Washington Nationals, Revenue Sharing, TV Deal And Stan Kasten.

WASHINGTON, DC - SEPTEMBER 05: Ian Desmond #6 of the Washington Nationals celebrates with Ryan Zimmerman #11 after hitting a home run in the first inning against the Los Angeles Dodgers at Nationals Park on September 5, 2011 in Washington, DC. (Photo by Greg Fiume/Getty Images)

New York Newsday writer Ken Davidoff posted a list of, "Winners and losers of baseball's new CBA", earlier this week in which he wrote that one of the winners in the new CBA announced by MLB and the Players' Association on Tuesday were the "True small-market teams," as he labeled them, because, "Starting in 2016, revenue-sharing will be limited to the clubs in the 15 smallest markets, as per a list already determined by players and owners. Big-market freeloaders such as the Washington Nationals will be on their own." Ouch.

Blunt as he may be, Mr. Davidoff is correct. CSNWashington.com's Mark Zuckerman wrote the same this morning in an article entitled, "Nats won't get revenue sharing in future." The Nats got money under the previous revenue sharing plan because it was based on payroll, Mr. Zuckerman explains, but now it's tied to market size and the Washington Nationals in the nation's capital are not a small market team. As the CSN Washington writer puts it, "... there's no excuse anymore for the Nationals to field a club with a payroll in the bottom half of baseball."

The calls for the Nationals to spend money on a payroll commensurate with a mid-to-large-market team are nothing new. Washington Post writer Thomas Boswell's sources told him a few years back that former team President Stan Kasten had recommended an increase in payroll back in 2008 when Washington opened Nationals Park. Before Kasten resigned from his position in September of 2010, two years after he's said to have recommended the increase, Mr. Boswell wondered what it would take to convince Kasten to remain in his role? "If the Lerners, with their gradually rising payroll of $66 million, took the decisive step toward the kind of $85 million budget that mid-market teams in new parks typically can afford, would Kasten stay to see his plan evolve?"

Kasten did not stay, resigning just days after the Washington Post article ran. The Nationals didn't take the recommended step either, remaining in the bottom third in team payroll last season, though they did make a large long-term investment in free agent outfielder Jayson Werth. Before Rizzo convinced the Nationals' owners to invest in the outfielder, the Washington Post's Mr. Boswell quoted the GM explaining how he approached Nats' owner Ted Lerner, "'You have to prove your case to him,' Rizzo said. 'Lay it out point by point. He's very logical. But it can be done. If you can convince him, he'll go along with you.'"

"Good luck convincing him his payroll is $20 million short," Mr. Boswell responded in the article. The Nationals signed Jayson Werth to a 7-year/$126 million dollar deal, but their team payroll, according to USA Today was just over $63.8 million, 23rd overall up from $61.4 million/23rd overall in 2010. In Maury Brown's breakdown of Forbes' Franchise valuations last March, the Biz of Baseball writer noted that the Nationals were part of a group of teams, "... that will see revenue sharing, have had low attendance, and poor showing in the standings, but see high profits."

That list included the, "Washington Nationals ($33.5 million), and San Diego Padres ($32.1 million)," Mr. Brown wrote, and, "The Top 10 in operating income were the aforementioned Marlins, Red Sox, and Nationals, followed by the Dodgers, Padres, White Sox, Mets, Cubs, Twins, and Yankees."

The changes in revenue sharing in the new CBA, will affect most of those teams. The, "Yankees, Mets, Dodgers, Angels, Cubs, White Sox, Phillies, Red Sox, Rangers, Braves, Nationals, Blue Jays, Astros, Giants and A's," were mentioned by ESPN.com's Jayson Stark in an article entitled, "How the new CBA changes baseball", as the teams likely to, "be ineligible for revenue sharing by 2016," with the, "... Astros, Nationals, Blue Jays and Braves as the teams most affected -- and most motivated to increase their revenue streams over the next few years." 

If the revenue sharing plan rewarded big market teams spending like small market teams in the past it won't in the near future and the Nationals and other teams listed above will have to find other ways to replace that revenue. An increase in payroll is no guarantee of success or increased revenue of course, but if they weren't winning or drawing fans in the past and the D.C. fans will come out for a winner as evidence suggests, a jump in payroll, a jump in the standings and a corresponding increase in attendance could be one avenue to increased revenue.

More than a month before the changes to revenue sharing were announced as part of the new CBA, the Nationals reportedly hired a, "... high-profile media consultant to increase their share of the rights fees produced by the Mid-Atlantic Sports Network," a move they hoped, "could have a significant and positive impact on the Nationals’ revenue," as Washington Post writer Adam Kilgore reported in an early October article. A source quoted in the WaPost writer's article suggests that, "The Nationals should expect to 'at least double or triple' the $29 million they earned last year from MASN."

Ryan Zimmerman is expected to get a long-term deal in the near future. Players like Tyler Clippard, Jordan Zimmermann, John Lannan and Michael Morse are due to get raises in arbitration. The Nats are in the market for a starter, looking for an outfielder (more than likely through a trade), and they're looking to bolster their bench and their bullpen. The big spending in the last few years has been done in the Draft, with the Nats outspending the rest of the league in 2009 and 2010 and spending significant amounts on above-slot deals for a strong draft class in 2011. The new rules of the CBA will curb the amount a team like the Nats who will likely no longer be picking first overall can spend on the Draft. 

Two of the eight teams in this year's postseason were in the bottom half of the league in team payroll, one from the bottom third. The addition of two more Wild Card teams as soon as next season provides teams on the verge like the Nationals with increased motivation to make sure they take that next step. A playoff run or even a run at the Wild Card might be enough to turn each game at Nationals Park into an event and have fans turning up at the park or tuning in on the tv where the Nats still rank toward the bottom of the league in viewers.

Stan Kasten thought the Nats were on the verge of competing before last season, and the Nationals' GM and manager have stated openly recently that they believe they can compete for the post season in 2012. Could increased spending now provide the Nationals with what they need to take them to the next level? With a better tv deal, a team that competes for a playoff spot, Stephen Strasburg every five days and eventually Bryce Harper on a regular basis, is now the time to make that jump to a mid-to-large-market payroll? Or are the Nationals already headed in the right direction and capable of succeeding while spending as they have?

• Postscript:

The topic came up on MLB Network Radio tonight with Mike Ferrin and Baseball Prospectus' Kevin Goldstein and Steven Goldman discussing the changes to the revenue sharing in the CBA and the Nats in particular. Revenue sharing was part of the Nats' lifeblood, Mr. Ferrin said, "Because they got such a crappy television deal as part of their moving to Washington because Peter Angelos owns MASN," but now, "They're finally going to get treated like one of the big boys and one of the big market teams so they better take advantage of the extra cash while they have it." 

"The Nationals have a very rich owner," Mr. Goldstein said, "And a guy who suddenly looks like he's willing to invest in the team if you will. There's a lot of general consensus out there from people in the industry that the Nationals are kind of a sleeping giant, and I think that's true and I think they're going to be waking up pretty soon." 

"It's just a question," Mr. Goldman concluded, "of whether this bestirs them from their bunker and causes them to change their timetable, because as Kevin says they're really close and as we've discussed many times, the days of the Phillies are probably setting ultimately, I mean they'll have those pitchers, but that roster is aging... the Mets may never get there, I mean the other teams in the division are not necessarily going to step up. So the Nationals could, we just hope this doesn't necessarily change their timetable and cause them to make any more rash Jayson Werth-like decisions." 

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