Tuesday, August 2, 2011

Rays Stadium Saga is MLB's Problem

Yesterday, I wrote how the Rays' Stadium Saga is like the U.S. debt ceiling debate. Except, of course, MLB could keep going down the same path and remain profitable.

But the issue deserves more attention because despite all the noise about small-market teams losing money, MLB has had an anti-trust exemption for almost 90 years and, in many ways, functions as a single business, not 30 individual businesses (see how they're trying to rescue the Dodgers).

With $7B in revenue last year, there's plenty of profit in MLB to go around. And although revenue sharing is considered by some a crutch and a problem, it's neither; revenue sharing is a symptom of the league allowing teams to spend dollars proportional to their cities' size (because its more profitable that way).

As much as the Steinbrenners and Lucchino/Werner/Henry clans may want revenue sharing reduced, it will remain an important part of the MLB business model as long as salaries continue to grow (which they will). But since the big clubs profit more if the smaller clubs profit more, a stadium in Tampa Bay is so important to everyone in the league.

A good point is raised by Maury Brown of The Biz of Baseball, who says MLB owners already padded their pockets on the backs of Tampa Bay:
St. Pete built the then-Florida Suncoast Dome in 1986 to try and bring MLB to the market. When it was completed in 1990, it, and Tampa Bay-St. Pete became a lever to get new stadiums around the league built. Whether it was the White Sox, Giants, or Mariners, all used relocation to the new Dome as a way to get shiny ballparks built.
The stadium debate isn't about the Rays - it's about the profits of all 30 MLB clubs. If simply building a new stadium was the instant fix some people suggest, MLB would step in to help close the $200 million funding gap Tampa Bay faces in building a $500-$600 million stadium. But it's not. Unfortunately, the stadium debate is much like the national debt debate and there's no instant fix.

The problem in Tampa Bay isn't just about the fans or the market - it's about MLB. It allowed its business expenses to skyrocket, and now it wants you to help fix it.

No comments:

Post a Comment

Post a Comment