MONEY BALL MYTHS

Harvard University has an endowment of $28.8 billion. Shouldn’t it have to give part of it to other Ivy League schools so they can fairly compete for the best students? After all, poor Brown has a paltry $2.01 billion. There’s no way it can keep up, right?

It doesn’t work that way. A few people—me for instance—might argue that the unused part of college endowments ought to be taxed the same way our savings accounts are taxed, but few would argue that Harvard shouldn’t be allowed to have a bigger endowment or that it should subsidize other schools. Yet, oddly enough, millions of Americans think that major league baseball ought to work that way.

The New York Yankees have just won the World Series and the jeremiads have begun. The Yankees stand accused of buying the championship and the hue-and-cry goes forth for salary caps and across-the-board revenue sharing. You’ve got the love the delicious irony of living in a nation where half the population thinks that national health care would signal the dawn of communism, yet unabashedly support socializing professional sports. But let’s forget all of that and instead topple a few myths.

1. Money buys championships. Really? Did I sleep through all those Yankees World Series victories between 2000 and 2009? I thought they had won one in a row, not ten. Since 1995, nine different teams have won the World Series. In those fourteen years, an additional eight teams made it to the Series—seventeen different teams in fourteen years.

With its salary cap, the NFL has done only marginally better: eleven different Super Bowl champs and nine other teams advancing to the championship. The capped NBA has done worse than baseball—just eight teams have won titles and only nine non-titled teams made it to the finals. So where’s the cry to break up the San Antonio Spurs? They have as many rings (five) as the Yankees.

2. Okay, but money means you won’t suck. Someone forgot to send that memo to the New York Mets, the second wealthiest team in MLB. At number four the Dodgers haven’t won squat, and MLB’s fifth wealthiest franchise is the Cubs. Need I say more?

The least-valuable team, the Florida Marlins, have won two World Series crowns in the past fourteen years. Of the ten bottom branches on the money tree, five of them have been to Series.

Money is simply no guarantor of success in baseball or anything else. Or have people forgotten that the highest-paid executives on Wall Street are the ones who screwed up the economy?

3. What about the competitive balance? What about it? MLB is far more competitive than football or basketball. In 2009, the Yankees won 103 games, a winning percentage of .636. The league’s worst team, the Washington Nationals, lost 103 games (.364). The difference between the Yankees and Nationals was just .272, meaning that the Yankees had just a hair over 25% better chance of winning than the woeful Nats. By contrast there was an 81% difference between top and bottom in the NFL and 62% in the NBA. So how does a cap make those sports more competitive?

4. Fans lose interest when a wealthy team like the Yankees win. Wrong again. TV ratings were up by 39% for 2009, the biggest jump since measurement began. TV audiences swamped last year’s Phillies/Rays matchup and garnered the biggest numbers since 2004, when two other wealthy teams matched up, the Red Sox and Cardinals (#3 and # 8).

5. It’s just not fair to allow rich teams to beat up on small-market teams. For heaven’s sake grow up! Can we stop pretending that MLB consists of barons and pikers? There are no poor people involved in major league baseball! The richest owner? That would be Theodore Lerner at $3.2 billion in net worth and he owns the Nationals, MLB’s worst team!

George Steinbrenner is practically a pauper among MLB owners, merely the seventh richest. Of the top ten, however, only Steinbrenner and John Henry of the Red Sox have won championships, perhaps because they spend a higher percentage of their revenues on players (58% and 54.3% respectively), whereas the rich boys who own the Rays, Marlins, and Pirates pocket their revenues. (They shell out a parsimonious 17.4%, 24%, and 28% respectively.) I’m having trouble shedding tears for poor Jeff Loria who owns the Marlins and has a net worth of just $400 million.

While I’m on the subject, the Pohlad family of the “small-market” Twins and David Glass of the pathetic Kansas City Royals, both have more dough than the Steinbrenners. Pohlad and Glass recently made ESPN’s top ten list of greediest owners in sports. (Nope, George S wasn’t on the list!)

The day after the Series ended the Marlins gave Jeremy Hermida to the Red Sox for two non-entities just so they wouldn’t have to pay his contract. He made $2.25 million last year, a figure already below the MLB average of $3 million. Maybe misers are the problems with MLB.

But, as I said, no poor boys—and that includes players. MLB is not the Yankees against sandlot players. Are there inflated contracts? You bet, but I wonder which contract is less justifiable: A-Rod’s $30 million or $10 million for Gary Matthews, Jr. or Dontrelle Willis? Or maybe all those multi-millionaire utility infielders? Still, the MLB minimum is $400,000 per year, a figure it takes me many years to accumulate. Surely that can buy some pretty decent talent.

Let me return to the opening metaphor. MLB is analogous to the Ivy League—no paupers, no problems, and no reason to change the way business is done. Brown does just fine with an endowment a tenth the size of Harvard’s. It accepted just 14% of its applicants last year while Harvard’s apps were down by 40%. So let’s save the socialism for something that really matters. Did someone say health care?