Each and every off season we sit back, and watch the New York Yankees, and the Boston Red Sox compete in their annual arms race, and every high price free agent looks to cash in with one of these two teams. Since Major League Baseball has no salary cap, these two teams often wind up with the best players since they can afford to pay them more.
This year the Yankees treaded for OF Curtis Granderson, and might resign Johnny Damon as a potential fourth outfielder/Designated Hitter. The Red Sox are attempting to sign John Lackey and add him to a rotation that already features Josh Beckett and Jon Lester. Giving them three guys who would be aces on any other team.
Some see this massive spending by both the Yankees and the Rd Sox, who happen to be the first and third most highly valued baseball franchise respectively, and cry foul. However the real truth here is these two teams have done a better job managing the business side of their teams.
Both teams own and operate their own regional sports networks, which feature their games along with other regional sports programming. Most of the teams in the MLB are content just to sell off their broadcasts right to generate revenue, these two teams have created corporate entities that make huge amounts of money.
The Red Sox own and operate the New England Sports network and that channel alone had 9.8 million dollars in sales, and ratings better than ESPN, and Comcast Sports Net New England combined.
The Yes network is available both regionally and nationally and while exact figures are not available it certainly is a big cash cow for the Yankees organization. Technically speaking the Yankees do not own the Yes Network, but both the Yankees and the Network are owned by Yankee Global Enterprises LLC. However ownership of the network certainly increases the budget for the Yankees payroll.
Now should we penalize these two teams for being shrewd enough to maximize the value of their broadcast rights, and form new companies that help increase the budget for their team’s payrolls?
That question gets a little murkier when we come to the realization that both networks were founded with the help of other sports teams in the region. The Yankees teamed up with the New Jersey Nets, and the Red Sox paired up with the Boston Bruins for their respective regional networks.
Since this model has been so successful, it is a wonder why teams in other cities have not followed suit. These kinds of networks get better ratings because they are local, and the is an attachment to them by the local fans. So may people complain about the national ESPN and Fox Sports Net programming that they should be urging their local sports team owners to start their own regional networks.
The Red Sox and the Yankees have shown the other team a successful business model and instead of restricting them, the other teams should be learning from them.
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Comments
The Red Sox are 4th in salaries in the MLB. Are the Cubs and Mets ruining baseball?
Decades ago the Yankees held baseball hostage and in the National League the Cardinals had such a large minor league system that none could compete. The Marlins won a series, Minnesota as well and the Mets & Cubs are futile. What ruins baseball is too many teams with watered down talent. The leagues should pair down by 2-4 teams in each league and you'd see a more competitive product.
The Jews and Muslims have one thing in common: They both CAN'T have pork. The Mets fans & Red Sox fans have one thing in common: THEY HATE THE YANKEES!!!!
If you ask me it's teams like the Marlins, Royals, Twins, Pirates, etc that ruin baseball. They receive tens of millions of dollars in revenue sharing and do not reinvest it in their teams, pocketing it instead. It's shameful. MLB needs a salary "floor" before it needs a salary cap.
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