Despite what the newspapers will tell you, this is an incredibly slow news time in the baseball calendar. I was going to piggy-back off the “BJ Upton is finally mature” story but it just isn’t that interesting.
Rather, I will take the road more traveled by and stick a few more knives in Hank Steinbrenner.
In case you haven’t been following the pissy gripes of multi-millionaires, Hank took it upon himself to make unscheduled visits to the Yankees’ Spring Training media room on Monday and Tuesday of this week to enlighten the assembled scribes on socialism. Hank’s critique can be summed up in one sentence: I am tired of paying the Rays money and then watching them kick our ass.
There have been many good critiques of Hank’s statements in the last few days. John Romano has a great column in today’s St. Pete Times (in which he coins the title “co-heirman” for Hank…classic) and Larry at Sweet Spot blog It’s About the Money Stupid has a nice breakdown of baseball’s socialistic history. (If you haven’t read Larry’s detailed analysis of revenue sharing, and how it applies to the Rays, you are missing out. This is required reading for all baseball fans.)
John’s best point: Hank, don’t complain about baseball pro-actively mitigating business decisions and then hide behind the territorial preference that keeps competition out of Brooklyn, New Jersey, and Connecticut.
Larry’s best point: Baseball has always been socialist and, that socialism has made you and your family rich. So pipe down Hank.
I think Hank’s comments touch on an unspoken reality of professional sports generally and baseball in particular. Baseball has a sort of dual existence. Yes, baseball is a business and baseball is a competitive sport. But there is no overlap between a baseball team’s competitive business behavior and its competitive baseball behavior.
Each team is competing for scarce business resources (entertainment revenue) in its market. Each team is also competing for scarce baseball resources (wins). BUT, (and this is a Hank Steinbrenner-sized but(t)…what, I can’t make fat jokes?). Baseball teams do not compete with each other for business resources (entertainment revenue), they only compete with each other for baseball resources.
Outside of three markets (New York, Chicago, Los Angeles — and I am not even sure these are real “choices” due to the geographic distance between the clubs, size of the population in the market, unique appeal of each club, start time for each club’s home games, and date of each club’s home games), baseball teams don’t compete with each other for revenue because it is not possible for fans in one baseball market to regularly attend home games in another baseball market. Rather, baseball teams compete with other entertainment entities in their market – like movie theaters, restaurants, or Disney on Ice – for revenue.
For baseball to be “socialist” it would need to prop up the Rays so the Rays could compete for the fan revenue the Yankees are getting. This competition would, in theory, be healthy because the Rays mere existence would create enough entertainment supply that it would hold down Yankee ticket prices and prevent a monopoly. But baseball has no incentive to hold down ticket prices and the Rays’ existence has no effect on the Yankees’ ability to earn revenue.
In the end, baseball’s revenue sharing system doesn’t prop up competing businesses. It props up competing baseball teams. Major League Baseball is a single entity and the shifting of revenue from the Yankees to the Rays is no different than a corporation using cash flow generated in one department to supplement the bottom line in another department. In fact, Major League Baseball has an explicit anti-trust exemption granted by Congress that, as a matter of Federal law, allows it to function as a monopoly. (Other sports have hinted that they, too, are monopolies and should be permitted to conspire with among their individual franchises but the Supreme Court essentially crushed that argument in the American Needle case last term).
In the end, Major League Baseball isn’t engaging in socialist behavior because it doesn’t compete with itself. Hank’s argument is like accusing my wife of socialism because she uses money I earn for her own benefit. I doubt, however, that any of this logic will make it through the cobwebs in Hank’s Burger King-addled brain.