Selig: Pirates not putting profits over winning
Major League Baseball Commissioner Bud Selig on the Pirates: "I know how painful this is for the fans in Pittsburgh."
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The Pirates are "absolutely not" putting profit over winning, Major League Baseball commissioner Bud Selig said in an extensive interview with the Post-Gazette about his sport's most woeful franchise.
"I know how painful this is for the fans in Pittsburgh," Selig said by phone from his office in Milwaukee. "But, in watching this management team the past couple of years and how aggressive they've been and how they're restocking the farm system, that's where they had to start. And if they weren't doing it, you'd hear from me."
All 30 major league teams are advised strongly against giving out specific financial numbers, and the Pirates adhere to that. They have acknowledged making a profit in 2004-08, and they tentatively expect to make another this year, but they never have offered specifics.
Forbes Magazine has estimated that the Pirates' profit was $17.6 million in 2007, $15.9 million last year, but that magazine receives no access to any figures, from MLB, its teams or the financial institutions working with those teams.
Asked if the Pirates' ownership, led by chairman Bob Nutting, was making money in that range, Selig raised his voice in replying, "Absolutely not. Unequivocally not. I'm telling you, they're not pocketing it. I mean, it's just an economic myth."
Selig said, as the Pirates have, that any profit is being channeled back into the team. He said he would know if any of it was being paid in ownership dividends.
Selig pointed out that he and Rob Manfred, his executive vice president for labor relations, routinely examine each team's financial books, and that teams are required to comply because MLB is distributing revenue-sharing funds -- a total in the range of $450 million this year, Selig said -- from the high-revenue teams to the low-revenue teams such as the Pirates.
Occasionally, someone associated with those high-revenue teams will grumble publicly about low payrolls such as those of the Pirates and Florida Marlins. But Selig was adamant no team has come directly to him to seek action.
"I look at every franchise on an ongoing basis, economically and every where else. What we do, at every meeting, I have Rob Manfred go over where every club is, what they spend. I want to tell you: I've never had a complaint from a big-market club."
All revenue-sharing funds, as per MLB's bylaws, must be spent on improving the team competitively. That does not necessarily mean major league payroll, but it does include expenditures such as the draft, international signings and other endeavors such as the Pirates' recent building of a $5 million academy in the Dominican Republic.
The Pirates received a $28 million revenue-sharing check last year, plus another $15 million-$20 million in national broadcast contracts and other shared monies. The total amount they are expected to spend on major league payroll this year is $47.4 million, meaning most of that is covered without a penny of local revenue. The team's total expenditures exceed $100 million.
Meanwhile, the losing has reached historic proportions, with the franchise in its record 17th consecutive losing season and four losses away from 100 after its worst month of baseball since 1890.
Has Selig ever considered a full investigation of the Pirates' finances to ensure those funds are being spent appropriately?
"No, not with the Pirates or anybody else. Because we've shown it," Selig said. "The economic myth that they're putting it in their pocket is just not right."
He emphasized the two drafts under current management, on which the Pirates have spent a combined $18.7 million, ranking second in that category in 2008 and seventh this summer. The previous two years, they spent $10.4 million.
"There's no doubt that, between their payroll and everything else - look, the objective of revenue sharing is to get clubs to pour money into their baseball operations. It doesn't say where. Just make sure you're getting better. Well, I'm looking at some numbers, some charts, and the Pirates are one of our bigger-spending clubs on the draft. That's never happened until the past two years."
The larger issue as it relates to the Pirates' spending will come next year: If the current roster takes the field on opening day, even with internal raises, it likely will not cost more than $28 million, and the microscope would greatly intensify on ownership.
"I'm not worried about that," Selig said. "Their payroll is going to go up by a lot over that number."
Frank Coonelly, the Pirates' president, has said only that it will increase.
Selig likened the Pirates' current status to that of the Milwaukee franchise he once owned. The Brewers lowered payroll to $27 million in 2004, bringing a loud outcry from fans and even Wisconsin politicians whose tax money had paid for Miller Park. Today, the Brewers' payroll is $80 million, this despite being based in a market two-thirds the size of Pittsburgh.
"When the Brewers cut their payroll here and were developing their farm system, there was a lot of lipping here that went on, but they were spending money back then, too," Selig said. "Well, what happened? All of a sudden, here come all these kids: Prince Fielder, Ryan Braun and on and on. I really believe that's where the Pirates are now. I think they're doing it the only reasonable way anybody can."
He cited another example, a good bit further back.
"You know, I've read every book on Branch Rickey," Selig said, referring to the Pirates' general manager in their miserable early 1950s. "I know the times are different now, but Rickey got fired there in Pittsburgh in 1956 by John Galbreath. And I remember what that team was like. They were bad. But Rickey kept telling the Galbreaths that everything was in the pipeline, that they were doing well in the farm system. And he turned out to be right. Along came Dick Groat, Billy Virdon, Bill Mazeroski, Vern Law, Smokey Burgess and, of course, Roberto Clemente."
Although the Pirates indisputably have more talent in the minors now than two years ago, few would classify it among the game's upper tier, something Selig did during an All-Star Game media session in July when he called it among the top three.
"I'm not suggesting they have that kind of farm system now," he said, comparing it to that Clemente group. "Please don't misunderstand. But I've seen the Pirates be more aggressive in the last couple of years than, frankly, I've seen them in a long, long time. ... You look at some of their young players coming up, someone like Pedro Alvarez, and they're very highly regarded. I really think they've turned the corner."
Selig praised, in particular, the commitment of Coonelly, who worked in Selig's office for a decade as chief labor counsel before taking his current post.
"If I didn't feel so strongly that Frank, who is really intense -- and I think you'd agree with that -- would be sitting there and aggravating himself every day... look, I know how he feels. I know how Bob Nutting feels. Neal Huntington, I'm sure, feels the same way. Yes, I can assure people -- and I wouldn't say this if I didn't really believe it -- the Pirates are not only a franchise committed to winning but also are doing every practical thing they can to win."
But what about Major League Baseball's commitment to Pittsburgh?
In nearly every area, from economic -- baseball now is the only one of the four major sports without a salary cap -- to the scheduling of interleague rivalries to a pittance of exposure on the new MLB Network, markets such as Pittsburgh appear to be the lowest priority.
In stark contrast, Pittsburgh's other two professional sports teams, the Steelers and Penguins, are not only champions and marquee franchises in the NFL and NHL, respectively, but also big money-makers in terms of national television ratings and merchandise.
Why does Pittsburgh seem a pariah only in baseball?
"I've never said or felt anything like that," Selig said. "It is a great baseball market. Remember, I ran a franchise very similar to the Pirates. And I've always said that, if baseball can't make it in middle America -- and Pittsburgh, Cleveland, Detroit and others are in there -- it's not going to make it. Everything I've tried to do in reforming the system has worked toward this."
He noted the Pirates' 123-year history, too.
"You know, as a kid, I used to listen to Bob Prince on KDKA. Pittsburgh has a wonderful, wonderful tradition. Listen, I can close my eyes and see Mazeroski hitting the home run to win the World Series. And the magnificent teams of Clemente and Willie Stargell. I very much want to see that franchise succeed. We all do."
Teams that spend in the Pirates' range have been successful in recent years, notably the Tampa Bay Rays winning the American League pennant last year. But this year is different: Of the six teams most likely to win their divisions this year, five rank among baseball's top nine spending teams, all with payrolls of $100 million or higher. And the American League wild-card team will be the Boston Red Sox, at $122 million.
Selig cited the progress made in revenue-sharing, a pool that has deepened every year since it was $22 million in his first year. As he put it, "We really had some problems back in the '90s."
But, he said, more needs to be done when the current labor agreement with the players' union expires in 2011.
"Even though we've really changed the system, this year hasn't been as good as I'd like after watching Tampa and Milwaukee and other teams last year. ... In the next labor negotiation, I've used the word 'tinkering,' but it's actually more than that. One thing I will say to you: We need slotting, and we need a worldwide draft, both of which would be very good for a team like Pittsburgh. There's no question those will be two of our goals in 2011."
"Slotting" means a tiered cap on signing bonuses for draft picks, and there is a growing push among the sport's executives to get that done, especially after the Washington Nationals just paid a $15.1 million bonus to pitcher Stephen Strasburg. The worldwide draft is far less certain, as many teams prefer to scour for their own talent in the current system that essentially makes free agents of all 16-year-olds outside the United States, Canada and Puerto Rico.
In the interim, Selig advised patience with the Pirates.
"I understand the frustration of the Pirates' fans," Selig said. "But I have great confidence in Frank, and I know that Bob Nutting is committed to building this franchise. Do I believe they're on the right path? I'm very confident they are. I understand the cynicism, and I understand the reluctance of people to get excited. It's a very painful process, a painful transition."
He paused, then added, "I'm going to be right about this. When Alvarez and those other players get there, and that franchise is a success again, on and off the field, ask me again in a couple years, and you'll be able to say that Bud was right."
First Published September 29, 2009 12:00 am