Why is your team not performing better when it comes to winning the pennant or World Series? Many of the game’s top stars play for those who can afford salaries that are norms in today’s sporting world. They are truly Ruthian. When the average household in the country was making $6000 per year, Babe drew a salary of $80,000. Why? The Yankees could afford him in the nation’s largest market, drawing the biggest crowds in sport.
Stars draw top salaries. Stars draw big crowds. Big crowds mean additional monies and a better chance to make the post season.
The other day, the Philadelphia Phillies locked up one of the biggest local television deals in the history of the game. They will average $100,000,000 in TV rights over the next 25 years. It won’t begin at that amount for some time, but the average will adjust to that figure over the complete length of the contract.
Recently, the Los Angeles Dodgers set a mark that is envious. Their 25 year contract which begins this season will give them $280 million per season. Imagine, the ownership of this franchise will receive $280 million to pay for all of their team and farm team salaries and expenses, all of their travel plus a good amount of extra funds before counting one single ticket sale or the monies they will receive from the over three million fans who will come through their turnstiles on food, beverage, snacks, merchandise and other in-stadium opportunities. We are not including parking revenues here. We just talking about $280 million to do with what they want.
Then there are the Yankees. Their massive deal gives them $90 million per year and escalates up to $300 million per year. Their deal runs through 2042. Plus, they remain 34% owners of YES, the Yankees Sports & Entertainment Network. That means more revenue annually. The Yankees have created new ways to bring in revenue. They not only have a pre-game show before their game and post game telecasts, they have a pre-pre-game show.
The Los Angeles Angels of Anaheim are no slouches either. Their contract, for only 17 years, gives them $147 million per year plus 25% of the Fox Sports West network. That means they will receive monies from the network that also carries the Dodgers.
There are a couple more teams that may surprise some in this new day of ‘have and have nots’. The Texas Rangers will be receiving a one time fee of $100 million and then begin to receive $80 million per season for 20 years beginning in 2015. Plus they will own 10% of Fox Sports Southwest.
Also in this high atmosphere, are the Houston Astros. Not only did they get all kinds of financial breaks by shifting to the American League West, but they also signed a huge local television deal which began this past season which not only pays them $80 million per year but gives them a whopping 45% equity stake in Comcast SportsNet Houston.
Then there is the other end of the scale. The Milwaukee Brewers receive approximately $21 million per year. Kansas City Royals will receive $20 million per season. The Pittsburgh Pirates and the Miami Marlins receive $18 million per year while the St. Louis Cardinals receive only $14 million per season.
Oakland A’s figure is not available but is considered one of the two lowest in the major leagues while the Atlanta Braves, under a horrible deal when Turner Broadcasting sold the club to the present owner, Liberty Media, does not expire until 2031.
Now you have some sort of rough map regarding what certain clubs make through their local TV rights and perhaps you can see how some clubs simply cannot compete except by luck or through their farm system. It is probably safe to say that the Brewers, Royals, Pirates, A’s, Cardinals and Braves cannot compete in a posting war over the likes of Tanaka and the rest of the high-priced free agents.
Yet, year after year, the Cardinals continue to maintain respectability because their system of developing their players through their farm system is superior to any other major league organization.
For the other ‘have nots’ to compete year in and year out, they will have to adopt the Cardinals system of development or languish. After all, none of these teams will be receiving the kinds of local TV revenue all of the others will have.
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