OPINION

Baseball's Payroll Problem

Written by Gary D. Benz
Published April 02, 2008

Call it a case of Cleveland envy. How else to explain the headline in Wednesday’s sports section of the USA Today saying that the Detroit Tigers are basically in a dead heat with the New York Mets for the second highest payroll in baseball?

Apparently the reality of coming up short against the Cleveland Indians last season in the only place that matters, the standings, was enough to send Tigers owner Mike Ilitch back to his calculator and his bank book. The Tigers couldn’t beat the Indians last season with a payroll that was $34 million higher, so perhaps his thinking is that his Tigers can get it done this year with a payroll that is now almost $60 million more.

It’s not as if Detroit is enjoying an economic boom that is somehow eluding the rest of the country. If anything, the Detroit area is being hit harder than most. According to the Bureau of Labor Statistics, the Detroit metro area had the highest unemployment rate in the country in February at 7.7%. The Big Three auto makers continue to bleed money like a room full of hemophiliac cutters. The foreclosure crisis hasn’t missed Detroit. In short, nothing about the Detroit area economy looks positive for the foreseeable future.

Yet there the Tigers are, spending like Paris Hilton in a Louis Vuitton boutique, hell bent on winning a pennant at any cost. According to the analysis by USA Today, the Tigers 2008 payroll, which stands at $137.7 million, is but a mere $100,000 behind the Mets. The Yankees, of course, dominate at well over $200 million.

The finances of the Tigers aren’t exactly open for public consumption so it’s somewhat hard to know what extent Ilitch may be dipping into his personal fortune in order to fund this project. But it’s fair to presume that he’s playing with more than just the house money. At an average ticket price in the mid $20 range in Detroit and an anticipated attendance of around 3 million for the season, the Tigers can’t make payroll on ticket prices alone. Luxury boxes, concessions and local broadcast rights fees figure into the mix but it still hard to fathom that those other revenue streams can completely make up the difference.

Thus, while Ilitch’s view on what it takes to get to the Promised Land seems rather obvious, it’s an economic model that not many other teams are able or willing to follow, certainly not the Indians. Wherever one comes out on the issue of whether or not an owner has an obligation to spend some of his own money to keep pace each year, it is at least clear that the Indians’ owners, Larry and Paul Dolan, don’t view the quest for a World Series ring as necessarily requiring that sort of outcome. That’s not a criticism, just a fact.

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Gary is writer based in Akron, OH. His take on the long-suffering fans of Cleveland sports can be found at Wait 'Til Next Year, Again (nextyearagain.blogspot.com) or The Cleveland Fan (www.TheClevelandFan.com). Please feel free to send your questions, comments, concerns or criticisms to GDBenz@roadrunner.com.
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Baseball's Payroll Problem
Published: April 02, 2008
Type: Opinion
Section: Sports
Filed Under: Sports: Baseball
Writer: Gary D. Benz
Gary D. Benz's BC Writer page
Gary D. Benz's personal site
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