Sorry, Joe Fan

New baseball deal won't mean lower ticket prices

If you’re a baseball fan who thinks this drawn-out labor tussle was about you, you’ve been out to lunch. This had to do with decades of mistrust and bad blood, a tattered economic model, and small markets versus large markets. Sorry to break the news, but you’re not major players in this settlement.

The negotiators here could have given a flip about whether a family of four can settle into their seats, feed themselves and get back home for under $75. Baseball, like all the others, is a cold-blooded industry. And besides, attendance remains good and demand remains high.

So you can bet when the ink dries on the deal the billionaires and millionaires have hammered out, it’s certain not to benefit Joe Fan -- at least not in the wallet. No matter if they reached middle ground on this luxury tax business, ticket prices aren’t going down. And you can bank on them going up in seasons ahead. The $6 hotdog and $5 Coke darn sure aren’t getting any cheaper, either.

Oh, if you’re a fan of a small-market team, you don’t have to worry about contraction for another four years. But not much else is likely to change.

“I don’t see how the fans are affected in terms of the prices they pay,’’ says Smith College economics professor Andrew Zimbalist, author of Baseball and Billions. “Yet if you ask the majority of fans they’ll say that ticket prices have gone up too rapidly and the main reason for that is that [player] salaries are exploding. It is false. Any rational owner sets his ticket prices according to the demand for the game. And if he is doing anything but that, then he is not maximizing his revenues.’’

New York attorney Daniel Glazer, another student of the game’s economics, argues that it’s been naïve to simply blame free agency and accompanying salary spikes for higher ticket prices, anyway. His point is that between the introduction of free agency in 1976 and the 1994 work stoppage, ticket prices remained more or less flat while average salaries rose from $50,000 to in excess of $1 million.

Instead, he traces the relatively steep hike in ticket prices this decade to heightened fan interest and the construction of smaller, fan-friendly ballparks. Bottom line is you can expect owners to continue pricing tickets at the level that reflects demand, regardless of what luxury tax they get in the new deal or the percentage of revenue they now get to spread amongst themselves.

“No matter what the players are making, the fact of the matter is that any owner of a business will price tickets to meet demand,’’ seconds Glazer, author of Can’t Anybody Here Run This Game? The Past, Present and Future of Major League Baseball. “Whether someone like Alex Rodriguez receives $1 or $25 million for his services, a fan will still pay the exact amount to see Alex Rodriguez play baseball.’’

OK, so what’s in the new deal for the paying customer or the guy who plops down nights in front of the tube? At best, you can hope, a pastime in which the dregs of the game -- financial weaklings like Kansas City and Pittsburgh (Sorry, Mr. Selig, we can’t throw the Twins in here anymore) -- can see some light at the end of the tunnel.

Maybe a system in which a franchise like Montreal, with obviously terrific scouting and player development folks, could have afforded in recent years to keep the likes of Pedro Martinez, Larry Walker, John Wetteland, Moises Alou, Marquis Grissom, Ugueth Urbina.

“What fans should be looking for in determining if this was all worth it is whether the talent distribution is more even and whether Major League Baseball can put out a better on-field product,’’ offers Glazer. “That is really it. Will the product on the field be any better as result of all this strike talk and all the negotiations over the last year or so?

“Otherwise, we’re right back to where we started. It may take a few years, of course, to determine. Now, in retrospect, we can see with clarity that the 1994 [labor settlement] was a Band-Aid. That ’94 didn’t solve any sort of competitive balance problem.’’

What the last labor accord failed to resolve was the widening gap between the filthy rich and rich clubs. The rush of new ballparks in the 1990s helped pump additional revenue into several franchises, most notably the Cleveland Indians and Seattle Mariners, but what really tends to separate the men from the boys in the game these days is local broadcast revenue.

Here you have the New York Yankees generating more than $56 million in local media revenue last year and the Kansas City Royals a meager $6.5 million. So what happens last offseason? The Yankees out-bid themselves for free agent Jason Giambi while the Royals took on pinstripe castoff Chuck Knoblauch.

Yet high salaries aren’t by themselves the issue. The problem has been the inability of more and more clubs to pay them. What fans should worry about is that we don’t end up with baseball’s version of the Harlem Globetrotters and the Washington Generals.

Hopefully, the latest labor agreement, even if it fails to influence ticket prices, will at least be a step towards leveling the financial playing field. Then again, as the Cincinnati Bengals continue to prove over in the NFL, putting a cap on team payrolls and sharing TV money doesn’t guarantee a winner.

Mike Fish is a senior writer for CNNSI.com.

Comments? To e-mail Fish, click here.

 

Related information

Stories

Mike Fish Archive

Multimedia

Visit Video Plus for the latest audio and video