I like that idea. I know a couple of you guys (Ben, you, Mike) are the number crunchers here (math isn't my forte), so if you guys throw out some ideas for figures, I'd be happy to weigh in on it. :-)
WARNING: Long rant ahead... feel free to skip to the bottom to see my conclusion.Okay, perhaps the revenue sharing money that would be attributable for 2010 wouldn't kick in until mid-2011 (opposed to after the 2010 season like we did last year). Say the Marlins received $15m, then on June 1st, their RS budget would go from $0m to $15m. This would be extra cash and would be considered to be used on players if the team's total payroll exceeded their cap amount - $15m.
Let's say the Marlins have a cap of $50m and with the RS cash, they are at $30m on September 15th (start of draft). Since they have $20m to spare, it means they didn't need to use that RS money to stay under the cap in the first place, so that $15m is now attributable to the draft.
..... this is a lot simpler than I am explaining. All the RS money becomes is additional cash flow after June 1st for a franchise for that season. The Marlins could use that $15m however they wanted, just as they could in the majors.
What we are interested in is not actually matching RS contributions and receipts, but the amount of money that is used by such teams to put in MLB payroll and the farm. I'd venture to say it is a bit less than what they receive.
How has the draft been affected? Well, in the first round alone, the 2009 draft had over $12m more in bonuses than the 2007 draft. The small market teams' are certainly building up their pockets to spend on the farm. That's not even the best statistic... the top 15 draft picks in each of the past three years has had total bonuses of $39.7m, $47.3m, and $53.3m. It shot up by $14m in that half alone over the past two years citing much more weight given to small market spending. Of course, some small market teams do better than expected such as the A's, Marlins, and Twins and they are at the bottom of the draft, but that statistic is very telling. The big market teams are spending less, or the same, while the small market teams are spending more.
With inflation and Scott Boras both being factors, the biggest one has to be revenue sharing. This still doesn't help us with how much should be allocated. After all, we are talking a measly $8-9m/year increase for the 1st round for all teams. One could guess that you could multiply that number by a factor of 2 or 3 to represent the entire draft. That still comes out to at most $30m for all teams. If $30m is going to the draft, from RS, then where is the rest of the money going?
Well, payrolls aren't going down. The Marlins handed out big contracts to Hanley and JJ this off-season. The Twins gave a fat one to Mauer, and the A's have been signing players (and then trading them) to deals that aren't that cheap ($10m/year for Sheets). If payrolls are going up for these teams in hard economical times, then that it is definitely due to RS. I'd say a total of $50m for the small market clubs.
Non-draft prospect signings... this is where our league is more active because of simplified, smaller rosters, and a smaller draft, but teams like my Pirates are dumping a lot of money into foreign scouting. This is the money that fans aren't seeing in the books and are assuming it goes to the owners' pockets. How much do you think it takes to fly dozens of scouts around the world (South America, Caribbean, Mexico, Japan, South Korea, Taiwan, India, South Africa, Australia) all year long? All those flights, plus base salary, plus scouting incentives, plus contracts for the players, plus supporting staff (clerks, beancounters, statisticians) certainly comes to a pretty penny. I'd venture to say that a fully loaded international scouting team needs a budget of $8-10m or so per team.
So far... by very rough estimation, we have $80m in total + $9m/club. For 10 clubs, that would be a total of $170m. Revenue sharing is less than that, but that is where the central fund comes in. It's about $30m/team (after each team "contributes" $10m/year for pensions and the MLB operations fund.)... which would keep us looking for $130m + RS money. A lot of new stadiums have been built and baseball operations have been going up... Forbes has valued these baseball clubs rocketing in value over the years. MLB as a whole, and its central fund, keeps these franchises valuable for its own good. It's safe to assume that most of the central fund money, as it is intended, does not go to player development or payroll at all.
From ESPNRevenue sharing: Only income-challenged teams get a revenue-sharing check. But you should never forget that those checks are a lot larger than your average rebate check from Target. This sport shared $400 million in revenue this year -- more than the gross national product of Western Samoa. Now every club's payout is different. But the five neediest teams -- which we believe to be the Marlins, Pirates, Rays, Blue Jays and Royals -- averaged somewhere in the vicinity of $35 million in revenue-sharing handouts per team. And that still left over $200 million -- more than $20 million a club -- for the rest of the "payees" to divvy up.
We can safely arrive (with high confidence) at the conclusion that the revenue sharing money (not central fund) is used on payroll, the farm, and player development ($2-$5m/club?). However, $400m for just over half the clubs (17 or so) comes out to a lot of extra money.
The problem with revenue sharing is that there is a lot of gray area. We know some information from 2002, 2003, and 2005:
http://bizofbaseball.com/index.php?option=com_content&view=article&id=3760&Itemid=178... but that's about it. The conservative estimate is to go lower than what is given since we are only concerned with payroll. This is why I "like" my $170m figure. In fact, I will go lower than that.
We still have a tier system in place for RFA tags even with the new salary cap, so let's apply RS to the tier system like we did before... but how the money is used is entirely different...
TIER 10: 1 team x $20m = $20m
TIER 9: 2 teams x $15m = $30m
TIER 8: 3 teams x $10m = $30m
TIER 7: 4 teams x $5m = $20m
TIER 8: 5 teams x $3m = $15m
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Total revenue sharing = $115m
The consequences of this are that small market teams still will be unable to sign players to long-term deals. We don't have a MLB bonus system in place. They will still have to find a way to get under the cap when the RS money is dried up and the new season starts.
This may not be perfect, but it is a start, and the figures are similar to what we had for revenue sharing after the 2009 season.
