BASEBALL AND BILLIONS: A PROBING LOOK INSIDE THE BIG BUSINESS OF OUR NATIONAL PASTIME
By Andrew Zimbalist -- BasicBooks -- 270pp -- $ 20.00
Professional baseball is on the wane. Salaries must come down or the interest of the public must be increased in some way. If one or the other does not happen, bankruptcy stares every team in the face.
Sounds familiar, doesn't it? The words, quoted in Baseball and Billions, by Smith College economics professor Andrew Zimbalist, might have come from any of the current owners of Major League Baseball's 28 teams. It has the earmarks of the standard owner's lament: a tone both dire and querulous, a complaint that those players make too darn much money, and a hint that somehow the players and public are to blame for baseball's messy finances. Equally characteristic of this minatory utterance is what it lacks: any specific dollar figures. Trust us, say the owners. We're losing our shirts.
The owners could probably have spared themselves years of strain on their vocal cords by printing the statement on index cards and handing them out to anyone who asks how business is going. Of course, they would be duty-bound to cite the author and date: Chicago White Stockings owner Albert Spalding, January, 1881. Yes, in a turbulent world, baseball is unchanging.
What Zimbalist's book demonstrates is that owners' greed, pettiness, and arrogance have featured prominently in the sport's landscape almost as long as pitchers' duels and well-turned double plays. In the brief history of professional baseball that opens the book, we learn that owners treated players shamefully long before New York Yankees boss George Steinbrenner paid a lowlife $40,000 to dish him the dirt on star outfielder Dave Winfield -- an enormity that resulted in Steinbrenner's all-too-temporary banishment from the game. To cite just one example of egregious behavior, Spalding, once a player himself, petulantly refused to pay his team's train fare home after it lost a big series.
Even more impressive than the historical overview is Zimbalist's discussion of baseball economics. Although owners and officials in Major League Baseball's central office treat their financial statements like state secrets, Zimbalist has gathered hard data on stadium revenues, local TV deals, and merchandising money. What he uncovered is eye-popping. Did you know, for example, that average revenues per team grew 11.7% per year from 1970 to 1991? Put another way, revenues went from $5.7 million a year in 1970 to $58 million in 1991. Wal-Mart Stores Inc. would have to strain to match that performance.
The good professor even manages a coherent, convincing discussion of the most sloppery subject to vex any student of the financila side of baseball: profitability. Zimbalist cites Paul Beeston, president of the Toronto Blye Jays, describing -- apparently in an unguarded moment -- how owners manage to post sorry results even in banner years: "Anyone who quotes profits of a baseball club is missing the point. Under generally accepted accounting principles, I can turn a $4 million proffit into a $2 million loss, an I can get every national accounting firm to agree with me."
Baseball executives play down team earnings largely to turn public opinion against highly paid players. But as Zimbalist makes clear in a chapter on salaries, players are generally compensated commensurate with their monetary value to the team.
The most useful parallel for player pay, in fact, is to salaries in the movie industry. As Zimbalist demonstrates, players whose exploits draw the fans, like actors who are good box office, earn the big bucks. That seems fair to me. No one complains when Julia Roberts pulls down $6 million for her latest film. After all, she delivers entertainment. Ant what do we call it when Boston's Roger Clemens fans seven in a row or Philadelphia's John Kruk fouls off five pitches before slapping a single to the opposite field? I call it great entertainment. And Americans pay their entertainers well.
Don't get me wrong. Baseball does have serious problems. Former Commissioner Fay Vincent, whose recent ouster by the owners was largely over economic issues, may well have been right when he warned in 1991 that "baseball is poised for a catastrophe." But is is Zimbalist's considerable achievement to show that, as he puts it, "if catastrophe does befall the sport, Major League Baseball has no one to blame but itself." Many owners would still prefer to wage war against the players rather than cooperate with them a la the National Basketball Assn. Equally obnoxious is the mistreatment of the fans, either through cutting TV deals that shut out those viewers who aren't wired for cable or through attempts to extort new stadiums by threatening to move teams to a new city.
The concluding chapters of Baseball and Billions offer ways to fix baseball, but I doubt the owners will heed them. The solutions require cooperation, a concern for the greater good, and a firm commitment to long-term goals. Owners, alas, have rarely strayed from their devotion to selfish interests and short-term gains. I doubt they'll start now.