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"In The Best Interests of Baseball?" An interview with author Andrew Zimbalist

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I recently read "In The Best Interests of Baseball? The Revolutionary Reign of Bud Selig", and was given an opportunity to interview author Andrew Zimbalist on the book, as well as on the current state of some economic topics in the game. Here is that interview, with a review of the book forthcoming.

Marc Normandin: What made you want to write "In the Best Interests of Baseball?"

Andrew Zimbalist: You know, I've been snooping around the baseball industry for 16 years, and most of the work that I have done is about baseball's structures, baseball's incentives, and work that's connected to baseball's numbers in one way or another. As I've been trying to understand the economics and the numbers behind the game, I've come to know individuals better, and come to see the functioning of teams and of the commissioner's office, as well as to know owners and to know what their goals and priorities are.

It's been kind of nagging at me that I wanted to try and relate some of the underlying economic dynamics not to structures, but to the personalities who are involved at various levels and the relationships that they develop, and how baseball's institutions condition those relationships, and in turn how the relationships affect the way the game performs, how effective it is, how it evolves over time.

I had developed a relationship over the last couple of years with Bob Bowman at Major League Baseball Advanced Media, or MLBAM. Bob and then some others started to encourage me to talk with people in the commissioners office...I had really developed a very antagonistic relationship with the commissioner's office, not just with Bud but with Bob Dupuy and Manfred and other people who were surrounding Bud. So I called up Dupuy and said I was going to be in New York for some other business at one point, and suggested that we sit down and have a drink, and I know Bowman and others had been saying to Dupuy and Selig that they should get to know me, that somehow we had demonized each other but we ought to be communicating.

So I sat down with Dupuy and had a drink, and I told him that I was thinking about writing about people in the game and how they interacted with the institutions, and how in turn affected the performance of baseball. He liked it, and said that he would be happy to cooperate with me and arrange for me to have access to people in his office, and also certain documents. So I decided to set out to write a book about the governance of baseball, and naturally because the governance today is so much about the people who are there now, and Selig has been the acting commissioner since 92', and even before that when he became involved in baseball directly in 1970, he has been a very central figure. Head of the players relations committees for a very long time, he was head of various committees that were choosing previous commissioners; he's just been kind of at the center of everything for a long time. My book kind of just evolved to be more and more focused on Selig, although it remains a book on the history and the evolution of baseball's governance and the individuals.

So I look at all the commissioners and in each case I try to look at who they are, what their background was, how they became involved in baseball or business, and how the personality that they had formed affected the way they dealt with owners and the way they dealt with the game. I was trying to look at how the institution of the commissionership was framed, how it was conceived and how that conception changed over time, and how that in turn affected the way the commissioner would do his job. But as I said, probably at least half the book is looking at Bud Selig in some detail, looking at his own personal history, going way back to his childhood, and taking it through, trying to understand who he is and then looking at what he's done in the baseball industry from the time that he bought a small piece of the old Milwaukee Braves in the early 1960s, through his struggles to get a team back in to Milwaukee, and then more and more detail of what he had done since 1970 as owner and then commissioner. Then I try to trace and spend more time on the events in the 1990's around collective bargaining, and where that's led us today with the revenue sharing system and competitive balance problems, and what the main challenges are that Selig and baseball face at the moment.

MN: In your newest book, you detail the history of the commissioner's office and the men who held the position. Bud Selig is very different from commissioners of the past; do you think the commissioners who come after Selig will be more like him, or would they be more like those who came before him. Will we see another owner as a commissioner?

AZ: Frankly Marc, the biggest element here is about Selig being an owner and commissioner for 13 years, until he sold the Brewers in January of 2005. The biggest element here in fact is not what the media has focused on and I myself have written about, which is the presumed conflict of interest that there is between and owner and commissioner, being both at the same time; to be sure there were moments when I believe there was a conflict of interest, and when it was apparent that it was inappropriate for one person to be doing both jobs at the same time, so I think that's part of the story. I think the larger part of the story is that when baseball decided to push Fay Vincent out in 92' and to bring Bud in, they did this of course in context of an anticipated collective bargaining struggle, they didn't want Fay doing what he did in 1990, which was pushing them to an agreement they didn't want to reach and to reopen the spring training camps. They didn't want their employee Fay Vincent to curtail the process that they wanted to go through to constrain salary growth, so they appointed one of their own.

I think the more significant thing about that is when the owners did that, they were essentially saying we've had enough of the mythology of the commissioner's office. This notion that there is an omnipotent being who at once acts in the best interests of the owners, the players, the fans, the media, the cities, everybody, is farcical; it's a fantasy, that can't happen, in particular as our employee, as the owners, were not interested in having it happen. We want someone to represent the owners, and to govern baseball as if it is a business; we want to become a real business. I think it was that implicit statement in choosing one of their own to run the game, that signaled directional change in how baseball was going to govern itself, and you can see all sorts of evidence that baseball began to engage in the kind of activity and choices that a business would engage in.

To give just one example, baseball did not have a marketing department until 1996; that is four years after Bud came in. MLB is this massive organization, several billion dollars a year in revenue, and they didn't have a marketing department. Now they had individuals who from time to time did marketing related work, but they didn't have a marketing staff with a marketing plan, and it's only when baseball and the owners said, "OK, lets get ourselves a CEO, which is what a normal business has, not a commissioner, but a CEO," that the whole thing began to change. You don't see General Motors being run by a commissioner, who is supposed to act in the best interest of the workers, the owners, and the consumers. No, you have a General Motors run by a CEO, and this is the same thing with Microsoft and every other corporation in the United States. I think that's the biggest change. I also believe therefore, this is somewhat circuitous, to come back to the question you posed, I think that in 2009 when Bud is replaced, he is going to be replaced by somebody who reflects once again, the need and the desire of the owners to have a CEO in the office. In other words, they are not going to put somebody like Eckert back in, and they are not going to put Happy Chandler back in, they are not even going to put someone like Fay Vincent back in, because they are going to put somebody in there who has the necessary business skills and has the inclination to represent the owners and to conduct the sport as a business.

MN: Any guesses as to whom they may replace him with?

AZ: No, I think it's really premature to guess, and frankly for all the good work Selig has done to get the owners on the same page, or at least on a similar page, to get them working together rather then against each other, the owners still have a lot of friction amongst themselves, although it doesn't boil over as much as it used to, and because there's that amount of disagreement, its very hard to anticipate, especially before the next collective bargaining agreement is settled, which has to be done after this year. It's very hard to anticipate particular personalities and who will emerge to the top. Obviously there are certain individuals who are good candidates out there, but I have no desire in speculating which one is going to rise to the top anymore than I do trying to figure out who is going to be the next Democratic candidate for president.

MN: Speaking of the collective bargaining agreement, can we expect another work stoppage next time the players association and owners go to the bargaining agreement?

AZ: I really don't think so, I think that the two sides were really chastened and humbled in 94' and 95'. The game was almost destroyed. They're in a pretty competitive entertainment environment right now, where they not only have to deal with other sports like the NFL, but they've got to deal with the Internet, and they've got to deal with iPods and cell phones, and there's just so much that's out their to bombard our need for entertainment and visual stimulation, that baseball and other sports are taking a much bigger risk if they do a work stoppage this time around. The players I think don't have the same inclination to stop work that they used to, they are further and further away from the days of struggle and sacrifice that Curt Flood represented, many of the players today won't even know who Curt Flood was.

The average player is making two and half million dollars a year, there's not a great inclination to sacrifice that kind of annual salary on behalf of getting a few extra percentage points in salary growth if they could indeed even get that for a few years. I think it's a very problematic matter to think that the players would strike; I mean it's always possible if the owners get too carried away with some particular salary restraint program, and I think the owners also feel that work stoppages are enormously costly, and they basically now at this point have a handle on salary growth. Salary growth has practically not even occurred over the last four years, since the 2002 agreement was signed, to the extent that it has occurred more slowly, certainly more slowly then revenue growth. So I don't think as difficult as it might be to reach an agreement that either side sees very much in it from a work stoppage. I don't think we'll see a work stoppage. I think the larger challenge with the coming to CBA, is not going to be whether or not they can avoid a work stoppage, but it's going to be can they design a system for baseball that's more rational with more proper incentives then the system they currently have.

MN: Do you think contraction will play a larger role this time around?

AZ: I don't think baseball can contract. They have a deal of course with the players, that if they announce by June of this year, June of 2006, the players won't resist contraction. But I don't see any basis for them to contract. There's still strong revenue growth in the sport. You would have challenges from any city that was going to be affected by contraction. Minneapolis, Minnesota contested baseball the last time around and stopped the process. There would be some challenges to baseball's antitrust exemption, there would be litigations, and the necessity to, or at least the threat that they would have to open all their books and records. I don't think baseball wants to go through it. I don't even think baseball can even get away with contraction. It would get Congress quite angry, and we saw with the doping issue that Congress is prepared to haul baseball on to the carpet around certain issues. I don't really think there's any economic reason for them to contract, even though of course there are some teams that are grumbling about their cities, such as the Marlins. It terms of the overall economic health of the sport I don't think there's a reason to do it, and politically it would be very damaging and very difficult.

MN: Are there cities that are viable locations for a team like the Marlins to move to?

AZ: If the Marlins are looking for a publicly financed stadium, a largely publicly financed stadium, in a good market, I don't think there's any that is stepping forward right now. I also think that most cities, if they could get themselves to a point of putting down a couple hundred million dollars to support a new stadium to get a team, they might not want to get the team that Jeffrey Loria and David Samson are running. Those individuals have not done a lot in the last 12 months to make people in a city want to have them as the owners of their franchise. No city has stepped forward and said we have the political ability and commitment to put down a couple hundred million dollars for a stadium. No city has done that. Maybe the city that's closest to providing some kind of money whether, it's public or private, is Las Vegas, but that city is a market with a variety of different questions surrounding it, not the best city to go to. It's a viable city in the future, but I don't think it's the kind of city that any owner going to want to jump to right now. I don't think that Samson is going to be successful in identifying another market; he's much more likely to be able to strike some kind of a deal in Miami, or sell the team and have the other owner's strike a deal in Miami. I'm not persuaded that the dance with San Antonio will lead to a third team in Texas.

MN: Do you think the strategy the Marlin's have taken this offseason, of dealing off their proven talent for younger players is necessary for them to do to survive in their market?

AZ: No, I don't think it's necessary. I don't know enough about the quality of the prospects that they're getting to have a committed judgment on these trades that they're making. In the abstract, it's always a possibility, that by trading a higher priced accomplished experienced player for a prospect or two that you are in fact doing something that will help your team. Maybe not in the next year, but in the coming years, it's always possible. It depends upon the balance of the trade, how good the people are, on either end of the trade. I don't think as a general matter that's it's bad to trade experience for prospects. Particularly if a team, for instance is near the threshold of the luxury tax, and they want to make sure they don't go over the luxury tax threshold, might be a perfectly sensible strategy.

I think the problem that I have with what the Marlin's have done is that when they unload all of their talent, and it's a team of recent World Series victors and their throwing away everybody, virtually everybody from that team, then it no longer seems like a strategic move where their trying to develop certain positions and certain players, but it seems like a wholesale dump. I think that's the only way to understand what's happening here, and unfortunately in baseball, where each team gets these days around 32 to 34 million dollars from the central fund, and then if your revenue is low enough you get maybe up to another 30 million dollars in revenue sharing. Before you even put 9 players on the field, you're kind of guaranteed somewhere in the neighborhood of 60 million dollars. Well sure, since there is no salary floor in baseball except to the extent that you have to pay each player a minimum salary, it is maybe around 7.5 or 8 million dollars for the salary floor. If your going to take in 60 million and your going to spend around 10 or 15 or 20 on your payroll, and you're going to spend another 10 minimally for team operations, and you spend maybe another 10 on your front office on a very, very low budget, then you can almost guarantee yourself a profit.

What that team is doing is abusing baseball's system. It's a direct abuse of the mechanisms for revenue sharing that baseball provides, and Loria can in fact just about guarantee himself a profit even if no fans in Dade County and Brower County ever come to Joe Robbie stadium, or whatever they call it; I guess its called Dolphin's stadium now isn't it? This is kind of an abuse of baseballs welfare system and that's one of the reasons why I think the incentive structure in baseball really has to be modified.

MN: Oakland is now artificially limiting capacity by simply not selling tickets for over 10,000 seats. Do you think this will be as successful as having a small stadium, and if so do you think more teams playing in large parks will artificially lower capacity by using a similar technique?

AZ: Let me ask you, what is the capacity before the limitation?

MN: I think it was in the 45,000 range, I'm not entirely sure; it's in the 40,000s.

AZ: Are they going to do something like cover up those seats?

MN: Yes, they covered the upper deck and they are going to use it for advertising, I think that's the plan. The new one they want to build, they want to make it the smallest park size-wise, smaller then Fenway, for seats.

AZ: I think that Fenway and the Red Sox have done very well through 2005, with a stadium that last year had a capacity of 36,000. This is a good market in New England, and it is a very strong baseball market, and the owners have done a wonderful job boosting the baseball culture and raising the intensity of fandom in New England. They have gotten themselves to the point where they are going to be expanding to 38,000 this year and 40,000 soon there after. They're able to expand to that level because of the level of interest here. Oakland is a funny market, because if you include it with San Francisco it is one of the largest markets in the country, but if you separate it out from San Francisco it is not really a large market. Having a smaller stadium, particularly given the lack of intensity of baseball interest in Oakland, and trying to build up the cachet of the A's team, and to generate a premium on getting seats at the ballpark, and having a kind of sense of it being special to be able to go to the ballpark makes sense to me as a strategy. If they built a new stadium and they limited it to 35 or less then 35, I would want to see it be a stadium whose architecture is such that it would permit an expansion of capacity, because I don't think that they should satisfy themselves with an attendance that was forever more never going to be above 32 or 34,000. Given that market, and given where they've been in recent years, it makes sense to start at that level, but again it would seem to be desirable to have the ability to expand it in the future.

Andrew Zimbalist is the author of "In The Best Interests of Baseball? The Revolutionary Reign of Bud Selig" as well as "May the Best Team Win: Baseball Economics and Public Policy".