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March 7, 2001

The Daily Prospectus

Contraction Action

by Christina Kahrl

A reader recently wrote in with a strong opinion about the contraction of Major League Baseball:

 

Lately, I have heard some talk of contraction. I think that it would be a great idea. It is quite obvious that talent is too widespread. A smaller, more refined talent base for the league would put truly good players at less of a premium, and reduce the number of ridiculous contracts. The league should subtract two teams (any combination of Milwaukee, Minnesota, Montreal, or Tampa Bay) and pool their players into a "Contraction Draft." I don't think that moving these drowning franchises will solve their problems, but eliminating them would benefit the entire league.

I am curious about your thoughts, and the chances of this happening. In fact, I wonder if baseball will ever grow some balls and make the changes that are necessary to accelerate the game.

Tom Stocks

There's been a lot of nonsense written about the subject of contraction already, so I can't blame you for taking an interest in the subject. Speculating about it can be fun, up until the point that you remember it probably involves crushing the love of the game for a few generations of fans in two unlucky cities.

Sure, some people think that the game needs fixing, and some have reasons to latch on the ideas currently in circulation. But so far, the commentary on contraction has merely been a sign that late February and early March are tough times for a lot of professional writers. They're scrambling for something to write about, and seem only too ready to toe the owners' line on this subject.

Speculation on this imaginary "solution" probably hit a flagrantly unworkable low with the recent recommendations by the Chicago Tribune's Paul Sullivan that baseball contract by three teams. Under his plan, one team would be idle every day (and more importantly, every weekend). Sullivan then suggested that three franchises split their home schedules between two existing markets. What would that mean, other than that all the concerned markets must be viable after all, if none of them are to be abandoned?

However, even if contraction is little more than a cat's paw in negotiations with the union (and what better way to prepare yourself for some big-league poker playing than to invent your own chips out of thin air?), it raises several issues that are critical to the baseball industry as a whole.

Is contraction necessary for financial reasons?

Let's say we cut a pair of teams out of the herd. I don't see how the absence of two potential bidders would somehow lower the stakes anted up for Alex Rodriguez. It isn't as if the Twins or the Expos were gamely plugging away, clogging Scott Boras's phone lines with their offers for the game's best player. The Rangers spent the money they did because Tom Hicks frankly believes he had it to spend, and if you're going to invest in a ten-year contract, there's no one more deserving of the risk involved than A-Rod. Would two fewer teams make Cam Bonifay spend less on Pat Meares or Derek Bell? Bonifay was bidding against himself to start with and still managed to lose.

Theoretically, I suppose cutting 50 major-league jobs might somehow create some impetus for a drop in player salaries, just based on the old saw about supply and demand. At least notionally, you'd have the same number of players fighting for 50 fewer roster spots. I don't see the idea working out anywhere beyond the chalk board. Just as we didn't see pork prices drop when the pork market was glutted (and if you're like me, a good, cheap pork chop is a desirable thing), I doubt we'll live to see the day where player salaries go down because of an increased supply. Global scouting hasn't lowered team player-development expenses, even though MLB draws from a larger population of amateur talent than ever before.

The only reason to expect player salaries to drop after a contraction is just as viable a notion today as it would be if there were only 28 teams: more teams appreciating that they don't have to pay Ron Coomer much when they can spend closer to the minimum to employ Mario Valdez or Morgan Burkhart. But even that would merely drop the median salary, while doing very little to affect the "ridiculous" contracts, and doing nothing to offset the costs of spending as much as half a billion dollars to buy out a pair of team owners.

Is contraction necessary because of the long-lamented shortage of talent?

If there is a shortage of talent, I don't see much evidence for it, because there are still a huge number of players stranded in the minors who can play at the major-league level. It's fashionable to complain about expansion pitching, but it took expansion to give pitchers like Rick Reed, Gil Heredia, Steve Parris, Omar Daal, Jose Lima, Bryan Rekar, Rick White or Jeff Tam the second chances that they deserved. I fail to see how regular playing time for Joe Girardi and Mike Matheny proves a shortage of catchers. Their employers are ecstatic about overpaying them while people of equal merit, from Tom Wilson to Creighton Gubanich, have wasted most of their careers waiting for calls that never came.

Expansion did not create opportunities for guys like Scott McClain or Billy McMillon, not when teams were determined to overpay and retain guys like Charlie Hayes and Danny Tartabull. With players being recruited from around the globe, the idea that we're suffering from a shortage of talent is pretty dubious.

Is contraction necessary because of the shortage of major-league markets?

We have a basic problem of definitions here, because there's a bigger difference among ownerships than there is among individual markets. The ten smallest markets in baseball, from 21 through 30, are Minneapolis/St. Paul, Cincinnati, Phoenix, Oakland, Denver, St. Louis, Pittsburgh, San Diego, Milwaukee, and Kansas City. Two teams on that list get brought up as franchises that might need shutting down, but neither of them are in the bottom pair, and nobody's suggesting that Denver or St. Louis should lose their team.

In 2000, a year in which the Brewers and Royals supposedly operated without "faith and hope," they both outdrew teams in significantly larger markets like Tampa Bay or Philadelphia. The Phillies spend a moderate amount of money--and even less thought--on their payroll, but play in the sixth-largest market in the country. They field a loser year after year. Their attendance reflects that, not the viability of Philadelphia as a major-league baseball market.

When contraction gets bandied about, what markets come up? Certainly not the two smallest, Kansas City and Milwaukee. The Royals are now owned by a very wealthy guy, Wal-Mart honcho David Glass. The good people of Milwaukee (most of southeastern Wisconsin, actually) politely rolled over and paid for a new stadium, with a roof it doesn't need, when menaced with an implausible relocation threat. "Local revenue streams" are today's buzzword for what teams need to survive, yet while neither Kansas City nor Milwaukee do especially well on that front, neither of them seem to be in any danger of being snuffed.

If you use a blend of criteria for which teams to have disappeared, you'd probably come up with the Devil Rays (incompetent ownership, bad stadium, ill-defined local support, dubious local revenue stream) and the Expos (ditto), but both teams are relatively new investments for Vince Naimoli and Jeff Loria. You're going to try to buy out men who just sunk tons of money into buying into the right to make tons of money, on the premise that somebody has to go? That isn't going to happen.

The teams that do come up over and over again in this "debate" are in Minnesota, Oakland and Montreal, but what do those teams have in common? The desire for new stadia, and local-flavored reasons for why they can't get them as easily as other teams did during the 1990s. Montreal is probably in an impossible market considering the cultural differences, but Oakland's stadium charade is entirely the product of Bud Selig's goof in granting Peter Magowan most of urban California north of Los Angeles as "Giants territory."

Given the Twin Cities' past record of supporting a good team, is Minneapolis/St. Paul a bad market, or is it merely owned by a fabulously wealthy man who won't invest money in his product, and who had his bluff called when he tried to bully Minnesota voters into building one for him? If the Twins were wiped out, a team like the Royals or the Athletics or somebody would move to the Twin Cities in short order, and by virtue of not being Carl Pohlad, would probably have a better chance of getting some sympathy from the state legislature and Governor Ventura. If you put the Athletics in the Twin Cities, they'd draw more than two million screaming, hanky-waving fans in an indoor garage, and just try to convince me local television wouldn't become lucrative after a couple of years of that. You can wipe out the Athletics, but the Bay Area is only going to get bigger, and the chances of baseball fans being able to reach Pac Bell Park from San Jose in less than six hours (round trip) that much more unlikely.

Considering baseball's strong attendance figures and lucrative media contracts, the absence of a talent shortage, and the unlikelihood that scratching two teams would affect player salaries in a way that would make an appreciable difference, at the worst we might want to consider slight geographic reshuffling to give every team the best possible market to exploit. Moving the Expos to Northern Virginia is the most dramatic move with a chance of occurring. By itself, Washington, D.C. is the biggest market without a team, and if you combine it with Baltimore, it's the biggest market with only one team. The stumbling block on this front is the certain knowledge that Pete Angelos is a better lawyer sitting on a flock of better lawyers than anyone MLB has hired to defend itself in the past.

Comprehensive revenue sharing would be a way to make franchise relocations palatable, because the San Jose Athletics or Virginia Burgesses will end up kicking more into the pot than the current Oakland or Montreal offerings. However, geographic optimization makes sense with or without a more comprehensive form of revenue sharing. If the owners wish to continue to pretend that they are thirty independent businesses loosely allied courtesy of their antitrust exemption, then individual owners should have the freedom to move to a market where they have the best chance of creating a viable business. If owners create some improved form of revenue sharing, then the industry as a whole has an incentive to let franchises move to the best possible locations.

All of this is pretty far removed from the field of play, where my primary interests lay. I think that's the only reason I give contraction a second thought at all, because what fan doesn't close his or her eyes and come up with equally entertaining and silly scenarios that would magically put Vladimir Guerrero in the home team's doubleknits? Maybe fantasy baseball has spoiled too many of us, because that kind of wish fulfillment is so readily attainable in the land of make-believe. Daydreams aside, I know Guerrero somehow turning up in Oakland's green and gold would probably violate a few arms control agreements. What I'd recommend to fans is what I'd recommend to Jerry McMorris for cooking up the cockamamie contraction scheme in the first place: dream on.

Chris Kahrl is an author of Baseball Prospectus. Contact him by clicking here.

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

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