How Revenue Sharing in Baseball Hurts White Sox Fans

MLB revenue sharing is potentially doing more harm to White Sox fans than good as the franchise doesn’t have the incentive to operate as a big market team.

Ah, Spring…that time of year we all look forward to after months of harsh winds, bitter cold, and polar vortexes.  It’s a time for renewed hopes, rejuvenation, and baseball.  Spring training is in full swing and many fans around the league are feeling hopeful that their teams have made the right moves to put their favorite ballclub in contention.

Fans analyze and speculate over young talent in the farm system, free agent additions, and moves that their clubs can still make to improve their odds of competing this upcoming season and perhaps beyond.  In short, Spring breeds eternal hope…even for the most moribund franchises and fan bases.

Such was the case for the Chicago White Sox fan base up until recently.  Coming into Spring training, hope and the general outlook for the struggling franchise had never been higher.  The team was now several seasons into hitting the reset button and rebuilding the ballclub from the ground up.

Key veteran pieces, like Chris Sale, were traded away for a plethora of young talent that suddenly had the White Sox farm system looking like one of the best in all of baseball.  Manager Rick Renteria was hired to develop this infusion of youth.   Huge investments were made with the additions of key international players, like Cuba’s Luis Robert.

Management was outspoken about being aggressive in free agency this year and for the foreseeable future in support of adding franchise-altering talent to one of the league’s lowest payrolls.  The White Sox were all in…until they weren’t.  How things have changed in less than the span of a month.

By now, most fans are aware that the White Sox failed to convert on signing their number one target this off-season…free agent Manny Machado, who went on to sign with the San Diego Padres.  Just like that the collective hopes and dreams of White Sox fans were crushed by an ownership team unwilling to shell out the guaranteed money that Machado was looking for.

The explanations provided to the fan base were that they (ownership) would not risk not having the financial flexibility required to ensure that the current core group of players remained with the White Sox long-term.  Never mind that most of the players that could be identified as part of the core aren’t arbitration eligible for several years down the road.

For a franchise that struggles to gain new fans, fill seats at whatever they are calling the ballpark these days, and in general compete with its crosstown rival on the North side, this was a hard pill to swallow following the aggressive tone from management about their commitment to spend big money on one of the top tier free agents in this year’s class.  For the casual fan, this doesn’t appear to make good business sense.

Why would a team that has historically struggled to put fans in seats not do everything in its power to bring one of the biggest names in all of baseball to the Southside? To generate enthusiasm among a fan base that has had very little to root for over the past decade? In short, because there is no financial incentive for the White Sox organization to do so. Why do you ask? Because of baseball’s skewed re-distributive revenue system.

To summarize, the league’s top revenue grossing teams are bankrolling the league’s lowest grossing teams through a “tax” that gets redistributed evenly across all teams. Naturally teams like the New York Yankees, Boston Red Sox, and Chicago Cubs receive less in return, however, teams like the White Sox make out like bandits.

If the White Sox’s main source of revenue were ticket sales, one would argue that they would have a very vested interest in ensuring that fans were excited about spending their hard earned income on watching their brand of baseball.  Sadly, this is not the case.

Revenues being generated by a team’s actual fan base come in behind revenue sharing and multi-media (TV, radio, etc.) deals, which account for a significant portion of a teams’ revenue.   The White Sox usually come out ahead in terms of profitability and that is despite the sub-par product they put on the field year in and out.

The bottom line up front is that revenue sharing, being most MLB franchises’ top revenue generating source, creates a skewed incentive system where teams like the White Sox don’t necessarily need to put a competitive team in play. Why commit large sums of money to a handful of players and potentially dip into profitability, when you can claim that you have to operate like a small market team in order to remain financially solvent?

With one of the lowest payrolls in the league, a current “rebuilding” plan that could last several more years, and no pressure to win or produce now, why overextend the organization when it really doesn’t matter whether fans show up or not? The MLB’s very own Ponzi scheme (revenue sharing) guarantees that teams like the White Sox really don’t need to work hard for its fanbase.

Its main customer is the league, which has guaranteed (via revenue sharing) teams like the White Sox will not fail (at least not financially), regardless of performance.  Knowing this, does it surprise any White Sox fan why Machado is now a Padre or why this team persistently fails to put a competitive product on the field? I think not.