SBJ/November 19-25, 2012/Leagues and Governing Bodies

Megatrade dominates MLB owners meetings

Last week’s proposed megatrade between Toronto and Miami, sending the vast majority of the Marlins’ future payroll commitments north of the border, dominated discussion in and around these meetings. Nearly all of the chatter, not surprisingly, focused on Miami’s side of the deal — given that it marked the club’s third fire sale in less than 15 years and arrives less than seven months after the opening of a $640 million stadium funded largely by public dollars.

But the trade also carries significant risk for the Blue Jays, whose 2013 payroll is set to balloon to more than $115 million, by far the largest sum in franchise history.

Jose Reyes (left) and Emilio Bonifacio would be among the players going from Miami to Toronto.
Photo by: GETTY IMAGES
Toronto enjoys the entire country of Canada as its MLB market territory, its attendance grew 15 percent last season to 2.1 million, and corporate integration within owner Rogers Communications continues to grow. Still, the club is said to be unprofitable. Annual fiscal losses are pegged by industry sources at more than $10 million, and the 23-year-old Rogers Centre, once a futuristic icon of sports architecture, now needs significant upgrades.

Team President and CEO Paul Beeston declined to comment last week on the deal or its financial implications on the club, but MLB Commissioner Bud Selig said Beeston told him the Toronto market responded with vigor to news of the trade.

“Mr. Beeston says they’re very excited in Toronto,” Selig said.

The trade comes at a notable time in Toronto’s overall sports landscape. With the beloved Maple Leafs out of action amid the NHL lockout, and the NBA Raptors and MLS Toronto FC still among the laggards of their respective leagues, the Blue Jays now hold a unique opportunity to dominate the local market like never before.

Last week’s league approval of $12.4 billion in national TV contracts will bring to each MLB club the infusion of more than $25 million per year in additional revenue beginning in 2014, a significant factor fueling the trade. But while Toronto already is a larger media market than every U.S. MLB market except for New York, Los Angeles, Chicago and Philadelphia, the Blue Jays historically have been a midtier player with regard to revenue, attendance and payroll.

“That’s a lot of [player] contracts they just took on,” said one rival club executive last week, referencing the $163.75 million in contract commitments going north. “A lot still has to fall into place.”

NO GLOBAL CONCERNS: The 2013 World Baseball Classic, now in the midst of newly added qualifying round play and set for its full return in March, was among the topics of committee discussion last week, as the league prepares for the third version of the international tournament. Even as the event continues to grow, the WBC in recent weeks has suffered the high-profile departures of Texas pitcher Yu Darvish, a former star for two-time defending champion Japan, as well as Cleveland outfielder Shin-Soo Choo of Korea and Milwaukee outfielder Norichika Aoki, also of Japan.

The WBC also might be without, due to injury, Boston designated hitter David Ortiz, a former participant for the Dominican Republic, and likely without the services of Derek Jeter, by many accounts the most popular player in the game and a prior fixture for Team USA.

Even beyond players such as these, many teams maintain an uneasy balance regarding the WBC, wanting to support the international development of baseball but concerned about sacrificing their own players to injury. MLB executives say such worries remain minor.

Preliminary rosters are set to be announced Dec. 3.

“We’re not concerned, really,” said Paul Archey, MLB senior vice president of international business operations. “We’ve seen a lot of interest from players and we remain very optimistic.”

Added Selig, “This is really important, and I think teams understand that. This will be the biggest WBC we’ve ever had, and I believe the clubs have been very cooperative.”

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