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Free Agency
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Twitter: AJMckenzie94847
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00:21Hi everybody, I'm Brian Kenney and welcome to ESPN Classics Top 5 Reasons You Can't Blame.
00:25A series that takes a fresh look at sports personalities who are remembered largely for their mistakes, controversial moments, or
00:32questionable decisions.
00:33On this program, we defend the boss from the Bronx.
00:36On January 3rd, 1973, a group of investors, led by Ohio shipbuilder George Steinbrenner, bought an underachieving Yankees franchise from
00:44CBS for just $10 million.
00:47In the decades that followed, the Yankees reclaimed their once-dominant position, while Major League Baseball was in the throes
00:52of a major economic upheaval.
00:54With Steinbrenner in the game, free agency spiraled out of control as he doled out huge salaries to acquire the
01:00best players available.
01:01This created a rift between the large and small markets or the haves and the have-nots.
01:05And Steinbrenner became the personification of baseball's economic divide.
01:15The Yankees had been losers.
01:17They had not been pennant winners since 1964, and that had been the longest stretch that they had gone without
01:25being in the World Series since before they got Babe Ruth.
01:28CBS had owned the Yankees all those years, and not only weren't they doing well on the field, but they
01:33weren't doing all that well in the box office.
01:35When a group of investors, led by George Steinbrenner, purchased the Yankees, it appeared as though the once mighty franchise
01:42would continue under a collective and corporate mentality.
01:46It's particularly important to New York and to the Yankees that the group that gets behind the Yankees at this
01:51point have the wherewithal and the interest and the diversity to get the kind of job done.
01:58I can remember saying, I'm just a shipbuilder from Cleveland. I'm not really going to be involved in the team
02:04at all. Oh, boy.
02:06We had been used to CBS, which was kind of an absentee ownership, and he basically said he was going
02:10to be the same way.
02:12Well, we know how long that lasted.
02:15On New Year's Eve 1974, after an MLB arbitrator ruled that Oakland A's owner Charlie Finley was in breach of
02:23contract and declared Catfish Hunter a free agent, Steinbrenner signed the reigning American League Cy Young pitcher to a five
02:31-year deal worth $3.7 million.
02:34He has always been wonderful to all the other owners as far as finding ways to spend his money.
02:41I can remember talking to George about free agents. He said, Tommy, I'm not particularly happy about it, but if
02:48it's there, I'm going to take advantage of it.
02:50What happened in 1976 was the Yankees lost the World Series in four games to the Reds, and so he
02:56set out to improve the team still further.
03:13He made the team better. He brought people into the seats. They made money. It showed such great foresight on
03:21Steinbrenner's part.
03:22You got Hunter. You got Reggie Jackson. Rich Gossage. He went out and got the best guy, the piece he
03:28needed to win, and then they went out and won with it.
03:32Popped up. Munson. This could be it. He's got room. He's waiting. The Yankee bench on the field. Yankees are
03:39the champions.
03:41By winning a second straight World Championship in 1978, Steinbrenner had more than delivered on his promise.
03:49I'm just proud of New York and happy that these guys battled back because New York...
03:57The boss's reputation as baseball's all-time star raider has only grown as his payroll has soared beyond $200 million.
04:06Meanwhile, his teams have won six World Series and ten pennants.
04:11For all his success, he is widely regarded as a financial bully.
04:15You can blame George Steinbrenner for a lot of things, and one is that he has apparently utter disregard for
04:23the other teams out there.
04:24Is it bad that he has blown the salary structure out of the water?
04:29I guess for the Kansas Cities and the Tampa Bay's of this world, yes.
04:33There's a real sense of helplessness.
04:35For a small market team, if you get a good player and you develop a good player, once you develop
04:40them, George will take them.
04:43I think you probably could blame George because he's a little impatient.
04:47For instance, Enrique Wilson drops a fly ball on national television at 1 o'clock on a Saturday,
04:52and the next night they've spent $13 million to get Raul Mondeci to play right field.
04:57George Steinbrenner is still spending money like he's Gordon Gekko drooling over Anacott Steele.
05:02Just this week, 21 fans, $32 million for Cuba's Jose Contreras, the latter signing causing Red Sox president Larry Lucchino
05:11to grouse,
05:11quote, the evil empire extends its tentacles even into Latin America, end quote.
05:17In 2005, the Yankees' $208 million payroll was seven times that of Tampa Bay.
05:25With the addition of Randy Johnson, five of the top 12 salaries in the game were on Steinbrenner's payroll.
05:33I think his free spending habits will not be viewed popularly in the baseball history books.
05:41It's not healthy because Tampa Bay understands in teams that don't have the payroll,
05:46you can't compete year in and year out with those clubs.
05:50It is getting a little bit out of hand, I think, with one team's payroll, $190 or $200 million,
05:56and then you've got the bottom figure in the 40s and 30s, and it just doesn't make for an equal
06:01playing field.
06:02George Steinbrenner is the last of the great Robert Barrett's.
06:06He's a guy who doesn't like to play on an even playing field.
06:12It's one thing to say, hey, it's the rules, I'm just playing by the rules.
06:15It's quite another to fight, lobby, scratch, and claw to keep rules that you know are unfair in your favor.
06:24Contrary to baseball, in which local television revenues aren't equally distributed,
06:29giving the large market teams an advantage, the NFL took steps by taking control of all TV rights
06:36and sharing them evenly throughout the league.
06:39Wellington Mara, the recently deceased owner of the New York football giants,
06:45could have said in the 1960s, when television first became the big factor,
06:51hey, we're in New York, we'll keep all the money.
06:54It'll be an uneven playing field.
06:56Well, if he had done that, the National Football League would not be what it is today.
07:00But that's exactly what George Steinbrenner has done.
07:03He basically is no holds barred, I'm going to flex my financial power,
07:08and I don't care what you think about it.
07:09He doesn't care about the Pirates.
07:12And time will come when there's only going to be eight or ten teams surviving and able to play.
07:17The competitors in a league are simultaneously competitors and partners.
07:20And if you don't have some sort of competitive balance, then you don't have a league that functions well.
07:26George Steinbrenner is good for New York, but he's terrible for baseball.
07:31He just feels that he's not doing anything wrong.
07:38Well, it's true, the shipbuilding heir did spend like a drunken sailor.
07:41But he wasn't the only owner to do so.
07:43In this show, we'll count down the top five reasons you can't blame Steinbrenner for the economic divide in baseball.
07:48But first, here are some contributing factors that did not make our top five.
07:52We call them the best of the rest.
07:56The MLB Players Association.
07:58In 2002, the union would endown the owner's proposal for a salary floor.
08:06The union would not negotiate a minimum payroll.
08:11So, you know, the Kansas City Royals could be compelled to put $50 million a year in player payroll.
08:17It's really a union issue, and I think that was the biggest fear,
08:20is that if you start at the bottom and you create something there,
08:23inevitably you're going to end up with a cap at the top, and obviously they can't live with that.
08:28Our other best of the rest, salary arbitration.
08:32It's available to any player with at least three years' service and less than six seasons.
08:37The reason why baseball's economics are screwed up is because of arbitration.
08:43In a debt-locked dispute, an arbitrator chooses between the player's figure and management's.
08:48Each new arbitration award created the lowest possible salary for a player of that quality.
08:56And it accelerated salaries consistently for 25 years.
09:01Reason number five.
09:03Free agency.
09:05When Dave McNally and Andy Messersmith successfully challenged baseball's reserve clause in 1975,
09:12players were granted the right to sell their services to the highest bidder.
09:16Does free agency have a lot to do with economic imbalance?
09:20Of course, because some teams are in a better position to pursue the most important.
09:24Free agency did jack up the price.
09:26Free agency allowed players to bargain for their talent in a free market.
09:31From 1967 to 1975, the average player's salary grew from $19,000 to $44,000.
09:39By the 10th year of free agency, 1985, it had ballooned to $371,000.
09:47The system that came about was not one that evolved, but one that came too suddenly, like a tidal wave.
09:54If you look back, they could have been a lot more visionary.
09:56Charlie Finley suggested make every player a free agent every year.
10:00Then you'll have hundreds of players buying for jobs, and it'll be a real, real buyer's market for the teams.
10:06They would have held down salaries, because there would have been a far greater supply than demand.
10:11The greatest thing that ever happened to the Players Association was when they restricted free agency.
10:15And this year's a perfect example.
10:17A.J. Burnett, he's 49 and 50, and he gets $55 million for five years.
10:21It's not because he's a good pitcher.
10:22He's the best of the bad lot.
10:25In free agency's first three decades, the average Major League salary has multiplied 50 times.
10:31The salaries in Major League Baseball are growing much faster than almost any other growth industry in the country.
10:39Baseball salaries were going to go up stratospherically, whether George Steinbrenner was ever out of building ships or not.
10:52One down, four to go.
10:54Here is reason number four.
10:57Dumb owners.
10:59The Yankees may be spending the most, but a number of other Major League Baseball owners are equally guilty of
11:05jacking up the salaries.
11:07Jerry Reinsdorf once said, we're at the mercy of our dumbest owner.
11:12If one guy decides to step out and say, spend $55 million on Darren Dreyfurt, everybody else has to pay
11:18for the mistake, because that sets the market.
11:21Steinbrenner isn't the one raising the bar.
11:23When he signed Bernie Williams, it wasn't the highest contract in baseball.
11:26When he signed Derek Jeter, it wasn't the highest contract in baseball.
11:29Trailblazing salaries were all established by owners other than George Steinbrenner.
11:36In 1990, Milwaukee and Minnesota and Kansas City had the fattest payroll.
11:43In December of 1991, the Mets signed free agent Bobby Bonilla to a five-year contract.
11:50His $6.1 million salary for 1992 was $2.3 million more than the top salary of the previous season.
12:00Any other team signs a megastar for a huge new salary and breaks a new barrier, it raises the cost
12:06for all the teams.
12:07And the little small market teams are in death row.
12:11In 1996, White Sox owner Jerry Reinsdorf doled out to Albert Bell the first $10 million annual contract.
12:20Why would a man so concerned with the Milwaukees and Montreals of the world blow a hole in the salary
12:25ceiling?
12:26We really don't want to talk about that.
12:27That's not important.
12:28It's not about money.
12:29In 1998, Rupert Murdoch purchased the Dodgers and then signed pitcher Kevin Brown to a seven-year contract worth $105
12:39million.
12:41Arliss, did you hear the deal Kevin Brown got?
12:44No, no, not a word.
12:45I've won five Cy Youngs.
12:47How many has he won?
12:48None.
12:49In December of 2000, Texas owner Tom Hicks gave Alex Rodriguez the largest contract in sports history.
12:57We've entered into a 10-year contract for $252 million.
13:03That has to do with the stupidity of a brand new owner who didn't know there was a number between
13:08126 and 252.
13:10That really said that the top-level player, instead of being worth $15 million, is now worth $10 million more
13:16than that.
13:16George has been very, very careful over the years not to give the highest contract in baseball.
13:22Now, he might take it from the Texas Rangers after they're stupid enough to give it to Alex Rodriguez, but
13:27that's not his fault.
13:28He wasn't the one that set the bar.
13:30Reason number three, cheap owners.
13:33Well, there's not too many George Steinbrenners around.
13:36They should have paid their stars when they had them.
13:41It's not just about business with him.
13:44It's about winning.
13:45If the more owners took that attitude, then you have a little bit more balance in baseball.
13:50He has the money and he spends it.
13:52And a lot of guys have the money and they don't spend it.
13:55David Glass is one of the richest men in the world.
13:58He owns the Kansas City Royals.
13:59He chooses not to spend his money on the Royals.
14:01That's his choice.
14:03Carl Polat in Minnesota is the richest man in the state.
14:05If he wants his team to be a championship club like it was in the 80s, spend the money.
14:10In 2005, Pittsburgh, Kansas City, and Tampa Bay, all with comparatively small TV markets,
14:17each received more than $47 million from baseball's central fund and revenue sharing.
14:23Yet the payrolls of all three teams fell to major league lows of $38 million, $36 million, and $29 million,
14:31respectively.
14:32The revenue sharing transfers that they receive are supposed to be used to improve on-field performance of the team.
14:39He dropped the ball! He dropped the ball!
14:43Clearly, David Glass has not done that.
14:45David Glass, the CEO of Walmart, is running the team the same way he runs Walmart.
14:52And he's pocketing as much money as he can.
14:56George rails against revenue sharing in many ways, but he rails against it because his concept is that revenue sharing
15:02should not be used to put in someone's pocket.
15:05If I'm a fan of the Devil Rays, I'm blaming the Devil Rays more than I am the Yankees,
15:09because they're spending less on payroll than what they're getting in revenue sharing.
15:13I know when Lou was brought here, he was promised an increase in payroll every year, and it hasn't happened.
15:18George Steinbrenner was writing these checks to the owners of the Kansas City Royals and the Pittsburgh Pirates,
15:23and they were taking those checks, and they were stuffing them in their pockets.
15:26People get so caught on payroll numbers.
15:29When people try to legislate what number that should be, that's going a little bit too far, because they don't
15:35understand your business.
15:36I guess the saying is, don't own a team unless you can pay the piper and deal with the consequences.
15:41You can't get any easier than that.
15:44You can't just give McClatchy in Pittsburgh all this revenue sharing money and not expect him to put it back
15:49into the product.
15:51He claims he's putting it back into the minor league product.
15:54Well, that's fine. We want to see it pay off on the major league level.
15:57The ball goes to third. The ball gets away.
15:59Of the Pirates, Royals, and Devil Rays, only Kansas City has had a single winning season since 1994.
16:07You've got to spend money to make money.
16:09Kansas City, which is a fabulous baseball town, they're not willing to go out and spend more money
16:14to put a better product on the field so that the fans will come, and that's critical to Major League
16:19Baseball.
16:19If they don't put the money back into the team, they can't blame George Steinbrenner
16:23because they didn't want to make the investment to make their team better.
16:31Three reasons down, two to go. Here is reason number two.
16:37Captain Outrageous, 1976, he changed the call letters of Atlanta's local over-the-air station
16:43I knew that was Ted Turner. R.I.P. Ted Turner, he just passed.
16:48...station to WTBS and made it the country's first cable-fed superstation.
16:54Baseball's problems aren't because there's six signals on a few cable homes in Boston,
16:59because they're paying stumble bums $2 million a year.
17:02Ted Turner was the genius. He knew that it wasn't good enough to own a team.
17:08You had to own the television distribution vehicle.
17:11I believe that the deals that we have today in television, in large part, were due to Ted.
17:16In 1988, Steinbrenner sold the broadcast rights for Yankees games to the Madison Square Garden Network
17:23for $493 million over 12 years.
17:28Steinbrenner is the first one, I think it's fair to say, to exploit explicitly the local television market.
17:36The explosion in local and cable television revenues took edges that the New Yorks used to have
17:43over the Baltimores and Kansas City, and exploded them into large gaps.
17:48In 2001, Steinbrenner followed the lead of Turner with TBS by...
17:54...which carried...
18:00...the Yankees games to a cable audience in the United States.
18:04George Steinbrenner, when he bought the Yankees, he bought the New York market.
18:08You can't make the case that the New York television market is in any way equal to, say, the Kansas
18:13City television market.
18:15If you can charge a dollar per cable subscriber, and I have 12 million people to get it from,
18:20and you have 100,000 people to get it from, I will have more money.
18:24So if the Yankees are generating over $200 million a year, and the Kansas City Royals are generating
18:30maybe $10-15 million total local rights fees, that creates a divide.
18:35I can spend more on payroll, I have a better revenue stream, and then I beat you.
18:40The Yankees are champions of baseball!
18:43Blame George Steinbrenner? It's not his fault he's in New York.
18:50Capitalism.
18:51To the detriment of baseball, our national pastime has served as sport's last bastion of free enterprise.
18:58We live in a free market economy, and unless there's a regulator, George Steinbrenner is and should be free
19:05to do whatever he wants with the New York Yankees.
19:09I don't blame George Steinbrenner for the economic problems.
19:11George Steinbrenner uses the resources available to him in an effort to win.
19:16That's what he should do.
19:17Back is Brian Williams of Mike Pence!
19:22You can't blame George Steinbrenner for being a great businessman and taking advantage of what's already in place.
19:30The New York Yankees, world champions, team of the decade!
19:35Football would be the same way if it wasn't a salary cap involved.
19:38It's baseball's responsibility to legislate within reason so that teams in the middle and at the bottom of the economic
19:46scale
19:46have at least some chance to compete.
19:48For the overall health of the game, you need a little socialism.
19:52Although the Yankees share 34% of their local television revenue,
19:57the remainder of the take is still huge when compared to that of the small markets.
20:02They've got to take the local revenue for television, they've got to spread it more fairly.
20:07The people of this city put their money behind this team.
20:11I owe it to them to put it back into the team.
20:13And some guys don't understand that in baseball.
20:17A grand slam for Alex Rodriguez!
20:20You can't blame a guy for wanting to win.
20:23You can't say anything bad about a guy who wants to win.
20:25He has every right to want to win as anyone else.
20:28And he takes care of his team.
20:30Appreciate the opportunity Mr. Steinbrenner gave me.
20:32He's gonna go out, he's gonna spend money, he's gonna put the best product on the field.
20:35They didn't get beaten.
20:38They went on and they won the ultimate goal.
20:40Right now he is performing as a true American capitalist.
20:44And that's the society's creed that we live under.
20:49Yep.
20:51Well there you have it, the top five reasons you can't blame George Steinbrenner for the economic divide in baseball.
20:57Is George really the Darth Vader who oversees an evil empire?
21:01Or just someone who will reinvest his winnings back onto the field?
21:04Whatever your view, the pennants and World Series titles will likely be remembered long after the dry debate of economic
21:10inequity between the already super rich.
21:13I'm Brian Kenney, thanks for watching.
21:16Well they always say, what would you like to be on your tombstone?
21:19What you'd like people to say?
21:20I'd just like them to say, he never stopped trying.
21:24That would be good for me.
21:27Amen.
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