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This is why revenue sharing screws the Yankees

In baseball we always hear about the rich vs. poor, salary cap/revenue sharing/luxury tax argument. We know that the small-market teams are always crying, always wanting more from the big guys -- meaning, bluntly, our New York Yankees.

Well, in an organizational report about the Yankees, The Biz of Baseball has hit on the thing that always ticks me off about that argument. Check this out.

The Yankees remain the most valuable team in all of baseball. In the past nine years, the Yankees value as an organization has more than tripled from $491 million in 1999, to $1 billion 306 million in 2008. Let us compare that to, say the 30th rank team in baseball, the Florida Marlins. If you break down the numbers, the Marlins are a team that profits with less, a case of cutting their margins. In most cases, you have to spend money to make money, but with Florida, they post the largest operating income by slashing player salaries. The Marlins who have a payroll hovering around $20 million made a profit of approximately $35 million, largely due to revenue sharing. On the other hand, “The Evil Empire” posted an operating loss of $47.3 million, largely due to their player payroll and $100 million paid out in revenue sharing.

The key part of that, to me, is what I highlighted. The Marlins pocketed $35 million due to revenue sharing while paying their players only $20 million. Whether you truly believe the Yankees lost money in 2008 -- and I don't -- that is the problem with the whole revenue sharing system.

I understand that the values of the two franchises are completely different. The Yankees, though, earned that money, and the Marlins aren't using it to improve their franchise. They are just using it to fatten their bank account. That, simply, is not right.

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And people think this will work

for our ecconomy? Give them money, they will reinvest it…. nope.

by ryanwk628 on Mar 5, 2009 11:14 AM EST reply actions   0 recs

Revenue Sharing ...

only works when teams reinvest back into their teams. Unfortunately, I think too many lower market teams pocket the cash and make no attempt to invest that money back into their team. I understand Selig doesn’t have a pair, but this is something that he should mandate. I’m not even saying all the RS money be invested—perhaps 75 percent.

If teams fail to do so, they should be penalized—perhaps by losing draft positions and picks, or by forfeiting RS money the following year.

"Baseball is the background music of my life." -George Will

by Ronster22 on Mar 5, 2009 11:37 AM EST reply actions   0 recs

Maybe reward the teams who spend the RS money

by saying next year’s allocation will be based on what they spend this year .. the “use it or lose it” accounting principle.

by ilBrutto on Mar 5, 2009 12:37 PM EST reply actions   0 recs

i agree that the RS teams that get money

should not pocket it, but forcing them to spend it either isn’t foolproof.

it could cause a small market team to actually overspend on free agents. let’s say the Marlins are $20 mil under the salary floor, and there’s one decent FA still out there. the Marlins will be penalized unless they spend another $20 mil, so it might force them to wildly overpay someone, which would completely upset the market.

what a better option than a salary floor might be is giving teams to owners who actually want to field a winner. what a concept!

by Travis G on Mar 5, 2009 1:59 PM EST reply actions   0 recs

There have been some good ideas about motivating teams to spend rev-sharing money. I agree that FORCING them to is bad.

For one, they get more rev sharing money based on out-earning their market expectations or showing improvements over time.

Beyond the Boxscore // Calling BJ Upton lazy is lazy.

by Sky Kalkman on Mar 6, 2009 7:54 PM EST up reply actions   0 recs

Joe Torre's book talks a little

about this and how Toronto is able to keep Roy Halliday, Minnesota was able to keep (at that time) Santana as well as many others based on the revenue sharing. It could be the difference between having 1reliable ace on your staff and not having anything at all (like the Royals)

IMHO I’m not sure that the Yankees are doing their part for the market stability when they pay players like AJ Burnett 80 million

by ilBrutto on Mar 5, 2009 2:39 PM EST reply actions   0 recs

Yankee money

I’m not talking about the money the Yankees spend. I am talking about the money the Yankees give to other teams that the owners just stick in their grubby little pockets.

by Ed Valentine on Mar 5, 2009 7:09 PM EST up reply actions   0 recs

@ilBrutto, the Royals have Gil Meche.

Also, this kind of thing should be illegal. Why are the Yankees giving the Marlins money and the reasoning is supposed to be to create a competitive balance when they just pocket the money?

www.bronxbaseballdaily.com

by Rob Abruzzese on Mar 5, 2009 2:56 PM EST reply actions   0 recs

Sorry, I didn't realize gil meche was an ace...J/K

I seem to be “attacked” from two sides here…LOL.

Mr Abruzzesse: I posted earlier on my idea for use it or lose it, maybe you missed it.

by ilBrutto on Mar 5, 2009 3:03 PM EST reply actions   0 recs

Maybe in the current political environment..

..it should be called “spreading the wealth”, rather than revenue sharing.

"No matter where you go, there you are"

by coops2001 on Mar 6, 2009 6:34 AM EST reply actions   0 recs

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