Yankee-Adidas Deal Could Step on Some Toes
BOSTON — One of the most contentious issues resolved in Major League Baseball's 232-day labor strike was revenue sharing - insuring that each team got its fair share of money.
Now, only two years later, the New York Yankees are already beginning to chip away at the foundation of that agreement.
The Yankees signed a sponsorship deal on March 3 with the sportswear manufacturer Adidas, widely reported to be worth $100 million over 10 years - by far the largest contract with any United States sports team. As of now, the deal gives Adidas the right to advertise on Yankee television and radio broadcasts, on placards inside and outside Yankee Stadium, and to work closely with the team in community relations. It could have far-reaching consequences for the game.
"The long-term success of the league took a major step forward with revenue sharing," says Dave St. Peter, director of communications for the Minnesota Twins. "From a small-market standpoint, it's critical that we're all working on the same page."
But the Yankees don't appear to be on that page. The $10 million the Yankees will receive annually for the next decade is a substantial sum that will give them superior financial resources when signing new players. This contract alone will give the Yankees more money each year than the $8 million the Twins make on television revenues - usually a team's second-biggest source of money after ticket sales.
BY Mr. St. Peter's own admission, less well-known teams in smaller markets, such as Minnesota, cannot hope to match such a deal. Adidas points to the Yankees' storied tradition as the main reason they chose to sponsor the team.
"We were more interested in quality vs. quantity," says Chris Percy, an Adidas spokesman. "We look to organizations that have a heritage and tradition."
Yankee owner George Steinbrenner helped make the deal possible by speaking out against a proposed league-wide sponsorship with Nike. The deal, which would have given each team $350,000 annually, was voted down last October.
That gave the Yankees free rein to seek out a deal of their own. They initiated talks with Adidas after they won the World Series, Mr. Percy says.
The league may contest the deal, concerned that another league-wide sponsorship might be hard to engineer without the Yankees. But many say that this might have never happened if Major League Baseball had a commissioner. (It hasn't had one since 1992.)
"We'll never know, but I'd like to think that through leadership and direction, a commissioner could hopefully keep everyone on the same page," St. Peter says.
That any baseball team could attract that much money is a plus, he acknowledges. And Percy says owners have to do what is best for their teams. "I don't know if Major League Baseball wants everyone going off and doing their own thing, but as owners, they obviously have the right to do it."