The Price of Baseball Players
Sure, the price of ballplayers is going up, way up, judging from the Red Sox bid for Daisuke Matsuzaka. It's going so far up, some say, that the so-called small market teams cannot compete for free agents, despite generous revenue sharing. And that's bad, at least according to this column on the Sports Illustrated web site.
Do you ever get tired of this constant whining and worrying over small-market teams? Let's consider this problem like grownups. A few thoughts:
1. What exactly is a "small-market" team? In terms of population, Boston is smaller than Philadelphia, San Diego, Detroit, Baltimore and Milwaukee. Boston is about the same size as Kansas City, and nearly every other major-league city. Yet Kansas City, Milwaukee and Detroit are typically depicted as poor small-market teams that need our sympathy and maybe need revenue sharing from the Red Sox. Folks, these small-market teams are small because the teams have failed to create a larger market. Sure, Boston proper is part of a larger metro area (as is Detroit, for instance), and the Red Sox today are a regional attraction in New England. But it wasn't always the case. The largest difference today is that the Red Sox are compelling, have captured the attention and loyalty of generations of fans, and so Boston fans care: they attend games, pay premium prices, watch telecasts, listen to radiocasts, and even follow their beloved team for a lifetime, no matter where that life takes them. Why subsidize teams in commensurately large metropolises because they've accomplished less?
2. Competitive sports are a joint good, which means attracting fans to Red Sox games requires that there be good competition. A long Red Sox season of uninterrupted blow-out victories would get old (although we should try it, as an experiment). But there is no reason to think that the competition today in MLB is insufficient. Baseball attendance and revenues remain high and increasing. Plenty of teams other than the Red Sox or Yankees have recently had winning seasons and even won championships. The Red Sox' high and continuing revenue stream virtually guarantees that the club will field a competitive, contending team nearly every season. The less-wealthy teams need to play it smart, pooling assets in order to make a run at a title periodically. That's about the entire difference. The Sox and Yanks will always face stiff competition from the poorer clubs, just not from the same precinct every season. What's wrong with that? Why can't the Royals put together a competitive team every third season or so? The Marlins, Tigers, Twins, A's and other teams seem able to do it.
3. What's wrong with being a fan of a team that pools young assets to compete on occasion? The accident of birthplace made me a lifelong Red Sox fan. But I would have no problem rooting for a team like the Marlins, that features a host of young, cheap, talented players and that will likely be a very competitive team in just a few seasons. Not everyone can win. Fans can wait years, even generations, for ultimate victory; it's part of the fun of being a fan. I waited years for the Patriots; I'm waiting now for the Celtics. I waited my whole lifetime for the Red Sox.
4. Of course the Red Sox have to pay a ton of money for Matsuzaka. Because all the "small-market" teams have been handed revenue sharing cash, the only way for the Red Sox or other financially successful teams to extract profits from their loyal fans is to leverage their profits even more than ever. The Sox had to raise the stakes for free agents in order for the Sox' competitive advantage, namely money, to be useful. Without revenue sharing, the price of free agents, especially those at the middle-level of major league ability, would have remained lower, and the wealthier teams could have easily outbid the poorer teams had they so chose. Now, with revenue sharing, the top teams have to bid very high for the top free agents (especially with fewer top players even reaching free agency, again due to revenue sharing). More mid-level players will be affordable by the less financially successful clubs. These "poor" teams should be happy that the Sox will have to spend a lot on one player.
5. Poorer teams can afford big-time free agents. Houston (a small-market team that of course plays in a city about three times the size of Boston) just paid around $70 million to keep Roy Oswalt. The Red Sox' total payment (posting plus salary) for Matsuzaka won't exceed that price by much.
6. Let's stop using Bud Selig's language. "Small-market team" is a misnomer. It's not a permanent condition. Let's call them "less successful" teams, perhaps to encourage improvement. And let's stop setting baseball policy to cater to the need of the least successful clubs in the game.
Do you ever get tired of this constant whining and worrying over small-market teams? Let's consider this problem like grownups. A few thoughts:
1. What exactly is a "small-market" team? In terms of population, Boston is smaller than Philadelphia, San Diego, Detroit, Baltimore and Milwaukee. Boston is about the same size as Kansas City, and nearly every other major-league city. Yet Kansas City, Milwaukee and Detroit are typically depicted as poor small-market teams that need our sympathy and maybe need revenue sharing from the Red Sox. Folks, these small-market teams are small because the teams have failed to create a larger market. Sure, Boston proper is part of a larger metro area (as is Detroit, for instance), and the Red Sox today are a regional attraction in New England. But it wasn't always the case. The largest difference today is that the Red Sox are compelling, have captured the attention and loyalty of generations of fans, and so Boston fans care: they attend games, pay premium prices, watch telecasts, listen to radiocasts, and even follow their beloved team for a lifetime, no matter where that life takes them. Why subsidize teams in commensurately large metropolises because they've accomplished less?
2. Competitive sports are a joint good, which means attracting fans to Red Sox games requires that there be good competition. A long Red Sox season of uninterrupted blow-out victories would get old (although we should try it, as an experiment). But there is no reason to think that the competition today in MLB is insufficient. Baseball attendance and revenues remain high and increasing. Plenty of teams other than the Red Sox or Yankees have recently had winning seasons and even won championships. The Red Sox' high and continuing revenue stream virtually guarantees that the club will field a competitive, contending team nearly every season. The less-wealthy teams need to play it smart, pooling assets in order to make a run at a title periodically. That's about the entire difference. The Sox and Yanks will always face stiff competition from the poorer clubs, just not from the same precinct every season. What's wrong with that? Why can't the Royals put together a competitive team every third season or so? The Marlins, Tigers, Twins, A's and other teams seem able to do it.
3. What's wrong with being a fan of a team that pools young assets to compete on occasion? The accident of birthplace made me a lifelong Red Sox fan. But I would have no problem rooting for a team like the Marlins, that features a host of young, cheap, talented players and that will likely be a very competitive team in just a few seasons. Not everyone can win. Fans can wait years, even generations, for ultimate victory; it's part of the fun of being a fan. I waited years for the Patriots; I'm waiting now for the Celtics. I waited my whole lifetime for the Red Sox.
4. Of course the Red Sox have to pay a ton of money for Matsuzaka. Because all the "small-market" teams have been handed revenue sharing cash, the only way for the Red Sox or other financially successful teams to extract profits from their loyal fans is to leverage their profits even more than ever. The Sox had to raise the stakes for free agents in order for the Sox' competitive advantage, namely money, to be useful. Without revenue sharing, the price of free agents, especially those at the middle-level of major league ability, would have remained lower, and the wealthier teams could have easily outbid the poorer teams had they so chose. Now, with revenue sharing, the top teams have to bid very high for the top free agents (especially with fewer top players even reaching free agency, again due to revenue sharing). More mid-level players will be affordable by the less financially successful clubs. These "poor" teams should be happy that the Sox will have to spend a lot on one player.
5. Poorer teams can afford big-time free agents. Houston (a small-market team that of course plays in a city about three times the size of Boston) just paid around $70 million to keep Roy Oswalt. The Red Sox' total payment (posting plus salary) for Matsuzaka won't exceed that price by much.
6. Let's stop using Bud Selig's language. "Small-market team" is a misnomer. It's not a permanent condition. Let's call them "less successful" teams, perhaps to encourage improvement. And let's stop setting baseball policy to cater to the need of the least successful clubs in the game.
posted by TSLP at 11/16/2006
Comments on "The Price of Baseball Players"
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Darren Heitner said ... (8:24 PM) :
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Geoffrey Rapp said ... (6:44 AM) :
post a commentThat was one of the most insightful pieces I have read in a while. Great point on how these clubs are not in small market cities.
While I'm never a supported of whining, I'm not sure the time has come to stop debating whether spending by certain big-city teams has gotten a bit out of control in MLB.
I've always thought that the term "small market team" referred to the size of a team's MEDIA market, not population. That is, the number of people in a city is unimportant -- it's the number of people who watch local TV that matters because that determines how much a team gets paid to broadcast its games on TV. Boston TV penetrates into most of Rhode Island, parts of CT, and most of New Hampshire, making it a big market team. Talking about population as a way of defeating small market complaints may be a bit misleading.
I also think you may be setting up a straw-man by saying that Detroit is lumped in with KC and Milwaukee on the list of "small market teams." One analysis (a few years old) of TV markets which you might be interested, and can find here (http://home.nycap.rr.com/nickandaj/marketsize.html), lists Detroit as a "medium market city," rather than a small market city.
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