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10/2/2003

Baseball competitors are partners

By James Bouknight
The Daily Times-Call

BOULDER — America’s national pastime has seen better days.

Harold Roth, senior vice president of the Colorado Rockies, talked numbers with students at the University of Colorado’s Leeds School of Business on Monday and lamented baseball’s declining fan base, advertisers included.

Students peppered Mr. Roth with questions about corked bats and steroid use, suggesting that repeated scandals might be one cause of baseball’s declining popularity. Economics could be another reason.

“People can do without sports” if they don’t have the money, Roth said.

Owners of professional baseball teams collectively lost $500 million last year, a situation that was caused by a range of factors, according to Roth.

Fans are not shelling out for premium tickets to professional baseball games as often because the pricing is “very high,” and because of a sluggish economy, Roth said.

Revenue from television broadcasting rights for professional baseball games are potentially on the decline, according to Roth. NBC no longer bids for rights to major sporting events outside of the Olympics.

Since 1999, Major League Baseball has seen income from sponsorships drop by one-third.

Besides falling revenues, Roth also discussed how running a professional sporting team differs from a traditional business.

“Baseball is the only business where your competitors are also your partners,” Roth said. “You really want the other team to show up for the game.”

To make sure that happens, financially successful teams contributed $72 million last year to a revenue sharing program that aids less successful teams, allowing them meet their expenses, Roth said.

In professional sports there are two key factors that Roth considers fundamental for financial success: revenue sharing and salary controls.

The NFL is the model, according to Roth. Professional football shares revenue almost equally between competing teams and imposes a hard cap on player’s salaries. Players also can be cut at any time, Roth said.

There are no salary caps in professional baseball, and salary negotiations are still under way for the Rockies for the upcoming season.

James Bouknight can be reached at 303-776-2244, Ext. 389, or by e-mail at jbouknight@times-call.com.