Over the last month, we’ve focused here (and here, and here) on the future of baseball’s system of revenue sharing. The revenue sharing system moves about $450 million annually from baseball’s high-revenue teams like the Yankees and Red Sox to low-revenue teams like the Marlins and Pirates. The idea behind the system is to help low-revenue teams compete on the field. But as we’ve learned from confidential financial statements revealed by deadspin.com, some of the “poor” teams have instead used these payments to increase profits, rather than invest these payments to improve their ballclubs.
In our last installment of this series, we focused on the Tampa Bay Rays, a team that some think has used revenue sharing in the right way. No doubt, the current version of the Rays is a terrific baseball team. However, as I argued here in detail, the Rays’ need for revenue sharing is greatest right now: their current payroll cost is rising, and their local revenues cannot keep pace. But perversely, now that the Rays are achieving the kind of success that revenue sharing (supposedly) was designed to foster, the Rays receive less in revenue sharing than perpetual losers like the Pittsburgh Pirates.
Based on the data revealed by deadspin.com, I stated previously that the Rays probably lost money in 2009, and that they’ll probably lose even more money in 2010. I questioned previously how much longer the Rays could hold the current team together.
Now we have confirmation from Rays’ owner Stuart Sternberg: the Rays are going to cut payroll. The Rays’ current payroll? $72 million. The Rays’ projected 2011 payroll? $50 million. That’s a 31% cut.
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Continue reading Tampa Bay Plans A Step Backwards (More On Why Revenue Sharing Is Dead)