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A bit more on the distinction between the Wilpons and the McCourts

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In that last post about the difference between the McCourt situation and the Wilpon situation, I said that there was a difference between Wilpon’s ownership interest in SNY and the Dodgers’ ownership of broadcast rights.  That distinction led to a couple of similar reader comments. Like this one:

The situations are identical, just different structures. The major asset of SNY is the rights to Mets games, right? McCourt has Dodgers rights He could create a network and sell the broadcast rights to for $bazillion
He could then sell the network which is his personal asset to pay off his divorce. And that is OK where selling the rights to Fox is not?  SNY is just a shell for the rights that is packaged as an operating company.  No difference at all.

It’s actually even more stark than my reader says.  The Mets — as a team — likely get pennies on the dollar of what their broadcast rights would be worth on the open market because Wilpon is on both sides of the deal with SNY.   By underpaying for Mets rights, SNY is worth more and the money it keeps — as opposed to the money the Mets would have received — is not subject to revenue sharing with the other 29 clubs.  This has been going on for years, by the way. Ted Turner used to do with the Braves and TBS, albeit for some different reasons.

All of that said, I don’t disagree with my reader’s analysis. The point I was trying to make in the last post — and in hindsight utterly failed to make — is not that there is a fundamental difference between broadcast rights and regional sports network ownership interest. It’s that Bud Selig does and will continue to treat such things differently — and thus he will likely treat McCourt and Wilpon differently — even if doing so is disingenuous.

Why?  Because if he acknowledges that straight broadcast rights and the revenues of team-owned cable networks are essentially the same, the economic structure of baseball unravels.  Because it’s not really a structure. It’s an uneasy peace between big market, high revenue teams and the small ones.

That peace is predicated, in part, on the big clubs and the little clubs being allowed their respective excesses.  The big clubs can house their money in enterprises that are not subject to revenue sharing. Think the Red Sox investing in NASCAR teams and, more traditionally, big teams operating RSNs.  For their part, the small clubs are allowed to pocket revenue sharing money rather than invest it in their teams. At least within reason, as Jeff Loria and the Marlins found out last year.  Each type of team chafes at what the other is allowed to get away with, but they mostly keep their powder dry because everyone is getting rich.

Practically speaking, if the Wilpons are forbidden from using SNY money to settle their Madoff problems on a theory that doing so would harm the Mets, the fiction that this money is non-baseball-related is exposed and the Pirates and Royals of the world will demand that they be given a share of the RSN money the big teams are making.

Likewise, if Frank McCourt is allowed to use straight broadcast rights money to pay off his wife, the Pirates and other small teams — who are smaller than the Dodgers but, like the Dodgers, don’t have an RSN —  will feel free to pocket their own rights money and put even less into their teams than they already do, which will be a bridge too far for both the big clubs and the fan bases of the small teams (pocket the gate receipts and the concessions, Mr. Loria, but too many people are watching when you pocket the TV money).

If all of this sounds borderline corrupt to you — if it sounds like, hey, at some point someone should have filed a lawsuit over it — don’t worry! You’re not crazy!  Someone probably should have long ago.  But they didn’t.  Why? Because there are only like three owners in all of baseball who weren’t admitted to the very cozy ownership club before Selig took over. The price of their entry to the club: fealty to Selig and the highly anti-competitive arrangement described above.  Indeed, every year there are a half dozen things that happen that, if baseball teams were run as independent businesses who felt free to vindicate their rights through legal action, would lead to lawsuits.

But the lawsuits never come because no one is willing.  Big city teams are given monopolies over huge media markets so that they can build media empires. Small market owners are given the keys to small teams that, while not as lucrative on a cash flow basis, are almost certain to appreciate nicely and — with a few high profile exceptions like media revenues — they’re allowed to treat as their own private piggy bank.  It’s not ideal and it’s not fair, but it ain’t a bad bargain.

At least if you own a baseball team.

Orioles signed Tommy Hunter to a major league contract

ANAHEIM, CA - JUNE 12:  Pitcher Tommy Hunter #48 of the Cleveland Indians pitches in the ninth inning during the MLB game against the Los Angeles Angels of Anaheim at Angel Stadium of Anaheim on June 12, 2016 in Anaheim, California. The Indians defeated the Angels 8-3. (Photo by Victor Decolongon/Getty Images)
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The Orioles announced, prior to Sunday’s game against the Yankees, that the club signed pitcher Tommy Hunter to a major league contract. In related roster moves, the club recalled pitcher Oliver Drake from Triple-A Norfolk and designated pitcher T.J. McFarland and outfielder Julio Borbon for assignment.

The Indians released Hunter on Thursday after he struggled in a rehab assignment with Triple-A Columbus. Hunter was recovering from a non-displaced fracture in his lower back. The right-hander put up a respectable 3.74 ERA with a 17/5 K/BB ratio in 21 2/3 innings for the Indians.

This will be Hunter’s second stint with the Orioles. The O’s had acquired him along with first baseman Chris Davis at the trade deadline from the Rangers in 2011 in the Koji Uehara trade.

The Orioles are only responsible for paying Hunter the prorated major league minimum.

Orioles’ Mark Trumbo becomes the first to 40 home runs this season

NEW YORK, NY - AUGUST 28: Mark Trumbo #45 of the Baltimore Orioles hits a home run during the eighth inning of a game against the New York Yankees at Yankee Stadium on August 28, 2016 in the Bronx borough of New York City. (Photo by Rich Schultz/Getty Images)
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Orioles DH Mark Trumbo drilled a two-run home run to left-center field off of reliever Ben Heller in the eighth inning of Sunday afternoon’s game against the Yankees. In doing so, he became the first player to reach the 40-homer plateau this season.

Trumbo finished 1-for-4 on the afternoon. Along with the 40 dingers, he’s hitting .257/.317/.541 with 96 RBI. He has already set a career-high in homers and is four RBI away from tying his career high in that regard.

Trumbo is eligible for free agency after the season. Needless to say, his performance in 2016 bodes well for his ability to secure a hefty contract.