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View Full Version : Contraction anyone?



Mario-Rijo
02-12-2006, 11:35 AM
Was perusing the Minneapolis star for Krivsky related material and found this nugget. Glad it's not us! I would vote for it to be The D-rays and Marlins, if I had a vote. Florida just doesn't seem to care much for Baseball, w/ the exception of ST.

http://www.startribune.com/508/story/240117.html


"After a couple of false starts, I'm sure baseball isn't going to say anything in advance about contraction. If it happens, it will be when we're past the point of no return."



There is no denying this: Major League Baseball has two franchises absolutely ripe for contraction after the 2006 season in the Twins and Florida.

These are baseball's two most underperforming markets. The big-revenue franchises have grown disgusted with handing $20 million to $25 million per year apiece to teams located in what should be lucrative markets.




The timetable as laid out in the basic agreement between the owners and the players also fits perfectly with the Twins reaching the decision, "We've taken it as far as we can."

The agreement states the following: "The Clubs [management] shall have the right ... to reduce by as many as two the number of Major League Clubs effective for the 2007 championship season."

According to the document, the clubs must notify the players of any decision to cut teams effective for 2007 no later than July 1, 2006. The owners also must deliver a tentative schedule at that time, thus revealing the names of the teams to be eliminated.

westofyou
02-12-2006, 11:46 AM
There is no denying this: Major League Baseball has two franchises absolutely ripe for contraction after the 2006 season in the Twins and Florida.But there they are on a Marlin road show, taking calls from both coasts and the desert... quite a pickle to be going out of business and yet on sales calls all day.

M2
02-12-2006, 12:47 PM
Anyone who'd call Minnesota and underperforming market when they play in the same division as Detroit ... well, pick your favorite insult.

KronoRed
02-12-2006, 01:05 PM
Contracts the D-rays and move the Marlins to Tampa

Contract the Nats and move the Twins back to DC

I'm not in favor of offing teams that have won world titles :D

M2
02-12-2006, 01:42 PM
Stop trying to pretend that you're a struggling league when you're not. Contract no one. It's a horrible message to send to your national fanbase.

Joseph
02-12-2006, 01:47 PM
Stop trying to pretend that you're a struggling league when you're not. Contract no one. It's a horrible message to send to your national fanbase.

Amen.

StillFunkyB
02-12-2006, 02:29 PM
Stop trying to pretend that you're a struggling league when you're not. Contract no one. It's a horrible message to send to your national fanbase.

Agreed.

cincinnati chili
02-12-2006, 06:13 PM
For owners who are concerned with short term profit, contraction makes a lot of sense. It's a classic monopolist argument: raise prices by reducing output.

In the long term, it's a stupid idea. It's anti-marketing at its worst. It also might prove to be a bad gamble, as it's a good incentive for rival leagues to spring up and for Congress to re-examine the antitrust exemption.

Sea Ray
02-12-2006, 06:47 PM
I think contraction would be a good idea but I doubt they could pull it off. With the strange number of teams we have right now, we have unbalanced divisions and unbalanced schedules. I'm surprised they mentioned the Twins before the Devil Rays. I think they could cut out Tampa and Miami and never miss a beat. Sometimes businesses need to contract like the airlines and the automakers are doing and then they're a much more lean, efficient model.

I don't see Selig having the guts to really pursue something like contraction but I'd sure support it in principle if he did.

westofyou
02-12-2006, 06:49 PM
Sometimes businesses need to contract like the airlines and the automakers are doing and then they're a much more lean, efficient model.Sometimes they need to extend their market awareness before they cry poverty too.

I'll take that Miami team up here in the PNW... you live in Cincinnati, maybe they should contratct the Reds? They seem to be doing poorly lately.

Keystone12
02-12-2006, 06:52 PM
I doubt this article is really tapping into something. Contraction has to be at least two seasons away.

Sea Ray
02-12-2006, 06:54 PM
Sometimes they need to extend their market awareness before they cry poverty too.

I'll take that Miami team up here in the PNW... you live in Cincinnati, maybe they should contratct the Reds? They seem to be doing poorly lately.

The Reds have a new stadium. They're set to succeed. They just need a little more revenue, which would be the purpose on contraction.

Put the contraction idea out there and see who gets a new stadium first, Washington, Miami, TB or Minnesota.

RFS62
02-12-2006, 06:55 PM
It's leverage for the owners.

Jpup
02-12-2006, 07:16 PM
It's leverage for the owners.

exactly, just to get the tax payers to build their new stadiums for them. It's like Ford trying to get the people of Detroit to build them a new factory. Makes little sense.

Gainesville Red
02-12-2006, 07:23 PM
Contracts the D-rays and move the Marlins to Tampa



I'm a big fan of that idea. Put a national league team in Tampa = The Reds 2 hours away from me a couple times a year. :beerme:

MWM
02-12-2006, 07:36 PM
The major airlines and the US automakers were hemhoragging cash. MLB franchises aren't. And it wasn't because of the industry, it was because they were both incredibly mismanged. There wasn't a contraction, there was a reallocation of profits from the poorly managed companies, such as Ford and GM or Delta and American, to the well-run companies like Southwest and Toyota, which isn't dissimilar to MLB.

I would have no problem if franchises that were horribly managed over a long period of time were forced to change ownership. Under normal circumstances, this would be illegal, but I think the anti-trust exemption would allow MLB to do this. I mean, they did force Marge to sell. And poorly run franchises are a drain to the coffers of the other MLB owners. It would be in their best interest.

M2
02-12-2006, 07:45 PM
I would have no problem if franchises that were horribly managed over a long period of time were forced to change ownership.

And there's the solution if this really were a problem and not a thinly-veiled attempt at blackmail.

IslandRed
02-12-2006, 08:06 PM
I think contraction would be a good idea but I doubt they could pull it off. With the strange number of teams we have right now, we have unbalanced divisions and unbalanced schedules. I'm surprised they mentioned the Twins before the Devil Rays. I think they could cut out Tampa and Miami and never miss a beat. Sometimes businesses need to contract like the airlines and the automakers are doing and then they're a much more lean, efficient model.

I don't see Selig having the guts to really pursue something like contraction but I'd sure support it in principle if he did.

I suppose there's an argument for the economics of it, in that national money is split fewer ways and it would create more potential cities for existing teams to relocate. Can't blackmail your current city into building you a stadium if there's no obvious place to move. But it's not going to change any team's reality. Whatever impact it had would be spread across the board.

The reason the Twins are often mentioned in contraction talks is because their owner wants them to be mentioned. No one's just going to fold a team; MLB will pay them handsomely to go away. If Pohlad can't pressure the locals to pony up for a new ballpark, he'll be first in line for the buyout.

Sea Ray
02-12-2006, 09:47 PM
exactly, just to get the tax payers to build their new stadiums for them. It's like Ford trying to get the people of Detroit to build them a new factory. Makes little sense.

Well, it's more than new stadia. The owners would use this as a bargaining chip in negotiations with the players over a new collective bargaining agreement.

It won't happen although I do think baseball expanded too quickly and has paid the price for it. At the time it seemed like a great idea. They got the quick payout from the new owners.

In the long run 28 teams would work much better than 30. It would condense the talent and competition. I think ultimately four 7 team divisions with two wildcards would be preferable to what we have now. This would also eliminate teams like 2005 San Diego getting in.

Betterread
02-12-2006, 10:55 PM
I suppose there's an argument for the economics of it, in that national money is split fewer ways and it would create more potential cities for existing teams to relocate. Can't blackmail your current city into building you a stadium if there's no obvious place to move. But it's not going to change any team's reality. Whatever impact it had would be spread across the board.

The reason the Twins are often mentioned in contraction talks is because their owner wants them to be mentioned. No one's just going to fold a team; MLB will pay them handsomely to go away. If Pohlad can't pressure the locals to pony up for a new ballpark, he'll be first in line for the buyout.

This is the heart of the matter. MLB supports and encourages Pohlad's choice to the Twin Cities: Finance a new baseball stadium for me or I'll sell the team to a buyer who will move the franchise. The problem is that the Vikings, and the U of Minnesota football team also want stadiums. They will jostle for priority - but right now the Governor is supporting the Vikings stadium plans first, which is by no means a guarantee the Vikes will get their way.

Heath
02-12-2006, 11:14 PM
Major League Baseball has done feasibility studies on Charlotte, N.C., and Las Vegas, and both, an informed source said, would provide more revenue than the Twins can make playing in the Metrodome . One certainty is MLB is fast becoming intolerant over the lack of progress for a ballpark for the Twins. -- St. Paul Pioneer Press



That was from the SI.com truth & rumours part on Friday. Looks like MLB will go to other places before looking at staying.

I also think that the whole Washington thing will be very interesting for the new future ballparks. MLB is looking like a heel (IMO) by being bully-like thru Seligs' henchmen.

M2
02-12-2006, 11:47 PM
This is the heart of the matter. MLB supports and encourages Pohlad's choice to the Twin Cities: Finance a new baseball stadium for me or I'll sell the team to a buyer who will move the franchise. The problem is that the Vikings, and the U of Minnesota football team also want stadiums. They will jostle for priority - but right now the Governor is supporting the Vikings stadium plans first, which is by no means a guarantee the Vikes will get their way.

Probably helps that the Vikings have never threatened to move or fold.

FWIW, where I live we expect pro teams to foot the bill for their own parks/stadiums/arenas. Seems to work pretty well.

SandyD
02-13-2006, 12:06 AM
Boston area is a big enough market with a loyal enough fan base to get away with that. Can you see any league abandoning the Boston area because the public won't finance a ball park/stadium/arena?

Much less of a risk to move the Marlins or the Twins to different market.

I thought I had heard that the Vikings were considering relocating at one time, but I am not sure.

KronoRed
02-13-2006, 12:10 AM
I thought I had heard that the Vikings were considering relocating at one time, but I am not sure.
I'd heard the same, moving to LA I think it was.

This was a few years back.

MWM
02-13-2006, 01:41 AM
Thing is, population wise Minneapolis - St. Paul is not all that small. It's much moe populated than most people realize. There's 19 Fortune 500 companies headquarted in the area and outside of cities like NYC, Chicago, and San Francisco, it's one of the great business cities in the country. And there one of the few cities who actually NEED a new stadium. If Minneapolis had a new stadium, they'd have no problem consistently drawing large numbers of fans.

Here's some of the companies centered in MSP. They'd have no problems selling all kinds of corporate luxury boxes. There's all kinds of revenues to be had there. It's one of the places outside the big markets I would want to own.

Target Corp.
United Health Group
Best Buy
Super Valu
3M
US Bancorp
General Mills
Northwest Airlines
Land O'Lakes
Hormel

Mario-Rijo
02-13-2006, 01:47 AM
Guys seriously I do not mean to kiss butt, it's simply not my style. However I am clearly impressed and overwhelmed with the intelligence of this board. I am certainly not an idiot but I have to admit when I read this article none of these thoughts came to mind. I was only thinking to myself "wow perhaps now this watered down pitching in baseball will improve a bit and start to lower some salaries accross the board, and improve competition overall". And this is why I appreciate this board and it's my 1st priority everyday when I get online! Great views guys keep up the good work! :notworthy


The Reds have a new stadium. They're set to succeed. They just need a little more revenue, which would be the purpose on contraction.

Put the contraction idea out there and see who gets a new stadium first, Washington, Miami, TB or Minnesota.



Stop trying to pretend that you're a struggling league when you're not. Contract no one. It's a horrible message to send to your national fanbase.



For owners who are concerned with short term profit, contraction makes a lot of sense. It's a classic monopolist argument: raise prices by reducing output.

In the long term, it's a stupid idea. It's anti-marketing at its worst. It also might prove to be a bad gamble, as it's a good incentive for rival leagues to spring up and for Congress to re-examine the antitrust exemption.



The major airlines and the US automakers were hemhoragging cash. MLB franchises aren't. And it wasn't because of the industry, it was because they were both incredibly mismanged. There wasn't a contraction, there was a reallocation of profits from the poorly managed companies, such as Ford and GM or Delta and American, to the well-run companies like Southwest and Toyota, which isn't dissimilar to MLB.

I would have no problem if franchises that were horribly managed over a long period of time were forced to change ownership. Under normal circumstances, this would be illegal, but I think the anti-trust exemption would allow MLB to do this. I mean, they did force Marge to sell. And poorly run franchises are a drain to the coffers of the other MLB owners. It would be in their best interest.

Revering4Blue
02-13-2006, 03:11 AM
It won't happen although I do think baseball expanded too quickly and has paid the price for it. At the time it seemed like a great idea. They got the quick payout from the new owners.

In the long run 28 teams would work much better than 30. It would condense the talent and competition.

Exactly. I didn't- and still don't- favor an NFL-style salary cap system, and feel that MLB is more competitively balanced than given credit for. But you do raise a good point about further condensing the talent and competition.

God, I hope MLB doesn't get their hands on the Twins without contracting them after the shameful way they handled the Expos.


They'd have no problems selling all kinds of corporate luxury boxes. There's all kinds of revenues to be had there. It's one of the places outside the big markets I would want to own.


Ten years ago, I'd be inclined to agree with you. But the landscape of Pro Sports has changed dramatically to the point where Pro Sports owners have become almost solely dependent upon Corporate Luxury Boxes/Club seating as a source of revenue. Will the corporations in a market the size of Denver and Minn/St. Paul be able to continually shell out the dough for the afforementioned Luxury/club seating for 4 Pro teams in their respective cities?



In other words, a market the size of Boston can easily support MLB, NFL, NHL and NBA along with major NCAA conference (Boston College) basketball and football. In Minneapolis/St. Paul, that's cause for concern down the road, if it isn't already. I'm just not sure that they can keep with the Bostons, New Yorks and Chicagos as far as supporting 4 Pro franchises and major college sports simultaneously.

Caveat Emperor
02-13-2006, 04:03 AM
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Ten years ago, I'd be inclined to agree with you. But the landscape of Pro Sports has changed dramatically to the point where Pro Sports owners have become almost solely dependent upon Corporate Luxury Boxes/Club seating as a source of revenue. Will the corporations in a market the size of Denver and Minn/St. Paul be able to continually shell out the dough for the afforementioned Luxury/club seating for 4 Pro teams in their respective cities?

High-end seats such as luxury box seats and club seats are status symbols more than they are indicitive of any support for the local pro team. Corporations and businesses large and small own them because their competitors do, and they don't want to be the only ones not to be able to tell their clients/customers "here, take my tickets to Saturday's game." In many cases, they're partially tax-deductible as entertainment expenses incidental to business transactions under the internal revenue code. The buyers aren't just fortune 500 companies either -- local radio and TV station, local professional services (law firms, architectural firms, health care providers), and local restaraunts owners (people like Buddy LaRosa and Jeff Ruby in Cincy) all purchase these types of tickets. When it comes to luxury boxes, many are jointly owned by several different groups which devise some form ticket splitting with their co-owners. They're not as hard a sell as one might imagine.

And, above and beyond that, the "high end" seats will rapidly lose their relevance in the overall financial well being of professional sports franchises as the media dollars spent for broadcast and transmission rights increase. In the NFL, the money distributed by the league for TV rights alone covers a majority of operating expenses, before a single ticket is even sold.

Revering4Blue
02-13-2006, 04:48 AM
High-end seats such as luxury box seats and club seats are status symbols more than they are indicitive of any support for the local pro team. Corporations and businesses large and small own them because their competitors do, and they don't want to be the only ones not to be able to tell their clients/customers "here, take my tickets to Saturday's game." In many cases, they're partially tax-deductible as entertainment expenses incidental to business transactions under the internal revenue code. The buyers aren't just fortune 500 companies either -- local radio and TV station, local professional services (law firms, architectural firms, health care providers), and local restaraunts owners (people like Buddy LaRosa and Jeff Ruby in Cincy) all purchase these types of tickets. When it comes to luxury boxes, many are jointly owned by several different groups which devise some form ticket splitting with their co-owners. They're not as hard a sell as one might imagine.

And, above and beyond that, the "high end" seats will rapidly lose their relevance in the overall financial well being of professional sports franchises as the media dollars spent for broadcast and transmission rights increase. In the NFL, the money distributed by the league for TV rights alone covers a majority of operating expenses, before a single ticket is even sold.


Excellent points.

But still, you've got two franchises in Minneapolis/St.Paul which need new stadiums because they lack the boxes to accomodate the afforementioned corporations-small or not. Three-if you count the Timberwolves, who also claim to be losing money at the Target Center, though they can easily move to St.Paul to the arena with the NHL's Wild.

My point--and I didn't do a very good job of presenting it-is that factoring in corporate support and disposable income from the "common" fan, there is a limit to each market as to how many pro sports franchises the respective market can support.

Examples:

St. Louis with MLB, NFL and NHL would be hard-pressed to also support the NBA, assuming there were any interest.

Kansas City lost the NBA 20 years ago. But with a new facility in place in the coming years, they can easily support the NBA along with MLB and NFL because of the corporate/ disposable income demographics. Corporations were really not much of a factor 20 years ago, but they are today.

Anyway, I could list more, but I don't want to put everyone to sleep;)

It will be interesting to see how the Minneapolis/St. Paul situation plays out. But I have to believe that the Vikings will receive a new stadium first, which obviously spells trouble for the Twins.