The Future of Baseball (and the Red Sox)

By David Nevard

I. Baseball

Will Baseball change its economic structure? Impact: 5 years

our Table of Baseball markets, with Population, Attendance, Revenue, and Payroll

The Yankees are winning the pennant every year, while other teams are heading towards bankruptcy. This happened in the 1950’s and baseball solved the problem by expanding into new markets and instituting the amateur draft.Expansion has probably gone as far as it can under the current rules. The only cities left are too small to support a team without revenue sharing. Territorial veto power prevents teams from relocating into the New York metro area (which could probably support 2 or 3 more) or the Washington DC area.

In fact, Baseball owners have already voted to eliminate two franchises, though they haven't said which two.

Questions about contraction from The Diamond Angle

Expanding into current markets (i.e.increased market penetration) by building new stadiums worked in Cleveland and Baltimore. But it doesn’t seem so successful in Detroit and Pittsburgh.

High signing bonuses are slowly killing the amateur draft as a “leveler” of franchises. Poorer teams do not bother to draft the best players because they can’t afford to pay them. This would probably also apply to any palyers taken in a "contraction" draft.

Report of the Commisioner's Blue Ribbon Panel (July 2000)

Why nobody paid any attention to the Commissioner's Blue Ribbon Panel

Will baseball go on strike? Impact: 2 years

The last baseball strike had an immediate impact on two seasons – 1994 and 1995. One season had no ending (which may have doomed the Montreal Expos, the best team of 1994), and the other had no beginning (which helped the Red Sox, who did well in the 1995 scramble for unsigned players).

Baseball Fans driven crazy. Impact: Indefinite

II. The Red Sox

Will the Red Sox build a new stadium this decade? Impact: 20 years

A new stadium will not be built while JRY Corp. controls the Red Sox; John Harrington’s stadium plan failed to attract bank financing because of the uncertainties of building in the Fenway neighborhood. New owners may try to build in Fenway, South Boston, East Boston, or the suburbs. Another choice is to rebuild the current Fenway Park. A third choice is to stay with the current stadium. Baseball stadiums are traditionally built in waves, having to do with economic climate and architectural innovations. The current wave is nearing its end, as the economy turns toward recession and some teams are learning that new ballparks won’t automatically turn them into winners.
The stadium decision could have a large impact on the ballclub, either way. A new stadium might make the team rich and successful (Cleveland); the stadium might be filled with people but an economic failure (Toronto); or the Sox might lose the loyalty of the traditionalists and tourists who make up a large part of their live audience.

Who will buy the Red Sox? Impact: 10 years

JRY Corp’s majority interest in the Red Sox will most likely be sold within the next year. There are currently six groups bidding for the Red Sox. The variables here are many. New owners might invest heavily or very little. They might prefer building a strong farm system or they may want to sign free agents. Meddlers or laid-back? You can never tell until they get in there.

Winners : John Henry, owner of the Florida Marlins, Tom "Roseanne" Werner, TV Producer & Les Otten, Ski Resort Owner. Werner, who used to own the Padres, favors renovating Fenway Park, as does Larry Lucchino, who will be brought in to run the baseball operation.

BOSTON (BHS) In baseball's first merger in over a hundred years, Florida Marlins owner John Henry has purchased the Boston Red Sox. "We've decided to go with mergers instead of contraction," said Henry. "The new team will be called the MarSox, or possibly the Redfish. We haven't decided yet. We're not sure what city we'll play in or which league we'll be in. These details will all be decided by Bud... I mean, my buddies, the other owners."

The Red Sox are valued at $700 million, while the Marlins are valued at -$3,000. The Marlins play in a football stadium that was named after a company that went bankrupt two years ago. "Florida seems like the obvious choice to locate the team," said one industry insider. "I mean it's warm, you can get a tan all year long. Plus you have jai alai down there, and good golf courses."

John Henry made his fortune as a steel-drivin' man. It was as a little baby, sitting on his mother's knee, that he first got the idea that he could drive railroad spikes faster than any steam-powered machine. His first test of this theory came in [continued on page 43]

Losers:

Frank McCourt, Real Estate developer. Owns land in South Boston, wants to build stadium there.
Charles Dolan, Cable Television mogul. Brother of Indians owner.
Aramark Corp, Concessionaire. Already a limited partner in Red Sox
Jeremy Jacobs, Concessionaire. Owns Bruins & Fleet Center.
Joseph O'Donnell, Concessionaire & Steve Karp, Real Estate Developer. Karp was once involved with the Patriots.
Miles Prentice, New York Lawyer.

Who will be Red Sox General Manager? Impact: 3 years

There are apparently some scenarios where new owners will buy the Red Sox and keep Dan Duquette as General Manager, either as an interim GM or with a new contract.

Will the team be sold before the 2002 season? Impact: 2 years

If the team is not sold by early December 2001 then winter meeting deals and free agent signings (if any) will be made by a lame duck administration, and a new team might not take shape until 2003. Team sold December 20.

Who will be Red Sox field manager? Impact: 2 years

Joe Kerrigan has two more years to go on his contract – a “golden parachute” from Duquette. He has so far not proved himself competent to manage a major league baseball team.