Mourning In America

A New York Democrat on politics, journalism, and the Mets

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Thursday, December 16, 2004
 
Curses! Beaten Again! I coulda hadda scoop. I coulda been a contender.

My initial post-withdrawl reaction to the Kerik mess was that it might make Rudy more likely to run for Governor in NYS, since the collateral damage (with the administration and especially the press, which has locked onto this story with some of the most impressive and legitimate investigative journalism I've seen in a very long time) would hurt him enough to make his already longshot presidential run even more of an uphill battle.

You'll just have to take my word for it that I thought about it before the New York Post. Spitzer can beat him -- especially if he keeps showing the judgement he did in pushing Kerik in the first place -- but I think he'd be tougher than Pataki or any other stiff (they courted Tom Golisano?) the NYS GOP might put up.


Wednesday, December 15, 2004
 
Pre-Christmas Resolution: Blog more.

My Kerry hangover and a kind of tough work schedule has limited blogging lately, but I promise to try and be better about it. Especially in the wake of the Kerik implosion -- my initial reaction to the nomination was to race to the blog and question his credentials for the post, but the fact that NY's Senators seemed to get on the Kerik Karavan awfully quickly gave me pause, and inertia did the rest.

I hate losing the opportunity to say "I told you so." That hurts so much, I've learned my lesson, and you can count on healthier blog traffic.

Anyhow, with the 2006 NYS Gubernatorial election practically around the corner, and Petey coming to the Mets, there will be much to comment on, and I'll do my best to keep up.

But for now, let me just fire off a cheap shot: According to the tagline on this ESPN.com piece, "Owners Could Cash In With Expos Contraction" :

Darren Rovell, who covers sports business for ESPN.com, can be reached at darren.rovell@espn3.com.

They seem to have dropped a key clause: It should read, "Darren Rovell, who does a poor job covering sports business..." Try to read the article, which borders on the indecipherable, and tell me I'm wrong.

At it's core, he's trying to argue that contracting the team would be a better long-term economic move for the owners than selling it. He could be right -- basic rules of supply and demand would suggest that eliminating competition (for ticket sales, players, etc.) would tend to increase the value of the remaining franchises. But he takes an aggressive tone that implies the owners are trying to get away with something by folding the team and retaining the "$50 million" in annual revenue sharing and TV contract payments to the Expos/Nationals.

Economically, the value of those payments should be incorporated in the price any potential buyer would be willing to pay. If the up-front price was less than the present value of those payments over time, it would indicate that the buyer was calculating that the value of the entire rest of the organization was negative.

In that case, it's true that the owners would come out ahead by simply folding the franchise, and keeping their $50 million. But would that be "cashing in?" Not necessarily -- you'd still want to compare that benefit, which unfolds over time, with the already-incurred costs that baseball spent to acquire the franchise and subsidize its losses in the past several years. My guess is that it would be close to a wash.

Meanwhile, he cements his anti-owner bias by calling contraction an "artificial" way to cut player salaries. Generally in economic jargon, "artificial" refers to some rule that interferes with the natural action of the market. I wouldn't go so far as to say that anything involving an institution that benefits from an anti-trust exemption is truly market-based, but allowing economically unsustainable competitors to fail seems like a pretty natural application of market principles.

Whatever. I shed no tears for the owners. But they do kind of get a rough treatment here -- and it's not like the average reader got anything out of the piece, either. Bah. Humbug! There's that Christmas spirit!