From the WSJ Opinion Archives
LEISURE & ARTS
Winning Over Profit
Baseball's critics blame the wrong millionaire.
The Red Sox have just won the first battle in the 2004 war by taking three of four games from the Yankees at Fenway Park. But no matter what happens the rest of the season, Boston has already won the public-relations battle. To most fans and sportswriters around the country, and even to some in New York, the Yankees have become what Sox president Larry Lucchino dubbed them, the Evil Empire. Mr. Lucchino didn't go so far as to call George Steinbrenner the Evil Emperor, but he didn't have to. To most of Mr. Steinbrenner's fellow owners, that's what he's been for the 31 years he has been the Yankees' principal partner.
The Yankees have a 2004 payroll of nearly $184 million--in comparison, the worst team in their division last year, the Tampa Bay Devil Rays, will spend about $27.3 million. Nothing less than the Yankees winning the World Series will justify the huge cost. And if the Yankees do win, they cement their reputation as the monster that's ruining baseball. Mr. Steinbrenner, of course, couldn't care less about his team's or his own reputation, so long as the Yankees win.
Bill Veeck, the late, legendary Chicago White Sox owner, was not one of the Steinbrenner haters. He said: "I like George. He breaks all the unwritten rules." (Mr. Veeck was known to break a few himself.) By "unwritten rules," he meant gentleman's agreements among baseball owners. This year, Mr. Steinbrenner is breaking the most important unwritten rule of all, and he's doing it by playing by the written rules.
In baseball, the only one of the top three major sports without a cap on players' salaries, there is no rule prohibiting an owner from spending as much as he chooses on his team. Commissioner Bud Selig thought he had forced a de facto salary cap on the players in the 2002 collective bargaining agreement by instituting a "luxury" tax, to be assessed when a team's payroll exceeds a threshold. (This season, the threshold is $120.5 million, and the tax for a second-time offender, such as this year's Yanks, is 30% of the amount it exceeds the threshold.) What Mr. Selig didn't count on was that Mr. Steinbrenner would place winning above profit and keep right on spending.
The stated reason for the luxury tax was to address what Mr. Selig constantly called a "competitive imbalance." But the issue was a sham. Doug Pappas, editor of the Society for American Baseball Research newsletter, summed up the luxury tax bluntly: "It doesn't have a thing to do with promoting 'competitive balance,' which was never a problem in the first place. It was designed to keep George Steinbrenner from raising salaries."
The reason it hasn't is that Mr. Steinbrenner is no gentleman and has no intention of sticking to any gentleman's agreement. He wants to win.
No single team can match the Yankees' revenue streams, but if every team in baseball, regardless of market size, competed for some players, it wouldn't be possible for the Yankees to stockpile talent. If the Yankees have an unfair edge in the competition for talent, it's not because they spend too much, but because so many others aren't spending enough. After the Yankees signed Alex Rodriguez, Red Sox owner John Henry howled about baseball's need for a salary cap; what he meant was a cap that would keep the Yankees from spending more than the Red Sox.
It's not that the Red Sox couldn't afford A-Rod. Like several other major-league owners, including several in the so-called small markets, the Red Sox bosses have personal wealth far greater than Mr. Steinbrenner's. Unlike Mr. Steinbrenner, they seem loath to risk their own money on their teams.
Why should they when they get welfare from the Yankees? The Yankees could be paying out as much as $75 million in revenue sharing and luxury tax this year. Between that, the payroll and other team costs, the Yankees began this season not knowing whether they would show a profit. All Mr. Steinbrenner wants to do is win.
One of the absurdities of the current system is that it rewards some of the wealthiest men in the country for not investing in their own baseball business. For instance, the payroll of the Minnesota Twins, owned by billionaire Carl Polhad, ranks 23rd out of 30 teams. Mr. Polhad isn't required to spend any of the money given to him by the Major League Baseball central fund on players' salaries. He is required to spend it on team improvements; the catch is that those team improvements are defined by the commissioner, himself a former owner.
Baseball's critics are right: There is a ridiculous imbalance in baseball spending. But it hasn't been caused by Mr. Steinbrenner. It's been caused by a system created by men who, in the words of the former players' union head Marvin Miller, "pay lip service to competition and free enterprise, and shudder when they see it in action."
All George Steinbrenner wants to do is win.
