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AN Mailbag #6: Business side of baseball

We have two questions that deal with the business of baseball, so let’s group these together:

Sorry we got Nakajima... actually, not really
Sorry we got Nakajima... actually, not really

If indeed the new Dodgers TV deal goes by with Fox Sports West, which could bring around $6-7 billion in 20 years, how could that affect the Oakland Athletics, and in general other MLB teams?

Despite the contract language not yet being drawn up, the Dodgers are sure spending like they already have this money in hand. Indeed, for all intents and purposes, this is already a done deal. This puts the Dodgers into the upper strata of MLB teams in terms of TV-related income. The Angels, Rangers, Yankees, Mets, Orioles, Giants and other ownerships all have significant ownership themselves of a cable network, or a billion-dollar contract to broadcast their games on another network. While MLB has a luxury tax that is supposed to preclude teams from going over that number, it is of course possible for a team to pay the tax and continue to spend upwards of $200M on payroll per year. This luxury tax also (basically) extends to the amateur draft. MLB teams are only permitted to spend a certain, fixed amount on the draft, allotted according to draft slot, and the penalties for going over in this context are much more harsh. Teams that overspend risk losing their top pick the next year.

Together, none of these things help the A's at all. The A's, Rays, Royals, Padres, and Marlins (lowest 5 teams by revenue as ranked by Forbes) need to be creative in order to field competitive teams. Being limited in how to spend money on the draft, being outbid by higher revenue teams for escalating free agent contracts, and not having new TV contract/new stadium revenue only increases the divide between the MLB haves and have-nots. Something must change in one of these three problems in order for the A's to remain competitive in the long-run.

This brings us to the next question:

I have a question: why should Oakland A's fans give a toss what Scott Boras has to say about the A's moving to San Jose. When I read that, I think maybe he thinks he can get more money for his clients -- I understand, that's good agent behaviour -- but as an A's fan that wants the A's to stay in Oakland, I wish he would mind his own business.

I'm not sure you should. Scott Boras is a powerful agent, to be sure, but his influence over Bud Selig's final decision is probably minimal. Indeed, Boras said the same thing in 2011, and no decision was made then. Why should his words be any more powerful now?

Marine Layer, who runs the excellent site, basically agrees with you on Boras' motives:

Again, Boras just wants the MLB pie to get bigger so that more of his players can get (over)paid and he can rack up bigger commissions. That's who he is, it's how he works. It doesn't take a genius to make the same deductions Boras has. More importantly, Boras has a much better sense of the league's and individual teams' financial pictures than anyone on the outside.

At the end of the day, it doesn't matter much what Boras, you, or I think. Wolff, Johnson (Giants' principal owner), Selig, and San Jose and Oakland city leaders will play the strongest roles in determining the A's future. Until then, I would encourage all A's fans to enjoy Oakland A's baseball live and in-person at the Coliseum. The nachos are delicious.