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    • Which owners are more frugal with their money than others?
  • To:All
  • 2/6/12
  • xforemanjoe

This was written in 2009 by Christopher Ramey who is a Western Connecticut State University graduate with a Bachelor of Arts Degree in History for E Sports. While he is currently studying to obtain his Masters of Business Administration in International Business, he maintains his life long passion for sports. Having played baseball as a child and young adolescent, it has remained the primary focus of his writing and enthusiasm. You can always look forward to an informative, entertaining and otherwise creative approach towards every article.

Which owners are more frugal with their money than others?

For the 2009 Major League Baseball season, the New York Yankees have the highest payroll for the ninth consecutive year, paying their players a total salary of $201.4 million. The next highest club is the New York Mets with a payroll of $149.4 million. The luxury tax threshold for this season is $162 million.

In case you aren't familiar with what that exactly means, here's an explanation. Any team whose payroll is over the luxury tax threshold has to pay a certain percentage rate: 22.5% for exceeding the limit the first time, 30% for the second time and 40% for every subsequent infraction. Because of this, the Yankees will be paying nearly $16 million in luxury tax expenses for the current season (they are the only team over the threshold).

Listed below are the names of the owner's currently worth more than Steinbrenner and the teams they are currently in charge of:

* Chicago Cubs: Thomas S. Rickets: $1.3 billion
* Texas Rangers: Thomas O. Hicks: $1.4 billion
* Detroit Tigers: Mike Illitch: $1.6 billion
* Houston Astros: Drayton McLane, Jr.: $1.6 billion
* Atlanta Braves: Liberty Media: $2.3 billion
* Cleveland Indians: Larry Dolan: $3.3 billion
* Washington Nationals: Theodore N. Lerner: $3.5 billion
* Minnesota Twins: Carl Pohlad: $3.6 billion
* Seattle Mariners: Nintendo Corporation: $257.4 billion (yes, you read that right. Nintendo owns the Mariners and the entire corporation is worth nearly a quarter of a trillion dollars).

Notice any teams that really jump out at you? Possible perennial payroll bottom dwellers and mid-market teams, such as the Washington Nationals and Minnesota Twins? Seems rather peculiar that two of the least spending teams in MLB boast the wealthiest owners, doesn't it?

But wait, I thought they were just poor lowly teams that can't afford to compete with the endless finances that teams like the Yankees offer other players. I mean after all, the Twins payroll this season is only $65.3 million and the Nationals is no better at $60.3 million. How can these victims of the Yankees tyranny honestly compete with a monetary juggernaut like Steinbrenner? (In case you haven't realized it, I'm being sarcastic and I'm laying it on pretty thick.)

Bet you didn't know that, huh? Weren't aware that the wealthiest owners were in charge of some of the lowest spending teams? Of course not, because nobody wants you to know that. The media wants to portray the Yankees and teams like them in such a negative light that it makes the story seem interesting.

Would you read a story that speaks about the other owner's who refuse to spend money? Like you honestly know who Theodore Lerner or Carl Pohlad are? Well, I do, because I've researched this topic endlessly because it aggravates me so much. Their refusal to spend money has forced MLB into this conundrum of having a luxury tax. They are rewarding ineptitude and that's utterly mind boggling.

MLB implemented the luxury tax to punish teams like the Yankees for spending so much money on signing players. They initiated this as a way to "keep the game competitive and every team on equal footing."

In reality, the sport needs more owners like Steinbrenner. He's good for baseball. The Steinbrenner's are one of the only ownership groups in MLB willing to do whatever it takes to win. They are the only owners who put the fans first and worry about the product on the field, rather than the bottom line.

It's purely ludicrous that the Yankees, or any other team that exceeds the luxury tax threshold, has to give millions of dollars to those "small market" teams, when their owners are worth nearly twice as much!

In effect you are penalizing any owner's passion and desire to win at any cost. We should be applauding owners like Steinbrenner, Frank McCourt, Fred Wilpon and John Henry. They are more than willing to take the necessary steps they see fit to put the best team possible on the field. They are willing to spend money to put the best product on the field for the fans.

I propose that the luxury tax should work in reverse order. Set a precedent for how much money each team should spend each season. If they don't spend the minimum amount, they should be penalized and have to pay the other teams in baseball a percentage. Now that's the way you maintain a competitive balance. Force the teams that refuse to spend money to open up their wallets and at least pretend they're attempting to be competitive.

I'm sick and tired of hearing about the Yankees are "buying championships" simply because they have an owner who is willing to set aside business ventures and put the team and wining first and foremost. If they have to cut one more check to teams like the Nationals or Twins, I might be sick to my stomach. Somebody write your Congressman! Implore them to force these cheapskate owners to at least pretend like they give a cr*p about their team or the fans.

I'm talking directly to you Theodore Lerner. And to you (the family of) Carl Pohlad. You boast two of the lowest payrolls in all of sports, yet you're both worth over $3.5 billion, respectively. Tell me where's the justice in that? They receive millions of dollars per year from the Yankees as a part of revenue sharing so their teams can "maintain a competitive level."

Hey, tell you what, if you spent the same percentage of your net worth on your team's payroll, they'd be begging you to share some money for the poor small market Yankees. Steinbrenner spends nearly 17% of his net worth on the Yankees payroll alone. Do you know how much the Nationals payroll would be if Lerner spent the same 17% of his net worth on his team? Their payroll would be a wh0pping $595 million.

If that doesn't prove a point, I don't know what will. Steinbrenner and owner's cut from the same mold as him are not bad for baseball. Teams like the Yankees don't hurt the competitive balance in the sport. You want to know what is bad for the sport? Take a look at all those teams on the receiving end of the revenue sharing. It's people like Lerner who are hurting the sport and compromising the competitive balance in baseball.


  • Reply to this Message
  • 2/6/12
  • indians2006

"I propose that the luxury tax should work in reverse order. Set a precedent for how much money each team should spend each season. If they don't spend the minimum amount, they should be penalized and have to pay the other teams in baseball a percentage. Now that's the way you maintain a competitive balance. Force the teams that refuse to spend money to open up their wallets and at least pretend they're attempting to be competitive."

I would go vote for this proposal!!

  • Reply to this Message
  • 2/6/12
  • xforemanjoe

They sure need to come up with some kind of competitive balance in baseball because the middle class won't be able to go to many games the way things are going and if they don't go the owners don't spend money to put a better team on the field. Plus the same teams will be in the post season year after year.
  • Reply to this Message
  • 2/6/12
  • 1bonz
omething has to be screwey with those numbers for Larry Dolan. There is no way no how Larry Dolan is worth 3.3 BILLION dollars american. Something is awary with his numbers.
  • Reply to this Message
  • 2/6/12
  • indians2006

I don't doubt he's worth that much! I 've checked several websites regarding his networth and the one's I've found say "unknown", where all the others(team owners mainly) mentioned are there to see. There is a reason for that I'd bet! He did purchase the team for 323 million. That sure isn't "chump change", unless he took on a big loan to purchase them.

As I said he is rank in the top 10 (#7 to be exact) as the one of the worst owners in sports! And he probably has risen because some of those owners, are no longer around (Al Davis), or have stepped up the last year or so to get their franchise better(Donald Sterling).

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  • 2/6/12
  • Steve11
Dolan = Rachel Phelps
  • Reply to this Message
  • 2/6/12
  • xforemanjoe

Actually I don't believe those numbers either but I figure if I post that someone will be able to figure out how to search and find out what the numbers really are because I can't find anything. I don't remember seeing his name or his brothers on the list of billionaires I looked at about a week or so ago so does that mean he has spent or lost enough since 2009 that he isn't a billionaire anymore? Did he actually have that much but because of his age transfer a bunch of that money to his son, wife and others??? I figure this will make people think about this and see what they can come up with.
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  • 2/6/12
  • xforemanjoe

LOL I always thought of Modell as Rachel Phelps as he did pack his bags and took his team to Baltimore.... lol
  • Reply to this Message
  • 2/6/12
  • quib
Once again, someone got the figures for CHARLES Dolan, Larry Dolan's brother, whom I am sure does not pass money along to him! So if Christopher Ramey expects to get his Masters Degree, he better dam-n well get his facts straight!
  • Reply to this Message
  • 2/6/12
  • quib
Of course he took huge loans to buy the team, because Charles Dolan is worth $3.3 billion, NOT Larry Dolan!
  • Reply to this Message
  • 2/6/12
  • 1bonz
Charles Dolan, I would say yes he could be a billionaire. Now that may not be the case since Cablevision took a big hit in the market recently. Charles is Larry's brother and does not share wealth with Larry. Now also most of Larry Dolans wealth comes from a large amount of Cablevision stock. That is what he used in buying the Cleveland Indians baseball team it was in a vehicle called the Dolan family trust.
  • Reply to this Message
  • 2/6/12
  • rmacd369

"sick and tired of hearing about the Yankees are buying championships"

The $ media outlets and YES can pay for all debts by the Yankees and have a hugh amount left over. Then add gate and merchandise. ... Steinbrenner's Could easily make over a 1/2 billion profit a yr.

  • Reply to this Message
  • 2/6/12
  • rxxan

In a similar article I found on SI.com today:
"
Three weeks ago, when the news broke that Tigers' DH Victor Martinez had injured his knee and could be out for the season, it created a window. The Tigers' offense, so reliant on just a few hitters in 2011 when Detroit won the AL Central, would be down a big piece in 2012. There was an opportunity for an up-and-coming team like the Royals, set on offense but with a questionable rotation, to step into the vacuum and close the gap on the top of the division by signing an available free-agent starter such as Edwin Jackson or Roy Oswalt. That kind of aggressive move could have turned the division race into a coin flip.

We know what happened next. The Royals did nothing while the Tigers replaced Martinez with Prince Fielder at a cost of $214 million over nine years. The swift, even shocking, speed of the signing was a credit to Tigers' owner Mike Ilitch. Ilitch, 83, is committed to bringing a World Series title to Detroit, and to that end has allowed GM Dave Dombrowski to sign free agents, pursue "unsignable'' draftees and push the Tigers' payroll to one of the top ones in the game. The Tigers are one of just four teams to ever pay MLB's luxury tax (in 2008), and the team's 2012 payroll may exceed $130 million for the third time in five years.

Ilitch represents an approach to sports-team ownership that is in short supply these days: wanting the next win more than the next dollar. Far too many franchises are run as if they're the corner grocery, with the need to stay in the black for the next month, next quarter, next year the primary goal, and winning a secondary one.

Contrast Ilitch to David Glass, the Royals owner. Glass has, since taking over the Royals in 1993, consistently been a hawk on labor issues, pressing for his Royals to get more of the money generated in other places, but rarely putting any money generated anywhere into the team. In recent years the Royals have spent a bit more in the draft and in international amateur signings than they had, but their approach to building the MLB roster remains penurious at best. Three weeks ago, Glass could have written a check that made the Royals three, maybe four wins better by signing Jackson, who would have immediately become the team's best starting pitcher. The Royals have an exciting young lineup and a strong bullpen, as well as young starters who may not be ready in 2012. Adding Jackson to the mix to challenge a Tigers team reeling from the loss of its DH would have cost nothing but money and made Kansas City better.

Glass though, represents that other, more common strain of ownership, the one that refuses to make investments that could potentially put the team in the red. The Kansas City Royals, like the other teams in the smallest markets in baseball, collect money from ticket sales and local media rights. They also get equal shares of nationally generated revenue, such as for Sunday Night Baseball or the postseason or the All-Star Game, even if they rarely if ever show up in those slots. On top of that, they get free money just for existing. Yet the Royals' 2011 payroll (just north of $38 million, according to Cot's Contracts) was lower than it was in any year since 2005, low enough to nearly guarantee a profit if no one showed up at the park.

The conversation about these matters tends to use a language --- "what we can afford", "in our market", "fiscal responsibility" -- that clouds what is happening, which is that spectacularly wealthy men, women and companies can invest in their product, but they often choose not to. The fact is, everybody who owns a major league team -- when MLB isn't making spectacularly bad choices about who gets to own a team, anyway -- is wealthy enough to make investments in the product that can improve the win-loss record without sweating whether the team will have positive cash-flow in the short term. The financial benefits of talent investment tend to accrue in future years for one -- a good team in Year One brings people to the park in Year Two, and so on -- while every team appreciates over time.

According to Forbes, Mike Ilitch was worth $2.7 billion in 2010, money he made by starting a popular national pizza chain and growing from there. David Glass' fortune is harder to pin down, but one estimate that dates to 1999 pinned it at $323 million, and it's not like Wal-Mart, for whom he used to be CEO, had a bad decade. You can do this with other owners, too - the Pirates' Robert Nutting and the Blue Jays' Rogers Corporation and the A's Lew Wolff and the whole lot of them.

These are incredibly rich entities who have competed aggressively and successfully to build their businesses. So why is it when they get into sports, all they want to do is talk about how they can't compete and need help from their competitors to make money? David Glass was the CEO of Wal-Mart, the most vicious competitor on the American landscape, but in baseball he can't spend a dime unless the Yankees give him six cents? That's not just disingenuous, it's a little bit pathetic.

We should demand more. We should hold up Mike Ilitch as the model, and we should rain scorn down on these rich men who hold fan bases hostage because they can't get a new ballpark or a new city or a new CBA to make their incredibly profitable long-term investments that much more profitable in the short term.

Owning a baseball team isn't like owning a conventional business, because there are benefits that accrue to baseball owners, a status that attaches to them in the community, that you don't get by being the most respected man on the Chamber of Commerce. Let's stop pretending that in exchange for that status, these men have no responsibility to the people who bestow it upon them.

We need more owners who want the next win more than the next dollar."

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  • 2/6/12
  • 1bonz
Great article. Just shows how these owners are all crying while making big money.
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  • 2/6/12
  • rxxan

I for one think we have the right GM in place. I like Antonetti's aggressiveness and his desire to win-now rather than the plan 5 years in advance like Shapiro always was. Maybe Shapiro was that way simply because he knew the ownership only gave him so much backing...

I think that with more financial support Antonetti would be more like Kenny Williams of the White Sox. Sure Williams has made some bad moves and added some bad contracts but Chicago won a World Series under him and that's all that matters in the end. It would be nice to see a true MAN that cares more about WINNING than the DOLLARS take a shot at owning this team. Dolan is consistently ranked as one of the worst owners in baseball.

The only thing I like about the man is that he served in the Marine Corps.

  • Reply to this Message
  • 2/6/12
  • xforemanjoe

Is Charles Dolan worth that much because his name didn't come up under the list of billionaires around the world either?
  • Reply to this Message
  • 2/6/12
  • xforemanjoe

Charles Dolan & family Net Worth $2.6 B, maybe seeing family this guy figured it meant the whole Dolan family but this is even less then he had in his article at $3.3 B.
  • Reply to this Message
  • 2/6/12
  • xforemanjoe

Very true.
  • Reply to this Message
  • 2/6/12
  • xforemanjoe

Very interesting and good read. Thanks for posting that. I guess at 83 Ilitch wants to see a championship flag flying in Detroit and a ticker tape parade before he dies but others like Dolan want to keep things going as long as they can so the younger Dolan can take over and still have all the money his Dad had not worrying about growing the business end but to make sure the kids are taken care of.
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