Red Sox owner John Henry has a new revenue sharing plan

Leave a comment

We civilians have been talking a lot recently about the injustice of the big market teams paying revenue sharing money to small, losing, but otherwise profitable teams. Today an actual big market owner — the Red Sox’ John Henry — speaks up:

Red Sox principal owner John Henry is calling for Major League Baseball’s revenue sharing system to be overhauled and replaced with a “competitive balanced payroll tax” in an effort to create competitive balance in baseball.

“Change is needed and that is reflected by the fact that over a billion dollars have been paid to seven chronically uncompetitive teams, five of whom have had baseball’s highest operating profits,” Henry responded in an e-mail. “Who, except these teams, can think this is a good idea?”

Henry added, “While the Red Sox are in the 16th largest media market we’ve found a way to be very competitive even though we are funding other teams . . . a system that directly impacts competition has to replace the current system, that hoped to, but ultimately did not cure competitive imbalances.”

The short version: Henry prefers a system where payroll — rather than revenue — is taxed and the money goes to teams who need revenue to meet a minimum payroll that is imposed on anyone who accepts shared dollars. Wanna cut things to the bone? Great, but the rest of the league is not going to subsidize you. Which is fine, because it does prevent the problem of the Marlins or the Royals or whoever hording money and not spending it on players.

But let’s not pretend that Henry is offering this plan up out of the goodness of his heart. The Red Sox, perhaps more than any other team, have a hell of a lot to gain by payroll, as opposed to revenue, being taxed. They have tremendous revenue advantages over everyone but the Yankees, and they still would even if they cut their payroll in half.  Henry’s system would protect all of that dough in ways that it isn’t protected now.

Henry acknowledges this by suggesting that the players be guaranteed a fixed percentage of total revenues, thereby making what any one team does with payroll irrelevant in the aggregate.  I’m suspicious, however, if for no other reason than that the owners have always been really protective of their revenue data. It’s easy to hide revenue. It’s easy to launder it, for lack of a better term, to.

For example, right now the money Henry realizes as a result of the Fenway Sports Group isn’t counted as baseball revenue, even though a lot of it is made by slapping Red Sox logos on things like race cars.  Is that going to be off limits to the players too?  If Henry’s comments about the size of the Red Sox’ media market are any indication they will be, if for no other reason than they prove that he likes to downplay the team’s power and money (Boston is not the 16th largest media market. According to Neilson it’s the 7th, and that’s just the city itself. If you take into account that the Sox basically have all of New England to themselves it’s even bigger).

At any rate, if you key player salaries to some overall revenue bogey, people will argue about what that revenue truly is, and that will lead to more labor strife, not less. Just ask the NFL.

All of that said, talking about the problems inherent in the current revenue sharing system is a good beginning. Ultimately, however, it seems like keeping the same revenue sharing system in place, but simply building onto it some sort of controls that prevent teams from simply pocketing the dollars would be a better bet than totally burning it down and starting with Henry’s new payroll tax idea.

Nick Williams has been trying to sell Jake Arrieta on the Phillies

Al Bello/Getty Images
1 Comment

CSN Philly’s Jim Salisbury reports that Phillies outfielder Nick Williams has been working out daily with free agent starter Jake Arrieta in Austin. The right-hander, who won the 2015 National League Cy Young Award, still remains teamless with spring training less than a month away. Williams has been trying to sell Arrieta on joining the Phillies.

Williams said of Arrieta, “He loves it here [Austin]. He has told me he likes working with young guys. I’m like, ‘All right, come on up.’ But I’m not writing the check. I don’t know what he wants. I don’t really dig into that because I’m not really in his position.”

On GM Matt Klentak’s hunt for pitching help, new manager Gabe Kapler said, “The pursuit is very real. I have a lot of trust that we’ll either go in [to spring training] with a new toy or we will pass on the opportunity because we’re better off giving this collection of pitchers a really healthy look because we thought that we could go acquire that piece a little bit later on this season or in the offseason next year.”

Arrieta, who turns 32 years old in March, went 14-10 with a 3.53 ERA and a 163/55 K/BB ratio in 168 1/3 innings last season with the Cubs. The Cubs, Cardinals, and Brewers have been linked to Arrieta this month.

Presently, the Phillies’ starting rotation figures to include Aaron Nola, Jerad Eickhoff, and Vince Velasquez along with some combination of Nick Pivetta, Ben Lively, Zach Eflin, Mark Leiter, and Jake Thompson. Arrieta would certainly amount to a big upgrade in the starting rotation and could make the Phillies a more attractive landing spot for Bryce Harper or Manny Machado, who become free agents after the 2018 campaign. The Phillies are expected to be in the mix for either or both players.