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June 19, 2002

The Daily Prospectus

The Daily Prospectus: The Owners' Rep Speaks

by Joe Sheehan

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This morning, I read an interview with owners' representative Bud Selig. The interview, conducted by The Sporting News' Dave Kindred, was disappointing because it covered exactly zero new ground. Selig merely referenced all his standard talking points, and was at no time challenged on his positions about the economic and competitive state of the game.

One of the reasons I am uncomfortable with Selig is that I do not believe he has a grasp of the economic forces at issue. I don't believe that he understands why sharing 50% of all revenue has an impact on the marginal revenue product of players. I don't believe he gets that treating all revenue the same-—whether it's generated in New York or Kansas City, whether by a new stadium or a local-television deal—-does little to affect the actual problems of differences in potential revenue among markets. I don't believe he understands that distributing revenue-sharing funds according to payroll was the huge glaring hole in the last Collective Bargaining Agreement, and paved the way for the team-execution issue he lovingly calls "contraction."

I don't think he grasps that using postseason wins as a proxy for competitive balance is misleading at best, dishonest at worst, or that the MLB way of calculating payroll for these purposes—-adding up the salaries of all players on the roster on August 31—-is also deceptive. I don't think Selig gets a lot of the issues that he absolutely needs to get in order to be a part of the discussion.

Just once, I would like to see an interview in which Selig was forced to demonstrate a grasp of these topics, and the many other issues that face the game. I would rather believe that he understands all of these things, yet promotes a line of thought that is self-serving because he knows that's the best path to the kind of agreement that he so desperately wants, an NFL-style CBA that limits labor costs, guarantees every team a profit regardless of performance and and has no chance of coming to fruition without the breaking of the union.

To be unnecessarily pithy, I want to believe that Selig is evil, rather than stupid. Evil can be fixed much more easily. Having an owners' representative who is aggressively unaware of the impact of his actions is a lot more dangerous than one who knows what he's doing. Selig, to me, seems to truly believe what he's saying, and that scares me, because true believers are the hardest to convert.

The only new theme I picked up from this interview was Selig's evaluation of the sale of the Boston Red Sox, a $700 million transaction:

 

"It's the Red Sox—one of the great franchises in sports.

But just think about that. The net worth there is $350 million; the land and the ballpark are worth $80 million to $100 million. So you're talking about a team worth $200 million to $250 million."

That's the revisionist history now? The Red Sox are worth $200 to $250 million? Nice.

I pretty strongly disagree with Selig's use of franchise values as a proxy for the health of a league as well. Franchise values are higher for NFL teams than they are for MLB teams in large part because the NFL broke its union in 1987 through the use of replacement players, and now has an industry-wide agreement to cap spending on labor. Selig has already tried this once and failed, but it seems clear that he's on a similar path as he was in 1994-95, trying to force a system down the players' throats in an effort to lower labor costs and raise franchise values.

If Selig wants to point to franchise values as the barometer for the health of a league, doesn't that illustrate that his primary goal, and primary concern, is the pockets of his fellow owners? There's no other reason to want an NFL-style system, not when there are other solutions—-split-pool revenue sharing, stadium-development funds, recruitment of motivated ownership groups—-that would have a greater impact on the health of the game as a whole and be more palatable to the union.

The NFL system is great for owners of NFL teams. That tells me nothing about whether the league itself is better than MLB. Selig's words and actions make it clear that he is not the commissioner of baseball, but merely the owners' representative to the press and public. 

Joe Sheehan is an author of Baseball Prospectus. 
Click here to see Joe's other articles. You can contact Joe by clicking here

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