Shouldn’t major league teams be bound by a competitiveness clause?
The Atlanta Braves are a really bad baseball team. They are so bad not even a mother could love this collection of so-called players. In the first 27 games this season they hit only 6 homeruns, which even in the dead ball era, would have been an embarrassment. At the end of April, the Braves had won just 25% of their games and were on pace to lose 120 games.
If things unexpectedly turn around and the Braves go on a winning streak that pushes them upwards to mediocrity, can you guess who the most disappointed people would be? If you answered, the Atlanta Braves’ ownership and management, you are correct.
Although the Atlanta Braves hierarchy will never admit it, they want to be a bad team, a really bad team, and they want to be bad for at least a few seasons. In this strategy the Atlanta Braves are not alone, as several Major League teams have losing big as their goal. The Braves aren’t masochists, but they have learned by watching the success of the Chicago Cubs and the Houston Astros last season and understand Major League Baseball currently rewards losing. The more you lose, the more you will be rewarded, and if you do this long enough you might get good. Confused? Dave Cameron of FanGraphs provides this non-technical explanation, “The worse you are, the better the draft picks you receive and the more money you get allocated to spend both in the draft and internationally. If you’re really terrible, you get better access to young talent than if you’re just ordinarily bad.” So the Braves who were stuck in mediocrity decided it made sense to slash payroll to save money and to be bad for a few years until they have enough good young talent to be competitive again.
In contrast, what the Atlanta Braves currently lack in prowess on the playing field, they have been producing like All-Stars in getting public funds for their baseball stadiums. As pointed out by Ira Boudway and Kate Smith in Bloomberg Businessweek, the Braves have cashed in on nearly $500 million in public funds in the last 15 years. Keep in mind that the Atlanta Braves are valued at approximately $775 million and took in $243 million in revenues last year.
The largest pot of public money is coming for the construction of Sun Trust Park, the new home of the Atlanta Braves in Cobb County just outside of Atlanta, scheduled to open in 2017. The stadium itself is slated to cost $722 million, with $392 million of public funds dedicated to the project.
Not content to just twist the arm of big municipalities, the Braves have also put the squeeze on towns where their minor league teams play. The Braves, unlike most Major League teams, own several of their minor league teams, while most Major League teams usually just have affiliate agreements with individual minor league owners who take all the business risk. The Atlanta Braves have used this unique business arrangement to leverage public funds from three Southern towns that host Atlanta Braves minor league teams.
In Rome, Georgia, the Braves were able to convince the city to build a $15 million stadium, which was funded in part by a sales tax impressed on the locals. In Lawrenceville, Georgia, there was a $64 million price tag, not including ongoing maintenance being paid in part by Gwinnett County. Last, but certainly not least is Pearl, Mississippi, whose debt rating was recently dropped to junk status by Moody’s Investor Services, which cited ongoing stadium liabilities as a culprit for the city’s financial malaise.
Keep in mind the Atlanta Braves are in the process of looking for a new Spring Training home in Florida, as their current lease with Walt Disney World in Orlando expires in 2018. Although details are sketchy, the Braves have had at least some negotiations with both West Palm Beach and Sarasota. No doubt the Braves are pitting various Florida cities against each other to land a sweetheart deal.
Billionaire John Malone, chairmen of Liberty Media which owns the Atlanta Braves, recently was quoted as saying, “The Braves now are a fairly major real estate business as opposed to just a baseball club.” Maybe if they went back to being just a baseball club they wouldn’t be such an embarrassment.