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Building from the ground up

Teams spend revenue sharing money to develop farm systems

Posted: Tuesday, May 18, 2004

NEW YORK Several of the biggest beneficiaries of baseball's revenue-sharing plan have among the lowest payrolls in the majors, spending the money on prospects, not stars.

Milwaukee, Pittsburgh and Tampa Bay, the teams with the three lowest payrolls in the major leagues, all received huge increases in revenue sharing last year, according to figures obtained by The Associated Press.

All three teams, unsuccessful on the field in recent years, have chosen to invest the money in their futures.

''We're not going to spend $10 million on one player,'' Pirates owner Kevin McClatchy said. ''It's not going to get us to the World Series, although it might make some people feel better. We had the largest winning percentage in the minor leagues last year. For us, that's the only way we're going to compete, with our minor league system.''

Under baseball's new revenue-sharing system, which changed formulas to help middle-market teams, high-revenue clubs gave up $220 million last year to their low-revenue competitors, up from $169 million in 2002.

Milwaukee got $16.6 million, up from $8.5 million, according to the figures, which were provided to the AP by a major league team executive.

Pittsburgh's share doubled from $6.4 million to $13.3 million, and San Diego's went from $6.2 million to $13.3 million. Tampa Bay's increased from $14.6 million to $20.5 million.

Brewers general manager Doug Melvin said his team's low payroll has led some to conclude that the team isn't spending money.

''It's not only the fans,'' he said. ''I don't think players understand. I don't think employees in our organization understand the money that goes into player development and scouting. I have to educate them on that.''

Montreal, owned by the other 29 teams, received the most revenue-sharing money last year ($29.5 million), followed by World Series champion Florida ($21 million), Tampa Bay and Kansas City ($19 million).

Devil Rays general manager Chuck LaMar went with youth after watching Greg Vaughn sign a big-money deal and become a bust.

''We've taken giant steps over the last several years,'' he said.

All teams' locally generated revenue, minus ballpark expenses, is put into a pool and divided 30 ways.

The AL champion New York Yankees paid a major league high $52.7 million, up from $26.6 million, and Boston's bill increased to $38.7 million from $17.9 million. Seattle paid the third-most ($31 million), followed by the New York Mets ($21.5 million), San Francisco ($13 million) and Chicago Cubs ($16.7 million).

Figures from 2003 haven't been audited and the 2002 numbers, while audited, still are pending final adjustments.

Yankees owner George Steinbrenner occasionally has criticized teams for not spending their revenue-sharing money. Giants owner Peter Magowan has no problems with the way low-revenue franchises are using the money.

''People tend to focus only on using the money to spend at the major league level,'' he said. ''Teams like Pittsburgh and Milwaukee vastly improved their minor league systems through judicious investment in minor league players.''

Bob DuPuy, baseball's chief operating officer, says it appears the new system is working. He cited San Diego, Tampa Bay, Cleveland, Milwaukee, Detroit, Pittsburgh and Kansas City as among the teams with young talent.

''I think it's too early to make a definitive assessment,'' DuPuy said. ''But if you look at the number of young teams that appear to have good young talent on the field and good farm systems, you have to come to the conclusion that it appears to be having an impact.''

Baseball's labor contract says each team must use the money it receives ''to improve its performance on the field.''

The players' association has received the reports but has not made any complaints to the commissioner's office about teams not spending money to improve, a baseball lawyer said on the condition of anonymity.

In the revenue-sharing plan baseball used from 1995-2002, extra money was funneled to teams with the least revenue, called a split-pool plan. In the labor deal that covers 2003-6, a straight-pool plan is used that largely eliminates the extra benefit to the teams with the least revenue.

Partly because of the change, Houston went from paying $4.3 million in 2002 to receiving $1.2 million last year.

Because of attendance drops, Baltimore went from paying $5.3 million to receiving $250,000, and Cleveland's payment was cut from $10.6 million to $4.8 million.

But cutting revenue-sharing payments isn't the objective. Teams hope their prospects make them winners before those players become free agents after six seasons in the majors.

''We would hope that we start playing better baseball, our attendance goes up and we don't get as much,'' McClatchy said. ''The goal is to win. If anybody thinks it's to get a little more revenue sharing, they're nuts.''

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