Is Bud Selig Worth $18 Million?

According to Sports Business Journal, that is about what Bud Selig received in compensation in 2007. It’s difficult to know his marginal contribution to revenue growth, given that the books are not open and I’m not exactly sure about what he does. However, what I am sure of is that Bud Selig has presided over an exceptionally prosperous era of baseball. While he may not deserve all the credit, he ought to get some.

From 2002–2007, MLB’s revenue increased 12.44% per year on average. During this same span baseball attendance was up 3.23% per year; and though attendance was down 1% in 2008, it was still up 3.4 % over 2006.

In addition, Selig seems to do a good job of handling the unique personalities of many proud owners. He’s kept labor peace, and he’s handled significant pressure from the federal government on several fronts. A lot of people don’t like Bud Selig, possibly for being rich or ending one All-Star game in a tie, but it’s hard to argue that he’s bad at his job. And considering that he is 74, no one would blame him for retiring, and I think the owners feel his compensation is what they need to retain his services.

There are a lot of rich people in the world. If you don’t like it, fine; but, it’s not Bud Selig’s fault. He possesses valuable skills, just like players on the field, and he’s going to be compensated for those skills or go somewhere else.

12 Responses “Is Bud Selig Worth $18 Million?”

  1. Kent says:

    I know it’s business and all, but I’d still like to see Selig and the owners make just…a little less money…and work toward really solidifying the ENTIRE league:  a Bill James-like TV revenue sharing idea–split revenue 50/50, the home team gets 50% and visiting team gets 50% that goes to a pool equally shared across the league; fluctuating ticket prices (like SF this year) and/or reasonable discounts for kids and seniors during certain games; a few more double headers to shorten the season a bit and get the playoffs started right away before the weather goes to crap; day playoff games; speed the game up in subtle ways (e.g. batter enters box, batter stays in box), and a host of other possibilities.

    Does he “deserve” that money?  Sure, the sport is wildly successful as an economic engine.  Should he take it all and laugh at the rest of us all the way to the bank?  Nah.  I don’t like Selig at all, but he has moved the league as a whole to new economic  heights and twisted our collective arms (across the country) to build stadiums with our tax dollars.

    …what do I know, I’m just a work dude with a family who loves baseball.  (I don’t want “Bud” to complain to me that the Twins or Royals can’t make money ever again!)

  2. Rick says:

    I don’t have a problem with each team paying him about $600K per year for the same reason I don’t care  what the players get paid. It’s not my money. The teams are placing a value on his services the same way they place a value on a player’s services. It’s not like Bud is the CEO of a corporation that lost billions of dollars last year and still received a fat bonus check that came out of the stockholder’s pockets. Personally, I don’t like some of the things that he’s done, but he doesn’t work for me and his bosses seem to be happy with him.

  3. Casey says:

    Two quibbles:
       -Cancelling the 1994 World Series = kept labor peace?
       -Necessary compensation to retain his services?  Who else would pay a former used-car salesman remotely as well, pray tell?  Other, comparable options do not exist for Selig; this is reward for services rendered (i.e. making ownership lots of money), not a carrot to keep talent.

    Not that I blame the owners for making sure what ain’t broke don’t get fixed…

  4. Ron E. says:

    “While he may not deserve all the credit, he ought to get some.”

    That’s not a very useful analysis. Tell us exactly how much credit he deserves and what his VORC (value over replacement commissioner) is.

  5. dan says:

    What about comparing the increase in revenue with the increases in other major sports?  Or in all entertainment?  I don’t have the numbers but I sense that you wouldn’t find he outperformed other areas much, if at all.

    Another area you could look at is the costs he could reasonably influence, versus revenue, but I’m not certain there’s much any commish can do about that.  What impact did the luxury tax have other than by enriching “small market” owners at the expense of big market ones?  Did that improve baseball as a whole?

    The fact is that Selig presided over baseball at a time of almost unmatched economic prosperity in the USA, and that likely had more to do with the increase in revenue than any skills he brought to the table.  I don’t have any problem with him getting as much as he can, but I do question if he was really worth what he was paid based only on revenue and ticket sales.  I think the next 3 years will say a lot about any legacy he will have as a commish.

  6. Ken Houghton says:

    ” he’s going to be compensated for those skills or go somewhere else.”

    Promise??

  7. sabernar says:

    I agree with dan.  Just because he was commish during a time when baseball started make more money doesn’t mean that Selig was the reason for it.  Could baseball find someone to do a better (or equal) job for much less money?  I would bet that they could.

  8. Tom says:

    I think Dan makes some strong points.  JC, could we see some of those comparisons between sports?

    Much as it pains me to say it, Bud hasn’t *totally* screwed things up–from a business perspective–so given the massive amounts of cash MLB is evidently throwing off, you can’t fault the compensation.

  9. CG Hudson says:

    For someone who (rightfully) drubs Gwinnett County leaders for opening the taxpayer wallets to MLB, you sure do let Bud off easy in this respect. For his entire reign, he’s been an unrepentant cheerleader/bully for tax giveaways to millionaires in the form of publicly funded stadia (see Minneapolis and Miami – or read John Brattain regularly).

  10. JC says:

    1994-1995 would have happened no matter who was in charge. The owners and players were still irate about collusion and such. The srtike was not a bright spot on his record, but his handling of labor issues in a bilarteral monopoly market has been good.

    Tom and others, feel free to compare away on your own.

    CG, Bud Selig isn’t being paid by the owners to do what I think is right. I didn’t drub the Braves for making the deal with Gwinnett County—it was a smart move on their part.  The fact that Bud has successfully used the All-Star game as a carrot for public subsidies is one reason that he is so well-liked by the owners.

    As for the ability to manage MLB being something that others willing to take a lower salary could do, I’m not convinced. Ben & Jerry’s once tried to cap CEO pay, but realized that they couldn’t find a competent  person under their cap. CEO’s are paid big bucks because their input is exteremely valuable.

    The strongest argument that Selig is worth his salary is a tautology. The fact that he’s being paid that much means he’s worth it. The owners of MLB aren’t stupid; in fact, it includes some of the smartest business minds in the world. I doubt they’re going to screw up here.

  11. Marc Schneider says:

    There seems to be an almost irrational dislike for Selig, probably because he isn’t Bart Giamatti or Fay Vincent.   Complaining about his misdeeds in getting new stadia and so forth is irrelevant; he isn’t getting paid by the fans, he’s getting paid by the owners.  What he is doing is clearly beneficial for the owners.  The idea that Selig or any other person is the commissioner of baseball is a misnomer.  He is really more like the CEO of a corporation whose mission is to make as much money as possible for his shareholders.  Plus, blaming him for the 1994 lockout might be fair, but there were other work stoppages before and there have been no others since.  He  deserves some credit for that.  I don’t like all the changes he has made–interleague play and the stupid all-star game deciding WS home field I could do without–but he brought about the wild card which has been the primary reason why there is any parity at all in baseball.  As far as twisting arms to get new stadia, I wasn’t aware that these cities were legally obligated to do whatever Selig wants.

  12. Edward says:

    The more pressing question: Is Ryan Howard worth $18 million?