Showing posts with label Revenue Sharing. Show all posts
Showing posts with label Revenue Sharing. Show all posts

28 November 2011

The Orioles are a Small Market Team

That title probably brought a number of you here to read this column and tell me how I am wrong.  Not only wrong, I imagine some of you might call me blinded by Dan Duquette's words over the past few weeks that suggest he considers the team a small market ballclub ("I learned in a small market, I applied my skills in a small market, to put together a top-quality team").

Mind you, I did not feel that Baltimore was a small market town.  I have always bought into the idea of the Orioles being a sleeping baseball giant as Peter Gammons used to say.  However, my own personal journey challenging that thought emerged as I began as I began traveling around to other cities.  I began to realize how small Baltimore is and how much of the city is probably not all that interested in baseball or inclined to spend money on it.  Add that to some of the money from corporations, perhaps, being siphoned off to the Nationals who are trying hard to be a well liked team (to varying success).  At this point, I became comfortable with Baltimore being a mid-market town, which made sense with respect to information available on how money is dispersed in Major League Baseball.  However, they calculate these things, the Orioles (in the few years available) were right in the middle neither giving or receiving much of anything.  

Recently, Dan Duquette referred to the Orioles as a small market team in being introduced to the fan base and in several interviews thereafter.  Are these valid statements?  Have we been in a situation akin to the frog that sit in a pot of water slowly coming to boil?  Do we not realize we are being boiled...or fading as a city of importance.  It would seem to fit the motif of an old port and steel city that is being marginalized by outsourcing of materials and a trade deficit.  It is also something that was harped on with the Wire.

My methodology was simple.  I consulted four sources:
AL East Rankings

Baltimore
TV Market Rank: 27th
Radio Market Rank: 21st
Population Rank: 21st
GDP Rank: 19th

Boston
TV Market Rank: 7th
Radio Market Rank: 10th
Population Rank: 22nd
GDP Rank: 9th

New York
TV Market Rank: 1st
Radio Market Rank: 1st
Population Rank: 1st
GDP Rank: 1st

Tampa
TV Market Rank: 14th
Radio Market Rank: 19th
Population Rank: 55th
GDP Rank: 23rd

Toronto
(not in United States, so we have to use different sources)
TV Market Rank: Between 4th ranked Philadelphia and 5th ranked Dallas
Radio Market Rank: Between 14th ranked Seattle and 15th ranked Pheonix
Population Rank: Between 3rd ranked Chicago and 4th ranked Houston
GDP Rank: Between 11th ranked Miami and 12th ranked Seattle



Conclusion
The data tends to indicate that the Orioles are likely a low mid-market team or a high small market team.  Camden Yards, a greater population, and a history probably helps the Orioles sustain a higher revenue than the Rays have.  It also helps that the Orioles' regional market deal helps them siphon cash away from the potential gold mine of the Washington DC market.  Of course, DC has had issues with properly supporting the team.  The last time a DC team was dominant was probably back in the late 1860s and early 1870s when the Treasury Department bankrolled the team.

Back to Baltimore, we might have to get use to the idea that this team cannot spend as much money as teams in Arlington or Boston.  The Orioles are at a competitive disadvantage and it makes it difficult for the team to succeed.  It requires a top notch front office that is efficient with how it invests its money and that has not been the MO of the team over the past couple decades (or ever?).  Even the great teams of the 60s and 70s were built on a foundation of out spending teams for bonus babies prior to the implementation of the draft. 

The Orioles were big spenders back in the day, so how did their population size compare back then?

Baltimore does appear to have stabilized in population and one hopes the same is true about the amount of money the team is able to take in from the surrounding area.  During the 1990s Baltimore began successfully (to a degree) shifting from blue collar to white collar commerce and production.  The city is still well behind New York, Boston, and Toronto in terms of available money coming from media deals.  I boiled it down to two things: (1) the Orioles are a threshold middle/small market team and (2) they are in a worst potential revenue market than three of the five teams in the AL East.

03 March 2010

A somewhat blind stab at revenue sharing . . .


In a recent article at Baseball America, Maury Brown discusses revenue sharing. He wrote:

Revenue-sharing money comes from two pools. One is central fund revenue, which comes from national television and radio deals, Major League Baseball Advanced Media, merchandise sales and the newly formed MLB Network. Each of the 30 clubs got a check for about $30 million in 2009 through this arrangement.

The other pool is the one that has created tension between small- and large-revenue clubs, as it is the one that transfers money between franchises. This pool is made up of net local revenues, such as ticket sales, concessions and media deals that each club negotiates for television and radio.


What is uncertain is how the second pool is dispersed. The following numbers are based on the total of 433MM of revenue sharing reported in the Biz of Baseball. I then merely assumed the money was paid out similarly to the 2005 scheme, but that is probably a rather large assumption.

Tampa Bay Rays 45.9MM
Marlins 43.1MM
Blue Jays 43.1MM
Royals 41.7MM
Pirates 34.8MM
Tigers 34.8MM
Brewers 33.4MM
Twins 31.6MM
Athletics 26.4MM
Reds 22.3MM
Rangers 22.3MM
Diamondbacks 18.1MM
Indians 8.3MM
Phillies 8.3MM
Padres 8.3MM
Nationals 5.6MM
Orioles 2.8MM

This method would suggest that Scott Boras was correct in his assertations earlier this offseason. It also suggests that MLB cuts a check for the Orioles at the tune of 32.8MM.

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