Coonelly defends Pirates’ use of revenue-sharing dollars
Pirates president Frank Coonelly insists the team’s ownership is not pocketing money it receives from Major League Baseball’s revenue-sharing system.
Over the past few weeks, people on both sides of the game’s labor-management divide — including union chief Mike Weiner, Boston Red Sox owner John Henry and superagent Scott Boras — have been critical of the revenue-sharing system.
Wednesday, Coonelly said the Pirates are using their cash as stipulated in the MLB labor agreement.
“The Pirates have used all of our revenue-sharing receipts and all of our local revenue in an effort to improve our performance on the field,” Coonelly said.
MLB’s revenue-sharing plan was initiated in 1997 and revised in 2002. This year, the system doled out roughly $400 million to so-called “small-market” teams. The Pirates received about $35 million.
Revenue-sharing money must be used for baseball operations, a purposely vague term which covers more than just the salaries of players on the 40-man roster. The cash also may pay for signing bonuses for draft picks, scouting and player development and improvements to the farm system, such as the $5 million complex the Pirates opened this year in the Dominican Republic.
In April 2008, Coonelly told the Tribune-Review the Pirates have used some of their revenue-sharing money to pay down the team’s debt.
Each year, the Pirates give the commissioner’s office a detailed report of how their revenue-sharing funds are spent. Those figures are shared with the Major League Baseball Players’ Association.
Weiner, who yesterday took over as executive director of the players’ association, said the union views the data with a skeptical eye.
“The basic agreement requires clubs to use revenue sharing to field a competitive team,” Weiner said. “We’ve had discussions with the commissioner’s office (about) various clubs for many years under the revenue-sharing plan. I would imagine that again will be an issue in 2011.”
Changes to the revenue-sharing system can’t come until 2011, when the collective bargaining agreement expires.
Some owners of large-revenue teams also question whether revenue-sharing money is being used properly. This week, Red Sox principal owner Henry called for a “competitive balanced payroll tax” to replace the revenue-sharing system.
In an e-mail to the Boston Globe, Henry complained that “over a billion dollars have been paid to seven chronically uncompetitive teams, five of whom have had baseball’s highest operating profits.”
Henry wants MLB to levy taxes on teams’ payrolls, not revenues. His plan would require a minimum payroll — something the players’ union opposes.
“Players historically have suspected that the request for a salary floor is a precursor to a request for a salary cap,” Weiner said. “And you know what this union’s position has been on a salary cap.”
Notes: Voting is under way for the Ford Frick Award, which enshrines a broadcaster in the Hall of Fame. Among the 212 candidates for a spot on the ballot are the former voice of the Pirates, Lanny Frattare, as well as the current crew of Bob Walk, Steve Blass and Greg Brown. Voting is conducted online ( www.facebook.com/baseballhall ) and will end Dec. 31. The top three picks from fan voting will be on the 10-person ballot. The overall winner, which will be decided by a Hall of Fame panel, will be revealed in February.
In addition to things such as ticket and concession sales, each team receives significant revenue from two outside sources:
MLB’s central fund
This is comprised of cash from national television, radio and cable deals, as well as merchandising and licensing contracts. The money is allocated based on relative revenue, so the so-called “small-market” teams get a bigger cut.
Each team puts 31 percent of its local revenue into a pool which is then evenly split among the clubs.
The Associated Press contributed to this report.