Can Cleveland Afford Francisco Lindor?
I think it’s fair to say that the city of Cleveland has an image problem. I don’t know how far back this issue goes, but they’ve been late-night joke fodder for as long as I can remember. I suppose flyover country plus rust belt plus the depiction of the city and baseball team in the movie Major League adds up to a less-than-stellar perception of the city. That attitude often transfers over to the baseball club, particularly in terms of what the team can and cannot do when it comes to spending. This perception is central to the debate about whether the Cleveland baseball club can afford a massive contract extension for Francisco Lindor. However, perception isn’t always reality.
There are two principal arguments against Cleveland offering a big contract to Lindor. The first is that Cleveland is too small of a market with meager revenues, and signing Lindor would push payroll too high. The second is an offshoot of the first: If Cleveland were to sign Lindor to a huge contract, they would have their ability to compete constrained because Lindor would cost too much to keep payroll in line with typical levels. Both arguments are worth exploring.
Last season, Forbes ranked Cleveland 25th among franchises for valuation purposes at $1.15 billion. Twenty-fifth place feels pretty close to 30th, and it’s true that Cleveland’s valuation by Forbes was just $150 million higher than the last-place Marlins. It’s also true that Cleveland is closer to 18th-ranked Arizona Diamondbacks than they are to Miami. Cleveland’s market certainly isn’t the biggest in baseball, but it has close to the same number of households as Denver and is significantly ahead of places like St. Louis, Pittsburgh, Baltimore, San Diego, Cincinnati, Kansas City, and Milwaukee. It’s not just market size and valuation where Cleveland is closer to a middle-of-the-pack team than a cellar-dweller.
When it comes to attendance, Cleveland has been in the bottom third for the past three years, but again, they are closer to the middle of the pack than the bottom. For the 2018 season, Forbes estimated Cleveland’s revenues amounted to $282 million, ranking 17th in the sport. The club’s local television contract isn’t one of the richest, coming in at between $40-50 million under a deal set to expire at the end of 2022, but it isn’t among the worst, either. Plus the team received more than $200 million when they sold the television network in 2012 (when the current television contract was created). Over the last decade, Cleveland has received television money in total that resembles something more like a mid-tier-to-nearly-upper-tier market. Cleveland might “feel” like a small-market team, and their success on the field over the past few decades with mostly homegrown stars and a smartly run front office probably contributes to that feeling, but they aren’t the A’s or Rays or Marlins. They have touted their own growth to the middle and have more in common with the Rockies, Diamondbacks, Padres, and Tigers than they do to the handful of teams with significantly lower revenues.
Even leaving aside the argument that of course Cleveland can afford to sign Lindor because the owner of the club is a billionaire, there’s still the matter of Cleveland’s precedent for spending and the framework necessary to devote a significant amount of payroll to a single player. It’s certainly helpful to understand Cleveland’s revenues and profits. According to Forbes, every team receives about $90 million from MLB. Add in close to $50 million for their local television contract, and Cleveland covers last year’s payroll with $10 million to spare before they even sell a single ticket. In 2018, Forbes estimated a $16 million profit for Cleveland even after a $150 million payroll. After a lackluster offseason a winter ago, the team lost around 190,000 fans in attendance for 2019. While that probably cost the team around $10 million, the team dropped payroll by $20 million.
Cleveland has dropped another $25 million off the payroll this offseason, but even if they lose another 200,000 fans, they’ll still end up with an extra $15 million or so at the end of the season. In summary, with a $150 million payroll and around 1.9 million fans, the team earns profits of around $15 million. Cutting payroll by $50 million and losing 400,000 fans leads to an extra $25 million in profits. It’s easy to see why this might be appealing to ownership and how this is one of the bigger problems facing the sport at the moment.
In terms of fitting a Lindor salary above $30 million right now, Cleveland’s payroll would still be around $15 million less than what it was a year ago and $35 million under their 2017 and 2018 totals. In the near term, Cleveland has just $24 million committed to 2021, $14 million to 2022, and just $3 million to 2023. The team is likely to pick up reasonable options on players like Jose Ramirez and Carlos Carrasco while other players will see increases in salary through arbitration, but the club has no long-term encumbrances on future payroll.
There’s also the idea of a Francisco Lindor contract taking up too much payroll. We can throw different percentages around in terms of what might be too much, but keep in mind that payrolls tend to escalate over time. For argument’s sake, let’s say Lindor signed a 12-year, $375 million contract today that paid him $20 million this year, $25 million next year, and $33 million over the 10 years after that. Let’s also conservatively assume that Cleveland will be running a $130 million payroll in 2022 when the free agent years of Lindor begin. In 2022, Lindor’s contract will take up 25% of payroll, which is a large number. As payroll increases though, that percentage drops. In 2009 and 2019, Cleveland was in the low-20s in terms of payroll ranks, but payroll increased by 67% over that time. While we can’t assume the exact same growth, Lindor’s contract moves from 25% of the payroll to 20% at the midway point to 15% by the contract’s end.
I looked for similar situations to Lindor where one player on a small-market team received a contract with a value exceeding $250 million (translated to 2020 values), and there just aren’t very many examples.
| Player | Year | Years | Total Value ($/M) | 2020 Adjustment ($/M) | AAV 2020 ADJ ($/M) |
|---|---|---|---|---|---|
| Giancarlo Stanton | 2015 | 13 | 325 | 395 | 30.4 |
| Ken Griffey Jr. | 2000 | 9 | 116.5 | 332 | 36.9 |
| Prince Fielder | 2012 | 9 | 214 | 322 | 35.8 |
| Joey Votto | 2014 | 10 | 225 | 293 | 29.3 |
| Joe Mauer | 2011 | 8 | 184 | 291 | 36.3 |
| Todd Helton | 2003 | 9 | 141.5 | 279 | 31.0 |
| Nolan Arenado | 2019 | 8 | 260 | 268 | 33.5 |
| Miguel Cabrera | 2016 | 8 | 248 | 260 | 32.5 |
| Miguel Cabrera | 2008 | 8 | 152.3 | 251 | 31.3 |
If the player needs to take up a signficant percentage of payroll, the list drops down further. Miguel Cabrera received two huge extensions and Prince Fielder also signed a big deal, but Detroit was running payrolls so large during that time, the individual contracts were closer to 15% of payroll. Giancarlo Stanton’s extension sort of fits, but given the Marlins had little problem dumping nearly all of Stanton’s contract on the Yankees despite him exercising his no-trade clause along with the Marlins’ ultra-frugal history, it doesn’t make for a great comparison. Nolan Arenado’s contract situation is difficult to assess because the opt-out hurts his trade value and simultaneously provides incentive for Colorado to trade him. In any event, Arenado’s AAV still comes in at under 20% of Colorado’s total payroll. If the Rockies aren’t successful, it’s because they bungled many other contracts and not because of Arenado’s.
Even Joey Votto’s huge deal has only amounted to 19% of Cincinnati’s payrolls over the last half-dozen years, and that percentage is going to go down over the next few as well. The real comparisons are Ken Griffey Jr., Joe Mauer, and Todd Helton. Griffey actually took up 26% of Cincinnati’s payroll over the course of his contract, starting at over 30% before working his way down a little bit over time. In order for a Lindor contract worth $33 million per year to have a similar effect, Cleveland would need to average a $130 million payroll all the way through 2031. Helton put up 29 WAR over the course of his deal, and while Mauer wasn’t as good with Minnesota after having to switch from catcher to first base and designated hitter, he still put up close to 20 WAR over those eight seasons.
There’s an argument to be made for taking those three good comps and pointing out that their teams weren’t very good. Those three players’ clubs put up a .468 winning percentage over the course of those three contracts, a 76-win pace. Of course, during that same time period, the bottom 10 teams in Forbes’ valuations put up a .483 winning percentage, a 78-win pace. While those three players didn’t end up on a lot of winning teams, their teams did about the same as other similarly situated teams who didn’t invest as much in a single player.
There doesn’t appear to be a significant disadvantage for small-market teams to invest big money in a single player. For an organization as successful as Cleveland in other aspects of the game, they seem well equipped to make an exception for Lindor and continue to build around him. This is a franchise that spent several years giving Michael Bourn and Nick Swisher 30% of their payroll. Spreading money around isn’t always the answer.
Arguing that Cleveland isn’t as small of a market and revenue-driver as one might think, as well as pointing out the lack of evidence that handing a big contract to Lindor would cause irreparable harm, might not make for a slam dunk case for a massive contract extension. But it is important to properly frame the issue. Cleveland isn’t Tampa Bay. It’s not even Cincinnati or Kansas City. Their club’s decent television deal and middle-of-the-pack ticket prices coupled with slightly below-average attendance puts the club pretty close to the middle in terms of revenue and generally profitable with a payroll around $150 million. That they are cutting payroll and essentially losing attendance on purpose to drive more profits is worth mentioning in any conversation regarding Lindor’s contract status. It’s not about whether Cleveland can afford Lindor. Of course they can. It’s about whether a $350 million or more contract for Lindor fits into their traditional payroll framework taking into account future salary obligations. And the answer to that question is yes, Lindor absolutely fits.
Craig Edwards can be found on twitter @craigjedwards.
The Indians have routinely been among the top teams in local TV ratings as well. So with a new deal on the horizon they should be seeing an upswing in income from that. KC just got a $50M/year deal with a smaller market, and lesser ratings.
teams are still getting these redic tv deals even with the boom of streaming? thought that may pull back by quite a bit in the coming years..
This is a really interesting piece, especially as it recounts where revenue streams come from and the risk/reward ratio of cutting spending when so much of revenues is guaranteed. It does leave you with two questions that are applicable to many mid and small market teams: Why isn’t there more pressure on ownership from the broadcasters/advertisers to spend on performance rather than just to let homegrown players leave? And, losing shouldn’t incentivized. The Indians have done a terrific job on the field, so we aren’t talking about an 75 win team who figures they won’t get much better by spending more so reaches for more profits by getting worse. Shouldn’t MLB recognize this dissonance, and shouldn’t this be reflected in the next CBA negotiation? I get that MLB doesn’t want to do anything that could enable the players to make more. But quality of product ultimately will matter, and you shouldn’t be driving industry revenues simply by relying on top-tier markets.
In a not at all serious answer, complaining is a one way street. The team and their sales reps get to bother you about supporting them and bigger buys, but the second you complain about the product, directly to them or otherwise, they get touchy.
The serious reason for this is advertising doesn’t actually do anything anymore, people are too sophisticated (and attention is goal directed and top down, and distraction has a momentary effect but not a lasting one so people need to be engaged in search for you product to give a shit about your ad), and anything telling you otherwise is probably lying to you, either by a little (google) or by a lot (facebook). However, people still at least believe a little in paid media, and people watch sports, so it’s kind of the last place you can get a guarantee that people are going to learn your auto dealership exists. Sports are the last refuge for any traditional media sales, so they’re going to be the last folks affected by this grand contraction in ads.
As a result, even if the product sucks, the eyeballs are there in a way they aren’t for CBS’s latest CSI. It DOES turn out that team quality matters in baseball for attendance. Not so much for tv. However, the floor of the market is still above most other media, even when teams are BAD.
I think teams know this, but even if they don’t, they’ve got no reason not to act arrogant about it.
“advertising doesn’t actually do anything anymore”
US Companies spent an estimated $240B on advertising last year. That’s about the GDP of Peru. I’m not saying they know everything, but I am saying they aren’t dumb enough to collectively throw away a quarter trillion dollars. Advertising still works. Maybe not in the same ways it did 30 years ago, but it still works. If you think it doesn’t work on you in particular, you are probably wrong.
Since the 70’s advertising has gone From education about products (eg the old Russell belk papers in consumption and the extended self and petty’s persuasion knowledge stuff) to creating awareness about products (e.g. Hagerty and Aaker, punj and Staelin. Eric johnson and other adaptive decision folks) to having little to no effect at all because people ignore it (tatler et al, orquin and loos, Michel Wedel’s students). Firms telling you otherwise are lying to you (Sheth at Emory two years ago). Sheth even bought like 3 different data sets with his own money to prove the point.
This a case where markets are irrational a good decade longer than they should be, and people are just slow to pick up on where research is at this point.
would love some more info on these studies..
best current source on how hard it is to tell if advertising is doing anything is the Rao paper below. I don’t teach advertising and promotions so I’m not plugged into the HBR level explainer, but Tatler et al (2011) is a really cool review paper on how people just don’t pay attention to things that aren’t goal relevant, and how they don’t influence decisions very much.
Off topic slightly, but the classic theory of advertising suggests that it might not work the way we assume.
A big part of advertising spend is just that — spend. It raises the barrier for entry, particularly in mature markets. Think tire manufacturers, or maybe fast food chains.
Now, clearly, this doesn’t apply to a market like baseball. But then again, neither do a lot of other components of business models.
Following the spirit of this excellent article, therefore, I would like to propose that there are domain-specific reasons for a team like Cleveland to sign a Lindor to an “expensive” contract. First, he’s the face of the franchise, and that has to have value in accounted goodwill. Second, if said face boosts park attendance by (say) $5 million, which I think might be an underestimate in this case, that’s an automatic offset to the annual cost.
And I seem to recall that the Indians are capable of pulling in full houses for year after year. (See: the 1990s.)
Owners in an entertainment business should prioritise putting butts on seats before premature cost optimisation
I mean if Lewis and Rao are right, it’s not like the Indians’ll ever know….
(https://academic.oup.com/qje/article-abstract/130/4/1941/1914592)
In the interest of doing accurate accounting, I may have overlooked it, but where did you capture & account for the other costs of buying, owning & operating the franchise? Front office, scout & game day employees, the repayment of funding used to purchase the team, stadium upkeep, etc.
On the tv contract, to characterize their annual revenue as “not one of the worst” is… curious. The Angels & Rangers signed tv deals that pay them $150MM annually, or triple what the Indians receive.
And using the past 3 years’ attendance is also a curiously arbitrary cutoff. From 11-16, using total season attendance, Cleveland ranked 24, 29, 29, 30, 29, 28. During that time, they finished 2nd (80 wins), 4 (68), 2 (92), 3 (85), 3 (81), 1 (94). So Cleveland fans don’t show up even when they are winning, and the last 3 years’ attendance of averaging #21-23 is more closely described as peak attendance than “having potential”. The ability to renegotiate the tv contract can’t come fast enough since most fans watch from home.
If I’m going to defend Dolan for a moment, is it reasonable to expect attendance to increase if Lindor’s signed to a big deal?
it’s not the authors fault but Forbes is sloppy as shit with stadium ops. I did some back of the napkin from previous experience of just “turning on the lights and turning them off” for a year and Forbes was just…. wrong. It’s not a ton of money- someone else here said about 10 million a year to operate the stadium, which seems about right. The problem is if you really get into it, do you count parking operations and other external investments that are basically revenue sources in the team but exist as separate legal entities for liability purposes.
Revenue from parking lots, sweetheart deals on stadiums and leases, partial ownership in TV broadcast outlets, interest on the playoff tickets you had to buy last year when they were “only” 10 games out of the wild card, and probably a dozen other things should absolutely count when looking at a team’s bottom line.
Basically when a team says “we can’t afford that player” they are almost always lying, which this piece illustrated pretty well. What they mean is “we choose not to afford that player.” That’s fine. They own the team, they have the right. But remember it when they ask you for a PSL payment or even just a game day ticket. Just like with the players, they want “loyalty” with fans to be a one way street and the direction of travel is always towards the owners.
what I find interesting, if unsurprising, is that we KNOW MLB keeps track of this kind of thing after the McCourt debacle, and thinks about parking lots and all as a revenue stream. But when it comes time to cry poverty, it’s all about the ticket sales and nothing else, not even the RSN
Yup and they also like to talk about all the money they invest in the areas around the stadium and how it means they can’t spend on the team, but conveniently leave out all the revenue they generate from those endeavors.
Owners drive the narrative in most cases and people are far too willing to listen the majority of the time. Season to season optimization of ticket revenue is actually incredibly short-sighted in my opinion, though also not surprising. Owners are looking out for their short-term best interests (profit) and choosing to ignore the longer-term benefits (more fan exposure, more future revenue).
There’s a disconnect between what’s best for an owner and what’s best for the team/MLB since ownership is finite and the team/league is relatively less finite.
Maybe it’s time to start a fan union.
See, I’d probably make a terrible owner (usually owners were former/current smart businessmen…not just a sportsfan). If I owned the team, I’d be wins-first….understanding that financials matter. But instead of trying to save money for the sake of profit, it would be to better our spending elsewhere….if you can give me a solid argument as to why they need to trade Lindor and not pay him, I’d listen. If it’s about the bottom line for the sake of the bottom line, that’s where I’m disconnected with what owning a team is about. I’d wear my team’s W-L results to bed every night.
Think Detroit’s former Mike Illitch, but without the idiotic contract signings. THAT’s the type of owner I want….the desire to win without losing sight of your team’s direction.
I have a tough time imaging that Ilitch lost any money in any year of owning the Tigers…
I know that wasn’t your point.
No, of course not. But he lost sight of what the team was, which is why they are where they are today. Rebuilding from the destruction of not knowing when to reload the team. Obviously financially the Tigers were successful during their run. But I wouldn’t have done it the way he did, with a blind, blank checkbook. You can build a great team without wrecklessness
Hell, look at Miggy’s deal. It’s atrocious….made no sense when he was offered it, makes no sense today. Can’t pay an overweight 1B/DH MVP money until he’s 40. At the time I’m sure he didn’t care, but now that their WS run is long gone, we’re stuck with a dead player for awhile. That’s $30M that could be better spent elsewhere.
Regarding Cabrera’s deal, that’s a bit of a special circumstance similar to Chris Davis’ deal from P. Angelos that had little to do with wins, losses, on-field value, etc.
Don’t get me wrong; I’m not saying it makes sense. But in all honesty, I find that kind of misguided loyalty to a franchise icon incredibly endearing, especially in today’s bottom-line mentality.
If only the Indians hadn’t pulled out of the deal with George Steinbrenner…..
Couldn’t agree more with you. If they don’t want to pay a stud SS, that’s their decision…it’s their team. But don’t be surprised when the fans turn on you. It’s a two-way street.
If he chooses Forbes as the sole basis for his arguments, it absolutely is his fault.
1. The $320 M purchase price in 1999 came out of a Dolan family trust.
2. You don’t have to take the Forbes numbers as gospel, but they estimated player costs for 2018 at $157 million and revenues at $282 million. With profits of $16 million, that leaves a little over $100 million for the cost of operating the franchise with front office , scout, and game day employees.
3. The county is responsible for upkeep and renovations of the stadium and have made multiple improvements over the last half decade that helped Cleveland land the All-Star game.
4. As far as the costs of owning the franchise, the team is profitable.
5. It’s been a while, but when I checked in 2016, Cleveland’s tv deal ranked 18th. The Rangers deal is worth about half of the amount you mentioned and unless the fees are the same every yer, they aren’t making that much more than Cleveland. And that doesn’t include the profits of selling the team-owned tv network. https://blogs.fangraphs.com/estimated-tv-revenues-for-all-30-mlb-teams/
6. Over the last decade, average attendance is within about 70k of what it was last season. and would have ranked 24th last year, though revenue would have been higher because Cleveland charges a little more than most of the teams in that range. It was also much higher the prior decade.
7. I don’t know if attendance would go up if Lindor signed a big deal, but the teams that were most active last offseason saw the biggest attendance boosts and the same thing happened to Cleveland when they bolstered their roster after making the World Series.
I’m old enough to remember a time when the Jake sold out every single game for like a 10 year period.
On your point 7, I think it’s quite clear that attendance WOULD NOT go up because Cleveland announced an extension for Lindor. Attendance increases lag or anticipate win increases. Extending Lindor extends the status quo, not a win increase. SomeGuy shows that Cleveland’s attendance remained at #29 (and actually went down from 19,797 to 19,661 fans per game) even after they signed Bourne & Swisher after 2012 and won 92 games in 2013.
I think Dolan is right — Cleveland either increasingly looks like a bad market for baseball or they need a new stadium to juice attendance and that’s with the team winning 93, 91, 102, and 94 games over the last 4 years.
Do you know why nobody will play for the New York Knicks or go to the Garden to watch them?
Do you think maybe if the Tribe owner’s last name wasn’t “Dolan” fans would actually enjoy giving the Indians their money? I know that it angers me to pad his wallet. The day that guy sells the team is the day the Indians sell-out the stadium again.
Thanks Craig. A few points and some questions. I’m open-minded, just need to see some facts and data to support your points that don’t seem to align with my research:
1. If funded via family trust, it’s not unreasonable IMO that they expected to repay that trust as though it were a loan. It actually could have been a loan that required repayment. So I don’t think we can discount that as an annual eating into profits.
2. Assuming the $157m is correct and the $100m profit you called out, there’s still a significant number of expenses that are not captured. I only called out game day & FO staff, but there’s many more. League-wide reserve fund to cover expenses in case a franchise gets abandoned a la the Expos, emergency fund to allow owners to weather a player strike, etc.
3. Do you have anything that shows the county is responsible for maint & upkeep? The material I found showed that was only the case for large expenses over $500k.
5. Rangers deal was $3b over 20 years according to Forbes (https://www.forbes.com/sites/mikeozanian/2012/12/12/rangers-tv-deal-may-come-back-to-haunt-dodgers/). Was there another article that shows it’s less?
7. How are you looking at attendance? Because using the total attendance from bRef, attendance from 11-19 has varied from a high of 2.05m in 17 to 1.39m in 15. Attendance has only topped 2m one time from 11-19.
8. The recent uptick in attendance from 17-19 (and the signings you reference) followed FA signings, not retention of existing players. EE after 16 being the most notable – after which attendance has again declined YoY.
Thanks!
As for the $157 million, we know that is correct, or at least very close given player contracts are made public. As I said, that leaves $100 million to run the rest of the team and still make a profit.
You are correct on the $500k improvements.
The Rangers tv deal is based on a september 2010 nightengale article and it turned out to be inflated. https://www.dallasnews.com/sports/rangers/2010/09/27/rangers-new-20-year-tv-deal-worth-80-million-a-year/
I just looked at attendance from 2010-2019. It averaged 1.65 million, only about 70k less than last year’s 1.72 figure.
Like I said, I don’t know if attendance would increase or maybe stay the same, which would probably be welcomed in Cleveland this season. Colorado and the Angels saw static attendance last season despite not-great seasons after locking up their stars, but they draw a lot more generally.
The front page description says “Cleveland isnt as bad as everything thinks it is.”
I’m only here to say: Craig, as a city it is, and you cant convince us other wise.
Of course, Craig’s point in this article really *is* that Cleveland is as bad as everyone thinks. I was hoping, based on the front page description, that Fangraphs might have run a rare piece defending an ownership group, but this piece just echoes the same tired sentiments that most fans (and writers on this site) constantly proclaim: owners are too cheap.
Won’t someone think of the poor plutocrats!!!???
It is VERY GOOD CAKE!
So go ahead and defend the owners then, Mr. Dolan.
Dismissing the author and the author’s arguments as biased in favor of players is dumb. First of all, there are numerous recent articles on this site where several commenters complained about perceived site bias in favor of owners. Second, and more importantly, regardless of bias, the author makes informed points. Dismissing the author’s statements as biased is intellectually lazy, because it excuses the reader from having to think about facts and arguments that may be uncomfortable and alleviates the need to come up with intelligent counters.
okay my point was just that I was mugged in Cleveland and as a whole the city itself sucks. Ill take my beating, but this take is terrible.
“They have touted their own growth to the middle and have more in common with the Rockies, Diamondbacks, Padres, and Tigers than they do to the handful of teams with significantly lower revenues.”
This is true in terms of a revenue standpoint, however, Cleveland has been much better at consistently fielding a competitive team that the comps above. Ironically all of the teams above have signed a player to a long-term contract that they are having trouble unloading and is preventing them from truly competing. Perhaps Cleveland would prefer not to make the same mistake the others have and would prefer to spread the payroll over several players and keep their risk low and chances of consistently fielding a competitive team higher.
SSS warning but all the mid market teams that have given out these mega contracts have regretted them (in terms of how they made it difficult to contend) FAR sooner than people predicted.
I’d rather they pay Lindor 60 million for 4 years (and shit, they can afford it). There should be a way to do these deals to pay for present performance without crippling your team for the back half of the deal. That sounds like something for the CBA to solve.
Given Lindor’s age, a 3-4 year extension at $100-130M might be a fair extension, getting him to free agency around 30 and keeping him arould while the team is still competitive. He might not enjoy hanging around much longer because sooner or later the window will close. There’s too many unknowns for either side to commit to a 12 year deal.
Lindor wouldn’t sign for 4/$60M. He’s getting $17.5M for 2020 alone and it will only go up from there.
I think he meant 4 years at $60M, or $240M. I think the notion of front loading the contract is one worth exploring (but $60 is too much for anyone not named Trout IMO)
Lebron James basically does short term deals (via opt outs) to maximize his earnings and impact/say on the direction of his teams.
Yeah I meant 240 total. Probably too much for Lindor, but their ROI would (?) be better than the Harper deal I think. They just spend less time underwater.
They only “cripple” the team based on ownership pressuring a reduction or stagnation in payroll. Teams are realizing that increased spending on players is not a good monetary investment. I don’t know f there’s anything that could be done in the CBA to affect that relationship.
“SSS warning but all the mid market teams that have given out these mega contracts have regretted them (in terms of how they made it difficult to contend)”
This narrative is wrong and needs to die once and for all.
Take Craig’s example using Joey Votto. Votto has accounted for just 19% of Cinci’s payroll and has produced 24 WAR since his extension began in 2014 while being paid $118m. Expecting any club to do better than $5m/WAR on the free agent market is extremely optimistic, let alone claiming such performance for the dollar has hindered the club from competing.
It’s not Joey Votto’s contract’s fault that Cinci stopped developing players internally to play around him.
I think we’re arguing that in equilibrium those deals prevent teams from winning championships because those resources are concentrated instead of spread out- emh down the page has some evidence of this, but it’s basic portfolio theory with the twist that you know your resource concentration hurts you down the line
And that’s a bad take unless you can show the value they got for that money could’ve produced more if spread around, thus my evidence that Votto produced significantly more per dollar than market average.
as seen below, one team in the last 50 years who concentrated more than 15% of payroll in a single player has won a world series (The MARLINS). There’s a both and there- pay more money for better players, and Votto is less of a concentration. There’s also endogeneity- like, Cincy’s farm is/was bad, and they seem cursed to underperform their pythagorean (perhaps because all the money is concentrated in a single asset, making performance more volatile). But across the board, if you hand one mega contract out as a mid market club, this appears to constrain you from buying other players, and you aren’t going to win a world series.
He has $107-$120M left to go in his contract; are you assuming that he’s going to produce another 20+ wins over that 4 or 5 year period?
I mean, it’s still not as bad of a contract as the Mauer and Fielder contracts, and you can argue that the back end is going to subsidize the front end to make it a “fair” deal overall but this part of the contract is going to be pretty unfortunate.
And it comes when they most need Prime Votto. Or a younger performer.
The good years came with the downside of the cycle and the decline is coming during a possible run.
If he doesn’t step back up for one last hurrah they might end up falling short. And it won’t matter how well the contract average looks.
In a PED-less world tbe mid-thirties are risky gambles with most players.
Again, this isn’t a function of the contract!
No, it’s a function of the passage of time, which is a key component of both the decline in performance (via age) and the remaining cash remaining (via the length of it). You can’t just say they got $5M per win without pricing in the back end, where they will probably get somewhere between 0 and 5 more wins for about the same amount of money they spent in the first half. It’s fundamentally incorrect to claim that the value of the contract is going to remain that high going forward.
Yes, it is a function of the length of the contract.
A similar example is from when Detroit, in the midst of a historically bad stretch during rebuilding signed Pudge to a massive contract. A year later they became respectable and the had Prime Pudge for the bulk of their run.
Timing matters.
Signing a long term deal entering a competitive window has a better chance of working out than signing it in tge middle of one and entering the decline phase.
Length and timing of contract is at least as imporant as the total value because of the roster and lineup spots it will tie up on the back end. Again: Pujols. Never mind the money: he is squating on a 1b/DH and producing way less than average for the position.
ALL back ends of contracts like that are bad; when you sign them, teams know (or should going) that the last couple of years will be ugly. I think the argument is that for the first half of his extension, Votto produced like he had before. But the development of players by Cincy was awful from 2014 on. Especially with pitching. Votto was the same as he always was, everyone else was just bad.
Tell that to NMR724! He seems to think that the contract is already over, or he just doesn’t care about pricing it in.
Not many teams can afford to write off $100M in several years worth of an underwater contract, so Chris Davis gets still more at bats, Pujols gets another year, and the Yankees are fighting Elsbury even if its “only” for $26M.
https://www.youtube.com/watch?v=ysmLA5TqbIY
How trustworthy are the Forbes numbers? Have always heard they should be treated with caution and are just loose estimates.
Yes, you are correct. Based on their estimates compared to historical sale prices, you could likely do better with a dart board. They have done nothing to deserve the credibility they seem to nonetheless possess.
worst thing about it is it’s just random error- it’s not obvious they’re systematically under or over reporting. If they were, we could just fudge things one way or the other.
Their estimates of NBA team values were incredibly embarrassing as well for an incredibly long time. And the NFL for that matter.
I doubt very much that you could walk into Cleveland with a check for $1.15 billion and walk away with the Indians.
That would be a good thing for an interested author to put some effort into investigating. Some effort. Any effort at all.
Instead we get another sloppy article from Craig Edwards without an inch of original research, editorial scrutiny, or novel analysis. Why? Because declining is the path of least resistance and makes a better case for his hobby horse.
This is basically the last chance Cleveland has to lock up Lindor on any sort of a discount, and the fact that it hasn’t come together yet suggests it’s not happening.
If Cleveland wanted to give a 10 year, $200M deal to Lindor when he first hit arbitration (or a 13 year, $250M deal, or whatever), that would have been a great deal for the team long-term. That was probably the time to strike a deal, for both sides. Now, you’re looking at a deal in excess of $300M and while I suspect he’s going to age better than nearly all of those contracts listed up there, all of those contracts except Cabrera’s first contract (and maybe Helton’s, but that was a while ago so I can’t remember) on that table are seen as bad deals for the team.
This is a problem it really does stink to have a huge black hole on your roster making $33M a year. The problem with this analysis isn’t that Cleveland can’t handle a $33M contract when Lindor is 30, it’s that they can’t handle a $33M contract when Lindor is 34. At that point, the opportunity cost of having Lindor is really tough. Many teams are fine with this; signing a guy to a mega contract like that lets you subsidize the front half of the contract with the back half. It’s essentially deferred money. Cleveland isn’t in a position where they can give $33M to Francisco Lindor’s age 34 season, much less what happens after that, and that’s not likely to change.
And I say all of this as a person who thinks that Cleveland’s ownership is a bunch of tight-fisted wimps who won’t spend money, because they do have a really terrible sense of the idea that you can spread out costs over multiple years. The smart teams are the ones that sign players to extensions as early as possible, because even if the individual player doesn’t quite pan out you still come out ahead overall on the group of players. Cleveland, like a lot of teams, seems to relish the years of cheap control for its own benefit rather than using it as leverage to lock in a long-term contract, which is not a good way to do things. So if we’re going to rake them over the coals for not spending, it’s that they weren’t willing to lock up Lindor earlier, not now when they’re essentially paying free agent prices to do an extension.
From what I’ve read in the past, Lindor — like Betts — has always wanted to test FA. 10/$200M certainly wasn’t going to be nearly enough to dissuade him, especially after Stanton’s contract in 2016.
You make an excellent point though about the difficulty for lower revenue teams having a $33M contract to a 34yo on their books.
So I got my timeline wrong a bit, because I thought Lindor was a super-two guy and he’s not. So they offered Lindor an approximately ~$100M extension before the 2017 season, when he had two seasons of pre-arb control. So that wasn’t enough.
If you fast-forward one year, where you’re buying out one pre-arb year and three arbitration years, $200M looks more like it’s in the right ballpark. Lindor gets a huge payday, the team locks him in for his prime years, it’s a win.
I think if you go to buying out three arbitration years (which would have been a year ago), now you’re probably looking at a very, very expensive deal because Lindor is a megastar, he’s going to earn like $10M in arbitration, and he can just collect his $40-$55M in arbitration or whatever (because they are not turning him loose at that point) and then cash in with a big deal. When guys are this young and this good, there’s not a ton of upside for them signing an extension unless it’s for free agency prices anyway, because even after a down year teams are still going to put huge numbers of zeroes on a contract like Bryce Harper. The only reason for them to do it is because earlier you’re buying out years where they’re comically underpaid, so once you miss that window it’s tough to lock up a megastar.
You’re correct in everything you say,but the bottom line is Lindor is not interested in signing an extension, he wants to go to free agency and has been pretty clear about it since arriving in the big leagues with his first round money and his New Balance shoe deal already in his pocket.
You lost me with your last paragraph. Cleveland was one of the first teams to buy out the arbitration years of young players, dating back to the years of John Hart as the GM. It’s a practice that they’ve continued.
But not every player is amenable to such a buyout. And someone like Lindor is in a strong negotiating position because he received a 2.9 million signing bonus. Much easier to buy out someone like Jose Ramirez, who signed for peanuts.
Oh yeah, Cleveland is absolutely the team that started that, with John Hart. And it worked really well, but the team absolutely should have gone above its limit for Lindor.
I think the question is whether Lindor ever would have been amenable to such a contract. Some people are saying he never was going to go for it, ever. I’m not convinced. It would have taken more money, sure, but he was going to be worth it.
“Cleveland, like a lot of teams, seems to relish the years of cheap control for its own benefit rather than using it as leverage to lock in a long-term contract, which is not a good way to do things”
It’s actually a perfectly good way to do things as long as you can use the savings to make sure your pipeline of serfs is really really productive. Which is a big part of why MLB keeps cracking down on the main methods used for that. But it can still be done.
I think ‘indentured servants’ is preferred over “serfs”, who are tied to the land and thus exhibit large home/road splits.
You’re neglecting the 48% shared local revenue when talking about how much teams get from central sources. See:
https://www.baseball-reference.com/bullpen/Revenue_sharing
Cleveland gets $210M from MLB, plus 52% of their local revenue, plus whatever small market funds they get.
They can easily run a $150M payroll, and still make money, so they can certainly afford to pay Lindor $35M.
The Rangers essentially did this with ARod’s first mega contract – concentrating 20%+ of payroll to one player and it didn’t work.
Kelly Criterion also suggests that concentration of funds into one success criteria (ie player) is a really really bad idea.
Tampa just won 96 games in baseball’s toughest Division while paying Charlie Morton almost 30% of the 25-man payroll.
One high-priced player won’t save a club from crappy team-building, nor will it keep them from doing it well.
How many years did Morton get?
Fiscal flexibility isn’t about one year or two but about longer term handcuffing.
Think Angels and Pujols.
Other than the fact that Lindor plays the middle of the field, is ultra athletic, provides value on both sides of the ball and will be 3-4 years younger than Pujols was when he signed his deal…yeah, the two are totally the same!
Don’t move the goalposts.
The argument presented was that concentrating more than 20% of payroll to one player doesn’t work, and I provided evidence that that is incorrect.
And I said it depends on when the contract was signed and for how long. A ten year $300M deal to a $25 year old has a better chance of panning out than a $12 year deal or a 10 year deal to a 32 year old.
Basebal, without PEDs to help healing, is a game for young people. Players who are still naturally good in their late 30’s and 40’s are rare.
This strikes me as a very weird interpretation of Kelly. A season’s worth of payroll isn’t a bankroll and depending on where you are in the relative payroll/success scheme around the league you might actually want a really high risk of ruin since it’s hard to win big without one and your “ruin” is heavily subsidized by the rest of the league.
Even if you want to squint and put Cleveland more towards the middle of the pack, when has a massive contract by a middle of the road (in terms of market) team ever panned out? If you look at the past 25 years and you’re looking at World Series winners, you don’t really see those, unless I’m missing something. The Cardinals are almost certainly the model team for non-big markets, and while they have signed premier players to very nice deals, they’ve never broken the bank for anyone.
In fact, there are several examples that come to mind of teams struggling to compete even when their high dollar player performs up to par. I think it is completely understandable given how many teams have tried this path and failed for any team to be reticent to go down it again.
At this point the issue isn’t the average salary but the length of contract.
Much like when Thome left, when the Indians matched the Phillies salary levels but wouldn’t guarantee the sixth(?) year, offering it only as a vesting option.
There is no way Cleveland dares go much past six and Lindor won’t go much lower than ten.
That six to ten window (32-36 years) is the danger zone for middle infielders. Too many implode in their mid thirties so the player wants them guaranteed and the team fears them.
Lindor is young enough that a deal that covers him until 30 or less might be doable but it won’t be much below market value if at all. But odds are long. Mostly it would depend on him getting spooked by last year’s injury or really liking the team’s near term prospects.
Why is that a problem? Lindor is 25. If you sign him to a 10 year deal right now, he doesn’t hit 32 until year 7. It really isn’t a big deal if Lindor craters at 32 and the Indians have 2-3 dead seasons. So they’ll have to operate on a $100M effective payroll those years. That’s not horrible.
Better to suck seven years from now when Lindor craters than to suck next year when they give him away for a B+ prospects and some live arms in A-ball.
Uhhh, he is 26. Also, the most likely out come will be a ~10 year contract for his free agent years, not starting right now. So he would be 28-37 in a 10 year contract once he reaches free agency.
That’s not what I’m suggesting they offer. I’m saying a 10-year, $300-350M contract starting right now. I don’t think he turns that down.
The Indians should hope he does.
He is (generously) listed at 5’11” and is wiry rather than a bruiser.
Put him next to Trout and figure out who is likely to be smacking 30 HRs at 35.
Players age and the decline starts in the late twenties. That’s well documented.
And the long contracts are “justified” by saying tge back end year subsidize the front end but the truth is few teams can afford $35M of dead money on the pine or IL for 3-4 years.
Fangraphs every year does an article on dead money contracts. Check and see where Cleveland lies on that list. And see where nost of tge dead money comes from.
And if in seven years he’s 33, nursing regular injuries, hitting like Addisson Russell, and too slow for SS and his big contract means Nolan Jones is hitting FA in his prime because they can’t afford two $35M salaries on a last place team? He wouldn’t be enjoying that as much as being “the face of tge franchise”.
Baseball careers have ups and downs and seven years is a long time and fans only care about you ‘ve done lately.
What looks bearable today becomes an anchor down the road.
Long contracts handcuff teams. Some can afford it. Most can’t.
Some interesting slanting of facts going on here.
The Indians 2018 revenue was boosted by the second installment of the Bamtech profits(approx. 25 million) from the 2017 sale to Disney.
Cleveland is the 33rd largest metropolitan statistical are in the U.S.,smaller then every example you cite.https://en.wikipedia.org/wiki/List_of_metropolitan_statistical_areas
The 200 million dollar sale of Sportstime Ohio to FoxSports was done by the Dolan family not by the team,as you imply,so it can’t be considered team revenue.This also was a one time stream of revenue.
Beyond those……
The Indians have won 90+ games four seasons in a row and there attendance has gone down during three of those seasons,leading to decreased revenue since all other sources of income are contractually static.
I’m pretty sure no team in major league history has ever won 93 games in a season and had their attendance go down 10%,like the Indians did in 2019.
Your proposed Lindor contract is a fantasy,10 years 40 million with a couple of player opt outs is what it would take to sign him in Cleveland.
Rendon just signed for 7 years ,35 million AAV and is a year older than Lindor will be when he’s a free agent and plays third base, not gold glove quality shortstop.Rendon is in no way as good an all around player as Lindor.
All of the the teams you’ve cited that signed their super stars to long term deals were unsuccessful during most of the length of those long term deals except for the Tigers and that’s because Ilitch dipped into his own pocket to make payroll.
Fangraphs has long championed the stupidity of the long term deal in baseball,why the Indians are being held to a different standard here is a good question.
Is it the player?
Is it ‘ The Dolans are cheap’ narrative supplying low hanging fruit for an article?
Brilliant. Craig did his team payroll increase/decrease bar chart article last week and decided to pile onto the Indians (after hitting the Cubs and Red Sox earlier this winter). He’s a prodigious writer so he may have missed nearly an identical article on Fangraphs a month ago:
https://blogs.fangraphs.com/the-cleveland-indians-and-the-burden-of-financial-proof/
The BAMTech sale money isn’t included in the revenue estimates, but if you want to add in $50 million to the listed profit amount, I won’t hold that against you.
I cited the DMA household number, which is a better indicator of market size.
How the Dolan’s decided to split the money on profits from a team-related enterprise doesn’t make it not team-related. It was essentially a signing bonus for the tv deal.
Cleveland’s attendance was roughly static from 2017 to 2018 at around 2 million after a huge jump over 2016. They did nothing last offseason and lost fans, but were still pretty far ahead from previous levels. Cleveland has supported the team when it wins and looks like it is trying to win.
Rendon just signed for $100 million less than what I proposed in the piece plus Lindor is still two years from free agency. If it’s a fantasy, I’d like to see him turn it down.
The point of the exercise regarding other teams isn’t to show that the other teams were bad, it’s to show there are barely any examples to draw from to make actual conclusions. I agree that the Tigers aren’t a great example because of how much they spent. It just doesn’t leave much in the way to do any analysis. The comparable players in the piece are also generally older than Lindor as well. Griffey and Helton were 30 and Mauer was a catcher. There simply aren’t enough examples of teams doing this to say it does or does not work. Even when they do it, the team performance doesn’t differe from the teams who don’t.
Of course you cite the TV market size since the MSA (33rd) and urban area (28th ) rankings don’t support your contentions.Cleveland itself is the 52nd biggest city in the country.
The TV market covers a large area from Lake Erie south to Columbus,but very few of these people actually attend games so that is static revenue until 2023.
Rendon signed for seven years not ten as I proposed yet you quote total dollars,playing loose with facts seems to be an obsession with you.In two years Lindor could well be worth far more than 40 million a year and he’s already turned down big money extensions,so turning down yours would be easy.
Twisting consecutive drops in attendance in 2018(while having a team record payroll) of 6.5% and 2019 of 10% into “supporting the team when it’s winning” is circus performer worthy.
Nope you haven’t convinced me of anything yet.
“Even when they do it, the team performance doesn’t differ from the teams who don’t.”
Would seem to be pretty good indication that teams should not spend the extra money in that case.
Pretty much every example you cited in the article ranges from meh to atrociously bad. None really grade out as good. None of those teams won anything meaningful other than the Tigers, who as noted were in a unique situation, and who have now absolutely cratered while being committed to paying Miggy for AT LEAST four more years and possibly up to six, ye gads. This is after everyone was screaming that he MUST get an extension back in 2014 or the Tigers were disrespecting him and showing the fans they don’t care about winning, etc. etc.
I think what we can safely and honestly say is that these contracts are a huge risk for teams in these market conditions. But it all feels like a record repeating – every time one of these situations arises it’s the same arguments about how the team has to sign the guy. Every time up until now when they have the contract has been at best a push and at worst a disaster. Lindor is a great freaking player. Signing him to the kind of contract it would require to keep him would still be a huge freaking risk for the Indians.
Fangraphs has long stopped championing the stupidity of long term deals in baseball. That was the ‘Dave Cameron – economics major’ Fangraphs. What the ‘David Appleman – Bernie Bro’ Fangraphs champions is GIVE THE PLAYERS MONEY!! GIVE THE PLAYERS MONEY!! Really, did any of you upon reading the headline doubt what Craig’s answer was going to be?
You are correct. This is #BORASgraphs now.
Boy you really went for it there…
Because Craig Edwards just wants to write about greedy owners. He’s not carefully considering the baseball issues in play here; he’s looking for jumping off points to make the same argument he always wants to make: owners rich and bad.
I know a lot of economics are based on team payroll. What I would like to know is what is the average MLB expense for “non-roster” employees… this would included all FO staff, scouts, bonus money, admin staff from tickets operators to team lawyers… the whole shabang… just curious if any one has a clue!
Craig Edwards: “(Forbes estimates) player costs for 2018 at $157 million and revenues at $282 million. With profits of $16 million, that leaves a little over $100 million for the cost of operating the franchise with front office , scout, and game day employees.”
If Cleveland wants to keep Lindor, they absolutely can do it and still remain profitable. However, I guarantee that they have run analyses showing that if they lose Lindor, they can be even more profitable. Bob Nutting figured this out several years ago- if ownership is willing to be a local pariah, they can laugh all the way to the bank.
Sadly find myself agreeing with this.
Amazingly, there are levels within the term “profitable.” Make $100,000 or $1 billion, you’re profitable either way! Only greedy pigs would choose $1 billion over $100,000… it’s pure profit bro!!!
Have you walked around “downtown” Cleveland? Have you seen the Cuyahoga River and Lake Erie?
It is likely not a matter of whether the Indians want to sign Lindor. It is matter of whether Lindor wants to stay. And why would he?
One of, if not the, best food towns in the middle east (west). Maybe he likes Japanese food ,and will only eat the best japanese food in the country which is somehow in the greater cleveland area.
or he just likes watching the river when it’s on fire, who knows.
Lindor has been paid ~$30 million if you include the $17.5 million he is set to make this year. He could literally just fly to japan whenever he wants Japanese food lol.
Downvoted for the first paragraph, upvoted for the second = no vote?
There’s extensive research that committing too high a percentage of your payroll to one player is problematic, particularly if your goal is to win the WS (which is should be). And Cleveland is well aware of that research, To wit:
“Cleveland’s database revealed that dating back to 1985, no World Series champion had committed more than 15 percent of payroll to one player. It’s a finding that still largely holds up going into this much-anticipated free agency shopping season.”
https://fivethirtyeight.com/features/good-mlb-teams-oppose-income-inequality/
I think Matt Holliday took up more than 15% of Cardinals payroll in 2011 and Scherzer and Strasburg definitely did this past year (which is after the article was written), but to that end I could also say.
I looked through the database of payrolls and found no team in the bottom 10 of payrolls has won a World Series in the last 25 seasons and the only two in the bottom half were the 97 Marlins and 2017 Astros.
If the goal is to win the World Series, they should have a payroll in the top half of teams.
Sure. You have to spend money and you have to spread it around wisely. It’s a “both/and”.
BTW, some sources show the 2015 Royals at #16 in payroll which would technically put them in the bottom half.
Is there something weird in their contracts? Both Scherzer and Strasburg seemed to have made an inordinate salary in 2019 ($80M+ combined, just over $40M in 2018).
Dont think so. Thats just how much they made last year as per their contracts. They both had $35 million salaries last year plus bonuses.
Washington contracts involve big chunks of deferred payments.
They are kicking the can down the road.
Good point. Craig will ignore it, claiming the data supporting a conclusion that nine-figure contracts are generally more harmful than beneficial to small market teams is too scant to be conclusive. Because this is #BORASgraphs now.
But the “nine-figure contracts generally harm small market teams (or *all* teams for that matter)” conclusion is not only supported by almost *all* of the available data, it also just makes common sense. Such contracts shift all of the risks over extremely long (usually 10+ year) time spans from the player to the team. You would think the counter-intuitive argument that small market teams are *not* harmed by nine-figure contracts would be the one that requires a lot more support and authority. But this is #BORASgraphs now.
Look at this week’s dead money article to see gow well long deals play out.
This is not nearly enough of a sample to make claims of a fundamental effect.
That’s true,but it also cuts both ways.It doesn’t prove that spending the money on those contracts makes a smaller market team a winner either.In fact,even given the small sample size, the opposite is true.
I agree,. But, it does not appear Cleveland is concerned about doing any better than they have the last few years. The rebuild is going to be ugly in a few short years.
Do the Brewers next…
What people forget is that real people care about relative wealth more than actual wealth. Baseball team owners look at each other and judge themselves on how well they are doing financially compared to the other owners (not by how much they can actually buy). That is normal financial psychology for humans. Fans want the team to win games, owners want their own wealth to climb faster than other owners. Sometimes winning helps them climb, sometimes it doesn’t. All these owners live better day to day than most (maybe all) European Kings in the dark ages, yet, they are not happy because they are not doing better than their peers. So they are constantly looking for ways to beat the other owners at extracting wealth. Completely plundering teams (like trump did to all his companies) does not work in sports. Winning does not always work, but can really help. But, their is no sure fire way to extract wealth easily when compared to the other owners unless your the dodgers or Yankees who have really out-sized revenue streams. Resigning Lindor has lots of downside risk for the Cleveland owners, and unless they win a World Series the upside is not much better then they are doing now. I doubt they resign him. He will go to a team like the Yankees or Dodgers who have little to lose, or a loser who has upside from becoming a winnerto gain.
If you’re on Fangraphs you almost certainly live better than all European kings in the dark ages and nearly all of them in the Renaissance as well.
Yes, But, having this extreme wealth does not change the fact that most people care more about relative wealth. You can’t change human nature.
” All these owners live better day to day than most (maybe all) European Kings in the dark ages”
——
“Who’s that then?”
“I dunno, must be a king.”
“Why?”
“He hasn’t got sh*t all over him.”
– Monty Python
Remember, Lindor rejected $100M extension offer as a 23 year old with $4M in the bank.
Now he is a 26 year old MVP candidate with four all stars and $30M+ guaranteed earnings.
He is not going to agree to any below-market deal.
Right. His best interest lies in locking in big salaries well past the point when his body stops being able to deliver.
The team’s best interests lie in a contract that ends just before that.
A long deal is extremely unlikely.
A short deal tbat buys out one or two FA years is theoretically possible but still unlikely.
There are really a couple of questions you address here :
(1) Can ownership afford to pay Lindor $30 million? The answer is clearly “yes. They’re paying him $17.5m this year, so unless you think they have less than $12.5m in profits, they can literally afford to pay him.
(2) if you were the GM, would you choose to pay him? This is a much dicier proposition. Since the Indians sent off Kluber and Bauer, I think we can conclude that (rightly or wrongly) they were serious about reducing payroll below $100 million. If that’s the hand you’re dealt, do you want to devote 30+% of it to Lindor? Probably not. You can talk all you want about how, in 7 or 8 years, it’ll really be more like 20 percent of payroll. But if I’m the GM and I tie my hands for the next few years, 2028 won’t matter to me because I will have been fired a long time before then.
They might have been looking to clear room for a bigger Lindor offer.
Moving Bauer and Kluber has other explanations than just saving money. The returns suggest moving Kluber might have been cash-based and might have been risk-based.
The return on Bauer suggests baseball reasons were the prime driver.
Not all money-reduction trades are pure salary dumps.
But these two absolutely were.
Not Bauer.
Bauer was addition by subtraction.
They didn’t trade away 2018 Bauer. They traded the 5+ ERA, back end starter Bauer and got back their likely new regular RF, two back end starters for 2020, and a lottery ticket in the low minors. Tbat is a lot for 18 months of a high upside/low floor erratic pitcher. Who was becoming a distraction in the middle of a run.
Yeah, they also saved money.
He’s the Reds problem now.
May they luck out.
Absolutely spot on.Bauer isn’t as good as he and other people think he is.That trade was an a huge win for Cleveland.
Kluber wasn’t strictly a dump either.
If they didn’t want to pay Kluber’s contract all they had to do was not pick up his option.They turned him into an asset and saved money at the same time,that’s one reason they’ve won 90 games 4 seasons in a row,an astute front office.
Are we maybe underestimating the costs of stadium, the minor league system, facilities, equipment, coaches, front office, scouts and so on?
To really judge teams finances we would need to know those fixed costs before mlb personnel. I’m not saying teams couldn’t afford more but you can’t just look at gross revenue (need to pay taxes too) and mlb payroll as there are a lot of non mlb payroll costs.
With the payroll they currently have they could afford lindor but only if they cut costs elsewhere. Do you really want to allocate a third of your payroll to one player?
IMO these analyses too often discount the cost of travel, which I imagine is fairly significant for MLB teams. We’re not talking about multiple tens of millions, but it’s definitely something.
It’s great to see so many comments. I hope they are all from die hard Tribe fans! Cleveland rarely sees a home-grown talent like Frankie. We all want him to stay here. The owner can afford him. That is obvious. Whether he wants to is another point altogether. I have always questioned Dolan’s desire to just be competitive vs win the World Series. If he stays I do believe the town will respond in many positive ways. The Indians’ MiLB system has some exciting talent coming. They will need to continue to draft well in the future (if Frankie stays) to provide a young, talented, and energetic team around him.
Even leaving aside the argument that of course Cleveland can afford to sign Lindor because the owner of the club is a billionaire
No no, go ahead and spell out this “argument”. Let’s see it in all its glory.
And then let’s see the logical consequences of it. Since the team budget is largely irrelevant because billionaires, what should the Indians payroll be? Do it for all 30 teams.
This will be insightful analysis and just overall very smart stuff. There’s a lot of rich owners out there. I don’t see why anyone should ever not pay a good player. Boom, analyzed!