Some Thoughts on the Dolans, Shohei, and Rob Manfred

Can’t expect change until the system encourages it.

Shohei Ohtani just signed a deal that would make him the 5th largest economy in the world. Ok, maybe not quite that big, but 10 yrs, $700 Million Dollars is certainly unprecedented in the baseball world. Ohtani is obviously somewhat of a unicorn as a player, but we’ve discussed that ad nauseum. Beyond the “that’s a lot of money for a DH” comments that have cropped up, I think there’s an element to the contract that people aren’t discussing. Shohei Ohtani is an international superstar, where he goes the eyes of the Japanese baseball market follow. If you’re tired of hearing about Shohei, that’s a testament to his value, he drives eyeballs to the game and absolutely generates more than $70 million a year in fan interest. Regardless of his production, as long as he’s at least something resembling the player he’s been the contract will be a good one for the Dodgers, lord knows they can afford it with their multi-billion dollar T.V. deal.

But it’s that T.V. deal, not Shohei, that is the real story here in my opinion. As a Guardians fan I too have spent many a night cursing the Dolans whenever I can. Those cheap bastards, they’d charge you for the urinals if they thought they could get away with it. Now I want to be clear that I’m far from a Dolan apologist, I’m not here to make the case that they’re good owners, or that we should appreciate what we have, or anything like that. What I will say, however, is that the Dolans are a symptom of the problem, not the problem itself.

Simply put, it’s unrealistic to expect billionaire owners to open up their personal pocketbooks to finance a winning product on the field. Note that I didn’t say unreasonable, merely unrealistic. While there are examples all across sports of owners taking a “whatever it takes” mindset with their payrolls, Steve Cohen, Mat Ishbia, and George Steinbrenner come to mind, it’s important to note that it’s not as though these organizations are operating at a massive loss each year. While those owners certainly front some cash from time to time to land players, it’s the revenue the org brings in that makes those payrolls possible. Now it’s worth mentioning that the Guardians operate at a pretty high level of profit, but their revenue is nowhere near that of the top teams in baseball. On TV deals alone the Guardians’ TV contract is worth approximately $50 million annually, or 5/7ths of a Shohei Ohtani. The Dodgers, on the other hand, have a TV contract worth in excess of $330 million annually. That’s nearly a 7:1 advantage.

If something about that feels unsustainable to you, you’re right. The Billy Beane “rich teams, poor teams, 50 feet of crap” meme was so poignant because it’s the reality of baseball. Simply put, with local T.V contracts the small market teams can’t afford to spend at the same level the big market teams do. We can bemoan the cheapness of billionaires all we want, but until the system changes to level the playing field, or the billionaires are incentivized to spend more (or disincentivized to be cheap) this will stay the same. Simply put, we can’t expect people to divert from a set of actions that they’re directly incentivized to take.

So what’s to be done? Who is to blame? Well I’ve said for a long time that every time your attention is on Paul Dolan, it should really be on Rob Manfred. This is on him and Major League Baseball. Like I said, the Dolans are merely a symptom of a larger problem. So how do we solve it? Well I’m reminded of a video of Bob Costas ripping apart Art Modell

Apart from the endlessly satisfying criticism of Modell, did you catch the key point? The NFL had a salary cap of $37 million, and through revenue sharing it guaranteed revenue of $38 million. That means if teams made $0 dollars in tickets, merchandise, etc. They’d still be able to make payroll (technically they have other expenses, but that isn’t the point). This ensures that every team can compete for the best talent. The Cincinnati Bengals are by no means a big market team, but they just signed Joe Burrow to the largest contract in NFL history. Could you imagine the Reds or the Guardians signing someone to largest contract in MLB history? It’d be preposterous.

That revenue sharing is the key. The NFL doesn’t have local tv deals like MLB does, they negotiate for the entire league and ensure consistency in the broadcasts. Now this isn’t to say that I only want national broadcasts on ESPN or whatnot. But, what if instead of 30 teams negotiating 30 contracts with RSN’s Major League Baseball negotiated contracts with networks, let’s say FOX and ABC for the AL and NL, and then worked out arrangements for every teams games to be shown each night. All of the broadcast revenue goes to the league and then is divided evenly amongst the 30 MLB teams. Then the teams can keep all of their money from ticket sales, merchandise, concessions, etc.

This would continue to leave an incentive for performance to ensure attendance stays up, but also makes sure that every team has enough money to operate. A salary cap could be put in place if you’d prefer. I’m not claiming it’s a perfect system, I’m merely one person and couldn’t possibly devise a perfect revenue sharing plan for a multi-billion dollar industry on my own, but it feels a hell of a lot better than what we have today.

Like I said, I’m no fan of the Dolans, but it’s clear that the issues go far beyond just their “cheapness.” Until the structure of the league changes to discourage the massive gap we have between rich and poor in baseball this will continue. So next time you want to take shots at the Dolans, please do, but make sure you get one in there for Rob Manfred too.