Slaying the New York Devils

The Yankees’ dominance of the off-season free agent market has not sparked the outrage of a Madoff or Blagojevich. Yet even in these days when shock and awe have been defined upward by the wild events of the day, the Yankee’s outsized spending spree renders those of us outside that sphere of influence incredulous. Is there a tipping point where the Yankees’ influence within the game is more than just unseemly and demands addressing effectively? New York City is the leviathan that tips the continent toward the east, a metropolitan region one and one half times as large as any other metro area. There are nineteen million persons living in the New York City MSA compared with thirteen million in Los Angeles and less than ten in Chicago. Of the twenty-four other major league cities, ten have populations between four and six million. The other fourteen–the true small market teams–are between 1.5 and 3.3 million in size. Baseball has done wonders to achieve competitive balance between the largest and smallest (Milwaukee) markets, but this winter’s off-season moves raise the question whether more needs to be done.

Fans in the New York City area are right to say that they did not make the system and it would be crazy for them to ignore it. As one fan said recently in the New York Times , baseball fans should see the Steinbrenner’s spending as a stimulus package for the rest of baseball. But is a Yes Network in Manhattan that sucks in twice as much revenue as the average for the other teams and almost one hundred million more than the second place Mets (see my article, “Size Matters”) really just to be taken for granted? Is it part of the landscape we cannot escape?

In the 1990’s Commissioner Bud Selig asked the equally fair question, ‘what can be done to give fans in other cities “faith and hope” that their teams have a realistic chance to win?’ The answer was revenue sharing and a luxury tax that redistributes a portion of what the Yes Network brings in to other teams in a complex formula. Yet it is clear from the money the large market teams–especially the Yankees–are throwing around that the table is still so tilted that half of the teams have an uphill march they can ill afford.

The one thing that mega-markets in metropolitan areas New York, Chicago and Los Angeles have in common is multiple franchises. However, when the media markets for Chicago and Los Angeles are divided to reflect multiple teams, they compare reasonably well in size to many other franchises. Yet dividing New York City proportionally between the Mets and Yankees still leaves two markets that exceed everything in sight–almost 10 million fans for each team compared to the new largest, the Dodgers and Angels with more than six million. Most of the mid-market teams, Boston, Philadelphia, Washington, Dallas and Atlanta are in that range.

The other professional sports have solved this problem in different ways. A salary cap levels the playing field in basketball and football, but such a cap in baseball will not happen. Besides, there are more interesting possibilities. Despite a cap, New York City still supports two successful professional franchises in basketball and football. In hockey the situation is different. There are not only the New York Rangers and New York Islanders, but also a third team–the New Jersey Devils. Northern New Jersey is a key component of the New York MSA and its media market, so professional hockey has divided NYC into three market shares. Hmmnnn….

So does baseball need a New York or New Jersey Devils team to provide that final component of competitive balance that finishes the masterpiece begun by Bud Selig at the beginning of the 21st century? A Blue Ribbon Panel–George Will, Paul Volcker, George Mitchell and Richard Levin–issued recommendations on competitive balance in July of 2001 that were implemented when the luxury tax and revenue sharing were adopted as part of the collective bargaining agreements in 2002 and 2006. But to those of us watching the Yankees acquire every big name free agent for the 2009 season, it is fair to ask whether the recommendations went far enough.

And then there is the issue of precedence. In 1950 when there were only 16 baseball teams–eight in the National and eight in the American Leagues there were three professional baseball teams in New York. Yet for all of the decades leading up to the 1960’s (when baseball began its expansion) the Dodgers, Giants, and Yankees dominated the sport even then when their relative affluence depended almost solely on gate receipts. For decades the three teams in the Big Apple were able to out draw every other team in Major League Baseball by so much that they were among the most successful year in and year out. Even with three teams in the city, the Yankees were so much more affluent than their rivals that they could maintain their own subsidiary franchise in Kansas City buying players from the Athletics as a way of keeping that franchise afloat.

So is it fair that there are only two major league franchises in New York City? Could the playing field be leveled by allowing a third franchise in the New York City such as exists today for Hockey? Baseball expansion has not been on the table for more than a decade and in the current economic climate it is unlikely to be discussed again. But the issue is one that needs to be raised in the future.

Baseball is resurgent and when the economy allows it there should be discussion of moving major league baseball into cities like Indianapolis, Las Vegas, and Charlotte. But more than anything the sport needs to include a third franchise in the New York City metro area. It may be dreamy-eyed to propose such a solution in today’s market place, but it is the solution to New York City’s outsized influence in the game and it deserves to be on the table.

Until then many teams can only look up at the Yankees and dream and model themselves after the small number of small market success stories. This year our hopes lie with the lowly Tampa Bay Rays. For us who question the Yankees and their overworn size, they are the ultimate heroes of competitive balance. So go forth Evan Longoria, BJ Upton, Carlos Pena and Scott Kazmir. Pull the sword from the stone, my beamish boys. Snicker snack goes the vorpal blades of competitive balance. Callooh, Callay!! The Yanks lose out on the very last day.