Author Topic: New payroll tax / minimum spending proposal from John Henry  (Read 2179 times)

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Offline JCA-CrystalCity

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Henry proposes a severe payroll tax and minimum payroll spending to restore competitive balance in lieu of the current revenue sharing system and no minimum spending requirements.  Some interesting thoughts, especially about teams that are perennially noncompetitve but profitable due to the current system.
"Competitive balanced payroll tax v. revenue sharing"

Quote
"Change is needed and that is reflected by the fact that over a billion dollars have been paid to seven chronically uncompetitive teams, five of whom have had baseball’s highest operating profits," Henry responded in an e-mail. "Who, except these teams, can think this is a good idea?"

Henry added, "While the Red Sox are in the 16th largest media market we’ve found a way to be very competitive even though we are funding other teams. At the end of the day, the small market clubs still cannot begin to compete with the Yankees and have a very hard time competing with the teams that are struggling to pay them so much. Consequently, a system that directly impacts competition has to replace the current system, that hoped to, but ultimately did not cure competitive imbalances."

About $400 million – 34 percent of each teams net local revenue – will be distributed to small market teams this year. Most of that percentage comes from the Yankees, Red Sox, Mets, and other high-revenue teams.

"We've seen a number of teams that are just sitting back," Boras told the Globe at the General Manager's meetings in Chicago last month. "We have clubs who aren't successful getting $80 million before they ever sell a ticket. The question is always going to be in the end, what are they doing with that money? For most of them they're paying off their debt to purchase the franchise. So they become owners, debt-free but they have not done a lot to contribute to the success of the game. Those are the things as an industry, certainly the fans have to look at it and realize that kind of revenue is available. The other part of it is I think we've proven time and time again that investment in players produces revenue streams and success points for franchises. Even in an economy where many businesses are struggling in our industry, as I said last year, we've been able to keep revenues at a record level."

Henry wrote that baseball "needs slotting for amateurs, a worldwide amateur draft and most importantly, an effective competitive balance tax that directly addresses disparity once and for all for baseball."


Offline Minty Fresh

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Is this the entire article?  I'd like to see Henry propose some concrete ideas rather than just nag that he can't keep up with the Yankees and subsidize the Pirates at the same time.

And the more I read about Scott Boras the more I like about him.  He's got some whackadoo ideas but he's got some very valid points about how to structure the salaries in baseball.

Offline JCA-CrystalCity

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What I linked was the whole article. 

I only quoted an excerpt because I don't feel good about copying too much from a source that has a site registration.  Even though boston.com is free, their business depends on traffic.  Same would go for subscription fee material (BP, ESPNInsider, or my roto subscription to CBSSportsline), but more so.

Offline PatsNats28

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do the red sox really have the 16th largest market? they've got basically all of new england.

Offline blue911

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do the red sox really have the 16th largest market? they've got basically all of new england.

Well ESPN is nationwide.

Offline HalfSmokes

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do the red sox really have the 16th largest market? they've got basically all of new england.


according to Nielson Boston is the 7th largest TV market

http://www.tvjobs.com/cgi-bin/markets/market2.cgi


Offline PatsNats28

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according to Nielson Boston is the 7th largest TV market

http://www.tvjobs.com/cgi-bin/markets/market2.cgi




plus you've got three extra teams in there (two teams in LA, NY, and SF area), so i guess it might work out.

Offline HalfSmokes

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plus you've got three extra teams in there (two teams in LA, NY, and SF area), so i guess it might work out.

sf is up there as a combined market- split it into oakland and sf and you get two much smaller markets. Then again this doesn't take into account the O's market extending into NC  :roll:

Offline tomterp

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according to Nielson Boston is the 7th largest TV market

http://www.tvjobs.com/cgi-bin/markets/market2.cgi




Right, and given that 5 other large markets are split (including DC / Balt) they have a very large market all to themselves.  They own all of New England, a vast market.  Henry's being a bit self serving with that 16th BS. 

Offline PatsNats28

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Right, and given that 5 other large markets are split (including DC / Balt) they have a very large market all to themselves.  They own all of New England, a vast market.  Henry's being a bit self serving with that 16th BS. 

eh, like half of connecticut are yankees fans. not to mention that RI, maine, vermont, and NH aren't that populated (all in bottom ten of state populations).

Offline PANatsFan

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And the more I read about Scott Boras the more I like about him.  He's got some whackadoo ideas but he's got some very valid points about how to structure the salaries in baseball.

I sure would like to have a beer with him someday. Imagine the stories he has to tell.

Offline Minty Fresh

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They own all of New England, a vast market.  Henry's being a bit self serving with that 16th BS. 

A bit?   :lmao:

Offline JCA-CrystalCity

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Right, and given that 5 other large markets are split (including DC / Balt) they have a very large market all to themselves.  They own all of New England, a vast market.  Henry's being a bit self serving with that 16th BS.  


Henry's closer to right than wrong.  Somewhere on this board I posted a few market analyses, including a reference to something Nate Silver did that you can track down, that has Boston somewhere in the 8th to 12th range, even accounting for its share of New England.  The two largest markets are the Yankees and Mets, the next two are the dodgers and angels.  The Cubs are around 5th, then it becomes fairly close among Philadelphia, Toronto, Atlanta, IIRC.  Then there is Washington, Boston, and maybe Dallas.  This does not account for the Cardinals following throughout much of the central part of the country due to being on KMOX for years.  

Also, he does not begrudge any team spending money to improve itself.  He is not complaining about NYY's spending. Rather, he is saying that the way for the profitable but non-competitive teams to improve is not to whack New York and other teams that, for lack of a better word, TRY to put a good product on the field, but instead force the non-competitive teams to use their subsidies on the baseball product.  As a fan, I would not mind that.  

He's not dodging an obligation to subsidize the markets with less revenue capability.  He's more than willing to pay a higher payroll tax if his payroll gets extreme.  His point is that you shold tax payroll for the subsidy, not revenue, because taxing local revenues encourages lazy owners to collect checks and put bad products on the field.  Man, do I sound like the Gipper or what?

Plus, think of the stimulus effects . . . (now I feel better).

Offline JCA-CrystalCity

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sf is up there as a combined market- split it into oakland and sf and you get two much smaller markets. Then again this doesn't take into account the O's market extending into NC  :roll:

San Jose and Sacramento have to be included in the bay area market.  Sacramento is the As AAA team. It's like Pawtucket to Boston.

Offline JCA-CrystalCity

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One more - just a guess on the "16th" number. that is probably the population within in the citty limits, thus is both accurate and incorrect.  

Silver's breakdown of markets is linked here. He has Boston 8th, behind both Chicago teams, Washington 12th, and Philadelphia 5th.

Offline PANatsFan

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San Jose and Sacramento have to be included in the bay area market.  Sacramento is the As AAA team. It's like Pawtucket to Boston.

San Jose is San Francisco's boring younger brother.

Offline The Chief

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San Jose is San Francisco's boring younger brother.

Must not be all that bad if more people live there.

Offline blue911

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San Jose is San Francisco's boring younger brother.

Did Burt Bacharach ever write a song about San Francisco?

Offline JCA-CrystalCity

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No, but I think George Carlin once sang "I left my sinuses in Miami, I my left liver in Peru, I left my lungs and my kidney to my true love in Sydney, but I'm saving my heart for you."

Offline PANatsFan

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Must not be all that bad if more people live there.

More people live in Fairfax than in the District, but where would you rather hang out on a Friday night?

Offline The Chief

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More people live in Fairfax than in the District, but where would you rather hang out on a Friday night?




And honestly you picked a pretty poor comparison.

Offline tomterp

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More people live in Fairfax than in the District, but where would you rather hang out on a Friday night?

Where would you rather have your kids go to school?

Offline PANatsFan

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Where would you rather have your kids go to school?


Sidwell Friends or Annandale? That's an easy one.

Offline tomterp

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Sidwell Friends or Annandale? That's an easy one.

Flint Hill or Anacostia?

Offline PANatsFan

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Flint Hill or Anacostia?

Regardless, touting the schools just strengthens my case for "boring"