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Dowbiggin Part Deux: Doubling Down on Nonsense

Bruce Dowbiggin of the Globe & Mail comes back with a followup to his wekeend article about how the "Jays were dropping the ball" due to the inadequate (and completely insignificant) amount of money they received for their television rights from corporate sibling Sportsnet. Part Deux acknowledges that there's disagreement about the analysis presented. Unfortunately, rather than a mea culpa, the article doubles down on the lack of any basic business/economic sense. This time, he summarizes the objections as a complete straw man, the "Rich Uncle Theory" - that is, Rogers will just benevolently give the cash. To wit: "Rogers, the Blue Jays and like-minded folk contend that with a rich corporate uncle like Rogers, the size of the TV rights and team payroll is not relevant. With Rogers bursting with cash, the team can access it anytime with a snap of GM Alex Anthopoulos’s fingers." And he proceeds to refute his straw man handily. Of course, as with most straw men, it's a ridiculous argument (much like the original proposition), that does nothing but distract from the reality. The Blue Jays' payroll will be set to maximize corporate profits. This means it will be set such that (in management's judgment) the marginal cost (player salaries) = marginal revenue (attendance dollars, merchandise dollars, sponsorship dolars, advertising dollars). Adding player costs means more expected wins, means more expected attendance and TV viewership, means more money. These relationships can be reasonably modelled, and then it's a matter of asking, if we add $10M in payroll, what can we expect to add in revenues? If it's more than $10M, add the payroll, and if not, don't add the payroll. This is not rocket science, Bruce, it's literally Economics 101.

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