Business of Baseball Report

30th Anniversary of Free Agency

The Hardball Times Baseball Annual 2006 contributor and SI.com columnist Alex Belth wrote an excellent column last week on the dawn of free agency. Last Friday was the 30th anniversary of the Messersmith/McNally ruling that essentially ended baseball’s reserve system and opened up what would eventually become free agency.

I was four years old when all of this went down, so I really don’t know of anything different than the current system outside of what I’ve read. Former union head Marvin Miller and former players Curt Flood, Dave McNally and Andy Messersmith aren’t names you hear about too often these days, but a lot of people don’t realize that they paved the way for the current system. At one point in time, baseball players were at the whim of the team that currently “owned” them. So whenever someone asks me how a player could strike when they make so much money, you don’t really have to go back that far to see why the players don’t trust the owners or the league and to see why the players want to hold on to what they have. Not just for themselves, but for future players as well.

And mark your calendar because Alex Belth has a book on Curt Flood coming out that will be a must-read for me. It’s available for pre-order and is set to be released March 20, 2006.

Yankees, Red Sox Hit With Luxury Tax Bills

The New York Yankees were hit with a $34 million luxury tax bill last week, and while the league is figuring out how it’ll spend the money, Yankees fans feel it is an injustice. Over the past three years, the Yankees have paid $63 million to the league, with another large hit coming in 2006.

The Red Sox were also tagged with a luxury tax bill; it was their second season over the threshold. Last year, they paid approximately $3 million to the league. This year it was over $4 million.

Twins Stadium Deal Faces Expiration

Washington, D.C. doesn’t have the only soap opera going. In April, a deal was announced that would finally net Twins owner Carl Pohlad the new stadium that he’d been begging for over the last several years. Unfortunately, to bypass a public referendum the state legislature had to pass the sales tax increase that would be levied within Hennepin County to pay for the county’s $235 million share of the construction costs.

The legislative session and a special session came and went without a vote on the stadium deal. Now the deal is set to expire on December 31, 2005 unless an agreement to an extension has been reached. And as the negotiations continue, word is starting to come out on how difficult the original negotiations were. At one point prior to the deal’s announcement, Hennepin County Commissioner Mike Opat got up and walked out of the negotiations with the Twins.

What was also interesting was that some unofficial projections showed that the Twins could see their operating revenue rise to $142.3 million in 2009 if the new stadium was built. This is nearly triple the team’s 2001 operating revenue of $56.3 million. These numbers seem optimistic to me, but Hennepin County’s investment and debt management officer speculated that the stadium deal could double the value of the team.

Indians Create Regional Sports Network

The Cleveland Indians are the latest team to try to cash in by creating a regional sports network. The Dolan family, which owns the Indians, has created Fastball Sports Productions. Ironically, the network has signed on to produce the largest television package in Indians’ history, while the Indians have ended their 16-year relationship with FSN Ohio. Fastball Sports will air 150 regular-season games along with eight grapefruit league games, and while the network will be a separate legal entity from the team, it will still be controlled by the Indians’ ownership group.

Padres Get OK to Move Right-Center Wall

One of the most extreme pitchers’ parks in the league will be not quite as extreme. Major League Baseball has approved the San Diego Padres’ request to move Petco Park’s right-center field wall in 11 feet. San Diego will be the home of the championship for the World Baseball Classic in March 2006, and the team fully expects the wall to be moved in by then. Padres Chief Executive Officer Sandy Alderson claimed that the team did a study that showed the shorter fence would have resulted in approximately 11 more home runs last year, five for the Padres.

There’s some speculation that this might be a precursor to more changes in right field. For now, it looks like the team will analyze the effects of the new distance and go from there.

Athletics Closing Coliseum’s Third Deck

The Oakland Athletics announced last week that they’re going to close the third deck of their stadium, McAfee Coliseum. The closure will bring the official capacity of the ballpark down from 44,073 to 34,179, which is in line with what owner Lew Wolff proposed when he announced his plan for the future home of the Athletics.

Jim Young, the Athletics’ public relations director announced that, based on surveys performed over the years, the view from the Colliseum’s third deck was among the worst in baseball. He also said that of the 144 season ticket packages for third-deck seating, 90% of those have been relocated to the second deck. The Athletics will also be reducing the prices of some of their seats to accommodate the fans who would normally be put out by the closing of the third deck.

Washington, D.C. Update

The report wouldn’t be complete without some kind of update on the Washington, D.C. stadium situation. I thought about leaving it out because not too much has happened since last week, but it’s always interesting when former mayors stick their noses into the current administration’s business. Regardless, it looks like there’s no end in sight. This story speculates that if MLB takes the city to arbitration, it could take upwards of six months to get the whole mess resolved. In the meantime, we can just wait and see what happens.

Have a great New Year’s Day.

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