Bud 'Smarter Than He Looks' as America's Pastime
by John Helyar
July 15 (Bloomberg) -- Tickets for Major League Baseball's All-Star Game tonight at Yankee Stadium are selling for an average of almost $1,000 on StubHub. Fox is selling 30-second advertisements for as much as $550,000. MLB projects that sales of licensed All-Star merchandise will climb 35 percent to 50 percent over last year's record total.
This comes in the middle of a season when baseball is so hot that it's the sport of choice for Madonna. MLB seems en route to drawing 80 million fans, setting an attendance record for the fifth straight season. The game's competitive balance is so good that Tampa Bay is just a half-game behind Boston in the American League East, and the third-place New York Yankees are looking up at the Rays!
I have just one thing to say to Commissioner Bud Selig: Stop, stop, you're killing me! For this columnist, making fun of the business of baseball has been as reliable a source of raw material as oil for the Saudis. I wrote a whole book (``Lords of the Realm'') on how the lords of baseball managed to lose every labor war and their game's preeminence.
Now here's the onetime national pastime, bidding to re-take the lead as America's top-grossing sport. MLB posted record revenue of $6.075 billion last year, more than double the take of a decade ago -- compared with $7 billion for the National Football League.
I acknowledge your power to do what's in the best interests of baseball, commissioner, but what about my best interests? You've taken away my franchise, as surely as you deprived the 10,000 loyal Montreal Expos fans of theirs.
No `Bud Lite'
I clearly underestimated you, Mister Commissioner. I should have listened to one of your staunch supporters who once insisted of you, ``He's smarter than he looks.'' I was in the camp that labeled you ``Bud Lite.'' I was wrong.
Now I'm not giving you a lifetime pass here. For one thing, you shouldn't get too cocky about the All-Star game. Much of the frenzy is due to this being Yankee Stadium's last hurrah and this being New York. You're also not in the clear on steroids. Henry Waxman just threw another one under your chin on that subject last month. You might also note that your 2007 World Series had lower television ratings than the NFL's early-round playoff games in 2008.
Still, credit where credit is due. MLB is in the chips today in no small part because of two things you did when business was in the pits back in 2000. In July of that year, MLB wasn't staging an All-Star Game moneyfest; it was releasing a ``blue-ribbon'' report on its money woes. The panel, which included your go-to blue-ribbon guy George Mitchell, stressed the widening financial gap between a few well-heeled clubs and the rest.
Sir, you are both MLB's chief executive officer and chief procrastinator; you can agonize for years before making decisions. This time, though, you ran with it like Jose Reyes. You convinced the owners in 2000 to grant the commissioner unlimited powers to address economic disparities.
Haves, Have-Nots
MLB teams went from sharing 20 percent of local revenue to 34 percent, as of the 2002 collective bargaining agreement, with immediate impact. In 2003, MLB collected $312 million from teams (mostly from ``haves'' like the Yankees, who contributed $76 million) and transferred it to 17 ``have nots'' like Tampa Bay, which was the leading welfare recipient with $33 million.
So a mound of credit to you, Commissioner Selig, even if what was in the best interests of baseball also happened to be in the best interests of your Milwaukee Brewers. (Selig's 28 percent ownership of that franchise was in a blind trust until the Brewers were sold in 2005 for $223 million, but he could hardly turn a blind eye to the benefits of greater revenue- sharing for small-market Milwaukee.)
The second thing you did in 2000 was create Major League Baseball Advanced Media, a subsidiary to handle baseball's online business, and have you ever run with it. MLBAM generated an estimated $400 million in revenue last year and is another fast-growing source of shared income.
Sharp Guys
You let Bob Bowman do his thing and you let some other sharp guys, led by Tim Brosnan, do their thing in running the rest of the business of baseball. MLB has always been considered sleepy, compared with the other major leagues. Not any more. The NFL has struggled for years making a go of the NFL Network, which now looks like it will be folded into ESPN. You're breaking strong out of the block with the MLB Network next year, with 50 million cable and satellite subscribers.
Entrepreneurial owners like the troika running the Boston Red Sox have made a big difference. And I was wrong about that, too, I have to admit. I joined in the criticism of your awarding the team to John Henry, Tom Werner and Larry Lucchino back in 2002, when they didn't seem to be the high bidder for the team, only the favored ``insiders.'' What have they done with the Red Sox? Merely more than doubled revenue to $363 million (by Forbes' estimate) since taking over the club.
Trickle Down
That hasn't just been great for one of your flagship franchises. It's great trickle-down economics for the whole industry. Revenue leaders like the Red Sox spread their largesse to MLB's underclass, through revenue-sharing and so-called luxury taxes on their high payrolls. That's contributed to more small- market teams becoming competitive and attracting fans.
Three of the four teams that made the two League Championship Series last year had payrolls in the bottom half among MLB's 30 teams: the Cleveland Indians ($61.7 million, No. 23), the Colorado Rockies ($54.4 million, No. 25) and the Arizona Diamondbacks ($52.1 million, No. 26). It must be said that the Red Sox, at $143.5 million and No. 2, won the championship.
This can't possibly last, can it Mister Commissioner? You don't even seem to have been dinged by steroids scandals! I must repeat once again, this really must stop: I'm going to have to find other commissioners to hassle. You're killing me!
(John Helyar, co-author of ``Barbarians at the Gate,'' is an editor-at-large for Bloomberg News. The opinions expressed are his own.)
To contact the reporter on this story: John Helyar in Atlanta at jhelyar@bloomberg.net
Last Updated: July 15, 2008 00:01 EDT |
