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Labels, Rebuilding Franchises, and Revenue Sharing

Baseball sage Peter Gammons weighs in on rebuilding teams' strategies. Is he characterizing the situation currently occurring in baseball correctly? What's the solution, and how are the Astros and Marlins involved?


Sports enthusiasts, in all sports, categorize teams into all sorts of different boxes, each with its own determining characteristics. Some features of these labels traverse different sports, while others are sport-specific. In baseball, some teams are labeled power-hitting teams, others built on pitching, but teams also take on titles like young and inexperienced, washed-up, or stuck in the mud.

A common method of characterizing teams is to use a team's current status and predicted future status, based on criteria like the age of the players, previous win totals, recent transactions, and money spent. Going into the 2013 season, teams like the Washington Nationals, Toronto Blue Jays, and the LA Dodgers would be considered "on the rise", while others like the New York Yankees and Philadelphia Phillies are old and on the downturn.

In a recent sequence of tweets, baseball guru Peter Gammons discussed one of these types of teams, franchises in the stages of rebuilding. Rebuilding implies a team that has shed lots of veteran players and their large contracts in return for young, inexpensive, often high ceiling players who most likely won't produce consistently at the MLB level for at least 3 seasons. Gammons used the Houston Astros as his prime example, as no other team, save maybe the Miami Marlins, can be seen more as a team in repair.

"If I'm an ALE or ALC owner, Houston's plan to have no payroll, lose, get the 1-2 pick 4 years in a row and still steal revenue-sharing $ [money] may guarantee 3 teams in the AL West win 90 games, and make the playoffs, and spit on the integrity of the sport."

Essentially, Gammons is describing the manner in which the Astros, as well as other before, have decided to rebuild their franchise. Often, these teams have money to spend, but choose to keep their checkbooks closed in an effort to expend little capitol now, and use their money only when a core has been built, around which pricey free agents want to join. From the Astros' perspective, this is the perfect strategy. It matters little to the Astros how many games they lose in 2013 or even 2014 because to attempt to win now, with the franchise the way it is, would be fruitless and a waste of money.

Gammons mentions that owners whose clubs compete in the same divisions as these rebuilding teams should be angry that their division foes are "abusing" the system in order to win in the future. He mentions revenue sharing, which is the system that MLB has in place to attempt to level the playing field a bit more for teams in small markets like the Rays, Royals, and A's. Every team, including MLB, puts a percentage of their annual revenue in a pot, and that money is then evenly distributed amongst the 30 teams. So teams like the Yankees and Red Sox put the same percentage of their revenue in the communal pot as do the A's and Rays, but their share represents a much larger sum of money than smaller market teams, allowing said small market teams to stay in the black and better compete from year to year.

Opinions about revenue sharing aside, the system does work to some degree, but Gammons brings up an interesting point. Big market teams already pay substantial portions of their revenue to small market teams, no matter the method, so said teams should be angry that the Astros and Marlins have intentionally cut payroll, despite having money to spend, expect to lose 95 or more games, all in the name of getting better draft picks.

The NBA has long had an issue with teams tanking on purpose, and instituted a lottery system for their draft to do their best to dissuade teams from losing on purpose. The subject has seen lots of opinions and critical writing (If you're more interested check out this link) Baseball, which doesn't use a lottery system for determining the draft order, recently instituted pecuniary caps on bonus money a team is allowed to give to draft picks to entice them to sign. These restrictions have been predicted to hurt small market teams.

Gammon also mentions the integrity of the sport. He seems to think that teams in "rebuilding mode" who essentially, but not overtly, tank their seasons have metaphorically spit on the game. I agree that there may be "something rotten in Denmark" in this strategy, but teams are allowed to spend their money as they see fit, as long as that money was obtained legally.

Integrity aside, Gammons offers a solution to the problem.

"Fellow big market teams who have payrolls under $40M should 1. Not get revenue-sharing and 2. Be out of the protected pick business. Rewarding trying to lose is wrong."

According to Gammons big market teams, another distinctive category by the way, should not be allowed to collect revenue sharing money and simultaneously should not be allowed to have their 1st round pick protected* if they put out an on-field product destined to lose 100 or so games. Teams that can spend money, choose not to, but still take revenue sharing money and collect protected draft picks, should be placed in a different box altogether, a stigmatized box that strips them of a good chance of rebuilding from the ground up, forcing them to use their money.

While Gammons' solution has some merit, and would most-likely "fix" the problem, it also encourages these teams to pursue free agents. The problem is that free agents have become more and more expensive, but also have become a less utilized route of acquiring players. More young, pre-arbitration players are signing long-term extensions in their youth, making them free agents on the wrong side of their age curve, and thus less desirable too all teams.

Peter Gammons is no slouch, and his opinion on all things baseball deserves merit, respect, and consideration. In this case, he makes valid points concerning the semi-tanking going on in Miami and Houston, but forgets that were MLB to go with his solution, it would most likely be more detrimental in the long run. The true issue, one I'm sure Mr. Gammons knows but couldn't fully articulate in a few tweets, is the way teams like the Marlins and Astros are treating their fans. Houston was recently a powerhouse team, sporting names like Biggio, Bagwell, Clemens, and Berkman, but will begin the season with starters like Tyler Greene, Matt Dominguez, and Phil Humber.

Overall, I think that the Astros intentions in their method of rebuilding are virtuous, as General Manager Jeff Luhnow has already created a top farm system, he and owner Jeff Crane rebranded the Astros with new jerseys, logos, etc., and Luhnow hails from one of the most reputable franchises in MLB history, the St. Louis Cardinals. The Marlins however deserve a spanking, as numerous writers before me have written, but the better solution to that problem is to boot owner Jeff Loria and team president David Samson out of MLB, and replace them with an owner and president who want to win first and turn a profit second.

This isn't a simple or easy topic, as it infuriates some, causes others to lapse into stupors, and often brings out the worst in sports fans. Still, it remains a constant and important aspect of the game, one that should be addressed by the league. In general, if Peter Gammons thinks something is critical, it most likely is just that, and I tend to agree.

Food for thought:

1) Are the methods of the Astros and Marlins right, wrong, or something in between?

2) Should sanctions like the ones proposed by Mr. Gammons be put into effect?

3) The Nationals recently rebuilt their franchise in a similar manner, and now are touted as a possible World Series contender, that has brought baseball, long thought lost, back to the city of Washington D.C., but will the Astros or Marlins follow suit?

*Teams with the worst ten records, and thus the first ten picks in the MLB first-year player draft, will not be subjected to a loss of their pick no-matter what type of transaction they make. In 2013 it will be the first nine. For more see this link.