Tuesday, July 21, 2015

Don't Hate the Players, Hate the Game

John Romano wrote in this morning's Times the Rays' have plenty of fans; they're just predominately choosing to watch on TV.  This blog has been writing since 2010 the Rays stand to make a huge windfall on TV money in 2017 (or sooner if they would just negotiate a mutually-beneficial extension).

But it begs the question - why didn't the Rays forcefully negotiate its way out of its less-than-ideal contract early for the sake of the team's bottom line and longevity? 

While we're at it, why didn't the team ask Grant Balfour ($7.5M salary this year) for the same favor?

The Rays have no problem asking the City of St. Petersburg for similar concessions...

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  1. Connect the dots.

    Why renegotiate a TV deal when attendances are dropping and no lights at the end of the tunnel to look elsewhere in the region.

    Brian Auld did say that Rays are not convinced that the TB region is suitable. Even if the official statement is 'we believe in the market and the region', this is a political correctness statement. Not much.

    Mass transportation is a major issue (that is driving up the TV ratings) in the region. And no integrated plan with a stadium in the works.

    Sternberg is giving the region a last chance over the next few years, but expect a plan B if no tangible actions/decisions are taken by the council members (of the TB region), the business community and the general public.

    A sport team is an asset that must have community involvement as well as a common ground for discussions, not just a negotiation/confrontation approach with a mix of 'I don't really care'.

  2. Obviously, the Rays will stay in the Tampa Market. I've always been curious about something though, the owners of MLB teams "cry poor" when it comes to contributing funds to stadiums, but they don't cry so much when it comes to giving huge sums of money to players.

  3. Nobody will give the Rays a better TV deal until the attendance improves and the stadium situation is resolved.

  4. Open the books of any MLB team sniffing at the coffers of America's cities. It should be a condition of any financing deal and would be part of the standard due diligence process. The Rays management--of all people--understand that underwriting lenders require all kinds of disclosures. When a team is asking for money, it should hand over the trailing 10 years of financials. That very, very basic due diligence is how banks avoid making bad loans. And that very, very basic due diligence is how cities should avoid making bad decisions and overpaying (or at least the cities could protect themselves otherwise in the deal terms, similar to banks requiring higher interest rates to compensate for the additional risk of lending to a borrower whose creditworthiness is less than ideal). The analogy isn't perfect, because a city isn't *investing* and pricing risk, so much as just handing cash to someone. Regardless, it is reasonable to demand to know whether your business "partner" who is crying poor is actually poor.

    I mean, just look at the heist that the Milwaukee Bucks pulled off with the generous help of Governor Scott Walker.

  5. John Romano states in his column:
    "Perhaps it's not an issue of whether Tampa Bay cares about the Rays, but rather a question of whether Tampa Bay can afford the Rays.
    When you combine a community on the low end of the household income scale with a sport that typically needs to sell 2 million tickets a year, you have a challenge."
    I think John has captured the essence of the Rays' issue quite nicely in the above two sentences.

    But I think rather than 'whether Tampa Bay can afford the Rays' it should be phrased, putting stadium contractual considerations aside for the moment, 'Does MLB want to continue to have baseball in Tampa Bay?'

    Tampa Bay is the 13th largest TV market in the U.S., just 8,000 households behind 11th place Phoenix and 12th place Detroit. Would MLB be better off abandoning this market considering that TV revenues are on the serious upswing and are becoming increasingly a larger share of team and MLB revenues? If the answer is yes, then MLB and the Rays have to figure out how to extricate themselves from the Trop agreement.

    If the answer is no, than the Rays have to either live with 15,000 per game, or spend a lot of money to build a new stadium, that may or may not draw 10,000 more per game to get annual attendance near the 2 million mark. Per Brian Auld, president of the Rays, drawing 10,000 more fans per game would add a maximum of $20 million per year in revenues, that, theoretically could go towards increasing player payroll. The cost of a new $600 million stadium is $34 million per year for 30 years at 4% interest rate. Obviously, it makes no economic sense for the Rays to build a new stadium without help. If MLB is on-board that a new stadium for the Rays is the right thing to do, they should provide that help, not the taxpayers.

    The taxpayers should no longer have to subsidize MLB because of their flawed business model that has two major defects:
    1. Not enough revenue sharing from the richest to the poorest teams
    2. Players being paid much more than they contribute to the bottom line of their teams.
    The reason that team owners can and do overpay players is because they are spineless and stupid when negotiating with players’ agents like Scott Boras and can afford to be, because on the other hand, local politicians are spineless when dealing with the owners regarding public funding of stadiums. The average team payroll for 2015 will be $106 million (25 x $4.25 million). If average payroll was $72 million ($2.88 million per player), than the average franchise would have the funds ($34 million per year) to pay for 100% of the $600 million new stadium cost. How easy would it be to bring payroll expenses back to planet earth by avoiding stupid contracts such as those for Alex Rodriguez, Josh Hamilton, Albert Pujols, Clayton Kershaw, Miguel Cabrera, Giancarlo Stanton, Robinson Cano, Joey Votto, Ryan Braun, Prince Fielder, Max Scherzer, Joe Mauer, Mark Teixeira, Jon Lester, Jacoby Ellsbury, Carl Crawford, Justin Verlander, Melvin (formerly BJ) Upton, etc.? Need I list more?

    So does MLB want to be an oligopoly with the present 30 team configuration, do they want to expand, or do they want to contract? MLB should think long and hard before abandoning the 13th largest TV market in the country.

    1. Agree strongly. +1.

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