BlueRibbonPanelReport

BlueRibbonPanelReport - The Report of the Independent...

Info iconThis preview shows pages 1–5. Sign up to view the full content.

View Full Document Right Arrow Icon
The Report of the Independent Members of the Commissioner’s Blue Ribbon Panel on Baseball Economics July 2000 Richard C. Levin George J. Mitchell Paul A. Volcker George F. Will
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
i Table 1: Division Series (“DS”) and League Championship Series (“LCS”), and World Series Games Won by Payroll Quartile, 1995-1999 Quartile I Quartile II Quartile III Quartile IV Total Avg Payroll DS & LCS W-S Avg Payroll DS & LCS W-S Avg Payroll DS & LCS W-S Avg Payroll DS & LCS W-S Games Won 1995 $46.4 19 6 $36.9 6 0 $31.4 0 0 $17.8 0 0 31 1996 50.0 19 6 37.9 7 0 28.1 0 0 18.2 0 0 32 1997 57.4 26 7 45.3 1 0 35.4 0 0 21.5 0 0 34 1998 64.0 18 4 50.1 8 0 35.4 0 0 18.0 0 0 30 1999 78.8 25 4 55.7 2 0 41.0 0 0 20.2 0 0 31 Total 107 27 24 0 0 0 0 0 158 Note: All dollar figures are in millions. From 1995 through 1999, a total of 158 postseason games were played. For analytical purposes, it is useful to divide the clubs into “quartiles” by ranking them (based on payroll) from high to low and separating the clubs into four equal size groups. For example in 1995, the seven clubs with the highest payrolls would constitute “Quartile I.” 1 During this five- year period, no club from payroll Quartiles III or IV won a DS or LCS game, and no club from payroll Quartiles II, III or IV won a World Series game. Chart 1: Average Annual Operating Income for All Clubs, 1995-1999 ($20) ($15) ($10) ($5) $0 $5 $10 $15 1234567891 0 1 11 21 31 4 1 51 6 1 71 81 92 0 2 12 2 2 32 42 5 2 62 72 82 9 3 0 Average Operating Income (Loss) (In Millions) From 1995 through 1999, only three clubs achieved profitability: Cleveland, Colorado and the New York Yankees. 1 Prior to the expansion in 1998, each quartile consisted of seven clubs. After the 1998 expansion, Quartiles I and III have eight clubs and Quartiles II and IV have seven clubs.
Background image of page 2
ii Table of Contents I. Summary of Findings, Conclusions and Recommendations. .......................... 1 I.1. Overall Conclusions. ....................................................................................... 1 I.2. Revenue Disparities . ....................................................................................... 2 I.3. Payroll Disparities. .......................................................................................... 3 I.4. Payroll and Competitiveness. ........................................................................ 4 I.5. Other Findings and Conclusions. .................................................................. 5 I.6. Recommendations. .......................................................................................... 8 II. The Economic Condition of the Game. ............................................................... 11 II.1. Overview . ....................................................................................................... 11 II.2. Basic Assumptions . ....................................................................................... 13 III. Data and Analysis. .................................................................................................. 15 III.1. Industry Revenues. ........................................................................................ 15 III.2. Local Revenues . ............................................................................................. 17 III.3. Central Fund Revenues . ............................................................................... 21 III.4. Total Revenues by Club. ............................................................................... 22 III.5. Club Payrolls. ................................................................................................. 25 III.6. Club Competitiveness. .................................................................................. 29 III.7. Games Won by Year. ..................................................................................... 30 III.7.1. Postseason Games Won. ..................................................................... 32 III.7.2. League Championship Series . ........................................................... 34 III.7.3. World Series . ........................................................................................ 35 III.8. Club Profitability, Club Debt and Franchise Values. ............................... 36 III.9. Conclusions Regarding Competitive Balance. .......................................... 36 IV. Remedies for Competitive Imbalance . ............................................................... 37 IV.1. Enhanced Revenue Sharing . ........................................................................ 38 IV.2. Enhanced Competitive Balance Tax and Minimum Club Payroll . ........ 39 IV.3. Unequal Distribution of Central Fund Revenues. .................................... 40 IV.4. Competitive Balance Draft. .......................................................................... 40 IV.5. Rule 4 Draft Reforms. .................................................................................... 41 IV.5.1. Include International Players. ............................................................ 41 IV.5.2. Eliminate Compensation Picks. ......................................................... 41 IV.5.3. Alter Eligibility Standards. ................................................................. 41 IV.5.4. Implement Disproportionate Allocation of Picks. .......................... 42 IV.5.5. Allow Trading of Draft Picks. ............................................................ 42 IV.6. Franchise Relocation . .................................................................................... 43 IV.7. Contraction. .................................................................................................... 44 IV.8. Game Development—Domestic and International. ................................. 45 IV.9. Summary of Recommendations. ................................................................. 46 V. Appendix I. ............................................................................................................... 47 V.1. Club Profitability. .......................................................................................... 47 V.2. Club Debt. ....................................................................................................... 50
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
iii V.3. Franchise Values. ........................................................................................... 51 VI. Appendix II.
Background image of page 4
Image of page 5
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 93

BlueRibbonPanelReport - The Report of the Independent...

This preview shows document pages 1 - 5. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online