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Rob Manfred’s $8 Billion MLB Expansion Catch-22
Commissioner Rob Manfred has said he sees MLB as a growth industry. But the entry costs in a league expansion would be enormous, and for the league's current owners, the upside of huge expansion fees is tempered by the prospect of diluted central funds.
www.forbes.com
So Manfred has a catch-22 on his hands: Expanding the league will bring a one-time lump sum, along with two new heavily leveraged ownership groups and diluted centralized revenues. And none of this deals with the thorny issue of clubs encroaching on two or more current television territories. Remember when the Montreal Expos relocated to Washington, D.C., and Baltimore Orioles owner Peter Angelos threatened to sue the league if there wasn’t some form of indemnification? If the league needs 75% of the owners to approve expansion, you can almost assuredly start with the owners who claim a particular expansion candidate market as part of their television territory to vote no. In some locations, like Las Vegas, six clubs claim the market.