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December 9, 2011 at 10:11 AM

No “bang for the buck” trophies in baseball

PHOTO CAPTION: White Sox GM Kenny Williams is often cited as an example of how not to spend money in baseball. Here he is in 2005, posing with the World Series trophy he won that year for a White Sox franchise that has seen its value double ever since. Photo Credit: AP
Lots of thoughful commentary spurred by yesterday’s blog post on the Albert Pujols signing being a wakeup call for the Mariners. It heartens me to see that many fans do indeed want to be serious in taking another look at the issues of baseball teams and how money is spent.
One quick note, based on a couple of comments on this blog. When we look at franchise value and the gap between estimated team worth and what the club was purchased for, it doesn’t mean a club has all that money lying around in cash. It’s all on paper, just like the spread between your home’s estimated value compared with the mortgage you have left to pay.
Naturally, a team can’t just sell shares in the club to turn that paper value into real money. So, yeah, it’s not like the M’s can take that $237 million spread and put it towards a Prince Fielder contract. I was engaging in a bit of hyperbole when I suggested they could “afford” to pay him $40 million per year. We don’t know what the maximum they could pay him would be without breaking the bank long term, but I think it’s safe to say $40 million per year might do it. And that’s why nobody’s seriously suggesting it. That doesn’t change the fact that none of us knows what the maximum number is.
And that’s why I’m not the one making arguments that the team can’t afford to pay Fielder.
Can they pay him $25 million per season? Logically, yes they can.
We’ve already shown you the team has just over $14 million to spend right now if payroll doesn’t change from last season. If a team that has shown operating surpluses every year except one since moving into Safeco Field doesn’t have enough reserves lying around to boost that figure by $10 million for this one year, then we’re all in trouble. Or, they could trade a handful of players to shed some salary, while eating most of the Chone Figgins deal and securing a few million dollars more to close the gap. Or, they could simply ask owners for a little more money after letting them not put new money in for over a decade. If those owners can’t afford it, that’s a problem — for them. Something the team needs to address. After all, on paper, those owners are well in the black on this investment — which cannot be compared to a regular stock market investment as some have tried to do, since taxpayers footed much of the investment’s current value by building those owners the majority of their cash-cow ballpark.
Whatever the M’s do, finding $25 million for Fielder in 2012 is entirely possible.
After 2012, the Ichiro contract for $18 million annually is finally off the books. That alone would pay for the lion’s share of any Fielder contract. When you look at long-term financial commitments by the Mariners, the money drops off substantially after 2012 and will be roughly $30 million in 2013 if Figgins is moved soon. By 2014, the only significant deal on the books will be Felix Hernandez’s final contract year, so no, the Mariners do not have any glaring impediment that will prevent them from making a competitive and even winning long-term offer for Fielder.
In fact, the only serious financial impediment for this team down the road will be if fans continue to turn away due to a lack of interest.
But if you want to argue that the Mariners can’t afford Fielder — which I am not doing — then you have to show me why. Don’t forget, he’s only one piece. But when you add that piece and continue to develop talent and make side moves to complement Fielder’s presence, your revenues should — in theory — go up.
I continue to be intrigued by the level of interest fans have shown in which teams are getting the best “value” for their dollars spent. The best “bang for the buck” so to speak.
Again, this is a phenomenon I’ve seen gaining momentum since the publication of Moneyball in 2003 and it’s not surprising, since the Oakland Athletics and Billy Beane did indeed manage to win games with stunning cost effectiveness.
The question I have is, who cares?
More to the point, why do fans care so much that their general manager is saving their owner money? Do they give out a trophy for that at the end of the season?
No, they don’t.

And if fans are not seeing their teams win a trophy for such cost-effectiveness, or are not receiveing a percentage of the money saved, why do they care so much?
Again, in his brilliant review of the Moneyball movie this year, Deadspin head honcho Tommy Craggs penned this paragraph:
Moneyball remains one of the best sports books ever written, but an unintended consequence is that Lewis–in turning a story about cold-eyed, revenue-maximizing bidness into a story about scruffy, yipping, slipper-chewing underdogs–helped consecrate the deeply Seligian idea that there is something inherently noble about being cheap and efficient, that teams like the A’s are competing heroically against a stacked deck when in fact teams like the A’s want the deck stacked in the first place. Even the little guy can win with the right kind of know-how, the book says.
It’s a lie in the long run, albeit a pleasant one.

I especially love the line about pushing the notion that “there is something inherently noble about being cheap and efficient” because that is indeed what the Moneyball book and movie and the followers spawned have managed to do. It’s tough not to get the idea that there are some fans out there who would rather their teams lose the World Series in cost-effective fashion than win it by spending like the Yankees and Red Sox.
Now, I do think the overwhelming majority of fans deep down want their teams to win championships in the long run. But in the process of getting there, I think they place too much emphasis on the cost-effectiveness of their GMs.
Ever wonder why Kenny Williams and Brian Sabean are still employed, despite being reviled by fans in some corners for their overblown contracts handed out? A thought struck me the other night at the winter meetings when I saw Sabean walking the corridors of the Hilton Anatole hotel in Dallas. He seemed pretty carefree to me. Didn’t look like a man beseiged by the knowledge he’s often used by fans as an example of how not to spend money in baseball. But why wouldn’t he look confident and relaxed? Sabean won the World Series a year ago. Williams won the World Series in 2005
You can dismiss both titles as flukes if you want. But winning a World Series is the ultimate trophy you can get in baseball. Better than the zero trophies received for being cost-effective.
A decade ago, the Giants under Sabean were valued by Forbes at $355 million, just before they lost the World Series in seven games. In early 2010, that franchise value had gone up to $483 million. Then, after the World Series title in 2010, the team was valued last spring at $563 million. Barry Zito contract and all. Why wouldn’t Sabean be smiling as he strolls the hotel corridor and glances at the ring on his finger?
The White Sox were valued by Forbes at $248 million in 2004, the year prior to winning the World Series. Last March, they were valued at $526 million. Williams might have made some big mistakes contract-wise, but the guy’s also got a ring and his team is in a better financial position than ever.
So again, it makes you question whether we are looking at the right types of things when we pull our hair out and wonder how guys like Sabean and Williams keep their jobs. After all, wasn’t Williams the anti-hero of Moneyball? The opposite of Beane? Haven’t we been conditioned to laugh at him by now?
Again, there are no trophies in baseball for being cost-effective.
Believe me, I do get it. I understand why fans want their GMs to not throw money away frivolously. There is an idea that if you save enough money by spending wisely, there will be a pile of it left over to go out and get those players who will put you over the top. But there is a fine line between this understandable, logical type of thinking and becoming conservative to the point where you no longer want your team or GM to take any chances.
There is always risk involved in winning. The Yankees and Red Sox have both seen risks blow up in their faces in expensive fashion. Sabean and Williams, clearly, have as well. So has Beane with the A’s.
But again, no risk, no reward. Putting together the most cost effective team in baseball is almost never going to get you a championship. And that’s because the premium player additions who will help put you over the top are almost never going to be the money-saving value types.
But “value” is all relative. It’s a fluid thing, not a solid piece that can be easily nailed down.
Pujols may be a bust for the Angels in five years. But if he helps them contend for the first five years of his contract and generates the revenues the Angels expect and then causes a spillover in attendance and revenues even when his career declines sharply then he will be “worth” every penny.
We’ll just have to see where the Angels franchise is valued down the road.
Let’s look at the Mariners. Felix Hernandez in his 2010 Cy Young Award season delivered $24.9 million worth of production “value” to the Mariners according to FanGraphs. At a cost of only $7.9 million for Hernandez in contract and pro-rated signing bonus money, that’s triple the bang for the buck.
But was he really “worth” that much to the Mariners? They lost 101 games that year. If you’d gone to the scrap heap or plugged a minimum-salaried pitcher in there, could they have won nearly as many games? Maybe. After all, Jason Vargas won nine games that year with a second-half collapse included. So, how much “worth” was it to the Mariners to have Hernandez around? Would a 105-loss team have been any worse than a 101-loss team that year?
So, for the great “value” delivered by Hernandez, it truly wasn’t “worth” all that much.
Had the Mariners spent an extra $15 million on some bats that year instead of plugging holes with Ken Griffey Jr., Eric Byrnes, Ryan Garko and Mike Sweeney, might those added bats have delivered more tangible “value” to the team than Hernandez’s performance? Arguably yes, especially if they led to something better by the team overall, including increased competitiveness, ticket sales and revenues.
That’s why, it’s a tricky thing to make “cost effectiveness” arguments in terms of real “worth” to a team. One team’s albatross can be another’s gem and vice-versa.
Nobody wants teams to be dumb. But I think we overvalue the need for teams to be cost-effective down to the last dollar.
Baseball teams have far more money than many fans give them credit for. They have a greater ability to ride out mistakes than many of us want to believe. Ask the Giants. Ask the White Sox. I’m not the one who keeps re-hiring their GM’s. There must be a reason other than their inability to compete for a bang-for-the-buck trophy that doesn’t exist.
And if those reasons override the arguments for cost-effectiveness, perhaps it’s time to wonder why so many fans worry about the latter to the degree they do. After all, it’s not their money being spent. Not their financial reward to reap. But the money spent on tickets going to see cost-effective, but non-winning products? That does indeed belong to fans. And it’s going straight into your cost-effective owner’s pocket.

Comments | Topics: Chone Figgins


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