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Talk talk

David Pinto, my blogfather, and one of the pre-eminent baseball writers, posed a couple of interesting questions as baseball approaches the new labor agreement:

…. What I’d like to explore this year is, now that the two sides seem to be cooperating, what can they do to make the game better. If a group were to sit down and design a league from scratch, how would you do it?

Teams are competitors, but they are also partners. The labor pool (players) is small and revenues big, so how do you justly compensate players and owners?

Should development of talent be independent of the major league, or should teams develop their own players?

What’s the the optimum number of teams in a divisions, and how much should leagues and divisions interact?

I'm gonna take a quick shot at just one

of these. The question of revenue sharing is perhaps the most compelling issue the leagues can consider. The Yankees are in a league by themselves when it comes to revenue. Yes, there are some other teams that have very impressive levels of income, but the Yankees are just so far ahead that it seems like there has to come a point when the issue just has to be confronted. For instance, they just signed Rafeal Soriano to a contract (three years, $35 million) that makes him a top-ten paid reliever, coming off a season in which he had something like 46 saves. In addition to what they are paying him, he also will cost the team something like $17 million over the next three years in revenue sharing and luxury taxes. They did this so he could be a set-up man for Mariano, who also will make something like $15 million per season. There is no question that the Yankees are the only team that could do something like this.

Several years ago Bill James posited that the one way the teams in baseball could make a significant impact into the Yankees massive advantage would be to force the Yankees to share the revenue for every home game equally. In other words, if the Yankees play a game in Kansas City, the amount of money the Royals gain is probably something like 15 or 20% of what the Yankees earn when the teams play in NY. If the teams split the local revenue equally, it would go a long way towards balancing out the revenue discrepancy. I'm paraphrasing, and I'll look up the piece (I think it's in the Historical Baseball Abstract), and give you a more complete version, but the idea is that the Yankees have a huge advantage in local revenue, but it doesn't have to be that way. As it stands, they keep a huge percentage of the money generated in these home games, (just like every team); but since the Yankees local revenue stream is so massive, they could play all of their road games for free and still generate twice as much as any other team.

James' point is that the other teams in the league have the power to say, you don't have a game if we're not there. We are half of the attraction. Share the local revenue equally.

Think about it. Am I missing something?

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All commentary is the opinion of John J Perricone unless otherwise noted.
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