Fixing the Baseball Economy

OK. Here’s my plan to fix everything. If Bud Selig is listening, he can feel free to take notes. It’s all based on television money, and it’s all fair and even. It’s great. I should point out that I don’t have any actual facts or numbers to use in support of my plan. But, heck, this isn’t the New York Times or anything. So, here we go.

The basis of my plan is this. I think the football salary cap works pretty well. Teams in Green Bay and Indy can compete with New York very easily. Much of the football salary cap is based on the money the NFL gets from television contracts. So, I think baseball should do the same. I’ll admit that I don’t really know what MLB does with the money it currently gets from its Fox or TBS contracts. Nor do I know where monies from the recently launched MLBTV channel goes. I also don’t want to do away with the regional broadcasts. One of the reasons watching Patriots games makes me want to throw up is that they’re all broadcast for the national audience. The hype and ignorance involved with every broadcast is too much to handle. I’d hate to give up my NESN coverage of Sox games. But, I don’t see why the money NESN pays for the rights to cover the games can’t go right into MLB pockets. (I know that NESN is owned by the Sox, so there may not be an actual payment to cover the games. But, there must at least be a numbers used internally for accounting purposes) How much are team’s regional contracts to cover the games? I have no idea. Can I guess? I can try.

If I remember correctly, at the end of its run, the cast of Friends was making $1 million each per episode. So, six stars for 20 episodes brings us to about $120 million that NBC was paying the stars per season. So, the revenue they brought in through ads must have been more that that, right? So, if I were paying for the rights to broadcast Friends, wouldn’t it be a contract in excess of $120 million? Now, I know that baseball games don’t get the ratings that Friends got per episode. But, if you add the ratings that Friends got for 20 episodes, and compare it to the total ratings baseball games get for 162 episodes, aren’t we in the same ballpark? (I know, clever pun) For number’s sake, could we say $100 million would be a number to use for broadcast rights to baseball games? How about if we included radio as well? Can I use $100 million for the sake of this plan? Thanks.

So, let’s say each team or television station pays MLB for the rights to regionally broadcast baseball games. Just like it does now, the rights could go to the highest bidder. (We can work out some arrangement for team-owned stations like YES or NESN. Either use some industry number to charge the team, or just let them bid along with everyone else. If FOX25 wants to pay more than NESN to broadcast the games, so be it.) Teams in major markets would bring in more money than teams in smaller markets. But, it would all go into a pool at MLB. Then, it would all be split up back to the teams to use for their salaries. So, if the total pool ended up at $3 billion, each team would get $100 million for salaries. That would be the salary floor. Every team would be required to spend that much on salaries for the year. The Pittsburgh owner wouldn’t profit from the NY television contract. So, every team starts with an equal chance. Pretty good start.

Now, what about the reward for teams doing a good job? Well, since that number was the floor, there will be a ceiling. Say we cap it at some amount higher than that floor. $20 million seems about right, either as a flat amount, or as a percentage of the floor. So, if teams want to use the money they get from other marketing or ticket sales to improve their teams, that’s great. They should be allowed to do so. But, it keeps everyone within the same $100- $120 million range of salaries. It’s the best of both worlds. The small market teams get to compete. The well-run teams get rewarded. Nobody is on baseball welfare. Plus, the system improves itself. As teams like Kansas City improve their teams using the minimum payrolls, their fans will return. This in turn increases their television bids, which increases the floor, and so on. As for the biggest hurdle…how do we get the union to buy in? Aside from the whole improving the game improves everyone argument, there’s a straight monetary argument as well. The 2008 Opening Day payrolls had the Yankees at the top with $210 million. The Marlins were at the bottom with $21.8 million (wow). In total, there was $2.6 billion in MLB payroll…or $87 million per team. This plan would put even more money into play. The alpha dogs like ARod may not make as much, but every other member of the union should have more money out there to gobble up. It’s a win-win.

Yes, I know that there is a lot more to it than that. Like I said, I don’t know how the money is split up presently, or how much TV revenue would really bring in. But, I bet there is some way that MLB could provide the $100 million I used to the teams. Whether it’s through broadcast rights, or internet revenues, or trips to Japan. I also know it’s not exactly a plan you could just start next year. There would have to be some easing in period. Maybe a Kevin Garnett-type exception for players already making too much for the caps. But, considering all that, I think this may be the start of the answer.

Anyone else have a better idea?