Tampa Bay Rays: Losing 29-1 – Times Are Tough in Tampa

When ratifying the 2016 Collective Bargaining Agreement in November, MLB teams voted 29-1 in favor of the agreement. The lone dissenter was the Tampa Bay Rays. Why would Tampa Bay keep the vote from being unanimous? How tough are times for baseball’s smallest revenue generating team?

Competitive balance is a relative term. In baseball, there are rules in place to help small market teams compete but they have nowhere near the same impact that a salary cap has in the NFL, NBA and NHL, respectively. Revenue sharing from high spending teams paying into baseball’s luxury tax are helpful for the small markets to add small increments of talent (or to line an owner’s pockets) but don’t do much to stop the widening of spending power between baseball’s haves and have-nots.

The most obvious example of a have-not is the Tampa Bay Rays. In terms of 2016 attendance, the Rays finished at about an average of 3,000 paying customers behind 29th place Oakland (or 18.3 percent less). They struggle to compete with the other teams as far as generating revenue where again they rank last in lucrative regional television deals, making about 1/6th of the regional television revenue that the Angels make (tops in the American League) and 1/10th of what the Dodgers take home (the top in all of MLB).

The economics in baseball, as well as the onerous agreement they suffer through at Tropicana Field, likely put the Rays at the greatest financial disadvantage in North American sports. Before playing baseball in front of the center of the known universe for start-ups and new technology, the Giants were actually thinking of moving from San Francisco for a “better” economic climate in St. Petersburg in the early 1990s.  What do they say about some of the best moves?

If you have read the excellent Jonah Keri’s The Extra 2%, you will know that for Tampa to compete in the most challenging division in baseball they needed to create an organizational shift and hope more than a few things would go right for them to make the playoffs. One of the things identified was to let their free agents walk and invest in player development rather than compete where they could for mediocre free agents (which is an overtly obvious idea now, but seems like it wasn’t in 2011). The best way to develop players is a talent pipeline that comes courtesy of the MLB draft. This is where the new Collective Bargaining Agreement (CBA) could work against a core philosophy the Rays used to compete – compensatory picks.

The CBA is removing first-round compensation picks for premium free agent defections and historically that is where the Rays may feel they have had an advantage. It is arguable that they do, as the only contributing major leaguer they have picked in the last five years from their dozens of compensation picks was the 2011 Blake Snell selection for losing Brad Hawpe. The fact is, it is a competitive balance mechanism that will be reduced for 2017 under the new CBA and it should make the players happy, particularly free agents, who now can sign contracts without the negative association of their new teams losing a valuable first-round pick.  While this change in the CBA helps the players, it does not help the Rays.

Tampa Bay wants to use the draft to keep up with teams that can afford to sign elite free agents as contract values continue to climb. Witness within their own division where one team just signed a $17.2 million dollar closer for the next five years and another has a $95 million dollar Kung-Fu Panda that it can so far chalk up to an expensive mistake.

The rules around the MLB draft are where the Rays were hoping to see changes – ideally a proposal where the draft would be a vehicle to provide an easier path for small-market teams to acquire affordable talent. The belief in the Rays organization is that the talent gap continues to increase between the haves and have-nots in MLB, and that is the reason most suspect they voted against the new CBA.

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