Why Revenue Sharing is Unfair

Of all the horrible, self-serving policies Bud Selig has enacted during his reign of terror as MLB commissioner, none is worse than revenue sharing. It penalizes major market teams and rewards small market clubs that are often run incompetently, like, say, the Milwaukee Brewers when Selig’s “family” owned it for a time during his time as commissioner.

ballA report in Friday’s The New York Times said the Mets lost $50 million in 2010. It didn’t say how much the team contributed to revenue sharing, but the report said it was “about 40%” less than in 2009, when the Mets contributed $40 million (the report said the Mets lost $10 million that season). So that means the Mets paid small market teams around $24 million in 2010 in a year in which they lost $50 million.

A report in Forbes earlier in the week said the Mets had “negative operating income” of $6 million in 2010. I’m not exactly sure how to reconcile this report with the $50 million figure — maybe it’s net loss vs. gross loss. Regardless, the Mets are losing money yet still have to contribute to revenue sharing.

The Forbes report said the Pirates had an operating profit of $25 million, while the Marlins made $20 million. These are teams with relative minuscule payrolls that receive large revenue sharing checks. These teams are free to cheat their fans by refusing to spend on payroll, then pocketing their revenue checks for a tidy little profit.

None of this seems fair. Yes, large market teams do have higher revenues, but they also have much higher expenses. Worker salaries are higher in New York than, say, Pittsburgh, because it is much more expense to live in New York. The same logic should apply to baseball.

If there has to be revenue sharing (and I don’t think there should), I think it should be based on a team’s profit rather than revenue. That would take into account the increased expenses of being in a major city.

Instead of big market teams writing checks to their small city counterparts, perhaps a system could be set up in which the small market teams get a larger percentage of shared revenue items. Currently the 30 teams equally share proceeds from the national TV contract, merchandising, Internet, etc. Maybe MLB should distribute that money unevenly and give a bigger share to small market teams. This way large market teams can keep their money and stop subsidizing losing operations.

Or maybe Selig can distribute some of his reported $17 million salary to the poor, poor small market teams. Don’t hold your breath waiting for that to happen.

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