- The Washington Times - Monday, June 25, 2001

Baseball owners would have us believe that the panacea for the games ills, both real and imagined, is increased revenue sharing among teams. Only then, were told, can the wee ones truly compete with the U.S. Steels and Standard Oils of baseball. Its worth noting that Major League Baseball (MLB) already has some notable redistributive policies in effect: Gate receipts and national-television revenues are shared and funds from a "luxury tax" on high payrolls are divided among the bottom feeders. However, local-television revenues are not shared equitably, and therein lies the disparity. But total revenue sharing, such as the NFL practices, is problematic.
Under the guise of promoting competitive balance, revenue sharing in fact subsidizes failure by paying off teams who dont perform. At its core, the concept is a dichotomy. Revenue sharing rewards teams for keeping measly payrolls (read: not investing in their products); however, notionally the program a term that seems more and more appropriate is predicated on the belief that to succeed, teams must spend money. Anyone see the problem there?
And theres the logistical quandary of ensuring that any revenue-sharing windfall actually goes toward improving the team. Keep in mind that baseball owners have been crying for years about their fiscal woes, and all the while guarding their financial records with the secrecy of Freemasons. Theyre masters at hiding profits, conferring outside business losses onto team ledgers and just about any other method of fiscal chicanery. Now all of a sudden this behavior stops and a flood of disclosure follows?
If MLB is to make improvements to the system and recalibrate league balance, it must drop its de facto territorial-rights policy. This is a tacit understanding among owners that teams will not be allowed to move into regions that currently serve as customer bases for existing franchises. Its a patently anti-competitive policy that owes its existence to baseballs puzzling immunity from the Sherman Anti-Trust Act.
For instance, the very reason a struggling franchise hasnt yet moved to Washington D.C. is that such a move would step on the toes of Baltimore Orioles owner Peter Angelos (although the affront would be more symbolic than economic). What makes less sense are the objections of Peter MacGowan, owner of the San Francisco Giants. Mr. MacGowan is crying foul over Oaklands proposed move to Silicon Valley, which would violate the Giants "claim" on the region. But such a move can hardly be seen as aggressive encroachment. As Keith Law of Baseball Prospectus pithily states, "Anyone who thinks that a San Jose resident is going to sit on Highway 101 for three hours to see a Giants game is on crack."
And what will certainly be overlooked amid the Giants grousing if such a move were to take place would be that the As would be moving farther from San Francisco. Granted, Siliconers have some palatable incomes, and this is no doubt what the Giants have in mind when they rattle their sabers. However, it cant be ignored that the As would be vacating Oakland, a sizable market just a puddle jump from the Giants Pac Bell Park. And Oakland residents, unlike those of San Jose and environs, might actually go to a Giants game.
Ideally, Congress would repeal MLBs anti-trust exemption. Failing that, MLB should stop kowtowing to a fractious group of owners and allow teams to move into occupied markets. Such a policy change would not directly supply small-market franchises with shared revenue; rather, it would afford those teams the opportunity to earn those dollars of their own accord.
Drop the territorial-rights restrictions and let, for example, the Twins move to New Jersey, the Expos move to Washington D.C., the Royals to Santa Monica and the As to Silicon Valley. This serves two purposes. One, it transfers these putatively struggling franchises to markets that can better support them. And, two, it reduces the ungainly market shares of baseballs most powerful teams. Ergo, the bar for market viability is lowered.
Well-heeled owners would be at loggerheads with MLB Commissioner Bud Selig over such a proposition, but is it really more objectionable to large-market owners than the concept of drastically increased revenue sharing? Consider: Would George Steinbrenner rather cleave a hunk out of his local-television revenues and hand it out willy-nilly, or would he rather take advantage of his entrenched power and let other teams come compete for fans on his home turf? To share revenues pardons the woeful marketing efforts of teams like the Expos; to share the markets themselves empowers the supposedly disenfranchised yet forces them to generate their own revenues and gain a beachhead by dint of promotional acumen and on-field performance.
But what of the vacated markets? This is what baseball doesnt want to hear: Not only does it not need to reduce teams, its primed for further expansion. This league-wide leveling of market shares makes the entire league less top heavy. Furthermore, it restores those vacated locales back to being viable hosts for Major League Baseball. Sports Economist Andrew Zimbalist puts forth a similar idea in his watershed 1990 work, "Baseball and Billions." His ideas seem long forgotten these days, what with all the team-contraction scenarios being bandied about. But baseballs desire to eliminate a couple of franchises is not borne of any egalitarian leanings, as they would have you believe; its nothing more than a desire to divide up that new $2.5 billion national television contract 28 ways instead of 30.
Owners are sure to balk at the idea of revoking territorial rights, and such a step by Mr. Selig would, no doubt, effect cries for his ouster. But Mr. Selig is the beneficiary of recently expanded powers, and he is in a position to make these changes by fiat. If he wants his commissionership to have a legacy of progress and is genuinely interested in serving as the games caretaker, hell summon the chutzpah to do this. Bold leadership ruffles feathers and raises ire. Otherwise it wouldnt be bold. And otherwise it wouldnt be leadership.


Dayn Perry covers baseball for ESPN.com

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