Red Sox Owner Calls For Overhaul Of Revenue Sharing System

Red Sox Owner John Henry Calls For MLB's Revenue Sharing System To Be Overhauled

Red Sox Owner John Henry is calling for MLB's revenue sharing system to be "overhauled and replaced with a 'competitive balanced payroll tax' in an effort to create competitive balance in baseball," according to Nick Cafardo of the BOSTON GLOBE. Henry in an e-mail said, "Change is needed and that is reflected by the fact that over a billion dollars have been paid to seven chronically uncompetitive teams, five of whom have had baseball’s highest operating profits. Who, except these teams, can think this is a good idea? ... At the end of the day, the small market clubs still cannot begin to compete with the Yankees and have a very hard time competing with the teams that are struggling to pay them so much. Consequently, a system that directly impacts competition has to replace the current system, that hoped to, but ultimately did not cure competitive imbalances." Cafardo notes about $400M, or 34% of each team's net local revenue, will be "distributed to small market teams this year," and "most of that percentage comes from the Yankees, Red Sox, Mets, and other high-revenue teams." Henry said the payroll tax would "replace revenue sharing dollars and go directly to the clubs that need revenues in order to meet minimum payrolls that should be imposed on each club receiving revenue." Henry: "Further, players would have to be protected with a guaranteed minimum percentage of overall revenues. This would be a very simple and effective method in reducing top payrolls and increasing bottom payrolls with no tax on revenues." Henry added that MLB's "free market system should continue and that teams should be able to operate as they please, but that those who spend a lot will pay a lot of payroll taxes." Henry also said MLB "needs slotting for amateurs" and a "worldwide amateur draft." Henry's comments "came after he was asked to respond to agent Scott Boras' comments" that teams "aren't spending their revenue sharing money and central funds on player salaries." Cafardo writes Henry is "certainly going his own way on this very sensitive subject and is certainly not in lockstep with some of his fellow owners on the revenue sharing plan" (BOSTON.com, 12/1).