The Ricketts family has told the us time and time again that the Wrigley renovation project was not going to funded by any public money. Well, that turns out to be a rather big white lie.
First, the city gave away parts of the public streets for the bleacher expansion. Normally, the city sells the property to the private developer at fair market value, which could have put millions into the city's coffers.
Second. the Cubs are seeking a $75 million tax credit from the IRS to help off-set (and pay for) much of the Wrigley Field project. The tax credit is supposed to help people restore historic and landmark buildings. That is money that other taxpayers, such as ourselves, will have to make up. As the Tribune reports, the Park Service and the IRS have raised serious issues about the historic "restoration" of Wrigley:
In a memo to the Cubs obtained by the Tribune, the agency expressed concern about advertising overkill at Wrigley, which is known for its ivy-covered outfield walls, hand-turned scoreboard and intimate dimensions as opposed to typical corporate billboards at every other baseball stadium.
"It is important that the cumulative impact of new signage in the outfield does not, in itself, create such a defining feature that the historic character of the stadium is altered," stated the memo, which was obtained through a Freedom of Information Act request.
In a statement, the Cubs said that it is "normal for there to be changes to design and construction as a project evolves and we are working with" the Park Service to finalize approval for those changes. The team said the entire project has been approved by the city of Chicago, and it intends to start construction at the end of the season.
But the federal government does not cede authority over its determination to a rubber-stamped city council. The article also states:
The Cubs are not required to get final certification of their rehabilitation plans before starting work. But the Park Service in general cautions property owners that any work begun before getting formal approval is done at their own risk of losing potential tax credits. If such work is subsequently deemed not to meet the Park Service's standards, then the entire project may be disqualified for consideration of benefits from the federal government.
One of the standards deals with new construction and states, "New additions, exterior alterations, or related new construction shall not destroy historic materials that characterize the property. The new work shall be differentiated from the old and shall be compatible with the massing, size, scale, and architectural features to protect the historic integrity of the property and its environment."
The team was hoping to have the Park Service give the team the thumbs up on the revisions before the landmarks commission voted on the changes in July, said Carol Dyson, chief architect and tax incentives coordinator at the state preservation agency.
"Much of the work being proposed can meet the guidelines," Dyson said. "The additional signage is something that's a little more complicated to evaluate. It has some visual impact."
As we have posted at length before, the plans for Wrigley Field is not "restoration" of a historic building and its landmark elements, but a massive real estate development project to create new advertising and commercial revenue streams to ownership. If the money was just going to rebrick the outfield walls, repair the manual center field scoreboard, or replace all the seats with traditional wood ones from the original era of the ball park, that would be "restoration" of the facility to its former glory. But adding electronic jumbotrons, expanding the footprint to add restaurants and bars, and advertising signage in and around the ball park has nothing to do with historic preservation but corporate greed. And that is why federal officials are balking at the tax credit request; how are these plans conserving any historical feature of Wrigley Field?
In the big picture, the tax credit is more important than the advertising signage. It amounts to 25 percent of the projected construction budget for the Wrigley Field portion of the plan. If it is not granted, the Ricketts cannot off-set or shield $75 million of income. This windfall may be critical in keeping the financial ship from listing further as any tax savings bolsters the bottom line of profitability.
September 7, 2014
September 6, 2014
NEAR FUTURE
Chicago baseball has been trending down. But, the near future may see a major turnaround for both franchises. Which one is closer to success?
The Cubs plan with current players seems to be cautious wait and see for 2015:
LF: Coghlan
CF: Alcantara
RF: Soler
3B: Bryant
SS: Castro
2B: Baez
1B: Rizzo
C: Castillo
SP1: Arrieta
SP2: Hendricks
SP3: T. Wood
SP4: Wada
SP5: E. Jackson
The White Sox plan is to rebuild quickly and compete in 2015:
LF: Vicideo
CF: Eaton
RF: Garcia
3B: Gillaspie
SS: Ramirez
2B: Sanchez/Simien
1B: Abreu
C: Flowers
SP1: Sale
SP2: Rodon
SP3: Quintana
SP4: Danks
SP5: Noesi
Both teams have found decent lead off hitters (Coghlan and Eaton). Both teams are comfortable with their projected infields. The White Sox have a much stronger rotation with Sale, Rodon and Quintana (#1, #1A, #2 quality starters) than the Cubs with Arrieta, Hendricks and Woods. However, the White Sox bullpen needs to be blown up and rebuilt.
The problem with the Cubs is that they may field a youthful bunch of free swinging .230 hitters. the White Sox have much more consistent hitters in the daily line up. The removal of Konerko and Dunn means the White Sox are in need of a DH, as well as a fifth starter. The Cubs still need to bolster their starting rotation and outfield (LF and CF) with more consistent play.
Both team appear to be poised to be better in 2015. But neither seems to be over the .500 mark as their rosters stand today.
The Cubs plan with current players seems to be cautious wait and see for 2015:
LF: Coghlan
CF: Alcantara
RF: Soler
3B: Bryant
SS: Castro
2B: Baez
1B: Rizzo
C: Castillo
SP1: Arrieta
SP2: Hendricks
SP3: T. Wood
SP4: Wada
SP5: E. Jackson
The White Sox plan is to rebuild quickly and compete in 2015:
LF: Vicideo
CF: Eaton
RF: Garcia
3B: Gillaspie
SS: Ramirez
2B: Sanchez/Simien
1B: Abreu
C: Flowers
SP1: Sale
SP2: Rodon
SP3: Quintana
SP4: Danks
SP5: Noesi
Both teams have found decent lead off hitters (Coghlan and Eaton). Both teams are comfortable with their projected infields. The White Sox have a much stronger rotation with Sale, Rodon and Quintana (#1, #1A, #2 quality starters) than the Cubs with Arrieta, Hendricks and Woods. However, the White Sox bullpen needs to be blown up and rebuilt.
The problem with the Cubs is that they may field a youthful bunch of free swinging .230 hitters. the White Sox have much more consistent hitters in the daily line up. The removal of Konerko and Dunn means the White Sox are in need of a DH, as well as a fifth starter. The Cubs still need to bolster their starting rotation and outfield (LF and CF) with more consistent play.
Both team appear to be poised to be better in 2015. But neither seems to be over the .500 mark as their rosters stand today.
September 5, 2014
REBOUNDS
Starlin Castro and Anthony Rizzo's seasons are all but over due to injury. Castro caused a high ankle sprain when he stumbled a slide into home plate. Rizzo has been having back soreness/tightness. Of the two injuries, Rizzo seems to be more troublesome long term.
But most believe that Castro and Rizzo's 2014 seasons were good "bounce back" years.
Castro:
2013: .245 BA, 10 HR, 44 RBI, .284 OBP, -0.6 WAR
2014: .292 BA, 14 HR, 65 RBI, .292 OBP, 2.1 WAR
Rizzo:
2013: .233 BA, 23 HR, 80 RBI, .323 OBP, 2.8 WAR
2014: .278 BA, 30 HR, 71 RBI , .375 OBP, 3.8 WAR
Both players increased their batting averages by more than 40 points.
Both players increased their home run totals.
Both players increased their on-base percentages.
While Castro's defense improved from .967 to .973 fielding percentage,
Rizzo's went down from .997 to .993. Both players have a better fielding reputation
than from observation (range, mental errors, out of position sets, etc.) But most
fans think their defense is adequate for the offensive production they create.
With better hitters around them in the line-up, one could hope that Castro and Rizzo will have better years in 2015. But nothing is a guarantee.
There will be injuries to take care of. There will be the added pressure to win (something that has been lacking the past several seasons). They will have the added exposure to be team leaders, and be more media savvy as the bandwagon begins to re-fill with believers.
But most believe that Castro and Rizzo's 2014 seasons were good "bounce back" years.
Castro:
2013: .245 BA, 10 HR, 44 RBI, .284 OBP, -0.6 WAR
2014: .292 BA, 14 HR, 65 RBI, .292 OBP, 2.1 WAR
Rizzo:
2013: .233 BA, 23 HR, 80 RBI, .323 OBP, 2.8 WAR
2014: .278 BA, 30 HR, 71 RBI , .375 OBP, 3.8 WAR
Both players increased their batting averages by more than 40 points.
Both players increased their home run totals.
Both players increased their on-base percentages.
While Castro's defense improved from .967 to .973 fielding percentage,
Rizzo's went down from .997 to .993. Both players have a better fielding reputation
than from observation (range, mental errors, out of position sets, etc.) But most
fans think their defense is adequate for the offensive production they create.
With better hitters around them in the line-up, one could hope that Castro and Rizzo will have better years in 2015. But nothing is a guarantee.
There will be injuries to take care of. There will be the added pressure to win (something that has been lacking the past several seasons). They will have the added exposure to be team leaders, and be more media savvy as the bandwagon begins to re-fill with believers.
September 4, 2014
OUT OF POSITIONS
I don't really know why the Cubs continue down the Henry-Quade spectrum of playing second basemen all over the ball yard. Logan Watkins playing right field? Really? He plays well defensively at second. Alcantara in center? He is still learning the position on the fly which is very hard, since Jimmy Piersall said repeatedly that CF is the hardest outfield position to play. Baez is learning second, and is doing well, but when he fills in for Castro at short, Baez is much better SS than Castro.
I know the concept that managers and general managers like: versatility. If you can play more than one position, then the team has more options (platoons, double switches, etc.). But all those utility players, in general, have to be utility players because they can't hold down one position as a true starter. A team filled with utility players is just a replacement level team in training.
So it is a little surprising that Kyle Schwarber is being pegged as a catching prospect. In 72 pro games, he hit .344, 18 HR, 53 RBI and 1.061 OPS. He should start in Class AA in 2015, with a possible promotion to Iowa mid season if he continues to hit well.
Schwarber's draft scouting report showed that he was probably the best fundamental college hitter, but he did not have the defensive skill set (and body type) to be a catcher. Most organizations felt he was destined to play left field.
The same is actually the chord on third baseman Kris Bryant. His size and range questions had him moving his bat to left field. But Bryant has told the Cubs that he wants to continue to play third base. In 138 pro games, Bryant hit .325, 43 HR, 110 RBI and 1.098 OPS.
One takeaway from the success of both Schwarber and Bryant is that despite the perceived defensive short comings, both players are comfortable playing their current positions. And if they are comfortable on defense, then they have less to worry about at the plate.
It is in the Cubs best interest to accommodate them because the team has no alternative players who can put up .300 BA, 30 HR, 90 RBI production at catcher or third base.
You let them come to spring training and win their starting spots. If the next crop of prospects, like Addison Reed, are going to be the shortstop of the future, then Castro needs to move to another position or be traded to another team. That's how the system has worked for a century.
But by tagging Schwarber and Bryant as left fielders, you just move the position iceberg to the outfield but not solve the problem of getting the best hitters in the daily line up. Barring injuries, Jorge Soler is going to play right. Schwarber or Bryant do not have the speed to play center.
Here is the current "push" chart of prospects depth chart:
3B: Valbuena - - - -> Bryant
SS: Castro - - - > Russell
2B: Baez
1B: Rizzo
C: Castillo - - - > Schwarber
LF: Coghlan - - - > Castro?
CF: Alcantara - - - > Almora
RF: Soler
Valbuena, Coghlan, Watkins and Alcantara fall to their roles as utility players.
But this push chart also shows that despite the huzzah of a prospect pipeline, the Cubs organization is still very thin. But pundits believe that the team having so many similar good prospects is a "good problem" to have. The Cubs may have fallen in love with their collection of prospects, and over-value their talent level so as to freeze themselves out of key veteran trades in the future.
I know the concept that managers and general managers like: versatility. If you can play more than one position, then the team has more options (platoons, double switches, etc.). But all those utility players, in general, have to be utility players because they can't hold down one position as a true starter. A team filled with utility players is just a replacement level team in training.
So it is a little surprising that Kyle Schwarber is being pegged as a catching prospect. In 72 pro games, he hit .344, 18 HR, 53 RBI and 1.061 OPS. He should start in Class AA in 2015, with a possible promotion to Iowa mid season if he continues to hit well.
Schwarber's draft scouting report showed that he was probably the best fundamental college hitter, but he did not have the defensive skill set (and body type) to be a catcher. Most organizations felt he was destined to play left field.
The same is actually the chord on third baseman Kris Bryant. His size and range questions had him moving his bat to left field. But Bryant has told the Cubs that he wants to continue to play third base. In 138 pro games, Bryant hit .325, 43 HR, 110 RBI and 1.098 OPS.
One takeaway from the success of both Schwarber and Bryant is that despite the perceived defensive short comings, both players are comfortable playing their current positions. And if they are comfortable on defense, then they have less to worry about at the plate.
It is in the Cubs best interest to accommodate them because the team has no alternative players who can put up .300 BA, 30 HR, 90 RBI production at catcher or third base.
You let them come to spring training and win their starting spots. If the next crop of prospects, like Addison Reed, are going to be the shortstop of the future, then Castro needs to move to another position or be traded to another team. That's how the system has worked for a century.
But by tagging Schwarber and Bryant as left fielders, you just move the position iceberg to the outfield but not solve the problem of getting the best hitters in the daily line up. Barring injuries, Jorge Soler is going to play right. Schwarber or Bryant do not have the speed to play center.
Here is the current "push" chart of prospects depth chart:
3B: Valbuena - - - -> Bryant
SS: Castro - - - > Russell
2B: Baez
1B: Rizzo
C: Castillo - - - > Schwarber
LF: Coghlan - - - > Castro?
CF: Alcantara - - - > Almora
RF: Soler
Valbuena, Coghlan, Watkins and Alcantara fall to their roles as utility players.
But this push chart also shows that despite the huzzah of a prospect pipeline, the Cubs organization is still very thin. But pundits believe that the team having so many similar good prospects is a "good problem" to have. The Cubs may have fallen in love with their collection of prospects, and over-value their talent level so as to freeze themselves out of key veteran trades in the future.
September 3, 2014
SEPARATION
There is a small undercurrent that will grow in the next few years into an interesting dynamic.
The Cubs have had a losing culture for generations.
When the Tribune sold the team in a bankruptcy move to raise cash, the new owners vowed to win a world championship.
When the front office changed to young geniuses with championship resumes, the fans bought into the rebuilding story line.
And the team continued to lose at historic levels of badness.
But as the team slowly turns around, there are several touchy points to consider as a fan.
The Ricketts family. They run hot and cold in the public mindset. But there is a growing trend that they are deemed unlikeable. Some take issue with the family politics, political issue baggage and blundering in Chicago politics on the Wrigley real estate ventures. A few take issue on how the Ricketts are running the team, as a secondary tenant in a grand scheme of building a mini-Disneyland at Clark and Addison. Some take issue that Tom Ricketts may know how to run a meeting, he does not know how to run a franchise. Ricketts has been compared to P.K. Wrigley.
The front office. Theo and Jed continue to be, in a word, smug. They continue to tell us they have a "plan" and "a process," which is corporate speak for "I know what I am doing" and "you can't understand it." Critics still believe that despite the small blimp of rookie success, that one did not have to do a minor league rebuild only - - - that a balanced approached could have brought 3 years of respectful, competitive play on the field for premium ticket prices. The counter is that the fans have to pay the high prices "to invest" in the hope of the future home grown products. That is condescending to the fan base. Fans don't pay for future performance, they pay to see their team win on the day printed on their game ticket.
The players. The channel of Rizzo, Castro, Alcantara, Baez and Soler have perked up dormant fans. They seem enthusiastic, energetic and having fun in the dugout. They sure swing for the fence like mad men. But box scores of team double digit strike out totals is alarming to a knowledgeable person. Despite hot starts, there is an illusion of success as Baez has fallen to batting .189 and Alcantara around .220. You can't have a roster of six batters hitting under .240 and expect to win a division.
At some point, fans are going to be confronted with mixed actions in regard to their team. Ricketts focus is on real estate development, not the Cubs. The front office is concerned about pooling minor league talent than spending on a competitive major league team. The players may have an undisciplined good time swinging for the fences, but their below average fundamentals will have long term negative consequences.
Can a fan dislike ownership, and still be deeply invested in his or her team?
Can a fan dislike the front office, and still be deeply invested in his or her team?
We have seen that fans can turn off the loyalty switch when their team is filled "unlikeable" players. It will be interesting to see how the factions come together in the near future, when money really has to be spent to get a winning team on the North Side while different agendas are at play.
The Cubs have had a losing culture for generations.
When the Tribune sold the team in a bankruptcy move to raise cash, the new owners vowed to win a world championship.
When the front office changed to young geniuses with championship resumes, the fans bought into the rebuilding story line.
And the team continued to lose at historic levels of badness.
But as the team slowly turns around, there are several touchy points to consider as a fan.
The Ricketts family. They run hot and cold in the public mindset. But there is a growing trend that they are deemed unlikeable. Some take issue with the family politics, political issue baggage and blundering in Chicago politics on the Wrigley real estate ventures. A few take issue on how the Ricketts are running the team, as a secondary tenant in a grand scheme of building a mini-Disneyland at Clark and Addison. Some take issue that Tom Ricketts may know how to run a meeting, he does not know how to run a franchise. Ricketts has been compared to P.K. Wrigley.
The front office. Theo and Jed continue to be, in a word, smug. They continue to tell us they have a "plan" and "a process," which is corporate speak for "I know what I am doing" and "you can't understand it." Critics still believe that despite the small blimp of rookie success, that one did not have to do a minor league rebuild only - - - that a balanced approached could have brought 3 years of respectful, competitive play on the field for premium ticket prices. The counter is that the fans have to pay the high prices "to invest" in the hope of the future home grown products. That is condescending to the fan base. Fans don't pay for future performance, they pay to see their team win on the day printed on their game ticket.
The players. The channel of Rizzo, Castro, Alcantara, Baez and Soler have perked up dormant fans. They seem enthusiastic, energetic and having fun in the dugout. They sure swing for the fence like mad men. But box scores of team double digit strike out totals is alarming to a knowledgeable person. Despite hot starts, there is an illusion of success as Baez has fallen to batting .189 and Alcantara around .220. You can't have a roster of six batters hitting under .240 and expect to win a division.
At some point, fans are going to be confronted with mixed actions in regard to their team. Ricketts focus is on real estate development, not the Cubs. The front office is concerned about pooling minor league talent than spending on a competitive major league team. The players may have an undisciplined good time swinging for the fences, but their below average fundamentals will have long term negative consequences.
Can a fan dislike ownership, and still be deeply invested in his or her team?
Can a fan dislike the front office, and still be deeply invested in his or her team?
We have seen that fans can turn off the loyalty switch when their team is filled "unlikeable" players. It will be interesting to see how the factions come together in the near future, when money really has to be spent to get a winning team on the North Side while different agendas are at play.
September 2, 2014
BAD HABITS
The big takeaway from Labor Day baseball is that the Cubs will labor at the plate.
Everyone, including veterans like Wellington Castillo, are now in games free swinging their bats to jack homers in batting practice. These overswings are going to take a toll on player bodies.
Anthony Rizzo has been out seven straight games with a bad back. Backs don't heal like other body parts. As anyone who has had a back issue, they never really go away. A person needs to be preventative.
Javy Baez followed rookie Starlin Castro's free wheeling approach to the plate. Both started off strong with hitting balls out of the zone and out of the part. When Jorge Soler arrived, he has the same overcut that creates massive power and majestic home runs. But the torque created in the back is a contorted sight.
The home run power may dazzle the fans but may cause more problems in the future. The Cubs may hit more home runs, but actually score less because they don't get on base. It's feast or famine: homer or strikeout. This is not a consistent approach to winning.
But the Cubs are not at the point of winning, yet. They just want to revive interest in the team with their home run happy rookies. Winning will come later.
But bad plate discipline is a bad habit to break, especially in younger players. The league will quickly catch up with rookie hitters, and it is the adjustments that need to be taken will either make or break a young career.
Everyone, including veterans like Wellington Castillo, are now in games free swinging their bats to jack homers in batting practice. These overswings are going to take a toll on player bodies.
Anthony Rizzo has been out seven straight games with a bad back. Backs don't heal like other body parts. As anyone who has had a back issue, they never really go away. A person needs to be preventative.
Javy Baez followed rookie Starlin Castro's free wheeling approach to the plate. Both started off strong with hitting balls out of the zone and out of the part. When Jorge Soler arrived, he has the same overcut that creates massive power and majestic home runs. But the torque created in the back is a contorted sight.
The home run power may dazzle the fans but may cause more problems in the future. The Cubs may hit more home runs, but actually score less because they don't get on base. It's feast or famine: homer or strikeout. This is not a consistent approach to winning.
But the Cubs are not at the point of winning, yet. They just want to revive interest in the team with their home run happy rookies. Winning will come later.
But bad plate discipline is a bad habit to break, especially in younger players. The league will quickly catch up with rookie hitters, and it is the adjustments that need to be taken will either make or break a young career.
September 1, 2014
A BREWING STORM OF CHANGE
If the whole financial apple cart rides on the Cubs creating their own "Dodger" cable channel, then there are going to be more potholes in the road to 2020.
The Hollywood Reporter reports that MLB is facing its toughest anti-trust suit to date. It involves the very lucrative television rights revenue streams.
Major League Baseball could be on the cusp of enduring something almost unimaginable: The end of the lucrative system by which professional baseball games are televised by region, consumers pay high prices for out-of-market package fees, and some digital telecasts are blacked out in home markets.
With the prospect that sports broadcasting might forever change, the league is seeking permission to file an interlocutory review of U.S. District decision that ruled against MLB's motion for summary judgment in the claims in a proposed class-action lawsuit.
In Judge Scheindlin's ruling, she determined that MLB's antitrust exemption doesn't apply "to a subject that is not central to the business of baseball, and that Congress did not intend to exempt — namely, baseball’s contracts for television broadcasting rights." As a result, she allowed the plaintiffs to pursue claims that MLB, Comcast and DirecTV have violated antitrust law by making anticompetitive agreements that negatively impact the output, price and perhaps even quality of game telecasts.
MLB is quite disturbed by the opinion and now wants to go before the 2nd U.S. Circuit Court of Appeals to present this issue: "Whether the professional baseball exemption to the antitrust laws bars Plaintiffs' claims against Major League Baseball with respect to Major League Baseball's territorial broadcast rules and structure."
Baseball's antitrust exemption dates back nearly a century and has been addressed in several big court cases, including Supreme Court rulings. However, legal scholars have debated whether the antitrust exemption merely covers labor matters like restrictions on free agency or goes further. Over the years, Congress has adjusted sports broadcasting rules but hasn't offered substantial clarity on the matter.
In a memorandum to support the interlocutory appeal filed on Wednesday, MLB says that every appellate court has "held that the exemption applies broadly to the business of baseball and is not limited to any particular facet of that business."
The ruling is important because it could upset the original club power and control over territorial licensing fees. Washington and Baltimore are current in court over their television territorial rights and provisions which stem from the Expos relocation into part of the Orioles territory. The Oakland A's have been stymied by the Giants who have much of the territory south into Silicon Valley as their exclusive domain. The A's could not move to Santa Clara. Baseball was not happy about it, but it will not upset the club's rights set forth in their original charters.
Exclusive territorial rights extend to radio and television broadcasting games. The home team controls the airwaves in their own community (or share it with a dual club city like New York or Chicago). Any team that comes into a pre-existing team's market will have to pay to do so.
The concept of exclusive local broadcasting has been eaten away by MLB itself, with its own cable channel and national television contracts with several networks who push games to everyone just about every night of the week. The advent of digital mobile apps and streaming video has taken away the territorial reach of over-the-air broadcast signals. The league would like to continue to package baseball as seller; but clubs protect their local rights like a Tiger mom to her cubs.
If baseball loses it stronghold on local broadcast rights, and national television deals, the overall price for "baseball as a commodity" will fall. In some circles, like large market teams, that could be a significant loss of revenue. Further complicating matters is large cable carriers have stopped paying for more sports channels because the fee structure is not supported by their average customers. The new Dodger network wallows in obscurity in the LA market because no transmission deals were made with other carriers. Some reports say that three-quarters of LA fans have lost their ability to see Dodger games.
The Cubs are banking on a huge revenue boost with television money. This is betting on the old baseball revenue model which is being attacked internally and externally in the courts.
The Hollywood Reporter reports that MLB is facing its toughest anti-trust suit to date. It involves the very lucrative television rights revenue streams.
Major League Baseball could be on the cusp of enduring something almost unimaginable: The end of the lucrative system by which professional baseball games are televised by region, consumers pay high prices for out-of-market package fees, and some digital telecasts are blacked out in home markets.
With the prospect that sports broadcasting might forever change, the league is seeking permission to file an interlocutory review of U.S. District decision that ruled against MLB's motion for summary judgment in the claims in a proposed class-action lawsuit.
In Judge Scheindlin's ruling, she determined that MLB's antitrust exemption doesn't apply "to a subject that is not central to the business of baseball, and that Congress did not intend to exempt — namely, baseball’s contracts for television broadcasting rights." As a result, she allowed the plaintiffs to pursue claims that MLB, Comcast and DirecTV have violated antitrust law by making anticompetitive agreements that negatively impact the output, price and perhaps even quality of game telecasts.
MLB is quite disturbed by the opinion and now wants to go before the 2nd U.S. Circuit Court of Appeals to present this issue: "Whether the professional baseball exemption to the antitrust laws bars Plaintiffs' claims against Major League Baseball with respect to Major League Baseball's territorial broadcast rules and structure."
Baseball's antitrust exemption dates back nearly a century and has been addressed in several big court cases, including Supreme Court rulings. However, legal scholars have debated whether the antitrust exemption merely covers labor matters like restrictions on free agency or goes further. Over the years, Congress has adjusted sports broadcasting rules but hasn't offered substantial clarity on the matter.
In a memorandum to support the interlocutory appeal filed on Wednesday, MLB says that every appellate court has "held that the exemption applies broadly to the business of baseball and is not limited to any particular facet of that business."
The ruling is important because it could upset the original club power and control over territorial licensing fees. Washington and Baltimore are current in court over their television territorial rights and provisions which stem from the Expos relocation into part of the Orioles territory. The Oakland A's have been stymied by the Giants who have much of the territory south into Silicon Valley as their exclusive domain. The A's could not move to Santa Clara. Baseball was not happy about it, but it will not upset the club's rights set forth in their original charters.
Exclusive territorial rights extend to radio and television broadcasting games. The home team controls the airwaves in their own community (or share it with a dual club city like New York or Chicago). Any team that comes into a pre-existing team's market will have to pay to do so.
The concept of exclusive local broadcasting has been eaten away by MLB itself, with its own cable channel and national television contracts with several networks who push games to everyone just about every night of the week. The advent of digital mobile apps and streaming video has taken away the territorial reach of over-the-air broadcast signals. The league would like to continue to package baseball as seller; but clubs protect their local rights like a Tiger mom to her cubs.
If baseball loses it stronghold on local broadcast rights, and national television deals, the overall price for "baseball as a commodity" will fall. In some circles, like large market teams, that could be a significant loss of revenue. Further complicating matters is large cable carriers have stopped paying for more sports channels because the fee structure is not supported by their average customers. The new Dodger network wallows in obscurity in the LA market because no transmission deals were made with other carriers. Some reports say that three-quarters of LA fans have lost their ability to see Dodger games.
The Cubs are banking on a huge revenue boost with television money. This is betting on the old baseball revenue model which is being attacked internally and externally in the courts.
Subscribe to:
Posts (Atom)