baseball revenue sharing – USA Gov Policy

America’s long tradition as “The Land of Opportunity” is being replaced by the new philosophy of “equal outcomes,” regardless of the effort put in. The attempt to implement this idea, akin to the growing popularity of socialism, has already found a home in one of the nation’s most beloved institutions: Major League Baseball (MLB).

The results have not been good.

MLB’s luxury tax and revenue sharing practices are also known as a “competitive balance tax.” Proponents of the concept allege that it was necessary to allow teams in smaller cities to play more competitively against big-city teams. Hal Steinbrenner, a co-owner of one of those big-city teams, The New York Yankees, disagrees with the idea. The National Review quotes him as stating “At some point, if you don’t want to worry about teams in minor markets, don’t put teams in minor markets, or don’t leave teams in minor markets if they’re truly minor…Socialism, communism, whatever you want to call it, is never the answer.”

Whatever label is placed on the concept, it has not achieved the results it was supposed to, and has in fact produced a whole new set of problems.

William Ryan Colby, in a paper presented to the e Department of Economics at Amherst College noted that “In 1996, Major League Baseball introduced its first system of comprehensive revenue sharing with the goal of creating more competitive balance in the league. the marginal tax rates created by MLB’s revenue sharing systems have actually worsened balance in the league. Although the most recent sharing system begins to realign incentives, it still risks “turning a ‘good’ imbalance into a ‘bad one” by subsidizing poorly managed teams at the expense of well run teams… the incentive structures created by MLB revenue sharing had the anticipated negative effects on competitive balance.

How the system has worked in practice is described by NBC sports “MLB teams participate in revenue sharing, a system that redistributes income from the richest franchises to their less profitable partners in an attempt to improve competitive balance. Under the 2012–2016 Collective Bargaining Agreement (CBA), each team contributes 34 percent of its net local revenue into a pool that gets divided equally among every team. Higher-earning clubs put in more than they get back while lower-earning clubs receive more than they put in…Over the past four years the Marlins, Rays, Royals, Padres and A’s among other teams received a combined $642 million dollars. The franchises that keep on giving to them are the New York Yankees, Boston Red Sox, Chicago Cubs, Philadelphia Phillies and San Francisco Giants. The mountain of cash deposited since 2012 i[reached] a staggering $1.15 billion [by 2016]”

A list of World Series winners since 1996 clearly demonstrates that the revenue-sharing scheme has not achieved its goals. Instead, it has ushered in a whole new set of problems.

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There have been complaints that the organization that have received the revenue sharing have pocketed the money rather than invest in building more competitive teams. Indeed, it appears that some small market teams apparently no longer worry about trying to effectively compete, because even if attendance falls off due to poor play, revenue will still flow to them from revenue sharing.

Russ Roberts, writing for CafeHayek explains: “Even if the Yankees [a big-market, big spending team] share their revenue equally with other teams, the beneficiaries of that subsidy may decide to simply pocket it rather than making their teams more competitive. Revenue sharing does reward mediocrity and punish excellence and as the amount of sharing grows, the potential harm from that perverse incentive gets worse.”

According to some, that diminished devotion to meaningful competition means that teams, both in large markets and small, feel free to be less generous with player salaries.

A 2018 CBS Sports report reported that “According to the Associated Press, the average MLB salary decreased from 2017-18. It’s only the fourth time in the last half-century the average salary decreased from one year to the next…The [MLB Players Association (MLBPA)] said…its final [2018] average was $4,095,686, down $1,436 from $4,097,122 last year. Since the union started keeping track in 1967, the only previous declines had been by $66 in 1987, when owners were found to have conspired to hold down salaries among free agents; a 4 percent decline in 1995 following a 7½-month strike that wiped out the World Series for the first time since 1904; and by 2.5 percent in 2004.”

The MLBPA voiced concern that several organizations, including at least one that received up to $160 million, were pocketing the cash and not using it to enhance their team.

The Report concludes tomorrow.

Photo: Pixabay

Quick Analysis

Judge Merchan continues to deny justice to Donald Trump

In August of 2024, we discussed the US Supreme Court’s decision in Trump v. United States. We described the three tiered system enunciated by Chief Justice Roberts to determine whether or not the actions taken by the President of the United States are entitled to immunity from criminal prosecution or not. The first tier are acts within the President’s constitutionally mandated authority which are subject to “absolute immunity.” The next are acts that may have “presumptive immunity,” and are subject to examination with evidence that rebuts the presumption of immunity. The third are acts which are unofficial, and which enjoy no immunity. In September, we also discussed the effect this decision should have on the New York County criminal case currently pending against President-elect Trump before Judge Juan Merchan. We cited to a CNN report, which described the evidence used against Donald Trump at the trial of that matter: “Trump’s lawyers pointed to testimony at trial – including from White House officials Hope Hicks and Madeleine Westerhout – they argued should not have come before the jury…'[a]ll of Hicks’s testimony concerning events in 2018, when she was serving as the White House Communications Director, concerned official acts based on [Presidential] authority for which President Trump is entitled to absolute immunity,’ Trump’s attorneys argued. ‘[the Supreme Court’s ruling] specifically forbids prosecutors from offering ‘testimony’ from a President’s ‘advisers’ for the purpose of ‘probing the official act.’” Sure enough, as Chief Justice Roberts stated in the Presidential Immunity decision, “[a]llowing prosecutors to ask or suggest that the jury probe official acts for which the President is immune would thus raise a unique risk that the jurors’ deliberations will be prejudiced by their views of the President’s policies and performance while in office. The prosaic tools on which the Government would have courts rely are an inadequate safeguard against the peculiar constitutional concerns implicated in the prosecution of a former President.” At the time, we stated that “Judge Merchan allowed testimony regarding Donald Trump’s official acts as President, acts which enjoy absolute immunity and which cannot be used against him, or even be entered into evidence in a criminal trial, a situation which could have been avoided had Judge Merchan delayed the trial until he’d received the guidance of the US Supreme Court.” Nonetheless, we predicted that Judge Merchan “will find a way to justify his actions once again, and let stand the unlawful conviction of former President Donald Trump.” You know how much we hate to say we were right…but…we were right. “This Court…finds that the evidence related to the [President-elect’s] claims relate entirely to unofficial conduct and thus, receive no immunity protections,” Judge Merchan wrote in his December 16, 2024 decision. “Further, even if this Court were to deem all of the contested evidence…as official conduct falling within the outer perimeter of Defendant’s Presidential authority, it would still find that the People’s use of these acts as evidence of the decidedly personal acts of falsifying business records poses no danger of intrusion on the authority and function of the Executive Branch, a conclusion amply supported by non-motive-related evidence.” In so ruling, the Court denied Donald Trump’s motion to dismiss his New York County conviction. Let us examine these findings, in light of the evidence admitted at the President-elect’s trial, and then compare that evidence to the acts granted absolute immunity by the US Supreme Court. In his decision, Judge Merchan discusses the testimony of Hope Hicks, who served as the Communications Director for the Trump White House. “Defendant argues that in her roles at the White House, any communications between Ms. Hicks and Defendant must receive absolute immunity…as Defendant’s ability to speak freely to Ms. Hicks was a core function of the Executive. According to Defendant, because Ms. Hicks wielded executive power on his behalf, authority that exists pursuant to Article II of the Constitution, any communications [President Trump] had with [Hicks] are subject to absolute immunity,” the Court wrote. Judge Merchan also noted that “[t]he People argue that the communications Defendant had with Ms. Hicks…constitute unofficial acts not entitled to any level of immunity.” In his inevitable agreement with the arguments presented by Manhattan DA Alvin Bragg’s office, Judge Merchan wrote “Defendant’s argument that any communication he had with Ms. Hicks is subject to absolute immunity by virtue of the position she held in the White House is mistaken…the President himself may speak in his unofficial capacity as a candidate or party leader, and certainly he can do so in his private capacity as well. Any argument that private conduct transforms into official conduct by communicating about the same to an individual with a particular title is without merit.” Thus, it is Judge Merchan’s position that the conversations Donald Trump had with his Communications Director are not entitled to immunity, even though those discussions were held at the White House, while Donald Trump was serving as President of the United States, merely because those discussions were not related to official Executive Branch activities. Sounds possibly reasonable – until you examine the Presidential Immunity decision more closely. In September, we wrote that “the statement made by Chief Justice Roberts in his majority opinion in the Presidential Immunity case [is significant]; ‘Presidents cannot be indicted based on conduct for which they are immune from prosecution…[t]estimony or private records of the President or his advisers probing such conduct may not be admitted as evidence at trial.’” This statement by Chief Justice Roberts points to a blanket immunity for ANY discussions had between the President and his advisors, regardless of the nature of those communications. Further, we noted that the Supreme Court issued the following warning: “[t]he government…contends that a jury could ‘consider’ evidence concerning the President’s official acts ‘for limited and specified purposes,’ and that such evidence would ‘be admissible.’” In rejecting that argument, Chief Justice Roberts states “[t]hat proposal threatens to eviscerate the immunity we have recognized. It would permit a prosecutor to do indirectly what he cannot do directly – invite the jury to examine acts for which a President is immune from prosecution […]