Peter Gammons: MLB’s small market puzzle

andrew friedman

Andrew Friedman, Executive VP of Baseball Operations & General Manager of the Tampa Bay Rays

In so many different ways, the 2013 season was a marvel, right down to a bunch of bearded baseball lifers honoring the souls of their city while their fans tried to honor them. “The front of this uniform doesn’t say ‘Red Sox,’ it says ‘Boston” were David Ortiz’s April 19 words to “our (—) city” that echoed into November.

The Pittsburgh Pirates made the playoffs for the first time since George H. W. Bush was president and Barry Bonds was a Bucco. The Cleveland Indians made the playoffs. The Oakland Athletics, Plumbers Park and all, won one less game than the Red Sox. Cincinnati, at best a medium market, excelled, again. Betrodden Detroit had yet another very successful season terminated by one of the most tense ALCS series in memory.

And, most remarkable, the Tampa Bay Rays won 90 games and made the post-season for the fifth time in six years. “That,” says one small market general manager, “may be the most amazing achievement in the game. It’s one thing to successfully get to the playoffs, but when you’re a small market, the most difficult thing is to sustain success. What the Rays have done is nothing short of astounding, and the Athletics are right there, as well.”

There is no denying the success Bud Selig has forged with revenue-sharing that has produced more balance throughout the game; all right, the Red Sox and Cardinals have won half of the last ten World Series, but now the teams with the longest runs without making the post-season are the Royals (1985) and Blue Jays (1993).

But there isn’t a small market team that thinks the new draft system works to their advantage. A team like the Rays, Pirates and A’s seldom can jump into the free agent market, seldom can they complete to hold their best players, hence the James Shields trade and now the possibility that David Price could be moved.

Now limitations have been placed on their ability to sign foreign players to inject into their farm systems, and the draft itself has virtually eliminated the opportunity for the Pirates to do what they did in their rebuilding process, namely go above “slot” for lower round picks. Now the draft rewards poor performance, not poor markets.

Look at the list of the 13 players to whom clubs made the $14.1M qualifying offers. The Yankees (Robinson Cano, Curtis Granderson, Hiroki Kuroda) and Red Sox (Jacoby Ellsbury, Mike Napoli, Stephen Drew) had six of the 13. Three—Shin-Soo Choo of Cincinnati, Ubaldo Jimenez of Cleveland, Ervin Santana of Kansas City—were from small markets. Brian McCann is from Atlanta, a mid market in terms of revenues. The rest were large markets.

For instance, the Pirates want A.J. Burnett back for 2014, but if they’d made the qualifying offer, he’d have taken it and eaten up between 16 and 20 percent of their payroll. That won’t work.

Small market teams aren’t going to play in the Masahiro Tanaka posting process, which could be in the $60M-$100M area—before negotiating a contract. The A’s brilliantly snuck in on Yoenis Cespedes, but since then it’s been big market teams like the Dodgers, White Sox and Red Sox that have won the battles for the veteran Cuban players, as well as top Koreans. When a 16-year old lefthanded pitcher named Julio Urias was made available by the Mexico City Reds in 2012, not only was Logan White and the Dodger scouting staff there, but they could afford to buy five players from the Reds just to get Urias, who at 17 is now one of the sport’s best pitching prospects.

Houston can rebuild with the first pick in the draft three consecutive years, but Houston is also a large market team that has to keep its fan base’s attention while losing with the idea of eventually winning. But it you’re Oakland, Tampa, Pittsburgh or Cleveland, it’s still a rich franchise game if that franchise is run right. That’s why what the Rays have done astounds their competitors, and why what the Mets have had to do building from the bottom floors is so difficult to justify.

  • AndyStewart

    I like the two-sided nature of this article. I’m curious though–truly and not professing to know the answer or the angles–in some, certainly not all see:Tampa, like Cleveland, Pittsburg, Kansas City, etc. why don’t teams raise ticket prices in order to compete? Boston, the New England region makes it a large market team, has had the highest ticket prices in MLB for quite awhile in order to, in part, offset a small park. My point is at some point don’t the fan-bases–large or small–have to bare the responsibility of helping make their teams competitive or not? Conversely those teams–after collecting higher ticket prices and presumably drawing the support of their fans–bare the responsibility of funneling those dollars into a good team on the field worthy of that support. A large part of Boston, New York, St. Louis, etc. success is directly attributable to those fans paying and supporting their teams. I’m all for rules that balance the playing field but at some point your organization and your fans must choose to make it happen…or not. Success and support should NOT be penalized routinely.

    • Travis Allen

      Boston, New York and St.Louis have large corporate fan bases that can buy large blocks of seats while Cleveland, Oakland, Pittsburgh, and Kansas city have far fewer large companies and their ticket sales are comprised mostly of family’s in those blue collar towns where people don’t have money to sell out stadiums. Raising ticket prices in those markets would do nothing more than price out the majority of their fanbase who probably already complain ticket prices that are too high.

      • AndyStewart

        Travis-I hadn’t thought of the corporate divide, good and valid point. Speaking only anecdotally Fenway is generally filled, in large part at least, with families, often who have saved for this one-time-a-year trip. Perhaps that stems from the “regional” uniqueness of the fan base ie drawing from ALL of New England vs. just one mid-sized city?

      • Dohsan

        You need to read up on US demographics more.

        StL actually isn’t any bigger or have more corps than Cleveland, KC, or Pitt. Like Pitt & Cleveland (but unlike KC), it is a blue-collar town. The Cards are simply a well-run organization.

        Oakland is in the Bay Area, which is one of the richest metropolitan areas in the world and has tons of corps. Even if you limit it to just the East Bay, the East Bay is richer than StL.

        • Travis Allen

          St. Louis has 10 fortune 500 companies, Oakland has 1. I live in the Bay Area and can speak from experience that the East bay and silicon valley citizens who have money to consistently buy tickets are spending the money to go across the Bay to AT&T Park because the experience you have when Attending a Giants Game as opposed to an A’s game is night and day. The A’s problem is that they need a new park(which the cardinals got in 2006) and if you hadn’t noticed they’re trying desperately to move to San Jose and the Silicon Valley(Where the money you talk about is).

          • Dohsan

            I won’t quibble over how you want to divide up the Bay Area, because it’s impossible to do, though when I lived in the Bay Area (2000-2002), seeing a game at Pac Bell Park didn’t seem that different from one at the Coliseum. Oaktown fans were rowdier; Pac Bell Park was more gimmicky. Maybe because I concentrated on the baseball.

            However, if you look at StL, Cleveland, and Pittsburgh, they are very similar. All 3 are small market industrial Rust Belt cities who have seen better days. StL & Pitt had 9 Fortune 500 companies in 2012 while Cleveland had 8 (http://www.city-data.com/forum/city-vs-city/1569336-2012-fortune-500-per-msa.html#b). If anything, Pitt is doing a little better than StL as the ‘burgh has revived a bit while StL hasn’t really recovered from its decline phase (I live here, so I can see it firsthand; you’re not the most dangerous city in America in 2010 if you’re not in decline). BTW, the Cards drew well even in the last days of the old Busch and PNC Park isn’t much older than the new Busch, so the stadium isn’t the reason.

            The main difference is that the Cards are a well-run winning organization with a long, rich winning tradition which has built a fervent fanbase despite it’s relatively small market size. The difference between the Cards and other small-market MLB franchises who have existed a long time in non-growing metro areas is due almost solely to the organization and not the market.

    • fightwookies

      Ticket revenue is significant, but it pales in comparison to the revenue from the new TV contracts, which are inherently based on market size. NFL is king in no small part because of the parity. Every team is on level ground and you win and lose on the field based on the decisions your leaders make, not based on being able to pay more for talent than other teams.

      • AndyStewart

        I see your point-and granted NESN, YES, and whatever the Mets network is, etc. certainly provide ridiculous currents of cash but if each MLB team is going to pull 52 M increasing ticket revenue would seem to be the only way to bridge the gap. Not easy, paying 35-40$ for what are 12-15$ seats hurts this 99%er but seems to be rewarded.

    • Brian

      Ticket prices can only go as high as the market will bear. Cleveland averaged fewer than 20,000 fans already this year. Raising prices and expecting the customer base to grow or even remain constant is a bad business model.

      • AndyStewart

        I understand that–I guess my overall point was something like–”shouldn’t these fan bases step up and be willing to help create a winner?” instead of waiting for one to be provided and THE being willing to support them. Cleveland is a good to great baseball city who used to support their team. My overall idea/question is when does that laissez fare attitude become penalized instead of somewhat rewarded by regulation changes and profit sharing which, in a sense, penalize successful, and yes larger, more passionate ones. ie step up by coming out and paying the higher prices and giving your team the finances to compete regularly–or don’t but leave the rules as tey are either way

        • http://www.uncorkedventures.com wine clubs

          Corporate money drives those significant sales-not individuals. That’s why the Giants have a payroll 3x what the A’s can achieve

          • AndyStewart

            hmmm ok, but I’m thinking the finances of the owner/ownership group do to, no? especially in the case you cite–which I am def. not an expert on. And individual sales clearly matter given the connection between large payrolls and large attendance numbers 2-3M and smaller payrolls and smaller attendance numbers 1-2M