Monday, May 15, 2006

Revolution, Revisited (Part 1)

Editor's Note: Ever faithful reader Anonymous pointed out that we here at Nats Blog have not said a word about the ownership situation in wake of the developments last week. I won't speak for SuperNoVa or dexys, but to be honest, I received the news with the same attitude that Alfonso Soriano pursues doubles down the line when the Nats are behind -- I just couldn't muster enough effort to care. The reasons for that reaction are complicated, and these posts are designed, in part, to explain them. They are long, though, so I've split them into four parts.

Just last week Bud Selig finally selected which group of billionaires is entitled to the privilege of spending $450 million dollars to join the exclusive club that is MLB. It should be a time for Nats fans (finally) to put 18 months of off-the-field unrest behind us, and look forward to a Bowden-free era of direction and purpose that typically comes from having a real owner and executives who actually have a stake in the fortunes of our local nine.

But before we do that, we should ask this question: What exactly did the Lerners spend their $450 million on? Livan Hernandez, Brian Schneider, Nick Johnson? Frank Robinson, Jim Bowden, Tony Tavares? RFK? 81-81 in 2005? The expected 70 wins this year? Each of these things are, at best, of average quality relative to other major league teams, and most of these things are below average. Perhaps if the Nats had talent like the White Sox, management like the Braves, wins like the Yankees and a ballpark like SBC Park, the price would be higher, maybe even significantly higher, but I don't think anyone can say that a change in players, management or park would lower the price. To be sure, a fair amount of that price is related to the new ballpark, but that sort of gets to my ultimate point: very little, if any, of the purchase price is related to the things we as fans spend so much time griping and worrying about: the players, the games, the wins/losses. The ballpark, on the other hand, does relate to the price, but fans have very little say in the existence and nature of the ballpark. The bottom line is that the Lerners are paying for something that has very little to do with the success or failure of the Nats on the field.

What they paid for was the exclusive right to the Washington, D.C. market for major league baseball. That in and of itself is valuable, regardless of what happens on the field. As Andrew Zimbalist pointed out in May the Best Team Win, Fay Vincent referred to Washington, D.C. as an "asset" even when no franchise existed in the city. The D.C. area is one of the top five media markets, with millions of residents who would be attracted to baseball and thereby attractive to advertisers and marketers who will pay the Lerners to get in front of that crowd. But it is important that the majority of the value to the Lerners does not come from the baseball played on the field, but from the exclusivity offered to them from MLB. So it's no wonder that Lerners are untroubled by the Nats current awful start, the decimated farm system, and the incompetent management. None of that matters. Getting in the exclusive club that is MLB will earn its rewards by itself. How else can one explain the existence of the Royals, Devil Rays and Pirates?

And therein lies the problem for those of us who spend a fair amount of time thinking, worrying and caring about the on-field fortunes of the Nats. If someone is willing to spend $450 million without much care as to the actual on-field success/failure, then how do you think the fans' complaining about the on-field failure will figure into their calculus? I suspect it will be received like my request for a hot dog from an RFK concession stand -- with something between bemused indifference and annoyed hostility.

Back in February, we had a colloquy with Dave of Nats Triple Play about whether and how fans could voice their displeasure over the mismanagement by Jim Bowden. Dave took the "company" line, chiding those who renounced their season tickets. I disagreed with that view, but upon re-reading that post, it's clear I was half-hearted in my stance, given that I ultimately had no idea how and to what extent fans could influence the management decisions of a team. But ever since that exchange, I've been thinking about what product, exactly, does MLB produce, what type of product we consumers want from MLB, and how we could influence MLB and our favorite teams to make that product?

Now, however, I'm reasonably confident on the answer to that last question. We don't really have any influence at all. We might as well be rooting for the weather. And the reason for this is that we don't have the one tool that we can use in almost any other case to effect change: competition. The monopoly MLB holds over DC, and over the business of baseball in this country, prevents consumers from having a meaningful say in the operations of that business. Until that situation changes, it is delusional (although, like many delusions, a reasonably pleasant one) to think we can effect change.

What has prompted this conclusion? Primarily reading Bill James's 1988 essay, Revolution (which can be found in James' 1989 collection This Time Let's Not Eat the Bones), along with some other books and articles by Andrew Zimbalist and Stefan Szymanski. These writings describe the relatively simple steps, although far-reaching and unprecedented, that would vastly improve the lot of us fans in our relationship with the sport we love. The more I think about these changes, and the effects they would have, the less interested I am in discussing salary caps, revenue sharing, luxury taxes, collective bargaining and the like, all of which, when you think about the game as it could be, start to look like what they really are -- hastily constructed artifices designed to symbolize and represent the beneficial effects of the free market without actually changing the most pernicious aspects of the monopoly of baseball, and which, in some cases, do more harm than good in making teams accountable to the fans.

In the next few posts I'll try to describe what I've learned from James et al. about the structure of baseball and the alternatives that would be preferable. In part 2, we start with a description of Revolution.

7 Comments:

At 9:13 AM, Blogger Dave said...

DM:

I tend to agree with you on one big point -- "regular" fans really don't have any influence on our overlords. Funny how the discussion comes around sometimes.

I do think one small group of individuals does have some weight -- those who buy luxury skyboxes. They can ask for hot dogs at RFK and actually get something.

It's a harsh reality, and it's one fans don't like. Knowing you have no influence on something you care about is a difficult position, and certainly "no fun".

 
At 1:26 PM, Blogger DM said...

Dave:

Yes, your point about the pointlessness of dropping season tickets has always rung true, and I've been trying to figure out why. As you'll see in the remaining posts, I think the problem stems from MLB's monopoly structure. Some owners might be influenced by negative publicity or media attention, but it is entirely their whim to be so influenced or not, and in most cases history shows that MLB owners are not necessarily beneficient, democratic caretakers of a treasured institution.

As I explain in the upcoming posts, there's a way to change this, but until that happens, I'm starting to believe it's kind of silly to pretend we can effect change.

 
At 4:34 PM, Blogger Dave said...

I certainly look forward to the other posts.

I maintain that my original stance is fundamentally this:

Please, enjoy the games and enjoy the experience, but don't believe that they (being MLB/owners/The Nationals Organization) care what we think.

Time has brought me a little more insight with that, and I might say it differently than the original post.

It's important to put the players (and likely managers) in another group, who care what we think but aren't necessarily motivated the same way. For a random example, I think John Patterson likely cares if fans are cheering for him or not, but his choice to play for Washington specifically (rather than "a baseball team that will pay him") is not due to love of "The Nationals" rather than a love of playing baseball for a salary.

That may be a discussion for another day.

 
At 10:52 PM, Blogger Chris Needham said...

If you had said it like that, I probably wouldn't have jumped at you. (As for the other guy.... No one controls him!)

 
At 10:01 AM, Blogger Dave said...

Chris:

Besides the "playing for effect" angle, it's also 4 more months down the road.

:)

Dave

 
At 2:04 AM, Blogger John Salmon said...

All of this is a good argument for a minimum spending cap, or floor, so that teams won't be able to go the low payroll/low revenue route (the Kansas city model) and still make money, through revenue sharing and other general fund money.

Even if they do lose money, and as the Forbes numbers show some clubs do fail to make a profit, in recent years frnachise value growth has been so strong it doesn't matter much if you happen to lose money ovber the short run, since (presumably) owners can cash out quite hadsomely when they choose to sell.

Obviously if all or most teams chose to go the KC route the game would suffer and this might lead to losses/dimunitions of franchise worth.

So most owners need to at least appear to be competing for the game to thrive. Local revenue is important enough in baseball that the competition is not entirely phony, as in the NFL, which is just a TV show.

 
At 8:58 AM, Blogger DM said...

John,

Thanks for the thoughtful comment.

I'm certainly not opposed to a minimum spending requirement, but I am skeptical about how much good it would do to remedy the situation. I question what those owners who need to live up to it would do. For example, I suspect it would primarily benefit some of the better known players on KC, in that Glass would probably give more money to Mike Sweeney because he is a popular player. Essentiallly they would spread it around existing players, and not really use it to acquire more players or improve the farm system. So again the intended beneficiaries, the fans, probably won't enjoy much benefit.

The problem is that how and when a team spends its money is a very dynamic and difficult decision. Placing a requirement like minimum spending, whether on major league salaries or minor league development, simply adds a factor that alters that dynamic process, and usually doesn't affect results as much as you think going on.

But it would be worth a try, at least.

 

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