"New ballpark makes Yanks even richer" Daily Courier 9/7/6
New ballpark makes Yanks even richer
By JORDAN KOBRITZ
The rich get richer. If that axiom applies in life, it's even truer in sports.
Last month, the New York Yankees broke ground on a new $1.2 billion ballpark across the street from Yankee Stadium. The "new" Yankee Stadium, so-named until a corporation with mega-bucks to spare coughs up a minimum of $20 million per year to slap its name and logo on the new edifice, is a testament to revenue sharing in baseball.
Originally intended to level the playing field between the haves and the have-nots, revenue sharing has worked more or less as intended. A number of teams have used their revenue sharing funds to become more competitive. The fact that the Yankees haven't won the World Series during the past five years, after winning four titles in five years is a sign to many that a semblance of competitive balance exists in baseball.
Teams are required to contribute 34 percent of local revenues to a pool that is divided equally among the 30 clubs. The Yankees are the biggest "net" contributor, having paid a record $77 million to the system last year alone.
In an accounting quirk that would make the financial stewards of Enron blush, the Yankees will be allowed to deduct the operating costs of the new ballpark from their local revenue, thereby reducing their contribution to the revenue sharing pool. If you're a fan of capitalism, you're probably cheering in the background. If you believe in competitive balance in sports, it's not too early to start crying in your beverage of choice.
The reduced contribution to revenue sharing isn't the only financial benefit the Yankees will derive from the new stadium. Seating capacity will be several thousand less than the old stadium, increasing demand and prices for tickets that are already sold out. The number of luxury boxes will triple. And corporate sponsorship opportunities will be expanded, bringing in tens of millions in extra cash annually. Baseball's richest team, valued by Forbes magazine in excess of $1 billion, is about to get much richer.
Theoretically, the same stadium opportunity exists for all teams, but the reality is only the Yankees and the Mets, who are also building a new ballpark can benefit from the financial opportunities available in the New York market.
Can anything be done to stem the money grab? Baseball's owners could attempt to change the revenue sharing formula. But under the Collective Bargaining Agreement, any change would require the approval of the Players' Association, an unlikely event considering the drag such a move would have on player salaries.
Fortunately for the have-nots, baseball games are won and lost on the field. There, the rich play by the same rules as everyone else.
(Jordan Kobritz can be reached at email@example.com)