01/14/11 6:17 PM EST
New book dives into the business of baseball
By Mark Newman / MLB.com
It was the combined run total for the Giants in those fateful first two games at home against the Rangers during the 2010 World Series. Hank Aaron hit at least 20 home runs over 20 consecutive seasons, from 1955-74. Ty Cobb batted at least .330 in that many campaigns.
So now that sports economist Andrew Zimbalist has authored his 20th book, those who consider themselves temporary custodians of the national pastime (don't we all?) should be on the alert. He is in the game, so to speak. He gets his hands dirty. "Circling the Bases: Essays on the Challenges and Prospects of the Sports Industry" offers a realistic look at the "merry-go-round" of sports -- including essays about salary shares and revenue distribution, facility financing, labor relations, antitrust law and performance-enhancing drugs.
Ah, yes, the romantic rite of spring.
If you want an easy-breezy baseball book, one that practically exudes the smell of a freshly cut outfield lawn, then look around and you will find a slew of them on the way. This is not that book. This is academic invasion, but recommended reading for those inside the league and front offices of all sports. Zimbalist is the Robert A. Woods Professor of Economics at Smith College, and in his spare time, he continues to show how the business of sport is evolving and how the sports industry is becoming more closely linked with the corporate sector -- thus more vulnerable to flux movement of the U.S. and global economies.
MLB generated a record $7 billion in gross revenue and had average player salaries exceeding $3 million last year amid slow recovery from a major recession, in comparison to the National Football League's gross revenue of $8 billion for 2009. While labor strife is ongoing in the NFL and National Basketball Association, there is continued optimism in baseball over labor peace that has lasted an improbable 16 consecutive years with no work stoppage.
"I'm optimistic as we head into the new year," Commissioner Bud Selig said at this week's Owners Meetings. "I've talked to all 30 clubs about ticket sales and other things. The last six years are the best six years we've ever had, and I think this will move up a little. That's how good I feel about it."
When you read Zimbalist's book -- which was written during 2010 -- you get a clearer understanding of why Selig might feel that way.
"Many executives expected the recession to take a still larger toll on the sports industry," Zimbalist writes. "The largest attendance drop among the major sports leagues occurred in Major League Baseball. Although MLB's overall drop was 6.8 percent in 2009, baseball's revenue remained flat, thanks to the ongoing growth of Major League Baseball Advanced Media and the introduction of the new baseball television network [MLB Network].
"The sports industry suffered some significant cuts and bruises, but it appears to have stabilized and to be poised to continue its ascent, albeit more moderately, in the decade ahead."
Pay special attention to Zimbalist's comparative research of salary shares for MLB, NFL, NBA and the National Hockey League. Baseball is the only one of those four sports without a salary cap, and Zimbalist contends it has been erroneously reported that MLB's salary shares are markedly lower than the others -- which would be possible evidence that the union "has been fighting the wrong fight all these years." Zimbalist shows the multitude of complex factors that are unique to MLB with its expansive and costly Minor League system, and in making the necessary adjustments his table illustrations show relative balance in salary shares for all four sports.
Did you know that the salary share of MLB players in 2002 was a record 67 percent? That is the ratio of total player compensation to total revenue. It gradually declined and stabilized at around 51 percent from 2006-08 -- Zimbalist's latest measurement data in Chapter 5. But as is often the case in this book, the author shows many caveats.
"Before comparing MLB's apparently low 51 percent with the 57 percent of HRR [Hockey Related Revenue], the 57 percent of BRI [Basketball Related Income], or the 58.4 percent of TR [Total Revenue] in football, it is necessary to make at least one important adjustment. MLB teams have to cover very substantial Minor League player costs, while the NBA [NBDL] and the NHL [AHL and a few players in the ECHL] have modest minor league costs, and the NFL has none. The NBDL and the AHL also generate revenues that help defray the player costs. [Baseball's] Minor League teams are mostly independently owned, and, in any case, the revenues earned do not go to the Major League team, yet the Major League team pays the salaries of all the players on affiliated clubs."
Zimbalist calculated that, in 2007, the average MLB club spent more than $20 million on player development, and of that more than $11.5 million went to Minor League salaries. Each team typically has six farm clubs, and increased emphasis is placed on fall and winter development camps and leagues, such as the growing Arizona Fall League. Zimbalist writes that an average of 6.2 percent of MLB revenues in 2007 went toward those costs.
"If we add the 6.2 percent that goes to Minor League baseball players [without generating revenue for the Major League club], the total player share in MLB revenue rises to 57.2 percent, roughly the same shares as the NBA and the NHL."
Zimbalist cites other "special features of the baseball labor market" that hold down salary shares in comparison to other leagues. This may be especially notable to many readers after a long offseason of monster contracts. Consider:
Length of contract. There are no statutory limits in MLB, compared to the six-year maximum restriction in the NBA. So the Rockies, for example, were able to just hand Carlos Gonzalez a seven-year contract extension, gradually increasing in out years, rather than packing in a higher salary up front.
Most fans are probably unaware of where the money goes when clubs pay posting fees in an attempt to sign players from Japan. Much of it goes to Japanese companies. Zimbalist notes that when the Red Sox paid over $100 million for Daisuke Matsuzaka, $52 million actually went to Dice-K. This trend is upward, too. It is a real expense by MLB clubs on players without being able to report it as salary, which would increase the salary shares.
Some of those fans who think MLB should join the salary-cap party may think otherwise after reading "Circling the Bases."
Chapter 8 is an exhaustive recap of the PED timeline in sports, with special emphasis on MLB. What is lacking in this section is a real research portrait of the multifaceted race by sports leagues and organizations to stay ahead of the cheaters, an ongoing scientific approach involving physicians, nutritionists, professors, geneticists, investigators and former elite athletes. MLB has emerged as an organizer and facilitator of this movement, hosting seminars, and there is no real evidence of that in the book. Having said that, it covers all the other bases and puts everything into perspective.
"What also appears to be clear is that MLB has become proactive and is on the right course," Zimbalist writes.
He adds that fans "have shown themselves to be resilient" and are "willing to forgive as long as MLB is making a forthright effort to confront the problem." Meanwhile, the topic was back at center stage during the recent Hall of Fame voting. A common theme emerged among baseball cognoscenti: Balloting will become more of a slippery slope starting next December, as the rollout of implicated, suspected or admitted past PED users gradually makes its presence felt as eligibles.
Come what may, Zimbalist cautions in his book that it would be "illogical" to contemplate asterisks or manipulation of the hallowed record book. No matter what you think of Barry Bonds, Zimbalist is saying, he is the concrete home run king with 762, seven more than No. 2 on the list, Hank Aaron.
"What remains for baseball is to develop a policy toward the records set during the steroid era. It seems to this observer that only one sensible choice exists," Zimbalist writes. "If amphetamines are considered to be performance-altering drugs, then the PED era has been in effect for approximately half a century. It likely will persist in various intensities for years to come. To single out particular records or individuals, when we do not know the effect of the PEDs on the performance in question and when the record breaker played with and against others who were also users, seems unrealistic. Moreover, if we were to nullify a particular record, then by implication it should nullify the performance of that player's team and, hence, wipe out the standings of the season in question. There is no logical place to stop.
"Baseball fans know that many elements of the game have changed over the years and will continue to change: the ball, the stadium dimensions, the travel, the height of the mound, the size of the glove, the share of non-U.S. players, the bat design, the workout regimens, and so on. Baseball fans also have their own opinions about the use and impact of PEDs. Fans have always discounted and debated the effects of these changes and, hence, the comparability of records over time. That is one of the joys of baseball fandom. Asterisking or expunging records will just dilute the enjoyment of this vaunted baseball tradition."
Another vaunted baseball tradition is the annual spring emergence of book after book. There will be chronicles to relive the Giants' and Rangers' dreamy 2010 seasons. There will be biographies you can't put down. There will be those anecdotal-rich list books like always, and the sweet paeans for yesteryear such as 2010's "Hub Fans Bid Kid Adieu" reproduction from the late John Updike.
Zimbalist is not going to help you win your fantasy league, make a sure-fire prediction about your favorite team, nor challenge Walt Whitman and Bart Giamatti for springtime baseball prose. But if you are among those who love numbers and love to wax authoritative about the national pastime year-round, "Circling the Bases" might be an important research piece to become more educated about the business inside sports.