July 19, 2002
It Isn't As Bad As
It Isn't As Bad As Bud Says -- It's Worse: At least according to Sal Galatioto, managing director of the sports advisory and finance group at Lehman Brothers. In an interview with the New York Times' Ira Berkow, he said:
"I think he's understating the crisis," Galatioto said, referring to reports that two teams, Detroit and Tampa Bay, recently avoided missing paying their players. "He's in a tough spot. If he says that too many teams are in trouble, it hurts the teams' abilities to get financing."
Galatioto doubts that a strike or a lockout will solve anything, and offers this prescription:
¶Contract at least two teams.
¶Increase revenue-sharing, but not to such a level that the redistribution hurts the value of the richest clubs. "If you dilute the value of the Yankees, Dodgers and Red Sox, you won't get any improvements by helping Milwaukee," he said.
¶Forget the salary cap and hope that a draft of contraction-freed players would stabilize salaries; that assumes, perhaps with too much hope, that the supply of better players would exceed the demand from two, four or six fewer teams.
¶Set a minimum payroll that would force needier teams to spend most of the cash they get from revenue-sharing, rather than pocket it.
"It's not that complicated," he said. "I'm not the sharpest tool in the shed. If I were, I'd be doing exotic derivatives. All I can say is it's a basis for negotiations."
So revenue sharing, a solution sportswriters have clamored for as often as their counterparts in the newsroom have flacked for campaign finance reform, isn't a complete panacea. What a surprise. That's not all Galatioto mentions -- and even posits that a league of as few as 24 teams would be more than enough for baseball to continue on in its present form. Give it a read.
(Meanwhile, the AP is reporting that the Devil Rays are beginning to miss payments to players, in particular, former players who are owed signing bonuses.)
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