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May 14, 2002
The Owner's View:
John Moores of the San Diego Padres pens this piece for the Wall Street Journal (link requires subscription). He's making the case for revenue sharing, but I don't agree with a number of points. A handful of clubs have adopted a fairly rational approach to deal with their revenue disadvantage. Unable to afford high-priced talent, these clubs have traded their veteran ballplayers away and opted for a "youth movement," hoping to catch lightning in a bottle. This is a risky strategy because it is extraordinarily difficult to determine which young talent will mature into competitive players. Furthermore, it's hard to retain the talent you groom. Just look at Jason Giambi, who moved this season from the small-market Oakland Athletics to the powerhouse Yankees. This handful of clubs sounds like the Royals. Youth movements do work if you evaluate your talent and sign them to long term contracts. That's why Cleveland was able to dominate, and why Oakland will continue to be successful. I have no doubt it costs less to sign a player who might be good to a long term contract than wait until a player is good and sign him as a free agent. If the young player doesn't pan out, you haven't lost that much. If the free agent doesn't work out, you're stuck. Unlike professional football and basketball, baseball has to bear the substantial expense of a "farm" system. It cost the Padres $18.4 million in 2001 to develop future players. This figure includes the cost of scouting and signing amateur players, the operation of our academy in the Dominican Republic, and many of the operating costs associated with six minor league affiliates. The total revenue received by Major League Baseball in 2001 from the minor leagues was $4,698,459. The Padres' share of this revenue amounted to $156,615. Oh, boo-hoo. Clubs have to pay for a farm system because they don't want to compete with independent minor league teams. If Moores thinks this is such a problem, then he should lead a movement to free the minor leagues from MLB control. Then clubs and trade or buy up and coming players, rather than develop them. When the Padres lose money, I provide the capital to cover the losses through personal funds or commercial borrowing. Like most clubs, there is no entity related to the Padres that covers losses or creates business synergies. The Padres have lost over $100 million during the seven years I have owned the club -- and we're at the middle of the pack, with some clubs losing less and some losing more. What I find remarkable about this statement is that Moores is implying that the Padres are not worth $85 million right now. I dare anyone out there to offer Moores $85 million for the Padres. He'd laugh you out of his office. Selig would never let a club be sold for that low price right now. If this is true, I'd seriously think of putting together a group to buy this team. They have some good players and they are opening a new stadium. With really good management, $85 million would be a great investment. Of course, the article ends with a shot at the Yankees:
50-50 Splits of gates and media money would do the trick just fine. If a team can win and survive with a $20 million dollar payroll, that's fine. But their players will get tired of no fans in the stands. My guess is the players will never accept a cap. So let the teams figure out revenue sharing on their own, then let the players look like bad guys if they don't accept it. The loss of revenue the big clubs will suffer will bring things much more into balance. |
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