Saturday, January 30, 2010

Competitive Balance Talks Reopen

Ten Changes over the Next Decade for Baseball

#5 Competive Balance Issues Addressed Again

As I sit here watching game 7 of the 1992 NLCS, the Pittsburgh Pirates and Atlanta Braves history took polarized turns after this game. The Pirates have not had a winning season since 1992 and the Braves went on to win a World Series and they were in year two of fourteen consecutive winning seasons. Competitive balance has been a big conversation in baseball since free agency dollars started having such an impact which has resulted in increased costs for the fans and the corporate clients. Baseball, just as all sports has become an expensive activity to enjoy on a regular basis in most markets. Large market teams have been well equipped to spend on player talent and improve their team easier than opponents in small or medium markets. The Pittsburgh Pirates and Kansas City Royals have 1 winning season since the 1992 season. They are a collective 1-33. This is not healthy for the sport to have two teams with strong histories to be simply woeful over the years.

What the Rays did in 2008 was remarkable and helped temper the talks of competitive balance trouble in baseball. Their model for success was executed perfectly and it is the model that the Pirates and Orioles have been building and rebuilding upon year after year without success (Pittsburgh and Baltimore were the only two teams from the decade that did not have at least one winning season).

While there should never be a perfect competitive balance. What the fans in Pittsburgh have had to endure since 1992 is terrible for the game of baseball. Even one winning season every five years and a playoff appearance each decade would be an upgrade on nearly 20 years of losing. In part, team management is at fault. The way that large market teams operate is also at fault. Not being able to solve this problem at the previous two collective bargaining agreements puts both the office of the commissioner and the MLBPA at fault too. In essence, everyone is at fault for this issue and it is going to need to have new resolutions during this decade that will change revenue sharing and the luxury tax. A point of reference to the amount of money that has entered the free agent market since 2000 is shown easily by the average MLB player salary. In 2009, that figure was 3.26M, in 2000 that figure was 1.99M(64% increase). Small market teams just can't keep up with that spending increase unless they execute perfectly like the 2008 Rays. Or should I say 2005 Rays, when they launched their player development plan because the rebuilding process takes a significant amount of time.

In the next decade, watch for competitive balance talk to return to the forefront.

Friday, January 8, 2010

The International Draft

Ten Changes over the Next Decade for Baseball

#4 An International Draft

During a interview with Bud Selig around the World Series this year, he talked about potential changes that he wanted to make in the Collective Bargaining Agreement when discussions re-open in 2011. Selig earmarked changes to the draft system as being one of the changes he wanted to make.

The rationale for making the draft international would be to even the playing field amongst signing amateur talent outside of the United States. So for players such as Aroldis Chapman, who signed a reportedly $30M contract with Cincinnati this week, he would have to enter the draft to determine what team they would play for. This would mean that the landscape of the Dominican League camps and international scouting would change drastically. Rather than having the right to sign any of the talent directly out of their home countries, teams would now have to wait for the MLB draft in order to sign talent. This would be a major change for the draft and have both positive and negative effects.

The positive changes that would likely come from an international draft would be a slight competitive balance shift. Teams that are less aggressive in setting up international camps will now have the same opportunity to sign the top talent outside of the United States as teams that are more aggressive with camps will no longer have the luxury of signing many players outside of the United States after grooming them in their camps. Another positive is that there has been some dirty business that has occurred in signing international prospects. Much like the agent system in the United States, there are people in Latin America that will work for players and then take much of their salary if they do get signed. The rights for players would be under closer scrutiny.

A positive is that the draft could become far more interesting to follow if the story lines will include players that could potentially be closer to MLB ready. This could be good for the game if the draft becomes more of an event like competing leagues. It is likely that the MLB draft will never have the hysteria of the NFL, NBA or NHL that includes talent ready to play at the highest level, but it may be a step in that direction. In 2007, the first two rounds of the draft were broadcast on ESPN for the first time in the history of the MLB Draft. Last season, the draft was held on the MLB Network for extensive coverage. There is potential growth in that event and the international draft would certainly engage more fans in foreign markets.

The major negative to the international draft would be the clerical work that would be needed. In order for players to become eligible they would have to declare for the draft and in doing so that would require a massive effort from baseball to cover all of the eligible talent coming mostly from Latin America and Asia. There will also be quite a bit of work required by baseball operations departments to cover such a large territory. There already is coverage in international markets of varying degree for each team, however with an international draft, there will be even more travel needed for scouting.

It is in my opinion that for the international draft, baseball would benefit from the competitive balance argument. The counter argument is fairly strong in this case however too because the sport may not be ready right now to make such a major change as it will require teams to significantly alter their approaches in scouting and player development. The idea has been set now, but it seems more likely that the international draft may not be ready for implementation at the 2011 CBA discussions, unless a well thought out plan is produced by the Office of the Commissioner. Likely by the end of the decade, an international draft will be part of baseball after some more time and thought is put into this idea.

Tuesday, January 5, 2010

MLB Portland

Ten Changes over the Next Decade for Baseball

#3 MLB Expansion/Relocation to Portland, Oregon
During my senior year of college, several classmates and I worked on a group project that detailed a strategic plan for relocating the Oakland Athletics to Portland, Oregon. It was our opportunity to get creative and develop an idea that was plausible. The result was a comprehensive report that covered pretty much all of the areas of running a professional sports franchise including: sponsorships, marketing, baseball operations, etc. Here is the condensed version of why Major League Baseball belongs in Portland:

Currently, the Portland Beavers provide the city with their baseball entertainment playing in the AAA Pacific Coast League. With their stadium located downtown, accessible to public transportation, the city was thinking with foresight when they built the new stadium with the ability to expand the seating capacity and upgrade the facility if Major League Baseball came to calling. Getting the MLB to reach Portland is extremely well supported by their region. The city is headquarters for both Addidas and Nike. There are two very well done websites to support the idea that are linked below that show how much time and effort has gone into MLB Portland. Importantly, the people of Portland support their teams. The Trailblazers have been in the top ten in attendance the last three years and are currently fifth this season, selling above 95% of their seats. Including as high as 3rd in 2008-2009 when they sold out 102% of their seating capacity for the year. The interest in the Blazers points that adding another major professional sports team would be well supported. The Portland Timbers will be joining Major League Soccer in 2011, so I predict that by the end of the decade, Major League Baseball will be the next to expand to Portland.

Other benefits to having a team in Portland is that it will create better travel for teams that are going to play Seattle. Right now, Seattle travels the furthest of any team and its closest MLB competitors are Colorado and Oakland. By adding a team to Portland, a rivalry will hopefully be created in the Pacific Northwest and baseball would have the opportunity to expand its presence further into Oregon, Northern California, Idaho and Montana. Fans wouldn't have to drive 8 hours to see a baseball game anymore. Teams would be able to reduce travel time a bit by making a swing to play Portland and Seattle. There could even be a re-alignment of teams so that each division has 5 teams in it. (Houston to NL or AL West?)

I feel that rather than adding a new team and potentially creating the problem of having an odd number of teams, Baseball should relocate one of its teams to Portland. The obvious choice to me is the Oakland Athletics. The A's finished last in attendance in 2009, averaging around 17,000 fans each night. They play in a football stadium, which makes matters worse in that the percentage of seats sold was below 40%, so it looked even more barren. This was by far the lowest percentage across baseball. The A's were in talks of building a new stadium, but legal trouble and MLB market rules have dashed those hopes for now. An outdated stadium and low attendance are a bad combination for this team. Furthermore, across the bay in San Francisco, baseball flourishes. Oakland fans will still have the opportunity to see baseball if they so desire. The San Francisco market size would increase and Baseball would grow further into some of its unclaimed territories.

Moving baseball to Portland just makes sense.

For Further Reading:

Cuban Baseball

Ten Changes over the Next Decade for Baseball
#2: Cuban Politics Affecting Baseball

In the 2000's Cuba saw a few players defect from their country to be eligible to play baseball in the United States. Examples of such players include Lvian Hernandez, Orlando Hernadez, Jose Contreras, Yunel Escobar and Kendry Morales to name some of the more famous players. There already is some history of Cuban players succeeding in Major League Baseball and being well compensated (See Jose Contreras and bidding war).

[For an excellent story detailing Yunel Escobar's defection, the following Sports Illustrated article opened my eyes:]

With Ardonis Chapman now being contacted by double digit number of teams, and the performances at the World Baseball Classic in 2006 and 2009, there is a lot of top-tier talent that remains untapped from Cuba. There is talk that border restrictions will be loosened for their country now that Fidel Castro is no longer in leadership. Contingent on political changes in Cuba, a country rich in baseball talent, there will be a major influx of Major League and Minor League talent. With 48% of minor leaguers born outside of the United States and 28% of major leaguers, this is going to increase the supply of talent, which is going to hurt salaries and improve the product on field. While the changes will be tough to observe on the surface. Having such a high amount of new talent available is going to impact the economics of the game to some extent and certainly create some new story lines.

I would come down on this as being a positive for baseball. Whenever there is an opportunity to have the overall product on the field improve, baseball needs to take it. It may stifle salaries a bit at the lower level, and make the conversation about an international draft very interesting, but it should create a great deal of pride for people of Cuban heritage. MLB Marketing would benefit well from this as a result.

Perhaps this is why the Marlins aren't in Portland, OR.?

Sunday, January 3, 2010

A New Commissioner for Baseball

Ten Changes over the Next Decade for Baseball

#1: A New Commissioner for Baseball
This is an excellent starting point for this conversation because we already know that Bud Selig has decided to step down from his post as MLB Commissioner, a position that he has held since 1992. The decision that the owners make for his successor may also be the most important one made of the decade. As we have seen all throughout baseball history, the leadership of the players and the league have changed the game. Examples such as Kenesaw Landis (famous for stomping out the rival Federal League), Marvin Miller (Leader of the MLBPA and responsible for increasing player rights) and Bud Selig (Initiated the Wild Card, revenue sharing and steroid testing) exist as proof of the importance of this decision.

The coming decade could be an opportunity for baseball. Football has become America's favorite game to watch in recent years and they could be in for some trouble with a strike or lockout due to increasing player demands and under-publicized health issues for players (did you know that the average life-expectancy for an NFL player is their mid-fifties?). Baseball will have the opportunity at the end of the 2011 season to discuss substantial changes to the revenue system of the league. There has already been talks of salary cap, an international draft and hard caps for signing draft picks. All of which would substantially change the economic status of the game in favor of the league rather than the player. At the conclusion of those talks, Bud Selig will step down and Major League Baseball will appoint a new commissioner.

Likely, on Opening Day 2012 baseball will not have all three of those talking points installed in the Collective Bargaining Agreement. They may be lucky to have one based on the history of bargaining with the players. This means that the next commissioner will have a great deal of work on their hands to continue to impact the economics of the game. In addition, there may be more radical ideas to talk about such as shortening the season, the World Baseball Classic and so on, so forth. The most important rule is that leadership is going to have to be savvy and ready to legally out-maneuver the MLBPA while still keeping the integrity of the game in tact and the players on the field as expected by the fans. A work stoppage in baseball would be catastrophic, especially with the NFL having some problems under the surface. This could be a decade where the MLB picks up some lost ground to the NFL in terms of popularity outside of the Northeast.

Some names that I have heard tossed around have been: Cal Ripken Jr., John Schuerholz, and even George W. Bush. I feel as though those names would do a great job as being ambassadors to the game. I do not feel that is the proper direction for this decade. There are going to be significant changes being made to the game in the future. Having leadership with a strong legal background is going to be incredibly important to the game. Selecting the correct person is going to be important. Both lawyers, Marvin Miller battled Bowie Kuhn for years on making the right decisions for baseball. During that time, the players made significant gains in unionizing, opening free agency and arbitration. Major League Baseball will need to select its leader carefully after Bud Selig retires.