24 April 2017

Revenue Sharing: Rebuilding Teams Through the Draft

Guest Post by Clara Culver

Which MLB Hall of Famer was drafted 1,390th overall in the 1988 draft?

It would make a pretty good trivia question, wouldn’t? It might be an easy answer for some baseball whizzes: Mike Piazza.

Perhaps his case is a little unique. Nevertheless, it serves as an example that a quality ballplayer can be found in any part of the draft. Thanks to MLB’s revenue sharing system, struggling small market teams maybe getting an extra chance to find those diamonds in the rough.

Major League Baseball introduced revenue sharing in 1996, following the 1994 and 1995 baseball strikes. During the strikes it became more apparent that there was a need for revenue sharing. Large market teams were dominating the free agent markets (1). Player salaries had been rising since the 1970s when free agency took off after the Dodger’s lost their arbitration case against pitcher, Andy Messersmith.

In fact, Messersmith’s name come up more than once when you look at the history of MLB’s competitive balance and imbalance. Although his first mention is far more subtle - being listed as a third round pick for the Detroit Tigers in the 1965 Major League Draft (2). The very first draft held by MLB.

MLB was the last of four major US sports to implement a player draft. Prior to the draft, teams sent out scouts around the country to scoop up the best players with appealing offers. Wealthier teams, such as the New York Yankees - the baseball dynasty of the first portion of the 20th Century - were able to fund large scouting networks, seek out the best players, offer them the most money and provided them with valued player development within their minor league system. Smaller clubs, like the Cleveland Indians, were stuck in a growing imbalance created by this long-time scouting tradition (3). The draft opened up the opportunities for those smaller clubs to pick up players and continues to do so today.

The way teams view the draft has surely changed. With the start of free agency, small market clubs turned to the draft more and more to build their teams. Small market teams look to the draft differently than big market teams. With large player contracts and owners fighting free agency, by the 1990s MLB had yet again become lopsided in a similar way it had been prior to 1965. Teams like the New York Yankees and the Los Angeles Dodgers continued to grow, scooping up big contracts and drafting top talent. Low revenue teams struggled to hold onto talent once their players were eligible for free agency but got their choice of a draft pick first thanks to the reverse order draft.

And yet, big market teams are able to add all the right pieces to turn a bust of a season into a winner overnight. Or so it may seem on paper. Those without that kind of large revenue are expected to make a long turn around if they ever do at all.

As a Red Sox fan or a Yankee fan or the fan of another wealthy team, someone may crack a joke at the so-called “bottom feeders” making their presence known at the low end of the standings. However, they get a bonus that big market teams don’t: An extra draft pick.

In the 2012-2016 Collective Bargaining Agreement, the Competitive Balance Round of the MLB draft was installed. It is an attempt by MLB to create competitive balance in the league that is closely wound to the revenue sharing system (4). Teams with the smallest markets and revenue pools are eligible to participate in this particular portion of the draft. It's been a feature every year. The Competitive Balance Round consists of two rounds with six picks each. Formerly a lottery system in which those who didn’t make it to the six spots of Round A, were reentered into Round B. Although with the latest CBA renewed in December of 2016 the lottery has been replaced by a formula to assign draft order (5) . Round A covers draft picks in the 30-40 range, while Round B picks come from lower down in the 60-80 range. In recent years, what kind of major league players have made it from this range? Some pretty good ones. Players such as the Boston Red Sox outfielder, Jackie Bradley Jr and the New York Mets pitcher, Noah Syndergaard were both picked from the 30-40 spots in the draft.
With Round A of the Competitive Balance Round covering such a range it gives small market teams a new approach to how to rebuild from the bottom up. A small market team may value draft picks differently than how a big market team does (7). Big market teams have the freedom to sign higher priced free agents while at the same time building depth in their minor league system. Small market teams don’t have that luxury. Getting an extra pick that can benefit them long term. Not only are they getting an extra pick - draft picks from this round are the only draft picks that teams are able to trade.

Now the small market team has three benefits. One, they are getting an extra pick to solidify the depth of their organization. Two, they are able to trade this player for the chance at something better in return. Three, their organization is being helped in both their building process and finances from the same source: revenue sharing.

But what about those draft picks from Round B? Is it worth it for a small market team? They may sign plenty of minor leaguers to fill their ranks, but will those players ever get a taste of the Majors? The St. Louis Cardinal’s found Jon Jay down at 74th. The Braves took Freddy Freeman at 78th.

The key is draft strategies and teams have plenty of them. From traditional scouting techniques to new sabermetric data - the major league draft is the same for all teams. A room filled with scouts and team officials pouring over every detail of every potential player on the radar (8). But for the small market teams they have that extra pick. They have that extra opportunity to create something from it. If they chose, they also have another piece to use in a valuable trade.

Teams are always looking for a fresh edge on how to navigate the draft. Figuring out how and whom is the best pick to improve their team. Every team is trying to get a competitive edge. With young players spending up to several years in the minors, it’s just another layer of questions that team have to sift through (9). It may take a couple years, but what will the final product look like? Over the past five years, the Chicago Cubs took that approach. They rebuilt through smart draft decisions, trades and signings and won the World Series as powerful team.

With the help of revenue sharing and the Competitive Balance Rounds - the Tampa Bay Rays, the Minnesota Twins and others are being given a place to use the draft as a means to build a strong team.

Revenue sharing is new to the Major Leagues at just over twenty years of being in practice. The Competitive Balance Rounds are even newer and with will be interesting to see how small market/low revenue teams are capable - if at all - use them to their advantage.

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Sources:

1. https://www.si.com/mlb/2014/08/12/1994-strike-bud-selig-orel-hershiser
2. http://www.baseball-almanac.com/draft/baseball-draft.php?yr=1965
3. http://sabr.org/research/history-and-future-amateur-draft
4. http://www.sbnation.com/mlb/2014/6/5/5763034/mlb-draft-2014-competitive-balance-rounds
5. http://m.mlb.com/glossary/transactions/competitive-balance-draft-picks
6.http://www.sbnation.com/2016/12/1/13806488/mlb-new-cba-collective-bargaining-agreement-luxury-tax
7.http://www.beyondtheboxscore.com/2016/8/13/12457662/the-value-of-competitive-balance-round-a-draft-picks
8. http://www.fangraphs.com/blogs/what-happens-in-the-draft-room/


Images:
http://m.mlb.com/assets/images/8/8/2/170574882/cuts/1280_draft_guo6vcpu_m8l54fkx.jpg

http://widget.campusexplorer.com/media/original/media-BCB5CA38.jpg

09 April 2017

Baseball as Society's Mirror

Guest Post by Daniel Cornellier
Sports, like many things in our society, reflect things that are happening within it, and just like movies, music, or TV, also have diehard fans that treat their team winning as life or death. Everyone knows someone that takes sports so seriously that you cannot help but think once in a while, “imagine if they actually cared about things that mattered?” There was a time when professional athletes had to work in the off-season, and baseball is generally the sport noted when talking about such a thing. “Like many players before the salary boom that began in the late 1970s, [Yogi] Berra returned home and found an offseason job” (baseballhall.org). In Yogi Berra’s time, baseball wasn’t the multi-million dollar product that it is now. In 1947, the minimum pay was only $5,000; today, it is $507,500 (theatlantic.com). No one can argue against the fact that baseball players 70 years ago played the game for the love of it; there simply wasn’t enough money there to play it for a full-time career.

We live in an era where professional baseball players (and other professional athletes) are idolized in our society. As a result of that, many children look up to them as a bastion of hope, and when I was a child I absolutely did. Therefore, when athletes get caught cheating, it is often a polarizing experience for people. When Alex Rodriguez was caught using performance enhancing drugs, he did everything within his power to not take blame for using them, and instead chose to deflect on others. He never seemed like he was sorry for it, and why would he be? As a society, we are obsessed with the biggest, strongest, fastest, etc., and when these athletes make unbelievable amounts of money, it makes sense that they might attempt to gain an unfair advantage. As a child, I fondly remember the home run race of 1998, when Mark McGwire of the St. Louis Cardinals and Sammy Sosa of the Chicago Cubs duked it out in an attempt to past Roger Maris’s record of 61 home runs in a single MLB season. It was a competition of the most primal nature; two men fighting head-to-head, one of them to be the ultimate victor. They both ended up breaking the record of 61 – Sosa finished with 66 home runs, and McGwire with 70. Even as an eight-year-old at the time, I knew there was something off about those two. I had heard mentions of steroids here and there, but that didn’t mean much to me. This is relevant because as a society, everybody watched the home run race. People that didn’t care for sports were watching it, my grandparents that didn’t watch sports were watching it; society was tuned in, and anyone that was watching TV knew about the home run race. Even now, most people can remember the home run race, and remember it fondly. As a society, no one cared that Sosa and McGwire were using steroids; the product that Major League Baseball was putting out was very entertaining, and everyone loved to watch it. It was talked about at the water cooler, at school, literally everywhere, so why did people suddenly care about PEDs when Rodriguez was caught?

Baseball for a long time has been considered “America’s pastime;” anyone that watches it will tell you that. Baseball is considered a gentleman’s game, so celebrating is something that many look down upon. If a batter celebrates a home run too much, they can expect to possible be hit the next time they come up to bat. It’s a thinking man’s game. If you go to a game, you will still see people in the crowd keeping track of the score in their own scorebook, as a throwback to back when it was all done by hand. A baseball game has no time limit, although recently some rules have been modified in an attempt to speed along the game. The longest game ever was in 1981 between two Triple A teams: the Pawtucket Red Sox and the Rochester Red Wings. It lasted 33 innings (with a suspension after 32 endings), and had a total time of 8 hours and 25 minutes (infoplease.com). Baseball is a “sacred” game, and many people believe when someone cheats they deserve to be punished. Why then, when Alex Rodriguez cheated did people want to go on a witch hunt and burn him at the stake? Quite simply, the MLB didn’t care at the time because McGwire and Sosa were making them an absolute boatload of money. Four years before the home run race, there was a strike in in the 1994 season, resulting in what many called an absolute low point for professional baseball. How could a sport that is supposed to be a staple of Americana be stopped by something as fickle as money? The 1994 strike is widely considering an embarrassment to the sport of baseball, and the 1998 home run race was absolutely what they needed. Many fans of the game stopped watching after the strike, and as I previously mentioned, the home run race brought not only baseball’s fans back, but created many fans that didn’t exist before.

In America, we often like to follow trends. The 1998 home run race is a perfect example of a trend, because not only did baseball fans watch it, the world did. It transcended baseball, and honestly, it saved baseball. I have lived through many years of the sport as both a participant and a fan, and some of my fondest memories of watching the game come from that year. I have never been so glued so a sporting event like I was to that one, and there isn’t a fan of baseball that doesn’t think of McGwire when they think of Sosa, and vice versa. Those two are forever linked in the hall of baseball mythology, regardless that they used PEDs. Society nowadays wants to shun players that use them, but that same society is the one that forgets just how excited baseball was in the late 90s. Everyone loves to see a ball hit harder or faster, and in the moment it is more exciting to see a 450 foot home run than it is to see a 350 foot home run. It was, and remains to this day, very hypocritical of people to ostracize Alex Rodriguez, but not recognize that steroids literally saved baseball. Until there is a way to prove whether or not every player uses performance enhancing drugs, people (and society as a whole) need to let it go.

Thank you for taking the time to read this, and I hope to see you!

http://baseballhall.org/discover/when-the-offseason-meant-job-season

https://www.theatlantic.com/business/archive/2015/12/mlb-salaries-labor-contract-negotiations/419889/

http://www.infoplease.com/askeds/longest-professional-baseball-game.html

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07 April 2017

A Trump Effect on Sports?

Guest Post by Anna Kerwood

The night of November 8th news shocked the nation that Donald Trump was going to be the 45th president of the United States. Emotions were running high for everyone, and most people had something to say about it, the good and the bad. Twitter, a highly used source of social media was exploding with tweets about the news. Many professional athletes are active on twitter and tweeted their opinions about the election results. Lance Moore, a former NFL wide receiver for the New Orleans Saints, (first signed by the Cleveland Browns as an undrafted free agent, also played for the Pittsburgh Steelers and the Detroit Lions) tweeted, “I sure will miss you @BarakObama.” at 3:38 AM on November 9th. The tweet by Lance Moore, he is just expressing his feelings about how he will miss Obama. This may not seem like a very influential comment, but Lance Moore has over 174,000 followers on twitter that saw this. The responses to Moore’s tweet were very negative and seemed to be coming from a predominantly white demographic for example someone tweeted back at him, “@LanceMoore16 @BarackObama I WON’T!!!!!! Good Riddance!” Moments later Moore tweeted, “He won and will be our president, so give him a chance. If we can’t support him, how can we expect him to help us?? We must spread love!” The responses to this were also very negative, but they were coming from mostly the black community, saying things like, “@LanceMoore16 yes give the KKK president a chance.” Lance Moore, an open supporter of the Obama administration tweeted his positivity about the election in the second tweet, and while some people supported this, the majority of responses were negative. Lance Moore is only one example of the many athletes who shared their political opinions the night of the election.

Trump strong opinions on immigration could cause many problems for professional sports, especially major league soccer. For example, Javi Martinez, a spanish (European) football player tweeted, “The end of my @MLS dream in the future? (laughing emoticons) #AmericanElection #EleccionesEEUU2016” at 3:40 AM November 9th. However, Trump’s executive order did not directly affect anyone on an MLS team.

Culture has a very big impact on professional sports, specifically social changes. Under the Trump administration our country will likely undergo some major social changes for example, the Obergefell v. Hodges case legalizing same-sex marriage could be overturned, and the black lives matter movement could become more active causing a greater divide between the white and black community. These changes will affect the professional sports industry in good and bad ways. Professional sports typically bring together groups of people from all sorts of demographics and political parties, but with some athletes some athletes expressing their political opinions could be bad new for professional sports.

Based on his business porous analysts suggest that the nation’s economy will likely grow under the Trump administration. Usually sports are a way for people of varying political views to come together, but this elections brought out some very strong opinions, seeing as both candidates were very far right and left. Under the Trump administration the nation's economy will likely grow. Also with Trump’s plan to create more jobs will increase the number of people who have extra money to spend. With this extra money people are making professional sports could see a boost in revenue due to a likely increase in gate receipts.

Professional sports are a reflection of the social changes happening in the country at the time so it will be interesting to see over the next four years how our most beloved teams change.



http://www.sportsonearth.com/article/214809428/trump-travel-ban-sports-world

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01 April 2017

The Impact of Social Media on the Sports Product

Guest Post by Christian Hodgson

On January 7, 2017 the sports world paused. It wasn’t because the Utah jazz edged out the Minnesota Timberwolves 94-92. It wasn’t because the Arizona Coyotes defeated the New York Islanders in an overtime shootout. No, in fact it had nothing to do with sports at all. On January 7, 2017, Tom Brady joined Instagram. What made this significant was Brady’s greatness and well-known secluded lifestyle, not the fact that an athlete joined a platform full of fans. In today’s society, as the social media and sports industries are on the rise, it was inevitable that they collide. But what exactly does that mean for the product sports have to offer?

The sports product is a very complicated one. Rather than other industries, sports doesn’t offer the consumer a material object, but rather entertainment. Though a consumer can buy a piece of memorabilia or a team related material object, it all stems from the entertainment that the team provides. A Los Angeles Dodgers hat means nothing without the baseball team. However, what sets sports apart is the type of entertainment they offer. The unique product sports offer is a community. When you go to a game, you’re going with thousands of other people with a similar interest or goal as you. But when half of the people are looking not at the game but instead at the screen in their hands, the product changes.

The clearest change is in the real life community. A study run by the USC Annenburg School for Communication and Journalism in 2010 showed that 14% of people admit to spending less face to face time with their friends since becoming connected to social media, with the percentage on the rise1. This doesn’t bode well for the people who still go to games looking for the full sports experience, even if the overwhelming majority still prefer to go out. However, for the people who stay home, they’re not missing as much as it seems. As real life and the Internet continue to merge, so do the sports communities. As of 2017, every single NHL, NBA, MLB, NFL and MLS team has an Instagram page, each with over a million followers. For the percentage of people who can’t or won’t go to games, this platform offers part of the community they’re missing out on. Columnist and analyst Gabriele Boland explains that when teams join social media, “It allows fans to have a deeper connection and experience with their teams, where they feel part of the action and up to date on the latest news”2. Social media allows the fans to connect with the teams themselves, rather than with the fans, a unique development to the sports product.

However, perhaps the more interesting change occurs in the entertainment aspect of the product. Previously, the way fans were entertained by the games were by attending them, listening to them on the radio or watching them on TV. Social media offers a new platform, and with it new methods of entertainment. Many fans that follow a team on Twitter or Instagram are usually well aware of the occurrences of a game. This is because as the game progresses, teams will release small video clips of what’s going on, like a player scoring a goal off a bicycle kick or a someone clubbing a home run. For the fans witnessing this from their couch, the isolated entertainment draws them further. They may be intrigued to tune into the game on TV or radio, or venture further into a team’s account or website. It also allows the fans to react to games in real-time, along with thousands of other people. According to data gathered by Twitter, there were 27.6 million tweets using the hashtag #SB51 during the Patriots vs. Falcons Super Bowl game on February 5, 20173. This was by far the most tweets of a live event in history, and shows that the entertainment value that sports offer is still very much present, just different.

When Tom Brady joined Instagram it had no impact on whether or not people enjoyed sports. What it really signified was how sports fans are changing without their knowing. Anyone who follows Brady is now just as close to him as they are to the community of people who go to witness him play. When Brady posts a hype video before one of his playoff games, his followers are instantly intrigued to pay attention, even if that means following along the Patriots Twitter feed throughout the game. As intricate as the sports product is it’s even more malleable, and the growing presence of social media will play a role in shaping it for the future.



1.USC Annenberg School Center for the Digital Future, "Special Report: America at the Digital Turning Point," www.annenberg.usc.edu, Jan, 2012

2.https://www.newswhip.com/2016/06/biggest-mlb-teams-instagram-vs-facebook/

3.https://blog.twitter.com/2017/how-the-patriots-sb51-victory-conversation-happened-live-on-twitter

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30 March 2017

Baseball's Appeal to a Global Fanbase

Guest Post by Clara Culver

Troy, New York – 1869.

Eighteen year old, Esteban Bellán took his spot at third base for the Troy Haymakers baseball team. He had come to America to study and ended up making history he would never be aware of (1). He was playing a small role in shaping the demographics of Major League Baseball.

Bellán was the first Latin American born ballplayer. His name has been lost somewhat to time. Little is known about him, including which hand he threw with or from which side of the plate he batted from, but his impact is strong. He played for the Haymakers until 1872 and appeared for the New York Mutuals in 1873, before returning to his birth home of Cuba in 1874. The Cuban League of baseball was established in 1878, with Bellán participating as both a player and a manager for the Havana team during the 1885 and 1886 seasons. Although baseball in Cuba predates Bellán, his return home and the baseball knowledge he brought with him, helped to set off Latin America's baseball boom (2).

In the past 60 years the demographics of Major League Baseball have been transformed. In 1956, the percentage of Latino ballplayers in the Majors was 5% (3). As of 2016, the number has risen to nearly 29% (4).

This is a reflection of America's own change in cultural and ethnic diversity. Currently, the Latino population of the United States is close about 18% or 56.6 million people (5). There is an influx of Latin culture coming to the United States and it is creating an appetite for cultural diversity among Americans. The appetite doesn't extend to Central and South America alone, it is reaching far and wide across the globe. The young, Millennial generation, loves diversity. Their outlook on immigration has been infectious. More Americans have the perception that immigrants make America stronger (5).

This may account for the Soccer's recent rise in population. Soccer is the world's favorite sport. Aside from the Olympics, the World Cup is the one sporting event that really brings the world together. It has a way of making people feel close to one another. Soccer is the common language between the people of the world; learn to speak it and it will get you deeper into another person's culture.

All US sports are trying to branch out into other parts of the world. Basketball is an Olympic sport and one of the most popular sports in the world. American Football has held exhibition games in London, but it has firm competition from soccer.

Baseball, too, is trying to draw in international fans. March 2017 marks the fourth edition of the World Baseball Classic. The WBC isn't the first time the baseball world has attempted to come together. From 1938 to 2011, there was the Baseball World Cup (which was won by Cuba 25 times.(6)

Esteban Bellán and others like him, had unknowingly turned Cuba into a baseball powerhouse. In regards to moving interest in the sport from country to country, the Cubans did most of the heavy lifting. By the 1890s, the Cubans had brought baseball to other countries around the Caribbean and Latin America. Today, in some Latin American countries, baseball is the national sport. Latin culture is known for its deep rooted passion and vibrancy. Baseball in the Dominican Republic reflects precisely that.

In the Dominican, baseball is much like it is elsewhere in Caribbean and Central America. It is played in tropical climates to the tune of merengue music in stadiums, filled to the brim with noisy, passionate fans (7). Outside the stadiums, baseball is played in dirt poor poverty. Kids play in narrow streets or in grassy patches of land along side farm animals. Some with balls, bats and gloves while others play barehanded with anything that they can find.

“Vitilla” - Dominican stickball – is played with broomsticks and bottle caps. Major League stars, David Ortiz and Albert Pujols, both started they journey to the big leagues by playing this game (8). The sports drink, Red Bull, has sponsored Vitilla tournaments in the Dominican Republic since 2009. In 2015, Red Bull sponsored a Vitilla tournament in New York City – the first in the United States. The reason? New York City's Dominican immigrants have brought the stickball craze to their new home. There are over 700,000 Dominican immigrants in New York City and the number is rising every year. While they have moved, baseball and Vitilla remain a source of pride and heritage for them. It is a reminder of where they have come from(8)(9).

For Dominican baseball stars who have immigrated to play for the Major Leagues – playing for their country is a great source of pride. They are proud to represent their country on a global scale and the Dominican people are proud to watch. In the past, the World Baseball Classic has made record TV ratings in the Dominican Republic (10).

The WBC is attempting to expose people to the international world of baseball. It has done well in the Dominican and Cuba as well as in Japan – another country where baseball is a top sport. Through the channels of Facebook and online livestreams, it reaches people in China, Australia and Israel. These countries have teams in the WBC, so it has been successful in producing global interest (11).

Worldwide it captures the attention of millions, but it struggles in the United States. Timing the WBC is difficult within the sports structure of America. Baseball's own season stretches from spring training in February to the World Series with can stretch into early November. During the winter, NFL football reigns. Followed by the NBA. In March, the same month as the WBC – NCAA basketball's “March Madness” takes over.

The World Baseball Classic is only televised in the United States on the cable channel - MLB Network (12). A great channel offering great baseball information, but what difference would it make if the WBC was broadcast in the way it wants to be received? The World Baseball Classic wants to be a global World Series – the World Series is available for everyone to watch without adding channels to their cable plan.

The timing of the WBC presents another issue. Falling so close to the Major League season, it is perceived as an injury risk to players, especially starting pitchers whose arms are more highly valued. No team wants their pitchers injured in or worn out by a competition that doesn't tie into their World Series campaign (10).

Baseball has every reason to market itself as a global sport. That is exactly what it is. It may not be as global as soccer and may never be, but it has its own cultural depth. Baseball has more than just its rich history to offer, the sport offers history in the making amidst a melting pot of cultures. With America's immigrant growth and passion for diversity, baseball may just get a new life. Baseball spread out from America and now it is coming back into it.

Check out some of those live streams or tune into the World Baseball Classic if you can. Get a taste of the diversity baseball has to offer.

1. http://sabr.org/bioproj/person/78dbf37d
2. http://www.baseballhistorian.com/cuba_baseball.cfm
3. http://sabr.org/bioproj/topic/baseball-demographics-1947-2012
4. https://nebula.wsimg.com/811d6cc2d0b42f3ff087ac2cb690ebeb?AccessKeyId=DAC3A56D8FB782449D2A&disposition=0&alloworigin=1
5. http://www.pewresearch.org/fact-tank/2016/03/31/10-demographic-trends-that-are-shaping-the-u-s-and-the-world/
6. http://www.topendsports.com/events/baseball-world-classic/winners-cup.htm
7. http://www.espn.com/mlb/worldclassic2006/news/story?id=2291226
8. http://www.foxnews.com/sports/2015/09/18/vitilla-dominican-stick-ball-tournament-comes-to-new-york-city.html
9. http://www.nydailynews.com/sports/more-sports/vitilla-hope-historic-sport-decline-article-1.2370205
10. https://www.bostonglobe.com/sports/redsox/2017/02/27/wbc-presents-classic-conundrum/DzYZUaMDjoPqfWfd0uibuI/story.html
11. http://baseball.com.au/News/Latest-News/millions-exposed-to-chinese-taipeis-pre-wbc-tour-1
12. https://www.forbes.com/sites/maurybrown/2017/02/13/vasgersian-smoltz-headline-mlb-network-broadcast-teams-for-2017-world-baseball-classic/#13675dfd1671


Photo Credits:
Esteban Bellán: http://www.library.fordham.edu/cubanbaseball/photoimages/e_bellan_7X13.jpg
Dominican baseball picture: http://blogs.uww.edu/fischerca17/files/2014/12/dominican-baseball11.jpg


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01 June 2016

Stadiums: Should We Really Pay?

Guest Post by Leon Moore


“The Stadium that Manning built” is what some call Lucas Oil Stadium. But the evidence points to a different builder of this 63,000 seat behemoth: the taxpayers. The stadium cost 720 million dollars, of which the Indianapolis Colts paid only 100 million (1).

The stadium in downtown Indianapolis opened in 2008 and replaced the RCA dome, which was built in 1983. Lucas Oil Stadium is an extremely modern stadium equipped with 1,000 flat screen tvs, 137 luxury suites, state-of-the-art turf and seven locker rooms (4). Proponents of the stadium argued that the building of this stadium would insure many future super bowls in the city and many college basketball tournament games.

The Colts also threatened to leave the city in 2006 adding to the cries for the construction of a new stadium funded by public dollars (4). As Andrew Zimbalist points out, a small market team is much more susceptible to this kind of pressure than is a large market team (5). And Indianapolis is a relatively small-market city. In addition to this, an economic impact study stated that over the next 10 years the project would create 2.25 billion dollars in economic benefit. It also stated that 4,900 construction jobs would be created along with 4,200 permanent jobs (4).

With seeming benefits like this on the table, the stadium was approved. Often In situations like this many people set to make money jump on board quickly. People like construction companies, contractors, architectural design firms and construction unions support these types of projects (5). In addition to these groups, bankers, lawyers and other businesses support the projects (5). With groups this powerful in favor, stadium projects can be approved with greater ease.

In the case of Lucas Oil Stadium, bankers have made huge profits. Goldman Sachs, who the Indiana Finance Authority borrowed money from, are now being paid 71 million dollars to restructure debt (2). The public debt grew to 666.5 million dollars after the auction-rate bond market collapsed in 2008 (1). With the deal the debt will be 296 million dollars (3). So essentially Indiana made a bad deal and are now having to pay even more to get some relief. There was also 43 million dollars of unexpected financing costs that fell on the state (1). Local officials have raised hotel, restaurant and rental car taxes to pay for it and the other costs (1).


But the real question is whether or not building this stadium actually benefited the public. According to a report by Jordan Rappaport and Chad Wilkerson the economic benefits to publicly financed stadiums are much less than initially predicted. Often the economic benefits from a stadium are actually just subtracted from another economic sector in a city (6). With Lucas Oil Stadium however, many people are brought in from out-of-town to large sporting events such as the Super Bowl and college basketball tournament games. So the building of this stadium might have more economic benefits than other stadiums.

But still, the amount that the taxpayers have spent on this will be very hard to make up. Combine the large debt with the fact that Goldman Sachs has seemed to profit off of taxpayers as well, and it makes the building of the stadium seem like a hard pill to swallow.

Many of the people with a vested interest in stadium construction already have money, which makes their influence on local government out-sized. They have the resources to advertise and hire firms to do biased economic impact studies. But the people who end up paying are the regular taxpaying people of the state. As Rappaport and Wilkerson point out, voters should have the ultimate choice over whether a stadium is built or not. They should have accurate and unbiased estimates and it should come down to how much they value their sports teams.

1) http://www.bloomberg.com/news/articles/2012-02-02/super-bowl-lands-on-taxpayers-backs-as-stadium-deal-turns-sour
2) http://www.atlredline.com/goldman-sachs-rakes-in-millions-from-lucas-oil-stadium-1705385983
3) http://www.indystar.com/story/news/2015/05/23/state-pays-escape-risky-lucas-oil-stadium-debt/27802331/
4) http://www.bloomberg.com/view/articles/2012-02-03/as-super-bowl-shows-build-stadiums-for-love-and-not-money-view
5) Zimbalist, Andrew “May the Best Team Win”
6) https://www.kansascityfed.org/~/media/files/publicat/econrev/econrevarchive/2001/1q01rapp.pdf

Images: http://huntconstructiongroup.com/projects/stadiums/lucas-oil-stadium/
http://www.bigten.org/sports/m-footbl/archive/100512aac.html

30 April 2016

Revenue Sharing in the Barclay's Premier League

Guest Post by Jack Decker


The distribution of revenue in the Premier League is a much better system than that found in the NFL, MLB, the NBA, and the NHL. This model revenue sharing system not only contributes to the growing profitability of the league, but may potentially be the cause of it.

The Barclays Premier League focuses on two main aspects for its revenue sharing plan: equality and merit-based reward. Although these seem contradictory at first glance, they both work together to create a system that is fair and encouraging for all teams. Percentage-wise, the more dominant category is even revenue distribution; 50% of total revenue from UK broadcasting is divided evenly amongst all teams.[1] While this itself is impressive, even more aspects of revenue besides local broadcasting are distributed equally. Central commercial and oversees TV revenue are split up equally between the clubs, and when these payouts are calculated for the 2013-2014 season, they are almost 1.5 times higher than the share from UK broadcasting![2] What this means for the Premier League is that the clubs are on a very even playing field. In fact, the ratio between the top and bottom earning club is only 1.57:1, much more equitable than for the four major sports in the US, all with a ratio greater than 2:1. [2][3][4][5][6]

The eternal problem of socialistic systems is that distributing the wealth so evenly leaves little motivation for individuals to try to earn any themselves. This exact qualm is had by many owners or commissioners, who are worried that generous revenue distribution would hurt the total income of the league. The NHL does a good job at combatting this, making revenue benefits only available to teams that are seeing an increase in their earnings, suggesting that they get rewarded only if they show that they are putting in the effort to succeed as a business. The Premier League has this covered as well; some revenue sharing is merit based. 25% percent of broadcast revenue is distributed based on performance, or how the club finished in the standings, and another 25% is dependent on facility fees, or how many times the club was featured in a UK broadcast. 2014 League champion Manchester City received $41.5 million in shared revenue for merit-based play, while the last place finisher Cardiff City received only $2 million. This aspect of revenue sharing certainly is not equitable, but it provides an important incentive to ensure that the best teams have motivation to succeed and will still be able to assist struggling teams financially.

Establishing a successful revenue sharing plan, as may other leagues have made clear, is a difficult feat. Nonetheless, the Premier League did so with ease, and now is reaping the benefits. League revenues have doubled in the past seven years, described by team owner Dan Jones as a “remarkable achievement”.[7] The reason for this is in due to the revenue sharing system, because it allows all teams to reap the benefits of broadcasting and also encourages more wage costs. The equal sharing aspect of the Premier League’s plan leads to all teams earning money from UK broadcasting, providing a sense of community for the league and making the TV deals less lucrative. Unlike for MLB, the broadcasting revenue exists for the Premier League to share, rather than for individual teams to turn immense profits from. The merit based sharing of the Premier League contributes to its widespread success as well, because it incentivizes all teams to spend a higher percentage of their revenue to improving their staff. In fact, wage costs rose to an average of 71%, a very high figure that resulted in debt for many teams, but led to an increase in the quality of soccer being played and thus made the league more profitable as a whole[3]. Both the sharing of broadcasting revenue and the reward for merit in the revenue system of the Premier League are responsible for league revenue increases.



If you find this topic of interest, please share your thoughts below. If there are any other details of revenue sharing in the Premier League that you find interesting, feel free to explain them in the comment section. Make sure to return to Tully’s Sports Blog for more exciting sports information!


1.http://www.businessofsoccer.com/2014/05/16/barclays-premier-league-clubs-split-2-6-billion-in-television-revenue/
2.http://www.premierleague.com/en-gb/news/news/2013-14/may/premier-league-broadcasting-commercial-payments.html
3.http://www.forbes.com/nfl-valuations/list/#tab:overall
4.http://www.forbes.com/mlb-valuations/list/#tab:overall
5.http://www.forbes.com/nhl-valuations/list/#tab:overall
6.http://www.forbes.com/nba-valuations/list/#tab:overall
7.http://www.bbc.com/news/business-27667472