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
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