Monday, December 27, 2004

But Can They Spend $200 Million?

I've heard the argument against owners like the Twins' Carl Polhad and the Tigers' Mike Ilitch many times. How can these billionaires cry poverty when they're too cheap to spend their own money on their teams? After all, Ilitch was all willing to spend his big bucks on the Red Wings (back when hockey existed), but was a cheap bastard when it came to the Tigers! But I don't blame these owners for acting the way they've been acting.

Think about it. Every free-agent signing is a risk. Aside from a few teams with crafty GM's (and the verdict is out on the A's in the post-Mulder and Hudson era), many teams are going to make mistakes. So it's not enough to ask these owners to spend an extra 10 million. Perhaps more like 25-30 million is more like it. And maybe more.

After all, the Yankees are the one team that can afford to eat a mistake, or a bunch of mistakes. Jose Contreras for 8 million? No problem, just sign someone else. Sterling Hitchock for $6 million? No problem, just get Jeff Weaver. No all-star in RF yet? Just trade (glorified salary dump) for Raul Mondesi. Mondesi turns out to be a mistake? Just sign Gary Sheffield.

But when the Pirates sign a Jason Kendall long-term and it turns out to be a mistake, they're strapped for a good few years. Only the Yankees can afford to eat their mistakes. These other teams have no margin for error. And no, they can't spend $200 million.

Besides, will the Twins be profitable by spending $200 million? In a small market? No YES network? I don't think so. So do you expect Polhad to ultimately waste millions just so his team could win? Come on.

In April, BusinessWeek wrote about how Boston has hit the limit on the amount they can spend:
The truth of the matter is that the Sox are hitting a wall. "We're maxing out on everything," [Red Sox owner] Henry admits. Every game is already sold out. Ticket prices are the highest in the majors. That means the Sox payroll has gone about as high as it can, which could have a severe impact on the team as early as next year. Four of the Sox' biggest stars -- Martinez, pitcher Derek Lowe, shortstop Nomar Garciaparra, and catcher Jason Varitek -- could become free agents at the end of the season. All are demanding huge new contracts, but "we can't afford to re-sign all of them," warns Lucchino.That's why sabermetrics has become such an important part of the Boston strategy. Henry is not a guy who goes in for half-measures. After buying the Red Sox, he first tried to sign Billy Beane. When that fell through, he did the next best thing: He hired Bill James, the writer and baseball thinker who invented sabermetrics, as senior baseball operations adviser.

The article also quotes baseball economist Andrew Zimbalist saying that the TV revenue gap between the Sox and Yankees is at least $100 million.

And if the Sox are "hitting a wall" with a $120 million payroll, what can you say for the rest of the teams!? If the Brewers tried spending as much as the Yankees, forget it! Either the owner or the team would go bankrupt. They're not getting YES network revenue. It just isn't happening.

And speaking of the Sox, in spite of their high payroll, I don't blame them for their spending. After all, with the Yankees setting the precedent by buying an All-Star at nearly every position, what do you expect the Sox to do, just sit there with their arms folded and say "forget it"? They want to win too. But in this league, if you want to win, you've gotta play by the Yankees' rules. And after the Yankees started putting their payroll on steroids, the Sox have done the best they can trying to compete.

And even if you'll tell me that the Yankees are just playing by the rules, and it's not the Yankees that are the problem, it's the system that's an issue, I think it's fair to say that the Yankees are the perfect poster boy for all that is wrong with the system.

1 comment:

Neopia9 said...

The Yankees spend WAY too much. At $184,193,950 last year, they would go through almost a BILLION dollars every five years! THE YANKEES HAVE NEVER WON A WORLD SERIES SINCE BEFORE THEY GOT RUTH- all they are doing is BUYING their World Series, starting with Ruth for $100G (worth $1,374,362.79 today) and going up from there. There really should be some kind of salary cap in baseball.