Major League Baseball officials say eliminating franchises such as the Twins
won't solve the economic problems they say plague their sport. But they also say
contraction from 30 teams to 28 is a logical step to take now while long-term
solutions are negotiated.
The owners will gather Monday in Chicago, with a full day of meetings
scheduled for Tuesday. Twins owner Carl Pohlad said contraction could be decided
at that session. He has not said whether he will fight it. Commissioner Bud
Selig did not commit to action Tuesday on contraction, but it clearly is a
central issue for owners as they try to fix what ails the game.
"How many teams (to be contracted) has been a subject of debate among
ownership for a long time," Commissioner Bud Selig told reporters during
the World Series. "There have been many things discussed. Some have been
discarded, some have life. We've run through the spectrum of just about
"I had an owner say to me the other day that our greatest mistake was
too much expansion in too short a time, and that's a fair assessment to make.
The only serious question I have is: Given the deterioration of our economics,
what are the best solutions? There are no simple answers."
Despite potential legal opposition from politicians, minor league affiliates
and the players' union, major league owners could vote Tuesday to approve a
proposal to spend perhaps $300 million to $400 million to buy out two
colleagues, including Minnesota's Pohlad, and fold two franchises. The Montreal
Expos are the most likely franchise to be dissolved, but several possibilities
involve ownership changes or contraction with the Twins, Florida Marlins,
Anaheim Angels and Tampa Bay Devil Rays.
Selig would not rule out the possibility a plan could be executed by next
season. Another Major League Baseball executive contradicted that, saying,
"They can't get it done that fast," but he confirmed the threat is
serious and suggested a vote for contraction this week could make it happen by
2003. Whatever the length of the process, league and team officials seem to
agree on one thing: It makes economic sense for the owners of the 28 remaining
-- Each team would have to share less in national broadcasting, licensing and
-- The teams mentioned in contraction proposals get the most money from other
teams in baseball's limited revenue-sharing plan.
-- Expansion by four teams within 10 years has left fewer cities to use as
leverage for existing teams trying to get better stadium deals in their
-- The collective bargaining agreement with the players expires after the
World Series, and the threat or jolt of players losing jobs could provide
leverage in negotiations with the union.
For some owners, contraction makes sense for the same reason cited by stadium
opponents: Major league baseball is bad business.
The combined revenue for all teams has increased in recent years, but so has
the disparity between the richest and poorest teams. A study commissioned by
Major League Baseball found that the difference in revenue between the richest
and poorest increased from $74 million in 1995 to $129 million in 1999. In 1999,
the total revenue of the top-of-the-list New York Yankees was $14 million more
than the total revenue of the three teams at the bottom -- Pittsburgh, Minnesota
Pittsburgh opened a new stadium in 2001, but the Pirates have not solved all
their problems. Montreal and Minnesota are candidates for contraction. The
Yankees have won the past three World Series and were one victory from making it
four straight entering Saturday night's game against the Arizona Diamondbacks.
The Yankees' payroll this season was $114 million, according to USA Today.
The Twins had the lowest payroll, $27 million, the second consecutive season in
which they had that distinction.
The vast differences in franchise wealth comes from the disparities in local
revenue -- local broadcasting rights, gate receipts and such stadium-produced
sources as concessions, parking and, in some cases, luxury suites.
The Twins rank among the bottom three teams in the majors in local revenue,
which is estimated at a bit more than $20 million this year, according to league
sources. The top-ranked Yankees have estimated local revenue of about $200
Under a revenue-sharing plan in place for 2000 and 2001, each team
contributed 20 percent of its net local revenue to a fund from which 75 percent
of the money was distributed equally among the 30 teams. The remaining 25
percent was distributed to the franchises whose local revenue was below the
league average, in proportion to how far below they fell.
The Twins and Expos each received a net gain of about $20 million last year
from revenue sharing.
If those teams were eliminated, the 28 remaining owners would not have to pay
that amount or a similar figure in the future.
Major league teams share equally in the revenue from such sources as national
broadcasting contracts, logo licensing and merchandising, and Internet
advertising. Last year, that provided about $20 million to each of the 30 teams,
according to league sources.
If two teams are eliminated, the 28 remaining owners will get a bigger slice.
Some sources estimate each remaining team might have to pay $15 million or so
to buy out two franchises. But those bigger slices of national television
revenue and smaller revenue-sharing contributions to weaker franchises could pay
for the contraction cost over time.
"It would ease the drain (temporarily)," one Major League Baseball
EMPHASIS ON STADIUMS
Stadiums and the revenue they produce are significant influences on a
franchise's health. The Twins have had no success in the Minnesota Legislature
or at the ballot box in securing a stadium. Pohlad says he wants to sell because
he can't make the Twins financially successful in the Twin Cities.
Expos owner Jeff Loria has even worse attendance and local revenue problems,
so he is looking elsewhere.
"It's kind of a last resort," an executive with another team said.
The Expos, Twins and Florida Marlins have had stadium proposals defeated or
delayed in the past year. And the economy is slumping at the same time Americans
are looking at the world, and their lives, differently since the Sept. 11
attacks. All of those factors make the already slim prospects of winning public
financing for stadiums even slimmer.
Eliminating two franchises also has the secondary effect of opening two
markets -- realistically, in this case, only the Twin Cities -- for expansion or
relocation. Expansion would seem a remote possibility in the next decade or more
after a contraction. But if the Tampa Bay Devil Rays survive the contraction
debate, they might use a city without a baseball team as a bargaining chip.
The Devil Rays, who joined the American League in 1998, the same year the
Diamondbacks joined the National League, have suffered from fan apathy, an
outdated domed stadium that was almost 10 years old when they moved in, and
Many people in baseball consider the Devil Rays, who finished with the worst
record in the AL this year, as the league's weakest link. But the franchise's
debt and a long stadium lease make it a more difficult contraction option.
For all the Twins' success this season, they're an easy contraction target
because of their cleaner books, year-to-year Metrodome lease, a short-term
broadcast deal the team already disputes because of various issues, and Pohlad's
willingness to sell.
Recognizing that contraction provides a short-term gain, Selig also is said
to be seeking more substantial revenue sharing to strengthen the 28 teams that
"The economic problems have become so pervasive that contraction is one
of many things we're considering to resolve our problems," Selig told the
Washington Post in late October, without saying it definitely would happen for
the 2002 season. "We've been doing a lot of work ... a lot of work on
contraction, thousands of hours of work on that and many other solutions. That's
the stage we're in right now."