Pay for Play

In August 1998, the New York Mets were in the midst of a three-team wildcard playoff race with the Cubs and Giants. Rainouts had required the Mets to schedule very rare back-to-back double-headers, and they were about to play four games at home over two days, against a fourth team, one that was essentially out of the playoff hunt. With every game incredibly important, it would have been unheard of for Met fans to root for a visiting player during that four-game series. But that is exactly what happened.

That visiting player was Mark McGwire, first baseman for the Cardinals. In both games of the first double dip, McGwire took Mets pitching deep. And as he was going for the all-time record for homers in a season, both home runs got the same reaction — thousands of flashbulbs, raucous applause, and standing ovations that lasted longer than his trots around the bases.

Sure, the fans were there to root for the Mets, but their memories are of those homers. And to this day, those who were fortunate enough to be at Shea Stadium for those seven hours talk mostly of the home runs — not of the fact that the Mets won one of the two games.

But as far as Major League Baseball is concerned, that fact doesn’t matter, not one penny. The $35 my friends and I each shelled out for a ticket, the $6 it cost to park, and the $25 or so more we each spent on concessions all found their way to the Mets coffers. The other team — which had to cover about half of the paychecks for the games, not to mention expenses related to equipment, travel, and accommodations — got nothing. And this is what baseball calls the free market at work.

In any other real-life situation, the visiting team would get a cut of the revenue brought in by the game. It is only because Major League Baseball operates collectively — that is, as one entity, and not as thirty individual teams — that such a ridiculous market failure occurs.

So, should visiting teams refuse to play unless given a cut of local revenues? Well, yes. But that will never occur, if only because it’s incredibly drastic, and radical changes like this almost never occur in professional sports. Let’s face it: The free market alone will never create a revenue-sharing plan, precisely because the marketplace has already been dismantled in favor of the centralized economic control given to the commissioner’s office.

Nevertheless, if a fair revenue-sharing plan is to exist, even within the framework of the MLB, it must generate the same outcome a free-market solution would deliver.

It could be rather simple: The visiting team gets a cut of the gate. This isn’t anything new, although it was a flawed policy when last seen in the major leagues. Before 1995, American League teams shared 20% of the gate with the rest of the AL, and the 14 teams tossed their shared fifth into one central pot. That pot was then divided equally amongst all fourteen teams (including the home team). The Yankees, Angels, Twins, Royals, etc. all received an equal share. And that makes no more sense than not sharing at all — which is pretty much where we are today.

Let’s take another look at that 1998 doubleheader. The Mets and Cardinals drew about 50,000 fans for those games. To make the math simple, let’s assume each fan shelled out $10 for their ticket. A total of $500,000 comes in. That money, given the current revenue-sharing system (or lack thereof), finds its way only into the Mets bank account. At the same time, let’s assume the Marlins were playing in Montreal and only 5,000 fans showed up. The Expos get $50,000, while Florida, like St. Louis, gets zilch.

The NFL currently employs a 60/40 split, so let's see how this scenario would work for baseball. With the NFL system, the Mets and Expos would get 60% of their gates, or $300,000 and $30,000, respectively. The other $220,000 would be divided up equally amongst the 30 teams in the league (including the two home teams). Those two games alone would get the Cardinals and Marlins each about $7,000 — but there are another thirteen games being played that day. All the day’s away teams would “earn” approximately $55,000, while the home teams would also get that $55,000 plus 60% of their own gate. (Yes, that means the home-team Expos would receive more in shared revenue than their fans actually spent at the ballpark. Funny how that works.) It wouldn't matter that the Marlins and Expos drew one-tenth the number of fans the Met/Cardinal matchup drew. The revenue is shared equally. So, again, this is hardly a free-market outcome.

So what if we give the 40% cut to the visiting team itself and not pool the money with the other teams? Well, borrowing the example above, the Mets would still get their $300,000 and the Expos their $30,000, and neither team would get the $55,000 in shared revenue. But the Cardinals — thanks to Mark McGwire — would get $200,000, while that hapless Florida/Montreal game would net the Marlins a mere $20k. Sounds a little more fair, doesn't it?

Of course, the Expos and Marlins come out losers in this deal. Had baseball pooled the funds, then divided and distributed them, both teams would be making about twice as much. But if only a handful of Montreal residents want to see the Marlins take on the home team, that’s exactly what should happen. There are simply no handouts here: If your team does not draw fans on the road, the effect of this lax commitment to winning will show up on your bottom line.

In fact, this system gives bad teams the incentive to improve.

And that is exactly what any revenue-sharing plan has to ensure — money will be shared, but only if you earn it. Having George Steinbrenner write a check to the Pittsburgh Pirates accomplishes nothing if the Pirates can either pocket it or fritter it away on bad players. Even worse, if a team is allowed to blow shared revenue without penalty — and we hardly want to give the commissioner’s office expanded power to nullify a team’s transactions — said teams will cry poverty even louder, with more money flowing from New York to the rest of the league.

Tying shared revenue to away-game attendance protects baseball from such nightmare economic situations and naturally balances the playing field. Besides, the away team is there for a reason — and it should matter who it is.

This article originally appeared on National Review Online on April 1, 2002.'