La Dodgers bought for 2 BILLION dollars.

[Le Grande Orange]

Originally Posted by magnet

I remember reading at one point years back that George ran the team in the red pretty regularly. Can a Yankees fan confirm or deny?

What rudel said. Or, to use an accounting term, related party transactions. The Yankees' stake in YES is no doubt very profitable. But since YES is a separate enterprise it effectively allows the Yankees to move profit to YES that might otherwise be attributable to the baseball club directly.

Related party transactions are used in this manner all the time.

[Postman]

Originally Posted by Skipaway

American leagues on the other hand hates owners who want to spend more for better teams. Salary caps, luxury taxes, drafts, revenue sharing, and all that. All basically measures to ensure owners who just want to make money can do that safely without somebody who just wants to win undermining them.

Interesting point of view you have there. I don't think you're fully grasping the American model of team sports leagues.

Some things you might want to consider:

1. With the exception of the MLS, the team sports leagues in the States are all the premier leagues of their sport. That means that as a rule they have the pick of the best players in the game. Paying more doesn't bring better talent into the league.

2. Drafts are designed to distribute talent around the league with priority given to teams that performed poorly in the previous season. It's team management that makes all the difference, not the size of a team's market.

3. The salary cap is meant to promote competition in the leagues that have it. It prevents teams from taking advantage of the money available to it due simply to being based in a larger market.

4. In leagues with a revenue sharing agreement, teams split the TV contract evenly, again offsetting any advantage a team may gain due simply to being based in a larger market.

5. The value of a team is based entirely on winning. Some teams like the Yankees, Cardinals, and Dodgers have won so much over the years that even if they hit a period where the team is playing poorly over many seasons, the team maintains its value. Newer teams (like the Rockies) must win to make money, though. There's simply nothing else on which to judge the organization.

The only team sport that doesn't have a cap or revenue sharing is Baseball, and I think it'd do well to institute one. The movie Moneyball illustrates the situation well.

[rudel.dietrich]

Originally Posted by Postman

The only team sport that doesn't have a cap or revenue sharing is Baseball, and I think it'd do well to institute one. The movie Moneyball illustrates the situation well.

If that is what you too away from the book and the movie then you entirely missed the point of both.

[Postman]

The subtitle to the book, "Moneyball: The Art of Winning an Unfair Game", refers directly to what I'm talking about.

"Its focus is the team's analytical, evidence-based, sabermetric approach to assembling a competitive baseball team, despite Oakland's disadvantaged revenue situation." (Moneyball - Wikipedia, the free encyclopedia)

It's the story of how Billy Beane took a small market team that couldn't afford to keep its stars and built a contender out of the scraps left by big market teams.

What do you think it's about?

[Vinny P.]

Originally Posted by magnet

George is currently pining for the fjords.

Google "Yankees profits" and you'll find articles from 2009 saying "Hey, the Yankees will actually turn a profit this year!" which would indicate it isn't normal business procedure.

I remember reading at one point years back that George ran the team in the red pretty regularly. Can a Yankees fan confirm or deny?

Originally Posted by rudel.dietrich

From what I have read the Yankees do make yearly profits if you factor in the YES network.

Which is why I think the super franchises in every sport need their own TV network.
Cowboys...Lakers...Canadiens

Right. Which is why I posed this question in post number 13:

I saw somewhere that the Yanks were valued at 2.15 billion. I know last year's Forbes had them at 1.6 billion. I wonder if that includes the YES network?

I assume that the YES Network is part of George Steinbrenner and his Yankees "empire."

Originally Posted by Skipaway

Of course he can do that, when he's competing with all the other owners who are interested in making money. That's the point.

If you have a couple of super rich people buying up Red Sox and Orioles and are willing to spend as much as they need to win at all cost, Man City and Chelsea style, Steinbrenner wouldn't be able to make money and win as easily.

Well, that's probably true, and one of the reasons why rudel stated that soccer has an unsustainable business model.

However, there are quite a few teams this year "throwing money at wins" in baseball: Marlins, Angels, Phillies, to name a few. Yet, those teams will probably still turn a tidy profit. Those are also the teams pushing the cost of labor up throughout the entire game.

[Skipaway]

Originally Posted by Postman

Interesting point of view you have there. I don't think you're fully grasping the American model of team sports leagues.

Some things you might want to consider:

1. With the exception of the MLS, the team sports leagues in the States are all the premier leagues of their sport. That means that as a rule they have the pick of the best players in the game. Paying more doesn't bring better talent into the league.

2. Drafts are designed to distribute talent around the league with priority given to teams that performed poorly in the previous season. It's team management that makes all the difference, not the size of a team's market.

3. The salary cap is meant to promote competition in the leagues that have it. It prevents teams from taking advantage of the money available to it due simply to being based in a larger market.

4. In leagues with a revenue sharing agreement, teams split the TV contract evenly, again offsetting any advantage a team may gain due simply to being based in a larger market.

5. The value of a team is based entirely on winning. Some teams like the Yankees, Cardinals, and Dodgers have won so much over the years that even if they hit a period where the team is playing poorly over many seasons, the team maintains its value. Newer teams (like the Rockies) must win to make money, though. There's simply nothing else on which to judge the organization.

The only team sport that doesn't have a cap or revenue sharing is Baseball, and I think it'd do well to institute one. The movie Moneyball illustrates the situation well.

1. I wasn't focusing on bringing more talents into the league. I was talking about the distribution of the talent among teams.

2. Draft system awards failure, making bad teams not as bad. It also means you can be a cheapo on free agents and still get good talents, while it blocks teams that are willing to spend a mean to invest.

3. The salary cap is a mean to make the spending predictable and controllable. Great thing to have from a business point of view.

4. Yeah, and a mean to ensure that even a horrible run franchise that alienates fans with no star power would have guaranteed income.

5. In which way is the team value depending on winning in the US? Even in NFL, the most socialist league, Cowboys and Redskins have been at the top of the valuation and income list for a long time.

Moneyball said nothing about cap and revenue sharing helping baseball?


Overall, it's just a fact that American professional sports owners are generally making tons of money, while European professional sports owners way less so. American owners have done installed a lot of rules that are sold as competitive balance and league stability measures, but are more about them making money.

There is no competitive balance and league stability in American college sports, but fans aren't enjoying those less.

[Vinny P.]

Originally Posted by Skipaway

There is no competitive balance and league stability in American college sports, but fans aren't enjoying those less.

Not QUITE true. There is at least one "competitive balance and league stability" rule in college sports: Athletic scholarship rules. Each college is given only a certain amount of full-ride scholarships.

Not a real big deal, but still...

(Also, most college sports lose money. The only sport that really makes money is football. Basketball makes some profit, but nothing like football. Baseball and hockey generally loses money.)

[dudeosu]

Originally Posted by Postman

The subtitle to the book...

Is there anyone on this board who hasn't read Moneyball?

[rudel.dietrich]

Originally Posted by Postman

The subtitle to the book, "Moneyball: The Art of Winning an Unfair Game", refers directly to what I'm talking about.

"Its focus is the team's analytical, evidence-based, sabermetric approach to assembling a competitive baseball team, despite Oakland's disadvantaged revenue situation." (Moneyball - Wikipedia, the free encyclopedia)

It's the story of how Billy Beane took a small market team that couldn't afford to keep its stars and built a contender out of the scraps left by big market teams.

What do you think it's about?

The main idea of the book is how there are inefficiencies in the system and how those efficiencies can be exploited.

The book is not about how unfair the system is and it sure isn't about how that unfairness destroys the game or makes it so that certain teams cannot win.
If anything it shows that because there are so many bad ideas and misjudgments floating around baseball that all it takes is some unconventional but logical and sound thinking to put a winning product out on the field.

Billy Beane may say in interviews that he wants a salary cap but I think his personality is that he thrives under the current system.

[Skipaway]

Originally Posted by Postman

What do you think it's about?

I think it's not about team profits or competitive balance.

That book has nothing to do with the topic being discussed. That book is all about how to get the best team with limited resources.

[Le Grande Orange]

Originally Posted by Postman

3. The salary cap is meant to promote competition in the leagues that have it. It prevents teams from taking advantage of the money available to it due simply to being based in a larger market.

No, that's what owners claim is what a salary cap is for. In reality the purpose of a salary cap is to artificially restrict player salaries so that clubs can make more profit. Contrary to what is often claimed that competitive balance in MLB is poor these days, in fact it's no worse than what existed in the reserve clause era, and is in some cases better.

Originally Posted by Postman

4. In leagues with a revenue sharing agreement, teams split the TV contract evenly, again offsetting any advantage a team may gain due simply to being based in a larger market.

No, revenue sharing and TV contracts are separate items.

The NHL and NBA had for a long time no revenue sharing arrangements while the NFL and MLB did. In the NFL the visiting club was entitled to 40% of the gate receipts from that game; in MLB the visiting club got a varying share of the gate receipts. In the NHL and NBA the home club kept 100% of the gate receipts from each game. (In 1996 MLB replaced its gate sharing with a more comprehensive revenue sharing system which included all locally generated revenue.)

National broadcasting contracts are split equally between the member clubs of a league but local broadcasting contracts are not. As of 2006 in MLB national media amounted to $935 million while local media contracts amounted to $837 million—in other words of the total amount brought in by broadcasting 53% came from national deals and 47% from local contracts.

Originally Posted by Postman

The only team sport that doesn't have a cap or revenue sharing is Baseball, and I think it'd do well to institute one.

And yet MLB is second only to the NFL in total revenue, and is more profitable than either the NBA or NHL which have salary caps. (Since the Players Association will never allow a salary cap in baseball, it's a moot issue anyway.)

[Postman]

Originally Posted by dudeosu

Is there anyone on this board who hasn't read Moneyball?

Yep, me.

[Postman]

Are you guys Americans? Just curious. The views in this thread are strikingly original (for me). The arguments are well considered and presented -- and I respect that. It's just that I hang out in American sports forums and the topic of player compensation comes up from time to time. The salary cap is generally supported. People feel the players make too much anyway.

I once had a Yankees fan taunt me about Matt Holiday eventually playing for New York, and that there was no point in rooting for the Rockies.

For the record he was wrong. The Cardinals took him and then won a World Series.

Billy Beane failed. Rich teams like Boston can use saber-metrics to equal affect.

And, after all, the A's didn't even win the Pennant, and they still haven't.

[damientheomen3]

Originally Posted by dudeosu

Is there anyone on this board who hasn't read Moneyball?

*raises hand*

Haven't seen the movie either.

[rudel.dietrich]

Originally Posted by Postman

Are you guys Americans? Just curious. The views in this thread are strikingly original (for me). The arguments are well considered and presented -- and I respect that. It's just that I hang out in American sports forums and the topic of player compensation comes up from time to time. The salary cap is generally supported. People feel the players make too much anyway.

I once had a Yankees fan taunt me about Matt Holiday eventually playing for New York, and that there was no point in rooting for the Rockies.

For the record he was wrong. The Cardinals took him and then won a World Series.

Billy Beane failed. Rich teams like Boston can use saber-metrics to equal affect.

And, after all, the A's didn't even win the Pennant, and they still haven't.

There are mostly Americans here but also a pretty large international contingent.

And who says players make too much? If you have ever watched a baseball game, bought a hat, played OOTP or anything else baseball related then you support player salaries.
In a free market society everyone makes more or less what they are worth. Athletes make they kind of money they do because it is economically possible that they can do so.


And I would not say the Billy Beane failed. He took several teams to the playoffs. That should be the goal for any organization from year to year. Just get to the playoffs.
The playoffs themselves are a crap shoot since any team can win a series which is just a string of small sample sizes. The best team does not always win a series.
Just getting in is what you should go for. The Cardinals of last year, the Marlins for two seasons. The Giants who won the superbowl. Just get yourself there.

In the last several years Beane has not faired as well. He has not drafted well and some of his trades have turned out to be busts.
But his we signed to an extension through 2019.
The owner realizes he is there best shot at winning anything and is willing to put up with some off years or off stretches.

And in some ways the thinking of baseball has caught up to Beane. .OBP is no longer completely under valued which means that he can no longer get those kinds of players on the cheap.
And if you look at the draft now you will see more college age players being drafted high. Beane can no longer load up on those players in the later rounds.

[Le Grande Orange]

Originally Posted by rudel.dietrich

And who says players make too much? If you have ever watched a baseball game, bought a hat, played OOTP or anything else baseball related then you support player salaries.
In a free market society everyone makes more or less what they are worth. Athletes make they kind of money they do because it is economically possible that they can do so.

It's worth noting too the way player salaries are distributed. Undoubtedly some folks here the fact that as of opening day 2012 the average MLB player salary was $3,439,370 and think that's what many of the players will make this season. But in fact it's only a small number of players at the who make huge salaries while the rest make considerably less.

For example, 30% of the 852 players on the 2012 opening day rosters and disabled lists—247 players—were making less than $495,000. To put it another way, the 4 highest paid players are making more combined salary than the 247 lowest paid players ($125,198,582 for the top 4 compared to $119,481,810 for the bottom 247).

[rudel.dietrich]

Originally Posted by Le Grande Orange

For example, 30% of the 852 players on the 2012 opening day rosters and disabled lists—247 players—were making less than $495,000. To put it another way, the 4 highest paid players are making more combined salary than the 247 lowest paid players ($125,198,582 for the top 4 compared to $119,481,810 for the bottom 247).

Kind of reflects society as a whole.


It also feeds back into sabermetrics and Moneyball.

Can player A give me 85% of the wins I would get with player B but I only have to pay player A 40% of what I would have to pay player B.
You then invest that money elsewhere.

It also provides us with a very clear image of how players can be valued. Bill James early on could put specific dollar values on players.
He found that certain player types were being under valued and they could provide you just as many wins or almost as many wins or in some cases even more wins but could be paid a lot less.

We understand hitting with almost absolute clarity. We have figured out pitching and we are almost there with defense. All of the information is there it just has to be used.
And it is spreading to other sports. There are some exciting developments in basketball with advanced statistics that are giving us better tools than ever to evaluate players.

Once you can figure out how to value players statistical outputs then all you have to worry with is managing their mental states and then you can start putting together winning teams and championship teams.

[Vinny P.]

Originally Posted by Postman

Are you guys Americans? Just curious. The views in this thread are strikingly original (for me). The arguments are well considered and presented -- and I respect that. It's just that I hang out in American sports forums and the topic of player compensation comes up from time to time. The salary cap is generally supported. People feel the players make too much anyway.

I once had a Yankees fan taunt me about Matt Holiday eventually playing for New York, and that there was no point in rooting for the Rockies.

For the record he was wrong. The Cardinals took him and then won a World Series.

Billy Beane failed. Rich teams like Boston can use saber-metrics to equal affect.

And, after all, the A's didn't even win the Pennant, and they still haven't.

Why is it that so many people believe that the players "make too much money?"

In the economics of sports, players are the number one key to putting a product on the shelf. They are, by far and away, the most valuable resource any franchise owns. (Remember, sports franchises are businesses, just like any other.)

Case-in-point: My family owns/operates quite a number of restaurants around my hometown. We just opened up a new dance club, where we have a bistro/cafe on the bottom floor. (4 floors of different bars above it.) We hired a new barista to create and sell the best coffee drinks in the area. In order to be successful, we had to hire the best bartenders and baristas. We also had to purchase the best coffee-making machines. I would never imagine trying to screw my employees over. They are also perfectly free to come to anyone of my family members and ask for a raise if they feel they deserve it. The request would be taken very seriously and considered carefully. More often than not, we grant them the raise. (Happy workers makes for happy workplaces, which increases efficiency and customer satisfaction. Not only that, but it's only fair.)

In other words: You have to spend money in order to be successful. You have to be successful in order to make more money.

When it comes to players and player acquisition, it is only "fair" that the players should be able to negotiate their own contracts and recieve as high a salary as possible. Afterall, what sane human being would want to see their team's owner making $200,000,000/year off the back of your labor, and you only get to see between 1 and 10% of that money in return? Then be criticized for "making too much money."

Funny, how a lot of people who criticize athlete salaries, are spending $75 (or more)/month for television service, whether your a sports fan or not, some of that money goes directly to sports teams, the owners of such being BILLIONAIRES. And yet, the athletes are criticized for making a few million/year.

I dunno. I just find it kinda dumb. Baseball doesn't need a salary cap. It's doing very well without one.

[Postman]

Originally Posted by rudel.dietrich

There are mostly Americans here but also a pretty large international contingent.

Neat, that should be interesting. After decades of talking Baseball, I find it refreshing to hear some new arguments.

Originally Posted by rudel.dietrich

And who says players make too much? If you have ever watched a baseball game, bought a hat, played OOTP or anything else baseball related then you support player salaries.

Oh, I definitely support league revenues, if that's what you mean. It's the cut the players take that most people object to.

But your original question had me thinking. The belief is so widespread in my experience that I've never questioned it. The comments I've heard are typically in this vein:

These are grown men playing a boy's game, for Christ's sake! They're making millions of dollars, and they are threatening the cancellation of the season because they want more?

There's a definite feeling that ball players don't really earn their millions and should be happy with what they get.

With Baseball I think it's felt more acutely than in other sports because it's always been a blue collar game, played by blue collar guys. Since the advent of free agency, that hasn't been as true, and I think American fans resent it.

That said, the argument isn't being made as vociferously as I remember in my youth.

Originally Posted by rudel.dietrich

In a free market society everyone makes more or less what they are worth. Athletes make they kind of money they do because it is economically possible that they can do so.

True, without a doubt, but Baseball is not in the free market. It was given an exemption by Congress from such pillars of the free market as anti-trust rules. For that, Americans feel a definite ownership of the game.

Originally Posted by rudel.dietrich

And I would not say the Billy Beane failed. He took several teams to the playoffs. That should be the goal for any organization from year to year. Just get to the playoffs.

Hmm... that depends on your perspective.

Fair disclosure: last fall I was heard to tell a colleague of mine who is Padres fan that after more than four decades of following Baseball, I believe any year that your team is in contention in the fall should be considered a good year... and I believe it today.

The thing is, though, for a fan it isn't good enough to flirt with winning the World Series year after year. The team has to win it. So, when the Rox went on that tear a few seasons back and went to their first World Series, I thought it was wonderful, even after they were swept by the Sox, but I do believe that coming in second made them first among losers that season. It wasn't good enough. The Rockies organization said as much.

Think about the Braves organization. They were consistently contenders for so long (during the Glavine era), but only managed to win one title. Over all, that's disappointing.

From the business' perspective, though, there certainly is value to be gained from being a contender year in and year out.

Originally Posted by rudel.dietrich

The playoffs themselves are a crap shoot since any team can win a series which is just a string of small sample sizes. The best team does not always win a series.

Agreed, mostly. In fact I think what you consider a drawback is really the playoff system's greatest strength. American sports fans believe that winning when the season's on the line is what defines the best team, not performance over a long season. I can see merit to both arguments. Historically, Baseball has been the American team sport that most resisted the introduction of a post-season tournament. Heck, I still think it's sacrilege to have a wildcard in Baseball. Doesn't mean I don't watch it. ; )

From a fan's perspective, a post season tournament is very exciting, so much so that even American men's recreational leagues (for softball, hockey, soccer, etc.) which are played predominantly by sports fans feature a post season tournament. It's really fun. I love it.

Originally Posted by rudel.dietrich

The owner realizes he is there best shot at winning anything and is willing to put up with some off years or off stretches.

Yes, and correctly, I think. Since the A's have no money, Beane is the best option.

I'd like the playing field evened out.

[Postman]

Originally Posted by Skipaway

I think it's not about team profits or competitive balance.

That book has nothing to do with the topic being discussed. That book is all about how to get the best team with limited resources.

Oh, please, you're just arguing semantics. Moneyball is all about trying to achieve competitive balance in a game that's unfairly skewed toward teams from large markets.

What Beane did is seen amongst the Baseball fans with whom I've come into contact as a valiant, ingenious effort to overcome the bias built into Baseball which ultimately failed... and in so doing proves the need for a cap.