In the midst of a World Series that would become a seven-game classic, baseball’s steward, Commissioner Bud Selig, raised the white flag of surrender incuring the sport’s economic disparity: “As the problems have exacerbated, it has become clearer to me that everything should be on the table, including contraction. Can it be worked out for 2002? Time will tell. But I wouldn’t rule it out.”
Two days after that classic World Series ended, baseball’s owners took the historic step of voting to eat two of their own. How cannibalism addresses rather than ignores the game’s economic problems — a gross imbalance in franchise revenues and payroll expenditures and an expired labor agreement — the commissioner has failed to articulate clearly.
“It makes no sense for major league baseball to be in markets that generate insufficient local revenue to justify investment in the franchise,” Selig said after the contraction vote.
As the cliche goes, baseball is a business. Even more so, baseball is a business that has grown accustomed to public subsidies. That, in a nutshell, is the rationale behind contraction. A profitable market is one that transfers tax dollars to owners.
The three teams most often mentioned in contraction speculation, the Expos, Twins, and Marlins, have repeatedly failed to win support for publicly subsidized ballparks. It is inconceivable that they would be contraction targets had their local taxpayers offered to buy them new homes.
Consider the Twins, a hundred-year-old franchise. With three million people, Minneapolis-St. Paul is the nation’s 15th-largest metropolitan area and 13th-largest media market.
For six straight seasons in the ’90s, Twins attendance languished below 20,000 fans per game. But the Twins gave fans little reason to cheer. Look at the years when they were successful, though:
Year AvgAtt W-L -------------------- 1986 15,499 71-91 1987 25,703 91-71 1988 37,416 91-71 1989 28,117 80-82 1990 21,624 74-88 1991 28,319 95-67 1992 30,647 90-72 1993 25,292 71-91 1994 24,753 53-60 1995 14,690 56-88 1996 17,745 78-84 1997 17,421 68-94 1998 14,395 70-92 1999 14,942 63-97 2000 13,079 69-93 2001 22,286 85-77
A year removed from their 1987 World Series victory, the Twins drew almost 5,000 more fans per game than any other American League team.
They finished fifth in attendance per game after their 1991 World Series victory, trailing only Oakland, which had won a three of the last four pennants, and Baltimore, Chicago, and Toronto, all of which were playing in recently opened ballparks.
Even in 2001, with baseball’s smallest payroll and a collection of largely unknown players, the Twins enjoyed their first .500 record in nine seasons and a corresponding 70-percent increase in attendance per game. Simply put, Minnesotans will pay to see a competitive team.
Yet in the late ’90s, with the Twins losing more than 90 games per season, owner Carl Pohlad failed to persuade state and local leaders to approve a publicly subsidized ballpark. Thus, the Twins are in danger of disappearing. Now angling to sell his team in contraction, Pohlad, a billionaire, says he has to do what is best for his family.
The possibility that the Twins will be one of the two eliminated teams puts pressure on the Twin Cities and Minnesota to reconsider whether they want to replace the Metrodome, which opened less than two decades ago.
If the Twins are eliminated, Minneapolis-St. Paul provides baseball with a large metropolitan area to serve as a threat for relocation of teams in other cities reluctant to build publicly subsidized ballparks, assuming the Twin Cities learn their lesson and finally offer to fund a new stadium.
The Marlins play in the nation’s 12th-largest metropolitan area, with a population of 3.8 million, and the 15th-largest U.S. media market. Like the Twins, the Marlins have shown they can draw fans when they win:
Year AvgAtt W-L -------------------- 1993 37,838 64-98 1994 33,695 51-64 1995 23,783 67-76 1996 21,565 80-82 1997 29,190 92-70 1998 21,363 54-108 1999 16,906 64-98 2000 15,134 79-82 2001 22,286 76-86
Following their 1997 World Series victory, the Marlins were dismantled by their cash-strapped owner. Attendance per game collapsed as a result. After nearly finishing even in 2000 and staying at .500 through mid-August in 2001, the Marlins drew 47 percent more fans per game.
Rumor has it that baseball is concentrating not on the Marlins, but on the Twins and Expos. The Expos have a long history of miserable attendance.
Even in 1994, when the Expos had the best record in baseball before the strike ended the season, attendance was 22,930 fans per game, an improvement of just 11 percent over the previous season, despite finishing 94-68 and a mere three games behind the pennant-winning Phillies in 1993, and 87-75 and in second place in 1992.
But if French-speaking Montreal and its 3.3 million area residents are unwilling to support baseball, why not move the Expos to a U.S. city?
Selig claims relocation is not a viable solution right now: “If you just shift a club to another area without any other changes being made, all you’ve done is move the set of problems from Area ‘A’ to Area ‘B.'”
On one hand, Selig claims that “markets that generate insufficient local revenue” is the problem. On the other hand, he denies that moving a club out of such a market is the solution.
These conflicting statements expose the mendacity of baseball’s arguments, as does the fact that baseball has yet to select which two teams will be eliminated. If sick franchises are really the problem, why not vote first to get rid of the specific trouble spots, rather than initiating the process with two franchises-to-be-named-later? Perhaps because uncertainty produces leverage.
The Portland, Ore. area’s population of 2.3 million exceeds Cincinnati’s two million, Kansas City’s 1.8 million, and Milwaukee’s 1.7 million. Washington and Baltimore share a metropolitan area of five million people, with more than half of them living in the District of Columbia and Virginia.
The reason moving the Expos to Portland or Washington is not a solution is that neither of these cities has committed to build a taxpayer-subsidized stadium. Once contraction is completed, baseball will almost certainly be willing to expand again quickly if new ballparks are promised by these locales.
Indeed, contraction followed by expansion to metropolitan areas offering new ballparks will be profitable for the surviving owners so long as the stadium subsidies and expansion fees, which will surely be substantial, exceed the buyout payments to the divested owners.
This windfall will not affect baseball’s revenue-disparity problem, though, since the fundamental flaw — the absence of a reasonable system to share local media revenues — persists. Baseball operates under rules governing local media revenues that date from the era of Ted Williams, Stan Musial, and the Dick Van Dyke Show.
Selig sees the problem as clubs “that don’t generate enough revenue to be competitive franchises. If they can’t do that and don’t have the likelihood to do that, then obviously we have a problem.” In other words, blame the victims — ailing franchises — not the disease — baseball’s whacked revenue-distribution system.
MLB.com reports, “there is one club with local revenues that are less than 8 percent of the local revenues generated by the top club and less than 18 percent of the industry average.” Baseball’s solution is to axe the low-revenue franchise, not to question whether the revenues are properly apportioned.
Asked if Tuesday was a sad day for baseball, Selig answered, “If that’s true, then every industry in America that makes adjustments has a sad day,” as if baseball were like most industries rather than a legalized cartel under which all of the market participants can agree to buy out two of the firms and embargo whole cities and their inhabitants from enjoying their product.
“The fact is we’ve always said we have problems, and problems have to be dealt with. We can’t make believe they don’t exist. Are the solutions sometimes more painful than we’d like? Yes. If anything, (deciding to contract two teams) shows you how committed we are to solving our problems,” Selig said.
But contrary to Selig’s professed belief that baseball is confronting its problems, what contraction really demonstrates is that Selig and baseball’s owners are either oblivious to, in denial of, or helpless to treat the revenue disparity that ails the sport’s economic health.
Nor will the elimination of two 40-man rosters ingratiate the owners to the Players’ Association in the upcoming collective bargaining process. The owners might try to buy off the players with additional roster spots on the surviving teams, but those will not be equal to starting positions. It has been argued that this is a negotiating tactic with the union. If so, then the owners are off to an auspicious beginning in hindering a settlement.
Seven years ago, Selig presided over the cancellation of the World Series for the first time since 1903. Now baseball will scale back its operations and eliminate franchises for the first time since 1899. Way to make history again, Bud.