Money player: MLB's White talks baseball business

By Nola Breglio and Jason Heller

Like most professional sports these days, baseball is perceived as just a game, motivated by money, filled with players and owners look to do nothing other than rake in the big bucks.

JULIA TIERNAN/YH Major League Baseball's Cheif Financial Officer Jeffrey White talks shop at Pierson.

But Major League Baseball's Chief Financial Officer, Jeffrey White, said at a Pierson Master's Tea on Thurs., Oct. 29, that baseball isn't making as much money as the general public thinks. He said that this year, only a third of all baseball teams turned a profit. These losses occurred despite the 1998 season being what many have called the most exciting in recent memory. Baseball may be pulling in a lot of money, but almost none of it is profit. The highest revenue-earning club in the major leagues only grosses $150 million a year, while the lowest earns $40 million. This gross revenue is then divided between basic operating costs and increasingly exorbitant player salaries.

White discussed the disparity between big and small market teams, illustrating how "the Pittsburghs and the Montreals" cannot afford to sign expensive talent like Kevin Brown or Bernie Williams because with $40 million in revenues and $30 million in basic operating costs, only $10 million remains to be spent on players.

The Yale Herald sat down for an exclusive interview with White to discuss the financial disparities in Major League Baseball, why the money goes where it does, and the financial costs of winning.

Yale Herald: To what extent has baseball become more of a financial competition among teams than an athletic competition?

Jeffrey White: I think that's true within ranges...as in this year no team with a payroll under $40 million will have had a winning record, but by the same token a lot of teams with much higher payrolls didn't do too well either. In baseball, athletic ability, discipline, practice, game conditions, the field...all these things affect the results of the game more than in any other sport. Even the 1998 Yankees could have been beaten if Kevin Brown had--not to pick on him--been able to hold them, or if he had been left in for a little longer.

YH: Do you think the increasing presence of corporations such as Disney, Fox, and Turner Broadcasting among baseball ownership is detrimental to the game?

JW: The verdict is still out on that--corporations have to pay attention to shareholders, and they have behaved quite responsibly so far. The Braves, for instance have a higher payroll but a fairly good revenue.

YH: But why did the Braves, a corporate-owned large market team which spends large amounts of money on free agents, fail to draw big crowds during their playoff games?

JW: The higher pricing of our post-season tickets this year may have deterred some of the fans. Fans are people too, and they get bored, and perhaps assumed that the Braves would get to the World Series. They may have looked at the new prices and decided against going.

YH: There have been a number of new baseball stadiums built in the past few years, many funded largely by the cities in which they were built, such as Cleveland and Baltimore. Do you think this is comparable to corporate welfare, or is it beneficial to the cities?

JW: If you look at the impact of new stadiums in Cleveland, Baltimore, Denver, and Texas, there's not one case where people say those stadiums haven't had a beneficial impact on the area they've been located in. Cities spend money on golf courses, cultural things like theaters and symphonies...and I would doubt that most of these things had anywhere near the return of a baseball stadium.

YH: After 25 years in existence, what effect has the designated hitter--a role often filled by a player who would otherwise be nothing more than a low-paid pinch-hitter--had on the financial structure of baseball? Is there any real chance of it being abolished?

JW: It's probably raised our costs, but baseball lacks a consensus on the issue. In polls it has been shown that AL fans tend to support the DH, and NL fans don't.

YH: What ever happened to the "radical realignment" plan to reorganize baseball's divisions which could have put teams like the New York Yankees and Mets in the same division?

JW: My boss, [Commissioner Bud] Selig would like to do some of that because he believes strongly in the concept of geographical identification. He lives in Milwaukee and I've never seen him happier than when the Cubs played the Brewers and there were caravans of fans going from Wrigley to County Stadium excited about the games.

YH: Who's your favorite player playing today?

JW: Nomar Garciaparra

YH: Favorite of all time?

JW: Ted Williams.

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