MLB first to test economic waters

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By Robert Roselle III

By Robert Roselle III

With a slumping economy affecting us, no one is immune from budgeting. Even the sports world is not immune. Since the economy went south after other professional sports had already secured television revenue and season ticket deposits, Major League Baseball is going to be the first U.S. professional sport to show us what can really happen during this economic crisis.

But what does this mean for MLB? Only time will tell. So far the economy has already had an effect on MLB in the forms of free agency and ticket sales.

This past off-season saw a gap widen between the wealthy and not-so wealthy of baseball. While the New York Yankees were able to go out and spend close to $500 million on players in the off-season, teams like the Kansas City Royals and the Detroit Tigers are losing players or being forced to cut players to save money.

For example, Manny Ramirez was coming off a season in which he hit .332 with 37 homeruns and 127 RBI, so he and his agent expected to get a multi-year contract in excess of $100 million. Thanks to the economy, Ramirez received far less then he expected, a 2-year deal worth $45 million.

MLB is a business and unfortunately for the common fan, it thrives on big corporate sponsorships and luxury box sales.

Some businesses have dropped their sponsorships in order to cut back on spending, which means a big drop in money for franchises.

The Houston Astros would have had to spend $120 million to keep a team together that caught fire during the second half of last season, but they had to trim that figure to account for loss of sponsorships.

Ticket sales have also decreased from last season.

Teams like the Detroit Tigers and the San Francisco Giants have seen drops in season ticket sales by almost 50 percent from previous seasons.

However, it is not all negative.

MLB was able to start its own cable channel, which can be seen by more than 50 million viewers, and some teams have seen their season ticket list expand.

The Chicago Cubs have seen their season ticket waiting list grow to over 100,000. Yet, the economy is still on their minds.

Many solutions have been suggested but only a few make sense. The big one is instituting a salary cap.

The National Basketball Association and National Football League both have salary caps that prevent owners from spending large amounts of money on players.

Pro baseball currently does not have a salary cap, so a team like the Yankees has free reign to spend as much money as possible.

The addition of a salary cap to baseball would shrink the competitive gap between the big-market teams and the small-market teams.

The salary cap would also prevent teams from giving out large contracts to players and pull back the amount of money paid to these players.

The cap would prevent contracts that give players like Alex Rodriguez 10-year, $252 million contract.

It would make teams more fiscally responsible and spread the talent out, making the overall game better.

Instituting a cap does not account for the loss in ticket sales. However, because the cap will force teams to be more financially responsible, the ticket prices will drop because the team will be spending less on salary

The struggling economy has touched every business. MLB has the unfortunate honor of going to bat first against their economic woes. What they do will become a plan for the other major professional sports leagues. Only time will tell whether the plan is a homerun or a bases-loaded strikeout.

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