MPR: Will Baseball Ever Change?

Will Baseball Ever Change?
By Michael Khoo
October 28, 1999

Next week, St. Paul voters will decide whether to approve Mayor Norm Coleman's plan to build a new Minnesota Twins ballpark in the city's downtown. Supporters and opponents argue back and forth on the economic impact a stadium could provide, but both sides seem to agree the finances of Major League Baseball are in disarray, leaving small market teams like the Twins at a competitive disadvantage.

Cost of a Title
Payrolls of recent World Series winners
Year	Team	Payroll*	Rank
1999 1998 1997 1996 1995 1993	Yankees Yankees Marlins Yankees Braves Blue Jays	$85m $65.7m $53.5m $61.5m $46.8m $48.2m	1st 2nd 2nd 1st 4th 1st
* In millions

WITH THEIR WIN over the Atlanta Braves, the New York Yankees are again baseball's world champions. On the opposite end of the spectrum, the Minnesota Twins ended the year with the worst record in the major leagues. According to the business ledger, the results should come as no surprise. After all, the Yankees' payroll - at $85 million - was the highest of any franchise, and more than five times larger than the $17 million the Twins put into player salaries. Tom Montgomery is the founder of FANS for St. Paul, a group opposed to Mayor Coleman's plan to use tax dollars for a new ballpark. Montgomery says the financial inequities between large and small market teams are a fundamental problem that a new stadium won't solve.

Montgomery: Even if this thing passed and the public built the Twins a new stadium, unless baseball gets its house in order, they still will not be able to be competitive. Baseball has to get its house in order. And baseball has to get the message from the taxpayers that they're not going to put up with this basic, what is essentially corporate blackmail.

Because of Major League Baseball's anti-trust exemption, each team has a virtual monopoly over its metropolitan region. That allows large market teams like the Yankees to capture far higher revenues than the Twins, particularly from cable-TV contracts. And higher revenues equal greater bargaining power when seeking top talent. The current market imbalance has been a persistent issue since Coleman first proposed raising the city sales tax to pay for a new ballpark. And Coleman himself has repeatedly acknowledged the need for reforming the system.

Coleman: Baseball has to get its house in order, absolutely. I will be a vigorous champion of that. But I want to be a champion at the table, not watching them getting their house in order somewhere else, either in Minnesota or elsewhere.

Coleman says abandoning the Twins gives the city no leverage to effect meaningful changes in Major League Baseball. Opponents say using public funds to build the stadium gives the league no incentive to pursue reform.

Rosentraub: Do not bargain from weakness.

Mark Rosentraub is a sports economist at Indiana University. He says serious reform efforts should come before any public subsidy. He says until there's change, Coleman's strategy amounts to caving in.

Rosentraub: Is it best to demand from Major League Baseball first a proposal, or is it better to first approve a subsidy? I'm saying based on the hundred year history of cities dealing with Major League Baseball, I think the weight of the evidence would be that my strategy is better.

Rosentraub says baseball must seriously consider greater revenue-sharing between small and big market teams and develop player salary caps. He notes that last summer Senator Arlen Specter of Pennsylvania introduced legislation requiring the leagues to fund at least 50 percent of any new stadium construction from shared revenues. Rosentraub questions why Mayor Coleman wasn't present to testify during the legislative hearings. Coleman aide Erich Mische says the mayor has instead been in contact with baseball commissioner Bud Selig in an effort to address the problems.

Mische: We've had several conversations with the commissioner of baseball. And the commissioner of baseball clearly understands that Major League Baseball has a role to play in changing people's perceptions of the game and how it runs.

Last January, Commissioner Bud Selig impaneled a so-called blue-ribbon task force to study the economics of the sport. The group contains such luminaries as former Senate Majority Leader George Mitchell, former Federal Reserve chair Paul Volcker, and syndicated columnist George Will. The group has discussed issues of revenue-sharing and even of eliminating struggling franchises. But don't anticipate a magic bullet.

McHale: That might be a little more than this blue-ribbon commission can accomplish.

John McHale is the president of the Detroit Tigers baseball franchise and a member of the task force. Coleman has said he expects professional baseball to have taken serious steps towards reform by the time the proposed Twins ballpark would open in spring 2003. McHale said that remains a possibility of sorts.

McHale: None of us think we're ever going to eliminate the inherent advantages that the Yankees have of operating in New York or the Dodgers have of operating in Los Angeles. The question is can you buffer the extremes? Can you construct a system where clubs who operate in metropolitan areas a fifth or a tenth the size of the largest ones are able to offer their fans faith and hope that they may be competitive on a regular basis? And if you can define that, or accept that definition as having re-established competitive balance, then I think we've got a fighting chance to meet Mayor Coleman's timetable.

McHale wouldn't speculate on what actions the task force might ultimately recommend, if any. A final report is expected later this year or in early 2000.

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