From the Field of Information Management End the one-size-fits-all approach How brands can reach the two Brazils Cartoon: Anticipation Industry could learn from scholars Sutton Impact: Check thermostat Cartoon: Draft in the Windy City Fanaticos are the ‘more’ consumer From The Executive Editor: An AD's life How you see it
Upcoming Conferences and Events
SBJ/February 11 - 17, 2002/Opinion
Zimbalist to Manfred: You made point for me
Published February 11, 2002
Rob Manfred's response to my Dec. 24 SBJ column oscillates among the surreal, amusing, puzzling and illogical. Manfred insists upon portraying me as a shill for the players association. Referring to me, he writes: "His opinions are those of the players association and nothing more and are intended to move the debate away from the issue of competitive balance."
Never mind that my critique of baseball's accounting is fundamentally the same as it was in my 1992 book, "Baseball and Billions." Never mind that I began to consult for the union in 1994 and have not worked for it since early 1995. Never mind that I have written numerous articles over the past year in SBJ, The Milken Institute Review, Business Week, The Washington Post and the introduction to the paperback edition of Bob Costas' "Fair Ball," among others, where I have argued that baseball needs additional revenue sharing, a luxury tax on high payrolls, the internationalization of the amateur draft and a more open policy toward franchise relocations. Are these ideas really what Manfred believes are "nothing more" than the "opinions of the players association"?
Next Manfred maintains that I have no business addressing the issue of baseball's finances because I have "not had access to such detailed information in more than a decade." But shall we trust Manfred's sense of numbers if he believes that there are more than 10 years between 1995 and 2002? In point of fact, I have seen detailed financial records of several teams since 1995, sometimes because my advice was being solicited. But the real point is that the argument in my Dec. 24 column was not that I knew what MLB's combined bottom line was in 2001, only that the numbers presented in Commissioner Bud Selig's report to Congress were too incomplete to be useful. Consider the following.
Manfred criticizes me for "assert[ing] there is bloating in MLB's central office." For the record, the actual quote is: "Might there be some bloating in the central office?" But, more important, Manfred explains there is no bloating and that the central office's budget of over $180 million "included substantial investments in baseball's Internet business as well as moneys withheld to deal with the uncertainties surrounding baseball's current labor situation" (read: war chest in case of a work stoppage).
Manfred makes my point for me. The funds invested in MLB's budding Internet business and the labor unrest war chest are NOT operating expenses and do not reflect the EBDITA or operating income of baseball's teams. So, if there were, say, $100 million budgeted for these purposes, then MLB's combined operating loss, according to Selig's figures, would fall from $232 million to $132 million. To this, many other adjustments (see my Dec. 24 column) would have to be made to get a meaningful sense of the industry's economic health.
Next, Manfred takes me to task for assigning such a low value of $140 million to 80 percent of NESN and wonders whence the figure emerged. The answer: I spoke with individuals from two of the different groups bidding for the Red Sox who gave me figures of between $120 million and $160 million for 100 percent of NESN. The number I used suggests a value of $175 million. And, contrary to Manfred's puzzling claim, there is absolutely nothing "inconsistent" between this estimated value and the notion of synergies across ownership properties.
There's more to be said, but enough is enough.