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Losing Baseball Teams More Profitable Than Winning Teams in Strange World of MonopolyBall

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The Pittsburgh Pirates may be the laughingstock of Major League Baseball at 43-87 this season (and haven't had a winning season since 1992), but it seems the Bucs may have the last laugh after all.

The team that plays to empty stands has plenty of money in the bank, according to David Berri, a sports economist at Southern Utah University.

"They appear to be putting profits ahead of winning," he told NPR after reviewing a set of financial documents leaked to the Associated Press which showed that the Pirates earned nearly $29.4 million in profit in 2007 and 2008.

According to the report, which points out that Pittsburgh collected $39 million in MLB revenue-sharing in '08, Berri concludes that the Pirates' ownership is using the money to stay in the black, rather than spending it on better players--for which teams are supposed to use the money, in the interest of competition.

Berri is quoted as saying, "What these documents show is that the Pirates looked at the baseball landscape and essentially said, 'Well, you're giving us about $40 million a year. ... That really wouldn't be enough to close the gap with the Yankees or the Dodgers, so rather than spend the money on players, we're just going to keep it.'"

Let's take a look at the math in action:

In 2009, the New York Yankees revenue came in at approximately $375 million. Payroll was $208 million, or 55% of that.

Meanwhile, the Florida Marlins, who took in $139 million, spent $37 million on player salaries, or 27%.

However, while the Yanks may have more cachet, they've paid for it dearly. USA Today estimates the team lost $4 million last year, while the Marlins pocketed $43 million.

The Pirates say they've changed the way they operate over the last year or two, but still cleared $5.9 million in 2009.

The Atlantic Monthly confirms that "the lowest spending teams in baseball -- the Florida Marlins, Kansas City Royals, and Pirates -- are all taking in more in revenue-sharing than they're spending on players, and they all showed a profit last year."

What to do?

Berri (man, it's taking every ounce of willpower I have not to make a dumb Yogi Berra joke here...) remarks:

"If you go back to the Tampa Bay Buccaneers of the 1980s, I think they were doing the same thing. They were profitable losers every year. Then the NFL set a payroll minimum. And all of a sudden, they started winning."

Seems like we've got a bit of a chicken/egg situation here. Will a better team earn more for its owners? Or is the opposite true?

As they say, all's fair in love and war. And baseball.
POSITION:  No positions in stocks mentioned.