Thursday, May 2, 2013

Should We Even Acknowledge Individual Franchise's Profits/Losses?

Yesterday, we looked at a Slate piece that implied the NBA will continue to use Seattle to blackmail other cities into a variety of concessions (usually arena-related).  But there's another lesson to be learned from the league's rejection of the Kings relocation.

The NBA is basically asserting it is a single business controlling where its 30 franchises operate.  All four of the major leagues have argued this at some point: that they are each one business with 30-some-odd locations, rather than 30+ businesses each that make up a coalition. 

And while the Supreme Court ruled against the NFL's single-entity monopoly in American Needle, Inc. v. NFL), the leagues still essentially operate as monopolies.  It's not like a motivated businessperson could simply start up his/her own big-league franchise and enter the market.

Furthermore, MLB - unlike the NFL, NBA, or NHL - has legal protection as a monopoly in the form of its sacred antitrust exemption.  MLB is a single entity.  Which, should lead us to ask one very important question:

If MLB is a single business and it's raking in record revenues, why should we have sympathy for any individual franchise's finances?  The Rays operate within the MLB business model and their diminutive payroll is a business choice MLB made.

Now, before you start blowing up the comments section, realize we can still have sympathy for the hard-working Rays players who spend half their time in a half-empty dome. 

But the nature of the stadium discussion in Tampa Bay (and elsewhere) shouldn't be about whether the team needs to relocate to survive;  it really is only about whether MLB thinks it could bolster its bottom line by relocating the franchise to another market.

In that context, relocation (and even moreso, contraction) doesn't make a lot of sense for MLB.  And for local municipalities, it may make even less sense to spend huge chunks of public revenue on a profitable corporation that brings in nearly $8 billion annually.

5 comments:

  1. Noah,

    Regarding your comment:
    "Now, before you start blowing up the comments section, realize we can still have sympathy for the hard-working Rays players who spend half their time in a half-empty dome."
    Granted the players are hard working, but they are extremely well paid. Whether they play to a full house or a totally empty stadium makes no difference to their paycheck. I see no need to extend them sympathy. A basic reality of Pro Sports today is that the players are extremely well paid because the owners of the teams, in many cases, are not paying for anywhere near full cost of the stadiums. It's interesting that the owners always play hardball with the municipalities, almost always getting all the concessions they want, at the expense of the taxpayers. On the other hand, they roll-over when negotiating contracts for players - best example right now is the $86 million still owed Alex Rodriguez (after 2013) who has already made $353 million to date. If NY Yankees ownership/management would have had to pay for the full cost of the new Yankee Stadium, maybe they would have been a little less dumb on negotiating A-Rod's current 10 year contract.

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    1. I too would trade my problems for theirs, Scott. Sympathy is all relative, and I'd expect they'd have some too for the plight of the common man (or woman) in Florida.

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  2. St. Pete or Tampa dose not deserve to have a mlb team.

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  3. While I agree that a lot of regions contribute too much money towards stadiums, I think it distracts from the overall argument about the Rays needing a new stadium. Now I know Noah seems to hold the opinion that since the Rays draw as well as last place teams with horrible April weather, the Marlins, and some big market teams from the 80s, that means the Rays attendance is just fine. I tend to disagree with that sentiment.

    I do think the Rays and MLB would be better served by a new stadium and thinking otherwise seems foolish to me. However, I don't think it should be up to the city (St. Pete or Tampa) to provide a new stadium. There's a lot of things to discuss before even talking about how the stadium would be paid for. Ie. when will the Rays be allowed to talk about a new stadium.

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  4. LOL, "Naive Noah"! Moving to Seattle ISN'T blackmail for the most part, it's a real possibility...
    "shouldn't be about whether the team needs to relocate to survive; it really is only about whether MLB thinks it could bolster its bottom line by relocating the franchise to another market.", it's BOTH; 1 situation exist because of the other...
    Beazy

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