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More Zimbalist

Part II of All-Baseball.com's interview of Andrew Zimbalist is up (you'll have to scroll down to get to the new stuff). Here's a sharp comment on revenue sharing:

I think revenue sharing is a positive for baseball. The owners are going to share almost $300 million dollars this year.

The problem is with the incentive structure in the revenue sharing system- they reward failure and penalize success. The better job you do in building a team, attracting people to your ball park, and boosting television ratings, the more you’ll be taxed. And, the worse job you do, the more revenue transfers you’ll receive.

For example, you have an example like the Philadelphia Phillies. They play in the fourth largest market in baseball and, until last year, they were getting roughly $10 million plus per year in revenue sharing. That’s absurd. [Owners] David Montgomery and Bill Giles weren’t doing a good job in building their team and selling it in the community, and they were getting all that money in the largest unshared market in the game. Those are bad incentives.

At the other end, you have the Red Sox in the sixth largest media market in the country and the 18th or 19th largest baseball territory, as defined by Major League Baseball, and- because they’ve been so successful- they’re paying the second most revenue sharing of any team. Close to $50 million dollars in revenue sharing. So, you’re penalizing them for being successful.

In my view, the revenue sharing system is structured wrongly. The teams shouldn’t share based on revenue; they should share based on local market size.