Friday, August 30, 2013

Fact-Checking Rays' Revenue Sharing Campaign

After a quick chat with Field of Schemes' Neil deMause this week, it seems we both came to the conclusion that some of the MLB criticisms heard at this week's Stu Sternberg/Matt Silverman/Tampa Bay Partnership discussions may be off-base.

According to the Tampa Bay Times, prominent businessman and Tampa Bay Partnership chair Chuck Sykes said Sternberg and Silverman reiterated MLB's growing frustrations with how much money they have to share with the Rays:
Sykes said it was interesting to hear that the Seattle Mariners and Cleveland Indians used to be recipients of revenue-sharing, "then over time, as they worked with their various initiatives and new stadiums, they're now a payer into the system."
That was news to our ears, and deMause wrote this morning:
According to Forbes, as of two years ago the Indians were recipients of the biggest revenue-sharing check in baseball; and since then, the team’s attendance has actually gone down. And even if somehow they’ve made a miraculous turnaround since then, it’s hard to see how this can be credited to a stadium that opened in 1994.

It looks like this is going to be the Rays’ PR strategy, though: Yeah, we’re winning ballgames, and making money, but we’re doing it with the help of this revenue-sharing program that MLB specifically set up to help low-revenue teams win ballgames and make money, and there’s no way they’re going to let that continue. To which the sensible response would be: What, so MLB thinks the Rays wouldn’t be revenue-sharing recipients if it moved them to Charlotte or something? But then, sensible responses aren’t the game that MLB is playing — nor, it would seem, is the Tampa Bay Times.
Those comments came within minutes after I posted my dissection of what seems to be MLB's silly revenue-sharing argument.  But at the very least, its comforting to know I'm not the only one who thinks the Rays' campaign to reduce Yankees/Red Sox revenue sharing isn't terribly convincing. 

After all, even if the Rays climbed out of the bottom-10 in revenue, another team would simply take its place and we'd still have the 10 richest teams cutting checks to the 10 poorest teams to preserve some semblance of parity...

23 comments:

  1. It's not the Rays fault, it's the teams that exceed the luxury tax ceilings' fault! I'm sure the Yankees, and Sox are tired of the Rays out smarting the system by using the extra revenue for funding better player development, and better farming. If the Rays had as dumb of a front office as the Royals, then this wouldn't even be a story. And who to say that the Rays don't want to become the equivalent of the Yanks or Sox, and wouldn't translate the extra revenue from a new ballpark into better players, oha yah, you would think so NO'ah (a naive Red Sux fan)...
    If your the Yanks or Sox, I think you would see the Rays stay @ the Trop, playing on welfare, because after learning the hard way, a wealthy Rays could be a World Series winning team every year opposed to a contending...
    Though I'm trying to find the "fact-checking" part of your article, unless your referring to the re-reporting of deMause's opinions...
    "the squeaky wheel gets the oil!"

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    1. B. Dufala,

      You do know that 'luxury tax' and 'revenue sharing' are 2 totally different things, when it comes to MLB, right?

      And please provide the 'evidence' that the Rays could generate Yanks or Red Sox caliber revenues if they moved to a new stadium in TB.

      Thanks

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    2. (again), "I live how everyone likes to take things out of context". I didn't mean making as much revenue as the Stanks or Sux, I meant have as great of teams, like now, but better! (again) If the Rays have the 2nd most wins in the Majors over the span of the past 1/2 decade on one of the lowest payrolls because of supposedly the lack of revenue being a "small market", then imagine translating double the revenue into double the payroll steaming possibly from a new ballpark(?)! Maybe opposed to contending every year for a WS, maybe we would win or at least go to the WS every year (like the Bostons, LAs, and NYs of the world seem to do)...

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  2. The saddest part is Noah, like I been referencing to for the past year, is with your resources and some real "investigating" you could be part of the solution, which would help "tax payers" in it's own way, oppose to being part of problem like now by assuming things...

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    1. B. Dufala,

      Thanks for clarifying that you never assume things.

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    2. lol, your right about at least 1 thing, though it's more likely of outcomes I express, I do "assume" some "things"...

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  3. The Rays are going to become the Yanks or Sox with the revenue from a new stadium? Is it going to attract an extra two million people to settle in the Tampa area?

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    1. I can't understand why everyone on this blog likes to take things out of context, though I could guess why, but I'll be mature about things...
      Where in my post did I say "the Yanks or Sox with the revenue from a new stadium?", what I said was "who's to say that the Rays don't want to become the equivalent of the Yanks or Sox, and wouldn't translate the extra revenue from a new ballpark into better players", let me translate for the slower crowd, "who says the Rays don't want to become as great of a baseball team as they can possibly be by using ALL ways of money making to do so?"
      Also, ask Pittsburgh if they need to become the size of NY or LA to be a great football team, ask Boston if they need 8 million more people to settle in the city to be a great basketball franchise, ask St. Louis if they need a bigger population to be a greater baseball town! Of course not, it takes winning, which "newsflash!", your Tampa Bay Rays have the 2nd most wins in the past 1/2 decade in the Majors with one of least amount spent on players! So again, imagine if they had double or triple the amount to spend!

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  4. You're citing the Pittsburgh Steelers as an example of why market size doesn't matter? That's because the NFL shares so much more revenue and has a salary cap. Which is why MLB is largely to blame for its own revenue "issues."

    And Dufala, you aren't really arguing the Yankees and Red Sox would prefer the Rays to stay at Tropicana Field, are you? Have you not read anything about how MLB teams are "tired of sharing revenue" with the Rays?

    http://shadowofthestadium.blogspot.com/2013/08/crazy-simplistic-thoughts-on-stadium.html

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  5. They didn't always have a salary cap in the NFL! And, if revenue played a part of Pitt's success then why don't most other teams have as great of a history (even just within the last 10 years)?! Their the 2nd most popular team in pro football in America including being sold-out for seasons, and it's not because the city needs an "EXTRA TWO MILLION PEOPLE TO SETTLE IN" Pittsburgh!
    And as for the "tongue-in-cheek" comment, of course, if it means spending more in taxes for more wins for your team in the Yanks or Sox. (though I shouldn't need to) Let me explain! If the teams in the AL East want to spend more then $178 mill, then they'll have to pay taxes to the bottom 10 teams, and if the Rays stay at the Trop, they'll likely have a small budget because of their smaller income, which will normally keep'em in the bottom 10. So if your the Yanks or Sox then you'd be glad to see the Rays stay in the Trop, pay them (considering the money is going to be spent in taxes anyways), and think of it as paying for WINS, like paying a player on the field, opposed to the Rays having a new, more lucrative "money making machine" to play at, and having the extra revenue to spend on talent to beat the Yanks or Sox yearly. See, you (Noah), and other "Nancy negatives" think just because teams like the Pirates & Marlins in our day used to simply pocket the money, opposed to spending it on players, that the Rays would do the same thing if they had the extra money, and history so far proves yinz wrong...
    Besides, "tired of sharing revenue", though it might be partly true, let's keep it real, to exploit that issue to "business leaders" in Tampa, it sounds more like a smoke-screen or a prop at the same time...

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  6. The NFL has had a salary cap preserving parity ever since the television money got so lucrative major-market teams would presumably have unfair advantages.

    And I'm not saying the Rays would necessarily pocket more money if their revenues went up...I'm saying their revenue-sharing checks would shrink, negating those gains and the effects on payroll. The real winners are the teams that would have to cut smaller checks to the Rays.

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    1. LOL, it's funny how my accurate statements are sidestepped. Also, the Yanks & Sox will have to pay the in taxes, and if it's not to the Rays, then the Rays are probably making more then the previous years even w/ the help, which would make the "real winners" be the Rays...

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    2. If the Rays make $15M more a season, then they get $15M less in revenue sharing. Overall revenues equal.

      However, the richer teams will have to share less.

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    3. My bad, your right about that, though if the Rays would make more in time with help from a new ballpark then they would playing in the Trop with a welfare check cut to them, then I would still believe the Yanks & the Sox would rather have it that way...

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    4. ---If the Rays make $15M more a season, then they get $15M less in revenue sharing. Overall revenues equal.

      That's simply untrue. Teams don't share all their revenues, only a portion of them. The calculation is rather complicated and dependent on the revenues all the other teams have, but in a static world if the Rays got $15 million more in revenues, they would get around $6 million less in revenue-sharing.

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  7. If the Rayz were in the AL central, sending checks to one of their division competitors would not be annoying to the Yanks or Sox.
    There's no way that the Rayz will ever be able to match their competitor's revenue streams and whether it's Stew or subsequent owners they will be
    looking for handouts from either taxpayers (local or tourists) or the rest of MLB.
    This is a byproduct of over expansion into marginal markets.

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  8. PJ,

    Excellent points. And the ideal world for Stu is to be getting handouts from locals AND tourists AND MLB.

    And because there are 30 or more teams in each of the 4 major leagues (MLB, NHL, NBA, NFL), the vast majority of the teams are always going to be able to say that they need to get better in order to win, and to do that they need more money from us so that they can get better players. The simple math fact is that the fair share of a championship is about once every 30 years.

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    1. (scott) Do you even follow or like sports or a certain team(s)?

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    2. B. Dufala,

      Yes I do. How about you?

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  9. Jesus, are the majority of sports fans as idiotic as B. Dufala?

    It's like they're so ridiculously ready to be ripped off that facts, common sense and budgets mean absolutely nothing. It's the same moronic thinking that led to millions of dollars being shoveled onto the Bucs and their new home: "New stadium for a bunch of billionaires and a 100th of a cent towards education? Sign me up!"

    And just look at how successful the Bucs are now! Or read about it. You can't watch it, because your public dollars are funding it, but they are sucking so bad that the team gets to pull the plug on public broadcasts.

    Hah - jokes on all of us. Except for genius sports fans, who always consider a stupid action worth repeating endlessly.
    The pro-stadium theft arguments all boil down to the usual misspelled points:
    1) The people who want to swindle money for a stadium say it's a great deal!
    2) I love sports
    3) Go Rays - something something Boston/New York Sux!
    4) Misspelling, gibberish, etc. etc.

    Christ- there's already a new attraction for people with your high-reasoning skills - http://florida.legoland.com/


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    1. LOL, really, you need to call on Jesus because you don't understand economics or progressive development? I could point out all your misunderstandings, but all I need is to point out 1, newsflash!, Hillsborough owns Raymond James, not "a bunch of billionaires". Have fun @ Legoland!

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  10. Just stumbled upon your blog Noah. Interesting articles. I haven't had the time to review them all so forgive me if I am repeating something. As of 2012 the City of St. Petersburg and Pinellis County are on the hook for just under $50m in bonds. However, the assessed tax value as of 2013 for the Trop property and adjacent properties is around $95m. What are your thoughts on why St. Pete is playing hard ball? Is it because Foster knows that St. Pete residents would rather see the $6m in bond funds go towards something else? Also, Neil deMause asked that by bringing the Rays to Tampa, population would increase by $2 million. To answer him - YES. The current Rays stadium location is not as densely populated as a Tampa region. Having the stadium adjacent to two of the most heavily trafficked highways in Florida (4 and 75) and within an hour drive of the number one tourist destination in the world would be HUGE. Just my .02. Keep up the good work.

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  11. MLB & the Rays want a new ballpark built for them, but they have to undoubtedly settle their debt to St. Pete if they break the contract early. And the value owed to St. Pete on that contract goes beyond simply what they owe on their bonds.

    When you finish paying off your 30yr mortgage, do you still have value in your home? Of course - you bought that home with the expectation it would pay dividends down the road. Just the same, St. Pete built a stadium with intentions it would provide value in baseball for 30yrs (the league and team both agreed to those terms).

    So St. Pete is playing "hard ball" to protect its financial leverage and ensure a fair payout if the Rays leave the city before 2027. The team and league don't want to have to pay, so they leverage.

    As for a Tampa location, traffic would be a huge issue. Transit could greatly help the Rays, regardless of where they play.

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