« Archive for November, 2009

Anyone who’s read this blog over the years knows how I feel about Marvin Miller’s place in baseball history — I have him as the second most important off-field figure, next to Branch Rickey. With Miller again up for HOF induction, I think it’s worth re-posting what I wrote two years ago, when Bowie Kuhn got in and Miller was left out by the Veterans Committee, which insanely enough is populated by a bunch of players that Marvin Miller helped make rich. This is from December 3, 2007, in a post titled “The Hall of Fame Has Issues”:

Five men were elected this morning by the Veterans Committee: Walter O’Malley, Barney Dreyfuss, Dick Williams, Billy Southworth, and Bowie Kuhn. O’Malley and Dreyfuss were team owners, and each played large roles in the sport during their eras. Williams and Southworth were World Series-winning field managers. I have trouble making a legitimate case against any of them, except that they seem to be benefiting from the inherent randomness of the who’s in, who’s out culture.

But I can say this with confidence: that Bowie Kuhn was elected and Marvin Miller was not is perhaps the greatest injustice in the history of the Hall of Fame.

This is the Washington Generals being honored ahead of the Globetrotters. Wile Coyote being enshrined before the Roadrunner. For anyone who knows the history of these two men, this is more than a strange happenstance; it is complete ignorance, at it’s very worst.

Here are two executives that were on opposite sides of the same bargaining table for over a decade, whose careers in baseball overlapped almost completely. You cannot tell Bowie Kuhn’s story without telling Marvin Miller’s, and vice versa.

And when these stories are told, it’s clear that you are not discussing two equals. Miller was a brilliant thinker and strategist, a man set on revolutionizing the sport’s business model, all while righting a tremendous wrong. He was, I believe, the second most influential off field personality in the history of baseball, behind only Branch Rickey.

Kuhn, on the other hand, simply did his best to avoid failure. He had neither the forceful nature of Judge Landis, nor the business sense of Peter Ueberroth, nor the consensus-building skills of Bud Selig. The business grew under his watch out of pure necessity, only after Miller’s labor victories changed the teams’ once negligible cost structures.

And those victories were as numerous as they were earthshaking. When Miller became executive director of the Players Association in 1966, the sport had no collective bargaining agreement. Players were bound under the oppressive reserve clause, which would have been deemed illegal in any other industry in the country. They received a small pension from All-Star Game revenues, and that was it.

Miller changed all that, and quickly. He negotiated the first CBA in 1968, and in 1970 had binding, independent, arbitration included in the second such agreement. He soon parlayed that into his greatest gains: Catfish Hunter’s free agency in 1974, and the monumental Seitz Decision in 1975. With these victories under their belts, the MLBPA had turned the tables: thanks to Miller’s incredible foresight, they had taken over the power in salary negotiations, making many of them exceedingly wealthy in the coming decades.

Where was Kuhn when all this was going on? Flatfooted, along with all of his bosses. The owners were soundly beaten on every level, over and over again, because of their unwillingness to even recognize the possibility of change. When Miller first came on board, after working for several labor unions including the United Steelworkers, management personnel went above and beyond to belittle him. If anything, this tactic only helped solidify the players’ resolve. Later, when Peter Seitz outwardly hinted that he was going to rule for the players, and strongly suggested that the owners should cut a deal, they refused to even listen.

This was representative of Bowie Kuhn’s leadership, and should be his legacy. But apparently it isn’t. Instead, he will be enshrined into the Hall of Fame, while Marvin Miller is kept out.

The Hall remains a fabulous museum, and a great place to spend some time if you find yourself in upstate New York. But as an honor society, it is lacking. And while there have always been mistakes, this is its greatest.

Here’s hoping this wrong is righted in two years, when the VC will again vote on a list of executives. Here’s also hoping Marvin Miller, now 90 years old, will still be alive and well when it happens.

Feedback? Write a comment, or e-mail the author at shawn(AT)squawkingbaseball.com

I’ve been biting my tongue on this one, simply because so many other people have been trying to break it down. But here’s the bottom line on this: neither of them are really lying, they’re simply spinning the same numbers differently, each for their own purpose. Let’s try to go through this quickly:

- Are any teams getting $80-90m from revenue sharing and the central fund this year, as Boras claims, or is there “not one” club that is at that level, as Manfred has said? Impossible to say for sure, but it’s almost certain that the Marlins or another team are right around $80m — maybe a bit above, maybe a but below, but not appreciably different enough to say that either man is wrong. According to Rodney Fort’s data pages, MLB should be taking somewhere around $1.2-1.3b in national media revenue, so that’s $40m per team. Add in a couple million from other sources (BAM dividends, merchandising, etc.) and you have about $40-$45m. If the Marlins are taking $35-40m in revenue sharing (a pretty reasonable estimate), guess where that leaves them…

- Manfred is right that if teams spent 60% of their revenues on player salaries, they would be losing money. How do we know this? Because they spent about 60% on player salaries in the early ’00s, and lost money. There are lots of non-player costs involved in running a baseball team, including operating the stadium, subsidizing minor league baseball operations, spring training, the draft, international academies/signings, travel, and countless other categories. 50% seems to be the magic number for profitability, and that’s about where they’ve been for the past few years.

- Boras is creating an ignorance-is-bliss situation, and taking full advantage. He knows about how much teams bring in, but can only guess what’s actually going out. For example, he cites the Braves, saying they’re “making $180 million. Their payroll is what? Around $100 million. Then you add $30 million (in expenses) for administration, the minor leagues, the draft, other things. So they’re pocketing $50 million a year.” That, obviously, is ridiculous; it costs a lot more than $30m to fund an entire organization’s non-player costs, which Boras probably realizes, but is using the fact that the teams don’t release these figures as a way to frame it in a useful way.

- Another important point to remember, specifically for 2009: while total league revenue will be flat or slightly up, the majority of teams almost certainly saw declines. The total sum will be held up by MLB Network and the new stadiums in New York, neither of which really help the A’s or the Pirates very much in an operating sense. Player salaries, meanwhile, were also basically flat, even though the Yankees — who increased revenue significantly — actually cut their payroll a bit.

I’m a bit more sympathetic with the owners here, but Boras really isn’t doing anything wrong — as long as teams keep their numbers hidden, it’s perfectly logical for people with a vested interest on the players’ side to cry wolf. After all, it doesn’t really matter if people in Pittsburgh hate Scott Boras; it matters a lot if they feel like the Pirates are simply pocketing lots of cash and not doing their best to win.

Feedback? Write a comment, or e-mail the author at shawn(AT)squawkingbaseball.com

Via SBJ (sub required), the Yankees sold 6,000 subscriptions, which, at $49.95 a pop, comes out to $300,000 in revenue. MLB Advanced Media gets half, and the Yankees split the rest with the cable providers.

Is that good? Well, according to the SBJ article, some people claimed it beat expectations, while others claimed it fell short. IMHO, 6k is more than I would have figured — I’ve explained why I don’t think it’s a good value for customers, so the fact that it got any traction at all is a bit surprising.

But really, the subscription numbers themselves don’t really tell the story here — $300k is nothing for the Yankees, Cablevision, and BAM, especially when it’s split between all of them. And even if there were ten times as many buyers, it still wouldn’t move the needle much at any of those companies. So I’d be more interested in seeing how people are using it. Are those 6,000 subscribers engaged? How many times did they actually use it — once a week, once a month, once period?

If people are actually using it, then this is a scalable model. But I’m still skeptical, as long as people are paying for cable as well — this is undoubtedly the model of the future, but $49.95 still seems like a steep price point for the time being.

Feedback? Write a comment, or e-mail the author at shawn(AT)squawkingbaseball.com

Here’s what we know:

  • Ratings are up across the board. MLB, NFL, college football — everything is up.
  • Attendance is down. Especially in MLB and the NFL.
  • Fragmenting trends continue. More people are watching videos online, on their phones, etc.

And here’s Mark Cuban’s thought on this: “You cant stop people from recording shows on their DVRs, and you shouldnt try. But you should try to give them as many reasons as possible to take advantage of the increased entertainment value of participating  with others. High participation  equals high viewership. That is exactly what record ratings for sports are telling us.”

He could be right; social media has added something to the sports experience for me. But most of this is happening on Twitter, and most people still only use Facebook, if anything.

There’s also a thought that more people are watching on TV because they’re not going out as much. Okay, I could buy that — except that ratings were generally down or flat last year, when the economy was even worse.

So if I had to put a guess out there, it’s this: people are time-shifting a much higher percentage of their TV watching. DVR, Hulu, torrents, iTunes — there are so many alternative ways to watch scripted television that there’s no point in basing your schedule around your favorite shows.

Except sports, of course, which will always be time sensitive. So all of a sudden, sports games are the only shows that people need to base their schedules around. Time-shifting other shows has lifted some of that burden — if before you were going to choose between going out Thursday and missing the Office or going out Saturday and missing the football game, you’re now always going to choose the game, since you can watch the Office whenever you want.

This goes along with what Cuban said: sports are events, and there’s a lot of value in watching live. And he’s right that networks should try to build that same kind of value around scripted shows. But that’s an uphill climb.

Also note that this should still only be a temporary bump. Ratings are always going to go down in the long run, as media consumption becomes more fragmented. Still, no sports exec is going to complain right now.

Feedback? Write a comment, or e-mail the author at shawn(AT)squawkingbaseball.com

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