It’s Not Labor Day Is It?

In yet another sign that the apocalypse is upon us, Major League Baseball is announcing that a new labor agreement has completed and will now go to players and owners for ratification. This marks the first time in the history of baseball that the two sides have completed a labor agreement before the current agreement expires. When I first heard the breaking news that a deal had been reached, I immediately ran out of my office and into the streets. I was afraid that at any point now the ground would begin to shake and buildings would begin tumbling to the ground. I looked up at the sky fully expecting to see the moon turn blood red and the stars fall from the heavens. This kind of news is typically reported in the Bible under miracles right before a discussion on the end of the world. I would expect that this news will be a boon to all television evangelists who can use this to call people to repentance and ask for donations to ensure that you are saved when the earth is destroyed.

Players and owners are now weighing in on the outcome of this successful negotiation with each side stating how pleased they are with the outcome. For the most part it is the same deal as was ratified in 2002. There are some minor tweaks such as luxury tax escalators and revenue sharing figures but for the most part the framework of the collective bargaining agreement is the same. Even player representatives such as super agent Scott Boras praised the deal.

This is a setting of success. It’s a platform, a stage that’s been built through very difficult times. To do anything to alter that success would be something that wouldn’t be in the best interests of the game. The business of baseball is being operated much more efficiently. Owners are becoming better owners. League officials are becoming more aware of the opportunity for content both nationally and internationally. The force of the revenue streams basically put the collective bargaining process into a different framework than it’s been in the past.

Scott Boras

Don’t get me wrong, I think it is great that we will have another 5 years of uninterrupted baseball without worrying about work stoppages such as strikes or lock-outs. It is just that when owners, players and agents all begin congratulating themselves on how great this is I get really nervous. It’s great that baseball will achieve $5.2 billion in revenue this year and that the average player salary will be approximately $3 million but the question begs to be asked, what about the fan? In 2005 the average ticket price was $21.17 which is up 6.3 percent from the previous year. Beer prices were on average $5.34 for 17 ounces while hot dogs averaged $3.23. According to Team Marketing, it cost a family of 4 an average of $164.43 to attend a major league baseball game. If you aggregate that price over 81 home games a family of 4 would spend $13,318.83 to attend a season of baseball. According to the US Government, the poverty threshold for a family of 4 is $20,000 as of 2004. So our figure for attending a season of baseball for our family of 4 represents 66.59 percent of the total income of a family at or near the poverty line. Until baseball realizes this fact and the collective bargaining agreement takes into account the escalating costs for their fan base, they will continue to see their market share erode as people attempt to find more cost effective ways to spend their diminishing discretionary income. Within the Arizona Diamondbacks market this is already having an impact. Television ratings for Diamondbacks games continue to rise each year while game attendance decreases. So while the owners, players and agents pat themselves on the back for finding an equitable way to split the money fans will find a new recreational activity to anoint America’s Pastime.

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