Revolution, Revisited (Part 3)

[Note: This is part 3 of a 4-part blog post. Part 1 is here and Part 2 is here .]

What are the benefits of an "open" league system? They are several primary benefits for fans, in my view, stemming from the increased competition such a system allows. First, success or failure would have a more meaningful impact on a team's bottom line. Right now a team's income is largely determined by its city, rather than whether it wins or loses. With relegation and promotion, bad teams in large markets can be forced down into lower leagues with fewer revenue opportunities, which good teams in smaller markets can get the chance at bigger revenues in the "major" leagues.

Second, by allowing more teams into the same market, fans have the benefit of competition between local clubs. We Nats fans would be a lot better off if the idiocy that is Tavares/Bowden/Robinson were not the only game in town, and we could switch our allegiance to a second club in D.C. (To those who might suggest that the Orioles are competition for fans of baseball in D.C., please do so, because the owner of that club is a poster boy for monopoly power abuse). That, in turn, will make the Nats a better club, because the owners will not tolerate fan defection. And note that in an open system where a single A or double A team has a chance, even remote, to make it to the big leagues, that would provide even more competition to the Nats from Bowie, Frederick, Potomac and Richmond, especially where these clubs are freed from their major league masters and can devote resources to actually winning games for promotion purposes.

Another important benefit is the ability of outsiders to actually start new baseball teams that might make it to the major leagues. Andrew Zimbalist explains this benefit as it has played out in the English soccer leagues:

[B]ecause league membership is not fixed, teams do not have monopoly control over their territories. Any individual with sufficient capital and drive can create a lower-division team, invest in top players and coaches, and potentially rise up the divisional ladder to the top level. As a result of this characteristic, promotion/relegation leagues tend not to have monopolies or even duopolies in large cities. London has had nine different teams playing in the top-level EPL since 1990. If a city has too few teams relative to its economic potential to support teams, then entrepreneurs are free to increase supply without paying the existing league for the permission to become an expansion team. Thus London EPL teams do not enjoy the rent from the large market that is bestowed, for instance, upon baseball's Yankees.

As a result, even though clubs could no longer prohibit franchise relocation, it doesn't happen in practice in the European soccer leagues because there is no longer any geographic monopoly over cities, so the incentives for relocation diminish. In baseball, owners who would want to move to a city like New York or Los Angeles would be free to do so, knowing that they would likely have to compete with several other clubs for those large markets. New clubs would be formed (or exisiting minor league teams repurposed) to serve markets like Portland, Las Vegas, Charlotte and even Montreal. This approach, by taking away the geographic monopoly on the baseball business, avoids the wasteful, protracted drama we watched with the Nats and the D.C. Council -- cities will be in a much stronger position when negotiating stadium deals with clubs, and, as Zimbalist points out, public subsidies for stadia in English soccer are very low, with the clubs financing most of the development.

The importance of allowing new entrants into the baseball market should not be underestimated. Why should all of the "outsiders" who have begun to revolutionize baseball with new ways of evaluating talent and strategy be forced to compete for the handful of jobs in MLB? Shouldn't an entrepreneur be able to start a new club, hire those folks and see if the new theories actually work? If all of the current minor league teams were real baseball teams, who had to evaluate and deploy talent to win games themselves, then suddenly you have hundreds of real GM positions (and assistant GM and all other related jobs) available, rather than 30 as there is today. Baseball needs start-up clubs to help keep it strong and innovative.

This point addresses something that's been bugging me since last summer. In the middle of chat over at Yuda's, we tried to list the length of tenure for all current GMs in MLB. The crazy thing was that the guy with the longest tenure with his current club was the now departed Chuck LaMarr of Tampa Bay, perenially one of the worst teams in MLB, and a team that makes terrible personnel moves. Also, it seems to me odd that the same guys keep getting hired by MLB clubs, even when they suck or, at best, are mediocre (e.g. Bowden). These counter-intuitive observations flow directly from MLB's monopoly structure.

Of course, not all would be rosy from some particular teams. Bill James acknowledges that his "Revolution" would be painful to many clubs in the early going. Some, maybe many, existing minor league clubs, especially those accustomed to living off the majors and not developing talent to win ballgames, would suffer and even go under. Relegation of teams like the Royals and Pirates would be painful. But these pains are exactly what is needed to force owners like David Glass to actually improve his team. Even the vaunted Manchester United spent time in the lower divisions of the English soccer leagues in the mid-1970s, only to return in the 80s and 90s to dominate the sport.

In sum, the baseball fan has a lot to gain from an open league structure with promotion and relegation. The fear of relegation will "concentrate the mind" of the club's owner and management, prompting them to improve their teams. Multiple clubs in major markets will prompt clubs to try to appeal to fans, rather than dictate to a captured group in an exclusive territorial market. And by prompting the minor leagues to be real baseball teams, that opens up a whole new market of opportunity and enjoyment of baseball for the avid fan, and spreads real baseball around the country in all markets, not just the large ones.

In the next part, I'll try to answer some anticipated objections to such an approach.