Last winter, we devoted more space than usual to discussing the seismic shift that was occuring in baseball’s financial landscape due to regional sports network (RSN) television contracts. The Los Angeles Angels and Texas Rangers both finalized a pair of $3-billion TV deals within the past 18 months that had the effect of turning the AL West into what the AL East used to be.
Now, we’ve got the Toronto Blue Jays re-invigorating the AL East with their cable conglomerate owners finally upping payroll well beyond the $100-million mark thanks to yesterday’s mega-swap with the Miami Marlins.
This story today in Forbes spells out what just happened and why it’s big news about what continues to take place in baseball.
The Blue Jays ownership, Rogers Communications, runs a network split into four RSN properties and have long had the ability to spend big on their baseball team. In fact, I’d submit that the Jays probably aren’t done yet and their off-season is just beginning.
Why spend now?
Well, as this story in Toronto spells out loud and clear, locals were getting fed up with the team’s yearly pleas for patience while they organically tried to grow from within. That’s small market baseball that teams in Oakland and Tampa Bay have to play. But when you’re based in one of the largest markets in North America, playing for an owner than owns and operates the kinds of RSN networks that Forbes now says are the game’s new driving force, well…you can only fool people so many times before they start to catch on to your game.
The money quote:
It’s like after decades of mediocrity, a light has come on and Rogers suddenly understands that their fans are not just annoyed, they’re angry, and they refuse to drink the cool-aid being served up by Rogers’ on-air employees. It’s been 19 long seasons since the Jays qualified for the post-season and Jays fans (the non-gullible ones) refuse to buy into the “we’ll spend money when the time is right” spiel. More and more fans have been demanding that Rogers — one of the richest owners in baseball — loosen the purse strings so hotshot GM Alex Anthopoulos can make some deals to put this team over the top.
Sounds a tad familliar, doesn’t it?
Will it guarantee them a title? Nope. You still have to work for those. But their margin for error just got bigger and I’ll tell you what, that pipe dream the Tampa Bay Rays have of getting a spanking new ballpark supplied to them by taxpayers in Florida just got a whole lot smaller. Who in Florida is going to want to build the Rays a ballpark after what the Marlins and owner Jeffrey Loria just pulled — gutting their team less than a year after opening the ballpark that taxpayers in Miami funded to the tune of nearly $500 million?
Good luck with that.
Unless the Rays’ owner, Wall St. investment banker Stuart Sternberg, starts to put up a bunch of his own money (fancy that) to boost team payroll, it looks like the Rays will continue to waste what should have been the pitching staff of a perenial playoff team. For all the ink that gets spilled applauding the Rays for saving money, they’ve made the playoffs just twice since 2008, their latest coming only after an epic Red Sox collpase in 2011.
Throw in the recent Red Sox struggles, the uncertainty over whether the Orioles have a playoff team or just a one-year fluke, the Yankees’ continued quest for pitching stability and all of a sudden, the AL East isn’t what it used to be.
In other words, the Blue Jays have an opening and just tried to kick the door in completely.
By the way, the Detroit Tigers, whose owner, Mike Illitch, went out and spent $214 million on Prince Fielder last winter and won a pennant in 2012, just shelled out two years, $26 million for a complementary outfielder in Torii Hunter. Yes, that’s right, the Tigers just filled an outfield hole by giving a 37-year-old free agent more money per year than any Seattle player other than Felix Hernandez earns. Somehow, Illitch keeps finding ways to fund his playoff team despite playing in what’s considered to be a smaller market. Amazing how that happens.
Folks, baseball salaries and payrolls will keep going up, not down, even if the Yankees and Red Sox are scaling back to avoid being hit by luxury taxes. The cost of mid-level teams trying to realistically contend (not being a one-and-done fluke) keeps rising, not falling.
What does this mean for the Mariners?
Well, as has been the case for the past decade, it’s entirely up to the team’s ownership group what it wants to do next. Nobody has put any handcuffs on the Mariners except for the team itself. If the Mariners want to be “players” again, they have the resources to step up to the plate and make something happen.
We’ve discussed this topic to death but it bears repeating still: the Mariners already enjoyed a lucrative RSN deal that was finalized in 2007 and went into effect in 2011.
They will have the ability to opt out of that deal by 2015. In other words, they have the leverage to open negotiations right now and demand more money out of ROOT Sports or whoever else they eventually want to do business with. These TV deals get done well in advance — four years in advance as far as the last Mariners deal — so this Seattle ballclub is well-positioned to be at the forefront of the ongoing TV revolution in baseball.
The Mariners were bought for $100 million back in 1992 and should be worth close to $1 billion once their TV plans are finalized, given the new, rapidly-changing growth in franchise values because of the RSN phenomenon. That’s a lot more value than the Blue Jays currently have.
So, we’ll see what happens next.
But the Toronto situation should be an eye-opener to any Mariners fan.
After years of claiming they had to stick to a mid-level budget in baseball’s top-spending division, the Blue Jays, without warning, turned it all around in 24 hours.
Was it because they had formed a young “core” that was now ready to be supplemeted? Not really. The Blue Jays lost 89 games last year, most of the younger players struggled, much of the veteran group was injured and nobody except Edwin Encarnacion surpassed expectations in 2012.
In fact, many of the players being sold to Toronto fans as part of the young core were traded away either yesterday or over the past 12 months.
No, if this Toronto “core” is ready now, it was ready a year ago. Absolutely nothing changed in Toronto other than a manager bailing on the team (guess he didn’t believe in the core much, either) and local fans coming to the realization that the franchise could be doing a whole lot more.
It’s amazing what fans raising the bar of expectations on a franchise can do to prompt that team into action.
But I won’t hand out any medals. The Blue Jays spent 11 seasons selling their fans on rebuilding with mediocre payroll and many of them bought into it until they finally saw the writing on the wall. Here in Seattle, we’re about to enter Year 5 of the Jack Zduriencik regime, so we’re still seven seasons and one GM change ahead of what the good folks of Toronto just went through.
Let’s see how much longer it takes the Mariners to get serious about trying to win again.