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 Post subject: Ex-Pirates owner Lustig: Nutting ‘too rational’
PostPosted: Wed Apr 03, 2013 1:18 am 
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This is a scary article and this gentleman articulates how tough it's going to be for us fans going forward. Ugh.

http://triblive.com/sports/pirates/3769 ... z2PN0DIHqT

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 Post subject: Re: Ex-Pirates owner Lustig: Nutting ‘too rational’
PostPosted: Wed Apr 03, 2013 8:12 am 
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So, my take-away from that article (which I think is a good one) is that Nutting is not cheap, but at the same time does not want to lose money.

The problem is two fold:

1.) Problem one is MLB itself allowing owners with different size pocket books to manage their teams and not baseball itself controlling the payrolls of each team thus creating a more level playing field for ALL teams.

2.) Nutting himself by NOT wanting to lose money to compete with the big boys...and in a way, I can't blame him!

The bottom line is MLB itself and until MLB ever decides to regulate each team's payroll...somehow (probably with the cooperation of each of the owners)...MLB will never be an "equal" employer (for lack of a better analogy).

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 Post subject: Re: Ex-Pirates owner Lustig: Nutting ‘too rational’
PostPosted: Wed Apr 03, 2013 8:55 am 
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I don't think selling the team to a potential owner with more pocket size matters. I think the Nutting group, owning 80% of the franchise is one of the wealthiest in baseball. The 7th wealthiest in baseball it I recall correctly. I'll have to find that article.

Baseball payrolls are generated by television contracts.

Luxurious TV contracts=large payrolls


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 Post subject: Re: Ex-Pirates owner Lustig: Nutting ‘too rational’
PostPosted: Wed Apr 03, 2013 9:28 am 
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Is this really anything new? The problem has always been the structure of MLB. It's why football is king and the NFL is the best professional league.

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 Post subject: Re: Ex-Pirates owner Lustig: Nutting ‘too rational’
PostPosted: Wed Apr 03, 2013 9:41 am 
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Well that doesn't scare me, and it supports what I have always believed - that the team is not pocketing excessive amounts of profit.

I don't believe that the team can never win with Nutting as the owner, or that the team has to lose money to field a winner. They are going about it the right way, keeping their financial house in order and gradually growing the talent base and the revenue stream. Hopefully they will be winning soon.

I do think our GM, manager, coaches, and player development personnel are suspect, and they better win this year or they should be replaced.


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 Post subject: Re: Ex-Pirates owner Lustig: Nutting ‘too rational’
PostPosted: Wed Apr 03, 2013 10:43 am 
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People need to understand that a professional baseball team is not a "business" in the traditional sense. Owning a baseball team is not about maximizing profit, it is about psychic benefit. The Pirates are not like IBM; they are more like an original Rembrandt.

Please read this excellent piece by Malcolm Gladwell to better understand this:

http://www.grantland.com/story/_/id/687 ... ba-lockout

Here's the punchline, if you don't like to, you know, read:

Basketball teams, of course, look like businesses. They have employees and customers and offices and a product, and they tend to be owned, in the manner of most American businesses, by rich white men. But scratch the surface and the similarities disappear. Pro sports teams don't operate in a free market, the way real businesses do. Their employees are 25 years old and make millions of dollars a year. Their customers are obsessively loyal and emotionally engaged in their fortunes to the point that — were the business in question, say, discount retailing or lawn products — it would be considered psychologically unhealthy. They get to control their labor through the draft in a way that would be the envy of other private sector owners, at least since the Civil War. And they are treated by governments with unmatched generosity. Congress gives professional baseball an antitrust exemption. Since 2000, there have been eight basketball stadiums either built or renovated for NBA teams at a cost of $2 billion — and $1.75 billion of that came from public funds. And did you know that under the federal tax code the NFL is classified as a nonprofit organization? Big genial Roger Goodell, he of the almost $4 billion in television contracts, makes like he's the United Way.

But most of all professional sports owners don't have to behave like businessmen. For every disciplined and rational operator like the Patriots' Robert Kraft or Mark Cuban, there is also someone like Washington Redskins owner Dan Snyder. Snyder was a brilliant entrepreneur, who at the age of 36 sold Snyder Communications — the marketing company he built from scratch — for an estimated $2 billion. He has subsequently run the Redskins like a petulant 14-year-old fantasy owner. Snyder Communications was a business. The Redskins are a toy. The former he ran to solely maximize profit. The latter he runs for his psychic benefit — as a reward for all the years he spent being disciplined and rational. And it is one of the surreal qualities of professional sports that they are as welcoming and lucrative for those owners who chose to behave like 14-year-olds as they are of those owners who chose to behave like grown-ups.


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 Post subject: Re: Ex-Pirates owner Lustig: Nutting ‘too rational’
PostPosted: Wed Apr 03, 2013 11:03 am 
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Quick straw poll:

Is there anyone on this board who would be unhappy if Sheikh Mansour swooped in, bought 100% of the Pittsburgh Pirates Baseball Club, and spent lavishly on the team? Let's say he came in and immediately paid top dollar to lure Andrew Friedman from the Rays to be the new General Manager for the Pirates and gave Friedman a huge cache of money to spend as he saw fit. Would anyone here be pissed?


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 Post subject: Re: Ex-Pirates owner Lustig: Nutting ‘too rational’
PostPosted: Wed Apr 03, 2013 11:10 am 
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J_C_Steel wrote:
Quick straw poll:

Is there anyone on this board who would be unhappy if Sheikh Mansour swooped in, bought 100% of the Pittsburgh Pirates Baseball Club, and spent lavishly on the team? Let's say he came in and immediately paid top dollar to lure Andrew Friedman from the Rays to be the new General Manager for the Pirates and gave Friedman a huge cache of money to spend as he saw fit. Would anyone here be pissed?


What kind of question is that and what is your point? The Pirates situation is what it is. The revenue will always be the issue, not the pockets of the owner. We have the same issues that about 10 other teams have. MLB is the problem. It always has been.

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 Post subject: Re: Ex-Pirates owner Lustig: Nutting ‘too rational’
PostPosted: Wed Apr 03, 2013 11:11 am 
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bucco boy wrote:
J_C_Steel wrote:
Quick straw poll:

Is there anyone on this board who would be unhappy if Sheikh Mansour swooped in, bought 100% of the Pittsburgh Pirates Baseball Club, and spent lavishly on the team? Let's say he came in and immediately paid top dollar to lure Andrew Friedman from the Rays to be the new General Manager for the Pirates and gave Friedman a huge cache of money to spend as he saw fit. Would anyone here be pissed?


What kind of question is that and what is your point? The Pirates situation is what it is. The revenue will always be the issue, not the pockets of the owner. We have the same issues that about 10 other teams have. MLB is the problem. It always has been.


Answer the question, don't duck it.

I'm not saying the MLB system isn't a problem. I'm asking a simple question.


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 Post subject: Re: Ex-Pirates owner Lustig: Nutting ‘too rational’
PostPosted: Wed Apr 03, 2013 11:13 am 
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J_C_Steel wrote:
bucco boy wrote:
J_C_Steel wrote:
Quick straw poll:

Is there anyone on this board who would be unhappy if Sheikh Mansour swooped in, bought 100% of the Pittsburgh Pirates Baseball Club, and spent lavishly on the team? Let's say he came in and immediately paid top dollar to lure Andrew Friedman from the Rays to be the new General Manager for the Pirates and gave Friedman a huge cache of money to spend as he saw fit. Would anyone here be pissed?


What kind of question is that and what is your point? The Pirates situation is what it is. The revenue will always be the issue, not the pockets of the owner. We have the same issues that about 10 other teams have. MLB is the problem. It always has been.


Answer the question, don't duck it.

I'm not saying the MLB system isn't a problem. I'm asking a simple question.


Yeah, I'm ducking it. :roll:

Here is my answer: It's a stupid question.

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 Post subject: Re: Ex-Pirates owner Lustig: Nutting ‘too rational’
PostPosted: Wed Apr 03, 2013 11:25 am 
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bucco boy wrote:
Yeah, I'm ducking it. :roll:

Here is my answer: It's a stupid question.


Given the inequitable nature of the MLB system, it's a pertinent and interesting question. Would you rather have an owner with unlimited funds or one who views owning a professional sports franchise as a "business"? The answer is obvious. You want the owner with unlimited funds who views owning a professional sports franchise as akin to owning an expensive piece of art. You want a guy who recognizes and embraces the "psychic benefit" of owning a sports team and is more invested in winning than using his ownership of something so rare and precious to make more money.

Read the Gladwell article, bucco boy. It's an excellent economic view of sports franchise ownership. Major league baseball teams are not businesses in the traditional sense. Not at all. And in a financially inequitable sport like MLB, having an owner who treats the franchise as though it is a traditional business can hold it back.


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 Post subject: Re: Ex-Pirates owner Lustig: Nutting ‘too rational’
PostPosted: Wed Apr 03, 2013 11:38 am 
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I agree with both points. Baseball's structure is ridiculous, and why the small market owners constantly roll over and take it amazes me. Plus, they have a great model(NFL) to look at...and they are looking up at it right now. As BB said, NFL is far more popular at this stage.

I also agree, and have argued here repeatedly, that owning a baseball(or any sport) team is different from a regular business. None of these guys want to lose a ton of money. However they've made their fortunes elsewhere and for most their sports ownership is more along the lines of a hobby. If they break even, make a small profit, or even on occasion lose a small amount it's not a big deal.

The Pirates get screwed by the system they and have an owner that doesn't seem okay with break even. The article did give me a bit more respect for Nutting as a businessman and helping the Pirates become viable. But, as someone on here said a while back, I'm not sure he knows HOW to win.


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 Post subject: Re: Ex-Pirates owner Lustig: Nutting ‘too rational’
PostPosted: Wed Apr 03, 2013 11:44 am 
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J_C_Steel wrote:
Given the inequitable nature of the MLB system, it's a pertinent and interesting question. Would you rather have an owner with unlimited funds or one who views owning a professional sports franchise as a "business"? The answer is obvious. You want the owner with unlimited funds who views owning a professional sports franchise as akin to owning an expensive piece of art. You want a guy who recognizes and embraces the "psychic benefit" of owning a sports team and is more invested in winning than using his ownership of something so rare and precious to make more money.


This is why it's a stupid question.

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 Post subject: Re: Ex-Pirates owner Lustig: Nutting ‘too rational’
PostPosted: Wed Apr 03, 2013 11:51 am 
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It just still baffles me that something labeled a "professional sport" allows such extreme competitive edges. Hopefully the current state of the Yankees is going to be a scared straight story for the rest of the MLB's large market spending.

I don't blame all small market owners for operating the way that they do, except Loria, who is essentially a genius white collar criminal at this point. The Rays could spend more money for instance, go to back to back to back World Series and still not sell out any of them. It's easy for fans to criticize when they're not losing the money.


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 Post subject: Re: Ex-Pirates owner Lustig: Nutting ‘too rational’
PostPosted: Wed Apr 03, 2013 11:54 am 
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bucco boy wrote:
J_C_Steel wrote:
Given the inequitable nature of the MLB system, it's a pertinent and interesting question. Would you rather have an owner with unlimited funds or one who views owning a professional sports franchise as a "business"? The answer is obvious. You want the owner with unlimited funds who views owning a professional sports franchise as akin to owning an expensive piece of art. You want a guy who recognizes and embraces the "psychic benefit" of owning a sports team and is more invested in winning than using his ownership of something so rare and precious to make more money.


This is why it's a stupid question.


Quite frankly, it's your response that's stupid.

In another sport rife with inequities and lacking a salary cap, Sheikh Mansour took a below-average team with a recent history of losing, the Manchester City Football Club, and turned them into champions by spending lavishly. That could happen in Major League Baseball, particularly if a team has an owner with deep pockets who recognizes the "psychic benefit" of owning a winning team and values that over treating the team like any other business or investment.

The question -- and my overall point -- is based on a well-known economic principle explained by Malcolm Gladwell in the linked article and accepted by economists from Harvard to Stanford. But hey, it must be "stupid."

I guess you know more than those pesky economists, bucco boy. Where'd you get your post-graduate degree again?


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 Post subject: Re: Ex-Pirates owner Lustig: Nutting ‘too rational’
PostPosted: Wed Apr 03, 2013 12:17 pm 
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J_C_Steel wrote:
bucco boy wrote:
J_C_Steel wrote:
Given the inequitable nature of the MLB system, it's a pertinent and interesting question. Would you rather have an owner with unlimited funds or one who views owning a professional sports franchise as a "business"? The answer is obvious. You want the owner with unlimited funds who views owning a professional sports franchise as akin to owning an expensive piece of art. You want a guy who recognizes and embraces the "psychic benefit" of owning a sports team and is more invested in winning than using his ownership of something so rare and precious to make more money.


This is why it's a stupid question.


Quite frankly, it's your response that's stupid.

In another sport rife with inequities and lacking a salary cap, Sheikh Mansour took a below-average team with a recent history of losing, the Manchester City Football Club, and turned them into champions by spending lavishly. That could happen in Major League Baseball, particularly if a team has an owner with deep pockets who recognizes the "psychic benefit" of owning a winning team and values that over treating the team like any other business or investment.

The question -- and my overall point -- is based on a well-known economic principle explained by Malcolm Gladwell in the linked article and accepted by economists from Harvard to Stanford. But hey, it must be "stupid."

I guess you know more than those pesky economists, bucco boy. Where'd you get your post-graduate degree again?


Once again, you posted that question to make YOUR point. You cannot even see that I am agreeing with your point. The answer is obvious. That's why I jumped all over your question. That's why the question is stupid. Not your point.

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 Post subject: Re: Ex-Pirates owner Lustig: Nutting ‘too rational’
PostPosted: Wed Apr 03, 2013 12:28 pm 
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bucco boy wrote:
Once again, you posted that question to make YOUR point. You cannot even see that I am agreeing with your point. The answer is obvious. That's why I jumped all over your question. That's why the question is stupid. Not your point.


Funny thing about print -- sarcasm often doesn't translate well. If you agree, writing "I agree" or "Obviously yes" generally does a better job of getting the point across.

As to the point, the unfortunate thing is that MLB has no reason to become more economically equitable, so we'll be dealing with "small market syndrome" for the foreseeable future. Unless, of course, Sheikh Mansour takes a sudden interest in the Pittsburgh Pirates Baseball Club...


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 Post subject: Re: Ex-Pirates owner Lustig: Nutting ‘too rational’
PostPosted: Wed Apr 03, 2013 12:39 pm 
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J_C_Steel wrote:
bucco boy wrote:
Yeah, I'm ducking it. :roll:

Here is my answer: It's a stupid question.


Given the inequitable nature of the MLB system, it's a pertinent and interesting question. Would you rather have an owner with unlimited funds or one who views owning a professional sports franchise as a "business"? The answer is obvious. You want the owner with unlimited funds who views owning a professional sports franchise as akin to owning an expensive piece of art. You want a guy who recognizes and embraces the "psychic benefit" of owning a sports team and is more invested in winning than using his ownership of something so rare and precious to make more money.

Read the Gladwell article, bucco boy. It's an excellent economic view of sports franchise ownership. Major league baseball teams are not businesses in the traditional sense. Not at all. And in a financially inequitable sport like MLB, having an owner who treats the franchise as though it is a traditional business can hold it back.


I'll play King Soloman. I'm not interested in rooting for a team that essentially buys its way out of poor decisions or gets it's pick of the top free agents. However, I'd prefer to have a favorite team that isn't foreclosed from even considering first rate talent. Under ideal circumstances, I'd turn the Pirates revenue stream into what the Cardinals generate.

I like Gladwell's writings a lot. I wholly agree with him that pro sports are not a "traditional" business. I've been writing that since joining this Board in 1999. The financial inequity problem results from MLB allowing too many "traditional" market forces to apply to talent acquisition (ie no foreign player draft and local TV revenue disparity).

While I generally agree with the premise that ownership of a pro sports franchise has a strong psychological component, I do not - under any circumstances - believe that a Steinbrenner owned Pirate team would have maintained a $175M payroll, just because Steinbrenner needed his ego stroked by fielding winning team no matter the cost.

I'll once again point out that the size of the payroll is not what I consider to be the measure of "cheapness." A far more relevant measure is the percentage of revenue that is invested in payroll. Investing $8M/year in McCutchen when revenues are $100M is a far stronger financial commitment than paying Granderson $15M/year when revenues are $300M.

I'm also not buying the notion that there exists a surplus of potential owners who are chomping at the bit to buy a team and to year in/year out have expenditures exceed revenue in the eight (or even nine) figures range.

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 Post subject: Re: Ex-Pirates owner Lustig: Nutting ‘too rational’
PostPosted: Wed Apr 03, 2013 12:41 pm 
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How about this one...saw the Pirates genetically cloned players, and then enslaved them (because that was the way that they were cloned - they don't know any better here), winning multiple championships along the way. And they donated all of their proceeds to a society that along the way, cured most forms of cancer. Would anyone here oppose that?

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 Post subject: Re: Ex-Pirates owner Lustig: Nutting ‘too rational’
PostPosted: Wed Apr 03, 2013 12:43 pm 
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J_C_Steel wrote:
bucco boy wrote:
Yeah, I'm ducking it. :roll:

Here is my answer: It's a stupid question.


Given the inequitable nature of the MLB system, it's a pertinent and interesting question. Would you rather have an owner with unlimited funds or one who views owning a professional sports franchise as a "business"? The answer is obvious. You want the owner with unlimited funds who views owning a professional sports franchise as akin to owning an expensive piece of art. You want a guy who recognizes and embraces the "psychic benefit" of owning a sports team and is more invested in winning than using his ownership of something so rare and precious to make more money.

Read the Gladwell article, bucco boy. It's an excellent economic view of sports franchise ownership. Major league baseball teams are not businesses in the traditional sense. Not at all. And in a financially inequitable sport like MLB, having an owner who treats the franchise as though it is a traditional business can hold it back.



I definitely agree with the business point and make it all of the time on the Steelers board. Pro sports is so commie! People actually compare sports teams to businesses like it's any bit similar. Like you might go buy a replica frock of your favorite Home Depot cashier or something.

If sports teams were businesses, the Pirates wouldn't have a team. All lower market teams would move to LA or Chicago or NY or Dallas.

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