behrcolls@aol.com
Strike or not, baseball
improve how
needs to
it runs
by James Flanigan
Los Angeles Times
The simple truth is that baseball is not a
very good business.
That's the basic problem as major league
baseball nears a fateful strike deadline Friday.
If there is a strike, the value of baseball teams
will almost certainly go down.
Yet if negotiators for the players union and
team owners reach an agreement on revenue
sharing and other matters, values of leading
teams still could go down because they will
be penalized to take care of weaker clubs in
the 30-team major leagues.
A decline in team values would be a ter
rible turn for the sport. The chief business at
traction in owning a baseball franchise is that
team values appreciate over time. The Ana
heim Angels, for example, have appreciated
at more than 10 percent a year since 1996,
when Walt Disney Co. first bought an interest
in the team.
The Los Angeles Dodgers rose in value 11.9
percent a year compounded from 1950, when
Walter O'Malley bought the Brooklyn Dodg
ers, to 1998 when his son Peter O'Malley sold
the team to Rupert Murdoch's News Corp.,
according to statistics compiled by Moag &
Co., a Baltimore-based sports evaluation firm.
On the other hand, the Florida Marlins ap
preciated at only about 5 percent during the
19905, which include the year the team won
the World Series. Its owners could have done
better in Individual Retirement Accounts with
compound interest.
There are fears today that appreciation could
be slowing because business people don't find
baseball, with teams reporting big losses, an
attractive place to invest.
Murdoch is reported to be trying to sell the
Dodgers, while retaining the television and
cable rights to games. (A spokesman for News
Corp. said Murdoch has said nothing about
selling, and his only recent statement is that
he is "thrilled by the improvement in the team
this year. - )
Disney has tried to sell the Angels but no
big-money buyers with serious offers have
stepped up to the plate.
Baseball is not doomed. In many ways its
losses are overstated and its future could ty
bright if it can reorganize operations. Unfor
tunately, current negotiations may not produce
such a beneficial reorganization.
In current labor talks, as well as those in
1994 that led to the longest strike in sports
history, baseball owners are trying to achieve
a cap on salaries and revenue sharing to foster
a competitive balance among teams.
Baseball is late. The NFL has had revenue
sharing and salary caps for years. The NFL's
overseers realized that if teams could be kept
roughly on a par, competitive games could be
come a national television attraction.
Baseball, which plays 162 games a year, is
more a sport of local enthusiasm. Its national
TV contracts have never been as large as pro
football's. But baseball never devised a suc
cessful policy to encourage regional television
coverage for its teams.
"The Cincinnati Reds used to be televised
in Kentucky, but today nobody sees them or
speaks about them," says economist Bruce
Johnson at Centre College in Danville, Ky.
And baseball should have been doing more
NASCAR
2002 Winston Cup
Standings:
Thru Race 24 of 36
Next Race:
Mountain Dew
Southern 500 September 1
Pos. Driver Points
1 Sterling Marlin 3240
Matt Martin
Jeff Gordon
Tony Stewart
Jimmie Johnson
Rusty Wallace
Ricky Rudd
Bill Elliott
Matt Kenseth
Dale Jarrett
Kurt Busch
Ryan Newman
Jeff Burton 2763
Michael Waltrip 2705
Dale Earnhardt Jr. 2640
Iti
Ricky Craven 2601
2546
Bobby Labonte
Terry Labonte
2480
Kevin Harvick
Jeff Green
NI,SCAR
insion Cup
SerieN
its business
to ensure competitive balance. Now it has be
come a sport of wealthier teams that are able
to hire better players, and other teams that gen
erally have little hope of making the lucrative
postseason playoffs.
Baseball today is pleading poverty. Base
ball Commissioner Bud Selig told Congress
that teams collectively are losing more than
$5OO million. But normal business account
ing, which includes depreciation of assets,
would reduce losses to $l5O million at most,
says sports economist Andrew Zimbalist of
Smith College in Nortfampton, Mass.
For example, expensive player contracts of
fer a tax shelter for new owners of baseball
teams. A buyer may take half the purchase
price of the team as representing player con
tracts and then amortize those contracts for
tax purposes over five years, gaining a tax
shelter for profits in any other business.
A team's connection with media companies
owning cable channels, such as the Atlanta
Braves, Chicago Cubs, Dodgers and New York
Yankees, also changes the profit picture. The
team's games add an attraction that increases
the cable channel's earnings, but none of that
profit shows on the baseball team's account.
"The big value in baseball franchises today
lies in regional cable organizations you can
create around them," says Michael
Mendelsohn, head of Patriot Advisors Inc., an
entertainment industry brokerage in Los An
geles.
The Yankees and their principal owner,
George Steinbrenner, have organized a lucra
tive regional sports cable network in the New
York area in recent years. And Steinbrenner
has used cable revenue to pay for star players,
making the Yankees a frequent champion in
the last six years.
But this has made him and the Yankees the
target of reform. Yankee revenue should be
transferred to San Diego and Kansas City so
that those teams can pay star players too, goes
the thinking behind the luxury tax other own
ers hope to place on Steinbrenner's payroll.
The Dodgers, as a large-market team, also
would have to transfer revenue.
But nothing guarantees that the wealthy
owners of small-market teams such as San
-Diege-aniiKantiasCitrwill invest shared rev
enue to become competitive. They' haven't
shown much initiative so far.
And no mention is made of the fact that
Steinbrenner's Yankees went 14 years from the
early 1980 s to the mid-'9os without getting into
postseason play.
What that portends is that even if there is
no strike, today's proposed reforms are not
likely to cure baseball's ills.
What could do so? Fresh thinking. John
Moag, head of the sports evaluation firm bear
ing his name, proposes that "100 pecent of all
gate receipts go directly to the home team's
player payroll." That would "establish a mean
ingful link between the fans and the players
they support," Moag says.
The tnith is, baseball could face broaden
ing horizons, with cable and satellite broad
casting able to target subscribers and attract
advertisers. Also international markets are
opening to baseball as they may never open
to pro football.
If baseball can survive this week, perhaps
it can become a good business tomorrow.
Professional Golf Association
PGA Money Leaders
Plus," Winnings,
Tiger Woods 5.496
Phil Mickelson 3.817
Ernie Els 3.128
Rich Beem 2.783
Jerry Kelly 2.454
6. David Toms 2.299
3145
3129
3101
3095
THE NATIONAL SPORTS ARENA
(Money in Millions)
Justin Leonard 2.175
Sergio Garcia 2.164
Vijay Singh 2.163
Shigeki Maruyama 2.074
Nick Price 2.014
Len Mattiace 1.993
Jim Furyk 1.935
Retief Goosen 1.932
Fred Funk 1.916
Chris DiMarco 1.863
JoseMariaOlazabal 1.862
Rocco Mediate 1.832
Chris Riley 1.771
Brad Faxon 1.663
Kenny Perry 1.650
Davis Love 111 1,638
Craig Perks 1.605
Scott McCarron 1.501
Bob Estes 1.500
SPORTS
Friday, August 30, 2002
Runners
continued from page 6
race in 28:51 to take 21st overall
and 6th in the same age group as
Schhultheis. Wheeler ran a 31:54
on the hot June evening, and Croft
completed the race in 33:10
finishing 56th and 74th
respectively.
Knapp ran a 37:01 to take 169th
over the entire field and 3rd in the
women age 20-24 group. Szafran
surprised herself in her first 5-mile
road race by running a 39:38 after
a long car ride from Bradford.
The most impressive thing about
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Statistical Leaders
Batting Average (AVG)
Player Team POS AVG
1 B Bonds SF LF .372
2 L Walker COL 1B .356
3 B Williams NYY CF .344
4 M Sweeney KC 1B .344
5 I Suzuki SEA RF .338
Home Runs (HR)
Player Team POS HR
1 ARodriguez TEX SS 47
2 S Sosa CHI RF 43
3 J Thome CLE 1B 41
4 B Bonds SF LF 40
5 S Green LA RF 38
Runs Batted In (RBI)
Player Team POS RBI
1 ARodriguezTEX SS 116
2 M Tejada OAK SS 110
3 M Ordonez MON RF 107
3 L Berkman HOU CF 107
5 A Pujols StL LF 103
Player Team POS Runs
1 A RodriguezTEX SS 105
1 A Soriano NYY 2B 105
3 S Sosa ChC RF 104
4 D Jeter NYY SS 103
5 A Pujols StL LF 100
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Major League Baseball
Runs
her time is she finished second in
the women age 16-19 group.
All of these accomplishments
were from one race and they were
from June. Since then, all of the
athletes on the team have
completed an additional two
grueling months of training and
ran other races. Also, this is just
the racing accomplishments of
five of the team's runners in one
isolated race. To list all of the
teams off season racing
accomplishments would
4110 a
Family Health
Council, Inc.
0 Adoption
League Leaders
Player Team POS Wins
1 C Schilling ARZ P 21
2 R Johnson ARZ P 19
2 B Zito OAK P 19
4 P Martinez BOS P 17
4 D Lowe BOS P 17
Earned Run Average (ERA)
Player Team POS ERA
1 P Martinez BOS P 2.22
2 D Lowe BOS P 2.39
3 R Johnson ARI P 2.44
4 G Maddux ATL P 2.56
5 B Colon MON P 2.65
Player Team PDS SO
1 R Johnson ARZ P 279
2 C Schilling ARZ P 266
3 P Martinez BOS P 221
4 M Clement ChC P 187
5 A Burnett FLA P 183
Player Team PQS SV
1 J Smoltz ATL P 46
1 E Gagne LA P 45
3 M Williams PIT P 38
3 E GuardadoMlN P 38
3 J Mesa PHI P 37
' •
'et:WEN!
Erie Office
1611 Peach St.
814-453-4718
Wins
Strikeouts (SO)
Saves (SV)
The Behrend Beacon
undoubtedly take up an entire
page. The "off-season" full of
training is over and the Lions
cross country team kicks off its
season this weekend at the
Westminster Invitational. The
team looks to build from a
summer full of hard work and start
racing the ones that matter.
ESPN/USA Today Football
Coaches Poll
Rank Team Record
1. Miami 0-0
2. Texas 0-0
3. Oklahoma 0-0
4. Tennessee 0-0
5. Florida State 0-0
6. Colorado 0-0
7. Florida 0-0
8. Nebraska 1-0
9. Washington 0-0
10. Michigan 0-0
11. Ohio State 1-0
12. Georgia 0-0
13. WashingtonSt.o-0
14. LSU 0-0
15. Oregon 0-0
16. Virginia Tech 1-0
17. Michigan St. 0-0
18. Louisville 0-0
19. USC 0-0
20. Maryland 0-0
21. South Carolina 0-0
22. Marshall 0-0
23. Penn State 0-0
24. N.O State 1-0
25. Wisconsin 1-0
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