Major League Baseball’s rich owners and its not-so-rich owners are skirmishing over the game’s economic structure, and if something doesn’t change by this time next year the conflict will burst into a bench-clearing brawl. For years, the poorest franchises have wanted rich clubs to share more of their local revenues, which include parking, concessions, gate receipts, and local broadcast contracts. The poor-club argument got a boost in July when an independent panel appointed by MLB recommended that baseball pool half of its local revenues.
The money pressure will only increase at the close of next season, when baseball’s labor agreement expires and the players negotiate a sweeter deal for themselves. The cash-starved, small-market teams will say that without revenue sharing they won’t be able to survive, let alone field competitive teams. If pushed too hard in the direction of revenue sharing, the rich owners might even pull out of Major League Baseball and form their own league.
The rich owners are right to oppose revenue sharing. It will not restore competitive balance. And extending life support to the half-dozen poorest franchises will only undermine the successful teams. The best alternative is to reduce MLB from 30 franchises to the two dozen that have a legitimate chance of staying healthy. Contraction has been quietly debated inside the baseball temples for more than a year now. Several executives, such as the San Diego Padres’ Larry Lucchino, have suggested dropping a couple of teams.
It all comes down to money. According to the report commissioned by MLB, the gap between rich and poor franchises has widened. Revenues at baseball’s eight richest clubs have almost doubled since 1995, rising from $69 million apiece to $123 million. Meanwhile, baseball’s poorest eight teams brought in $29 million per club last year, only $6 million more than in 1995.
With rare exception, the suffering franchises play in fairly small TV markets—those with 1.5 million or fewer households. This explains why these clubs are going broke: Local broadcast revenue is baseball’s most important income source. More viewers mean more money, and more money means a fatter treasury to attract top players, and top players often translate into bigger audiences. Also, big bucks make it easier for clubs to weather bad years.
The root of the problem has been over-expansion: Since the expansion era began in 1962, MLB has tried to put a team in every decent-sized North American city instead of moving franchises to where the people are. For example, instead of expanding the league again in the late ‘90s, MLB should have moved the Twins or the Expos to Phoenix. If a team can’t attract enough fans in one city, it should be given two cities, maybe even three so the potential market is at least 1.5 million homes. So let’s get out the surgical saw:
On paper, Southern California should be able to support three teams. But in reality, the Padres and the Angels are still in the second division of baseball’s revenue tables. Combine them! Assuming a third of Los Angeles supports the team, it would control about 2.8 million households. The team could be called the Saints or maybe something snappier, like the Nuns.
Theoretically, Southern Florida should support at least two teams. Right now, it doesn’t support any. The Marlins rank 20th by local revenue; the Devil Rays are 11th and fading fast. Merge them and move the new franchise to Orlando, where it would draw fans from across the state, as well as tourists. Miami, Tampa, and Orlando together have just over 4 million homes. Suggested names: the Sun Rays, the Fish, the Darlin’s.
The upper Midwest only needs one team. The Twins (29th in local revenue) can merge with the Brewers (25th). The combined Minneapolis-St. Paul-Milwaukee market: 2.3 million. Suggested name: the Beavers, evocative of the area’s rich history of fur trapping.
The Cardinals (14th by revenue) draw well throughout Missouri, but not in the far west of the state. Nix the Royals. They rank 26th by revenue. Combined Kansas City-St. Louis market: 2 million. Suggested name: Still the Cardinals.
Then, there are the Blue Jays and the Expos, two large-market teams that rank 16th and 30th by revenue and both on the decline. The combined team should be moved to Ottawa and given a name that shows it is Canada’s team. The Frostbacks? It may be an insult, but in Canada, so is Yankee. Combined market, including Ottawa: 4.7 million.
Contraction’s opponents worry that baseball will eliminate teams that may become viable. Indeed, a decade ago, the Mariners, the Indians, and the Braves all struggled to make ends meet. All three are now healthy. Ten years from now, the same may be true of the White Sox and the Giants. But that won’t be true of the Athletics, the Bay Area’s No. 2 team. Merge them with the Giants immediately. The new team could be called the Gigantics. It would dominate a TV market of 2.4 million households.
That leaves just two franchises struggling in small markets, Pittsburgh and Cincinnati. Both dwell in the bottom half by revenue, but neither is in immediate danger of failing. And both are close to opening new stadiums. If they don’t improve, merge them with the Phillies and the Indians.
Or, one of them could move to New York, a market of nearly 7 million—more than enough room for a third team. What do Pirates bring to mind if not Wall Street? And is there a better home for a team called the Reds than the Upper West Side?