Following The Money Trail: Pirates’ Use Of Revenue Sharing

The Pirates generated $59.5M last season from outside revenue sources, and sources said that the team “likely will earn even more money this season,” according to Joe Rutter of the Pittsburgh TRIBUNE-REVIEW. Each MLB team earned about $34.5M from national TV, cable, radio and merchandising and licensing contracts. But the Pirates also received $25M last season in revenue sharing. Only four teams — the D’Rays, Blue Jays, Marlins and Royals –-“received a larger payout than the Pirates.” That means the franchise “had more than enough money to cover a payroll increase,” from $38.1M at the start of the ’05 season to $46.7M this year. It also “raises the question of what the Pirates did with the leftover money.” Pirates Managing General Partner Kevin McClatchy “declined to detail the team’s allocations from the central fund and revenue sharing.” But he did say that the team is “within full compliance of the [MLBPA] contract, which requires teams to use revenue-sharing dollars to ‘improve performance on the field.’” McClatchy: “We submit our finances and how we spend our money to the league, and it’s also reviewed by the union. We never — ever — have had a problem with anyone questioning how we’ve spent our money.”

TIME SHARE: MLB Exec VP/Labor Relations Rob Manfred said that the Pirates from ’03-05 “spent 3.3 times as much on major-league payroll and player development than [they] received in revenue sharing.” Rutter notes in those three seasons, “the Pirates received an estimated $44.7[M] in revenue sharing.” Based on Manfred’s comment, the Pirates “would have spent $147.5[M] on payroll and player development in those three seasons.” The season-opening payroll in those years was a combined $125.1M, leaving $22.4M “to cover player-development expenditures.” McClatchy said that the Pirates’ revenue-sharing money “has been poured into the player-development system.” But Smith College sports economist Andrew Zimbalist said, “The notion that these teams are putting all of their money in player development is silly. Some have increased (spending) by a couple of million dollars, but that’s nothing compared to the extent of the transfer payments they are getting” (Pittsburgh TRIBUNE-REVIEW, 6/18).