A-Gon May Be Gone

[tzill]

You might call it "fine-tuning" the possible negative effects of revenue sharing, i.e. one set of regulations to fix the deficiencies and/or new problems resulting from a previous set. Layers/fine tuning - same thing to me. Next round would be to enact a requirement to get X number wins per dollar spent ( a "productivity tax" if you will) - something a competitive market would have optimized naturally.

Don't see how you can conclude any particular team would fold with any certainty.

Well, it's definitely only my opinion. However, I did clerk for the Honorable Harry Crump, the judge who wrote the injunctive order to prevent MLB from contracting the Twins. I just don't think a relatively free pro baseball market would support 30 teams. I could be wrong.

 

[xxERICSMITHXX]

Understood, and we can disagree. What chafes me is that at the beginning of the year, EVERY year, Pirate and Royal fans know they're fucked. I think of 7 yo fans in these cities and how it sucks to be them. Not good for the long term health of the game.

I would say that is more about who is running the team than the money they don't have. The Pirates have had plenty of opportunities to improve the the draft, but they refuse to.

They Royals are actually building a pretty nice core of players that will be coming up pretty quick, they have to have one of the best farms around. Once they trade Greinke they should have an even better group to work with.

 

[xxERICSMITHXX]

As usual, I don't disagree. And since we don't have a free market in MLB in which the Pirates would fold, I think a salary floor is necessary, just as it is in the NFL.

What would you like to see the floor at?

I think a floor could be tricky because it could negatively effect teams trying to do the right thing and rebuild. I would think it would have to be pretty low or include things like the draft, international spending and scouting.

 

[gp956]

The enforcement is the key. Our country recently went through (and might still be going through) a period where regulation of media ownership was largely unenforced. Maybe that is due to a basic lack of understanding of what direction one medium might be heading in relation to another (ie. the death of radio as we know it vs. the rapid expansion of internet marketing via social networking sites). My problem is with conglomerates such as Clear Channel, General Electric, Time Warner, Fox, Viacom, etc. and their control of news as entertainment rather than public service.

Network news is a requirement by the FCC to provide a public service, but with 24-hour news networks and the call of the almighty dollar, the quality of journalism has fallen by the wayside. Whereas a Utopian free market would dictate that the company providing the best product would survive, a lack of enforcement of regulation of media monopolies has made news a public disservice.

For an educated person, it is easy to maintain one's own information filter, and seek out publications and news shows that inform from various points of view. If media conglomerates own the dispensing of information, and the masses are stupid as you say (which I agree with), that makes for a society of people spoon-fed "the truth" by companies solely looking to line their own pockets. There is certainly nothing wrong with people trying to be successful, and being a good capitalist, I encourage it. It is the potential manipulation of the masses by major media conglomerates that worries me. What happens if NBC doesn't report on a General Electric recall of some sort? Right now, the other companies do, but what if there is a reason to keep something quiet that benefits all of them? That sounds like the beginning of a conspiracy theory, but if regulation of media-buying isn't strictly enforced, it is absolutely a real possibility.

The bottom line for me is living in an age where information is so readily accessible, we should be more informed, not less. I realize that is mostly due to our own laziness, but I certainly blame the education system, media conglomerates and the FCC for some of that laziness. Who cares about curse words? Monitor what your children watch and listen to. Explain to them that the use of those words can be offensive to other people. Who cares about nudity? We have the technology to block channels and individual shows. We need a society of people that actually understands, rather than fears, sex. Maybe that could lead to lower teenage pregnancy. I realize, again, that I will probably change my tune once I have kids, but I think the FCC's time would be better served enforcing the regulations that are in place regarding media ownership rather than fining Howard Stern (though not anymore) for saying "shit." How do you then fund the FCC? Fines for the attempted monopolies. Fees to pay for the investigation necessary to evaluate potential purchases and mergers. I may be naive, and I definitely don't think this is the biggest problem facing our nation, but I believe it is still a problem. (Sorry about the length; four years of journalism classes rear their ugly head)

Yeah... that really doesn't concern me. That's not a market failure, as all the negative/positive outcomes are reflected in the market price of the product. BTW, your post reminded of an essay by Ronald Coase about the different attitudes about government regulation when it comes to the market for ideas vs. the market for goods. link

The manipulation of the masses I'm most concerned with is that which is used in order to achieve market power through seeding government institutions via the electoral process.

 

[gp956]

Well, it's definitely only my opinion. However, I did clerk for the Honorable Harry Crump, the judge who wrote the injunctive order to prevent MLB from contracting the Twins. I just don't think a relatively free pro baseball market would support 30 teams. I could be wrong.

Well, had you claimed the Twins I might have agreed with you. Or the Marlins. Pittsburgh can support a team - with good ownership.

 

[Heathbar012]

Yeah... that really doesn't concern me. That's not a market failure, as all the negative/positive outcomes are reflected in the market price of the product. BTW, your post reminded of an essay by Ronald Coase about the different attitudes about government regulation when it comes to the market for ideas vs. the market for goods. link

The manipulation of the masses I'm most concerned with is that which is used in order to achieve market power through seeding government institutions via the electoral process.

Rightfully so. I definitely agree that this is not a pressing issue. It is just one that I am fearful may become one before it is too late to change things. My naivete shows when I trust elected officials and their employees more than the corporations that fund them. Both have much to gain and little to lose when attempting to herd us "sheep." My fear takes shape when their agendas completely align. Luckily, the American people are the best armed in the world. Too bad guns scare me. .

Thank you for the article. I will finish it later, when I have more time. My favorite part of the first page was the danger to economists in confining the discussion to the First Amendment... though not dangerous for American lawyers. No discussion of law is perceived as dangerous for this litigious country. . Also, thanks for the reasoned and educational discourse. What articles and sources do you recommend for better understanding the American banking system? Keep in mind that I have no experience with economics beyond a high school class where I mostly just filled in worksheets and undergraduate level micro and macro courses (did significantly better in macro if that helps you understand my limited understanding).

 

[tzill]

I would say that is more about who is running the team than the money they don't have. The Pirates have had plenty of opportunities to improve the the draft, but they refuse to.

They Royals are actually building a pretty nice core of players that will be coming up pretty quick, they have to have one of the best farms around. Once they trade Greinke they should have an even better group to work with.

I think it's both. Savvy guys with cash just aren't drawn to owning small market baseball clubs -- not much chance to stoke the ego. There are exceptions, of course.

It's interesting, once you exclude the 8 big market clubs (Yanks, Mets, Red Sox, Phils, Cubs, White Sox, doyers, Angels) the other 22 teams would all benfit from a salary cap and floor. Yet, those 8 teams swing big weight and keep the status quo by buying off the Pirates, Royals, etc. with cash transfers.

 

[tzill]

What would you like to see the floor at?

I think a floor could be tricky because it could negatively effect teams trying to do the right thing and rebuild. I would think it would have to be pretty low or include things like the draft, international spending and scouting.

Rob Neyer had a good plan, acknowledging the need to "blow it up" and start over once in a while. I'd set the floor around $67MM, and the soft cap around $101MM (median plus/minus 20%). I'd have NBA type exceptions for signing your own players. You'd be able to go below the floor once w/o penalty. If you stayed below for a second year, you'd be taxed at the difference plus 20%. The third consecutive year, the difference plus 30%, and the fourth and subsequent years, the difference plus 40%.

For example, if the Pirates only had a payroll of $57MM in year one, they'd get a pass. Year two, they'd be taxed $12MM; year three $13MM, and year four $14MM. I'd increase revenue sharing to include all media income, with the local team keeping 60% of the revenue and turning over 40% to the league. The league would then redistribute these funds based on income to more or less equalize income (or at least get it closer -- the Yanks are always going to make more money). I'd also cap spending on organizational development so that the Yanks don't simply get every international player they want.

 

[calsnowskier]

Rob Neyer had a good plan, acknowledging the need to "blow it up" and start over once in a while. I'd set the floor around $67MM, and the soft cap around $101MM (median plus/minus 20%). I'd have NBA type exceptions for signing your own players. You'd be able to go below the floor once w/o penalty. If you stayed below for a second year, you'd be taxed at the difference plus 20%. The third consecutive year, the difference plus 30%, and the fourth and subsequent years, the difference plus 40%.

For example, if the Pirates only had a payroll of $57MM in year one, they'd get a pass. Year two, they'd be taxed $12MM; year three $13MM, and year four $14MM. I'd increase revenue sharing to include all media income, with the local team keeping 60% of the revenue and turning over 40% to the league. The league would then redistribute these funds based on income to more or less equalize income (or at least get it closer -- the Yanks are always going to make more money). I'd also cap spending on organizational development so that the Yanks don't simply get every international player they want.

Great ideas!! Fine tuning can be done, of course, but for the sake of this abstract convo, I will agree with you 95%.

I would change one thing, however. I do not like to hamper orgs from investing in development, so I would like to add all international players to the amateur draft. This would require the ability to trade picks (selling them would be OK as well, but I would like to re-visit that possibility after a few years to make sure it is not being abused) and the institution of a slotting system. The slotting system could be amended to account for Asian players who are coming over after already having a pro career (and Cubans, maybe?).

 

[gp956]

Rightfully so. I definitely agree that this is not a pressing issue. It is just one that I am fearful may become one before it is too late to change things. My naivete shows when I trust elected officials and their employees more than the corporations that fund them. Both have much to gain and little to lose when attempting to herd us "sheep." My fear takes shape when their agendas completely align. Luckily, the American people are the best armed in the world. Too bad guns scare me. .

Thank you for the article. I will finish it later, when I have more time. My favorite part of the first page was the danger to economists in confining the discussion to the First Amendment... though not dangerous for American lawyers. No discussion of law is perceived as dangerous for this litigious country. . Also, thanks for the reasoned and educational discourse. What articles and sources do you recommend for better understanding the American banking system? Keep in mind that I have no experience with economics beyond a high school class where I mostly just filled in worksheets and undergraduate level micro and macro courses (did significantly better in macro if that helps you understand my limited understanding).

That's a tough one. I don't know of any concise guides to the US Banking system - it's such a broad subject. Most lay person sources are full of errors and profound misunderstandings. If you just want an overview, Mishkin's "The Economics of Money, Banking, and Financial Markets" is decent, and it's a standard undergrad text. Read chapters 1-18, then skip to chapter 27.

If you want to understand banking from a theoretical POV then initially skip everything else and go straight to Lawrence White's "The Theory of Monetary Institutions". It's great - concise - although it might be tough going without a solid foundation in micro. Then there is Sir John Hicks' "A Market Theory of Money," a largely forgotten but insightful theoretical book on money and credit - a good read too. Both are 150 pages or so.

 

[xxERICSMITHXX]

Great ideas!! Fine tuning can be done, of course, but for the sake of this abstract convo, I will agree with you 95%.

I would change one thing, however. I do not like to hamper orgs from investing in development, so I would like to add all international players to the amateur draft. This would require the ability to trade picks (selling them would be OK as well, but I would like to re-visit that possibility after a few years to make sure it is not being abused) and the institution of a slotting system. The slotting system could be amended to account for Asian players who are coming over after already having a pro career (and Cubans, maybe?).

That would absolutely kill the value of international players.