BASEBALL

Spare the Cash, Spoil the Rod

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Q. How can you say "More power to him"? Wasn't that you just two weeks ago who was whining about the high price of Yankee tickets? Isn't Derek Jeter now going to demand his $20 million a year, driving Yankee ticket prices higher than George Steinbrenner's blood pressure?

A. You'd think, wouldn't you? But history shows the opposite: higher ticket prices (and so higher team free-agent budgets) lead to increased player salaries, but not the other way around. In the late 1970s, for instance, the introduction of free agency sent average baseball salaries soaring -- but ticket prices actually fell relative to inflation. The only time ticket prices go up is when demand goes up, because a team has improved, because baseball overall is more popular -- or because a new stadium has brought in the tourists and the corporate ticket buyers to artificially stimulate demand.

That said, owners will sometimes use big player contracts as an excuse to raise ticket prices -- witness Cincinnati's threats to hike prices midseason last summer after re-signing Barry Larkin. Of course, the Reds never actually implemented that price increase, presumably because team management discovered that raising ticket prices for the pennant drive only works when you're not out of the race by Labor Day.

Q. Doesn't this just prove that baseball is about to be destroyed by competitive imbalance/baseball has plenty of money and should quit whining about competitive imbalance?

A. The second funniest thing on SportsCenter the week of the big deal was when a pair of ESPN pundits made these diametrically opposed arguments within minutes of each other. What a wonderful world, baseball, where you can be too rich and too poor, all at the same time.

The fact is, baseball as a whole has plenty of money -- it's just distributed poorly. What makes baseball's finances different from the other three major sports isn't so much lack of a salary cap as lack of shared TV revenue: in baseball, unlike in other sports, local TV revenue is the name of the game, but only revenue from the national contracts is shared. So you have teams like the Yankees ($100 million a year in local broadcast revenue alone) outspending teams like the Expos (no TV contract at all, for poutine's sake) year after year -- and you have owners like Hicks throwing gobs of money at 25-year-old shortstops in the hopes of making them into TV stars. In the NFL, where even the reincarnation of Red Grange wouldn't earn you more than 1/31st of the national TV money, that would never happen.

As for the future of baseball, I wouldn't worry. Some fans may recall that the sport has been through competitive imbalance before -- like, from 1921 to 1964 when the Yankees won the American League pennant two out of every three years. Sure, it's got to be rough to be a Kansas City fan right now as your team shops Johnny Damon since they can't afford to re-sign him -- but it must have been a bummer for fans in '59 when Kansas City sent that Maris kid to the big-spending Yankees for Marv Throneberry.

Q. You may not care about competitive balance, but Bud Selig sure seems to.

A. Bud Selig cares about anything that can be used as a blunt object in next fall's labor agreement showdown. "They'll use this $252 million purchase of A-Rod to say, 'Yeah, Texas got a little better, but look what happened to Seattle -- yet another reasonably competitive team priced out of the market," predicts Fort. Then, brandishing his blue-ribbon panel report, Selig will demand a luxury tax to rescue the 27 teams the report claims are losing money. "And Don Fehr," Fort continues, "will take the stance he's always taken, which is to look them in the eye, and say: Show me."

Which will lead to an impasse, which will lead to more owner brinksmanship and a likely lockout. "It'll be just the same," says Fort. "The owners don't even have a batting average against the players. They are 0-for-forever."

Q. Luxury taxes, revenue streams -- don't economists ever just sit down and watch ballgames like normal humans?

A. You bet. In fact, Fort says, "I have a hard time on the issue of the Mariners keeping my analytical self separate from my fan self," before launching into an impassioned defense of the Randy Johnson and Ken Griffey Jr. trades and criticism of the M's letting A-Rod walk for nothing. But there's no time for that kind of hot-stove talk -- not when there are $252 million contracts to be obsessed over.

Questions or comments? Please send them by email to neil@demause.net

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