Sports Biz with Darren Rovell

Why MLB Financial Leak Matters

Over the past couple years, Major League Baseball has called attention to its extensive revenue sharing plan that distributes the wealth from the game’s most well-heeled to those less fortunate.


The idea is to achieve parity. And while it has been suspected that many smaller revenue teams have pocketed the money, it was never known. We, as fans, didn’t know and the team executives that were giving the money to the poorer teams didn’t even know the specifics.

That all changed when the finances of several teams including the Pittsburgh Pirates and the Tampa Bay Rays were leaked earlier this week and PDF files were posted on

So the question is: Is it ethically wrong to make money in this situation? The answer is simple – it actually is. Once again, the teams that make more money are distributing money to those that don’t so they can compete on the field and yet, those teams aren’t — for the most part — spending money on their payroll. 

The problem with all this is that it’s subjective. There isn’t a salary floor so who is to say how much is enough money? The other problem is that money doesn’t necessarily equal parity.

Let’s, for argument’s sake, define parity as the number of teams that have won a championship over the last 30 years. Out of the four major leagues, Major League Baseball has had 19 different champions over the past 30 years – compare that to the NFL (15), the NHL (14) and the NBA (8).

While the league office might want to relate baseball’s revenue sharing to that equality, it’s not necessarily a direct correlation. With more money, you have the chance to make more mistakes, but you don’t necessarily do better on the field.

Baseball is supposedly on a manhunt to find who leaked the documents. That actually doesn’t matter any more. The story is how the leaking of the documents could perhaps change the way baseball regulates money spent by the bottom feeders.

A salary floor is not realistic because the union won’t allow it since a floor leads to a cap as well. The question is, is there any way commissioner Bud Selig can invoke his best interest of the game powers to influence how teams spend? The rational solution? Lower the amount of money that is being shared. Want parity? Increase the payroll tax — allow teams to make fewer mistakes. But the additional revenue sharing doesn't make sense. This wasn't supposed to be about a transfer in equity, which is exactly what it has become. The New York Yankees deserve to make more than the Florida Marlins — they're in New York. They're a better team.

Questions?  Comments?