if they want to spend $200,000,000 annually on payroll they should be heavily taxed directly on that – and if they want to spend more than that, they should be even more heavily taxed. So should all clubs who spend heavily on payroll – to the extent necessary – to bring the system into balance.”
Ah yes, the poor Red Sox in the 16th biggest largest market have done a great job remaining competitive despite facing such an uphill battle. Great story, compelling and rich. Truly inspiring.
Back to reality. One thing we have to acknowledge is that there are more ways to use revenue sharing money than signing big league free agents. Tampa and Florida have built perpetually productive farm systems through the draft, assuredly with some help of that revenue sharing money. In fact, you can argue this is exactly how the revenue sharing cash should be spent. Building a foundation for the team with a continually replenishing source of talent. Of course, it’s much easier said than done.
Henry also makes a good point about how the current revenue sharing system screws over the Yankees:
“Baseball has determined that the best way to deal with the Yankees is to take as much of their revenue as possible. I see that in direct opposition to the ideals this country was built on. Baseball is a business and should be treated as such. Baseball is also a sport that needs competitive balance in order to prosper. Taxing their revenues and other “large markets” in the way it is presently done, is simply confiscation on an order of magnitude never seen in any industry in America,” Henry said.
As for the perceived lack of competitive balance, I don’t really think it’s a huge problem. By my count, 23 of the 30 teams have made the playoffs within the last ten years, and 15 different teams (half the league!) have appeared in the World Series in that time. Giving the Royals more money probably won’t stop them from wasting $48.35M on Jose Guillen, Kyle Farnsworth, and Willie Bloomquist. At some point the crutch of being a small market team has to be removed, and blame has to be shifted to management.
I’m not going to get into talk about a salary cap, because it’s ridiculous. The reason a cap works in the NFL is because every team can afford to spend to the max. If you want to do that in baseball, you’d have to set the cap at like, $50M. A floor doesn’t help either, it just means small market teams would have to put more money in the pockets of fringe players to make payroll. It’s just not feasible.
Anyway, that’s my competitive balance rant for the day. Use this puppy as your open thread for the night. The Knicks take on the Suns at home, but otherwise you’re on your own for entertainment. Anything goes, just be cool.