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One fan's take on why we are where we are


The Folklegend
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In light of all the arguments over whether Loria, the fans, the Miami/Florida politicos, or Bea Arthur is responsible for where the Marlins are financially, MLB has gotten off pretty cheap. A few have asked that Bud Selig step in and help procure MLB funding for our park. Most have ignored that the Marlins are a reflection of the larger problem with the structure and organization of MLB.

 

We aren't the first team to be in this situation. It was Montreal. It was San Francisco. It was Minnesota. It is Kansas City. And so on. We won't be the last team to be in this situation. The root cause of so many different franchises going through hardships while others wallow in revenue is that MLB continues to act as if it is a free market of competing teams when it is not. It's a cartel.

 

Yes, yes, players can go from team to team, but the structure of all professional sports leagues is a cartel in nature. You can't start a baseball team and join the league. You can't leave without being contracted by the other members or selling to a new owner who has to be approved by the other owners. The league (cartel) controls entry and exit from the market. They establish league minimum salaries. They play an agreed upon number of games with a centrally determined schedule. They collectively market the league. These are all the hallmarks of a cartel.

 

Why don't they behave like a cartel? In cartel theory, the cartel will last as long as the members who comprise it subvert their individual interests to some degree in order to maintain the strength of the cartel. Cartels break up when one member begins to undercut the cartel in order to increase its own standing (Hi, Mr Steinbrenner!). Individually, companies have to shoulder the risk of competing in the market place. They can make more profit by being more efficient and drive everyone else out. This inherently cannot happen with sports because you need at least two teams to play a game. If you become a monopoly as a sports team, you go out of business because you have no one to play. On the flip side, individually you can also be run out of business. Recognizing that neither extreme is in their best interests, sports teams forego that profit at the top end of the scale for minimizing the risk of loss on the other.

 

Baseball operates too loosely allowing some teams to form their own television stations to generate revenue while leaving others in financial straits like the Marlins. You have teams with public funding of new stadiums (San Diego) and others fully funding their own (San Francisco) in the same state!

 

The Players' Union plays a big part in this. They have never understood the nature of the market, and they continue to push for a minority of teams to hand out big salaries while most teams can't. The players on the majority of teams suffer or await they're payday from a deep-pocketed team. If the players were to work with MLB to make sure MLB was stronger, the benefit would be to all teams and all players.

 

The owners are the other side of this. They don't act like a cartel and are content to put each other out of business. This is shortsighted in that it makes MLB look like a second rate product. The labor agreement and the strength of the players' union prevent them from instituting a salary cap, but the fact they can't agree on total revenue sharing bespeaks where their intentions lie. The Yankees could care less if the Marlins go under. That just means one less team to compete with. They fail to understand that by strengthening every team in MLB, the league as a whole will be more competitive. This in turn will fuel more revenues with the potential that individual teams will surpass what they could have made on their own. At that point it comes to down to simple management of the team as to the team's success not who can outspend the others.

 

Contrast the MLB to the dominant sports league, the NFL. The NFL fundamentally gets it. Every team through wise personnel decisions and competent coaching has a shot at the Super Bowl. First and foremost the owners' concern is the league. It's all about the health of the NFL. They understand that a healthy NFL is good for their bottom line. Wellington Mara, recently deceased owner of the NY Giants, was visionary in realizing that revenue sharing was not only required to keep teams like Green Bay in business, but that it was better in the long-run for the stability of the NFL itself. When's the last time you heard an NFL team be suggested for contraction? Sell off all their players because they can't afford them? Have serious labor unrest? Most arguments around the NFL are why did player A do that, or why did coach B call that play. The focus is the game on the field. Baseball too often devolves into labor disputes, stadium issues, franchise stability: all things off the field.

 

Contrast the MLBPA to the NFLPA. MLB players are seen by many as selfish, greedy, and opportunistic. NFL players aren't much different, but they're not perceived this way because of things like the United Way campaign. They have bought into the idea that the league is what matters, and they're raking in the money doing so.

 

Maybe it's a function of the NFL being much more team-oriented than MLB. You have nine players on a baseball team, but it's just one guy at the plate. I don't know. What I do know is that the NFL has surpassed MLB in popularity and financial success. It's past time for MLB to start becoming more team-oriented as an organization and to reclaim its status as our national pastime.

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the biggest difference is the NFL has an enormous TV contract that all teams share in equally, the only local media outlet is the radio services. They have a salary cap and a salary floor. They have non guaranteed contracts, so the players have nothing handed to them, and there is fluidity should a player not live up to his contract dollars. The league realizes that they are only as strong as the weakest link - that is why teams suck because they have bad management, not because the NY Giants are working on a different cash flow system that the Arizona Cardinals.

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the biggest difference is the NFL has an enormous TV contract that all teams share in equally, the only local media outlet is the radio services. They have a salary cap and a salary floor. They have non guaranteed contracts, so the players have nothing handed to them, and there is fluidity should a player not live up to his contract dollars. The league realizes that they are only as strong as the weakest link - that is why teams suck because they have bad management, not because the NY Giants are working on a different cash flow system that the Arizona Cardinals.

 

That's the whole point. The NFL acts collectively and they have buy-in from the players. You don't have each team on a different local channel. There is a national agreement by the league.

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the biggest difference is the NFL has an enormous TV contract that all teams share in equally, the only local media outlet is the radio services. They have a salary cap and a salary floor. They have non guaranteed contracts, so the players have nothing handed to them, and there is fluidity should a player not live up to his contract dollars. The league realizes that they are only as strong as the weakest link - that is why teams suck because they have bad management, not because the NY Giants are working on a different cash flow system that the Arizona Cardinals.

 

That's the whole point. The NFL acts collectively and they have buy-in from the players. You don't have each team on a different local channel. There is a national agreement by the league.

 

the nfl also only has games once a week for each team making it a tad easier for a national agreement with stations....

 

this would be impossible in the nba, nhl nad mlb.

 

in a way at least on the television agreements you are comparing apples to oranges.

 

I have been in favor of a salary floor since 1994 though, but that isnt going to happen anytime soon.

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