Tuesday, June 21, 2022

On Bob Nutting and the Pirates

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You can trace the history of the Pittsburgh Pirates back to 1882, when they went 39-39-1 in the inaugural season of the American Association. One of the strongest teams in that nascent league, the Pirates jumped to the better-established National League in 1887, and have played in the larger circuit ever since. 

Pittsburgh was big-time then. In the 1880 census, the city rated as the 12th-biggest in the U.S., and it was the fourth-biggest with a team in the AA. A decade later, however, the then-Alleghenies played in the smallest city with an NL team, with a sixth of the population of New York, 30% of that of Brooklyn -- still a city of its own -- and half that of Boston and St. Louis. By the turn of the century, the gap between the largest cities in the NL and the smallest had grown, establishing a dynamic that remains to this day.

As of 2020, Pittsburgh is the 67th-largest city in the U.S. by population, between Greensboro, N.C., and Irvine, Calif. There are about 27 times more people in New York than in Pittsburgh, about 13 times as many in Los Angeles. If we use the modern convention of measuring by the size of the TV market, Pittsburgh is 26th in the U.S., about 15% of the size of New York City, about 20% the size of Los Angeles. It is not the smallest market in the U.S. with a team -- that’s Milwaukee -- but it is part of a tier that simply doesn’t have as many people to please. The Pirates won 88 games in 2014, made the playoffs for the second straight season, and sold 2.4 million tickets. That same year, the Cubs went 73-89, finished fifth for a fifth straight year, and sold 2.6 million tickets. Don’t even ask about their respective TV deals. 

I take you on this snoozy demographic tour to make this point: There is a real need for the sharing of local revenue among baseball teams, to smooth out the differences in revenue for teams in small cities and teams in large ones. Over the last 30 years, baseball has asked teams in those large cities to share more and more of the money they make by dint of geography with teams that do not, ostensibly to prevent the development of a financial underclass, to sustain competitive balance. 

It’s not working. The Pittsburgh Pirates are, at the moment, the signature example of how it’s not working. The Pirates get a 3.3% share of the national-TV deals even if they never appear on national TV. They get a large share of local revenue-sharing money generated by the Yankees and Dodgers and Cubs and other large-market teams. Locally, their deal with Bally Sports brings in an estimated $44 million a year. They also, even as a bad team, sell tickets. Their last-place team in 2019 sold 1.5 million, and all the hot dogs and ball caps and parking spaces that go with that. Only the last of those figures is in any way contingent on the short-term performance of the baseball team. 

Bob Nutting isn’t the first owner to recognize that the league will subsidize a losing team, but he’s the one who has been the most aggressive about exploiting it. When his Pirates were good in the middle of the last decade, he didn’t do what owners in Kansas City and San Diego and Milwaukee -- all smaller markets -- did, bolstering his roster and raising the team’s payroll to maximize the Pirates’ chance of winning. Nutting let that team founder, its payroll peaking at 22nd overall and never rising above $116 million. For three years running, his Pirates have spent less on baseball players than any other team, and will fight to retain that crown in 2022.

This is a structural problem, but not the one you think it is. MLB shares more local revenue than any other league, more than enough to make the Brewers and Padres and Royals competitive with the Cubs and Dodgers and White Sox. MLB now shares, in fact, too much local revenue, so much so that teams can be both bad and profitable. A system designed to prevent the development of an underclass is now subsidizing an underclass.

Bob Nutting has, over and over again, chosen the next dollar over the next win. He’s the problem, and until he’s replaced, the Pirates are going to struggle. I can write about them in the middle of a lockout because I know that despite $200 million in revenue and a $52 million payroll, they’re not going to do anything to materially change the roster.