You might remember Rob Mains from the work he contributed to this site’s Community blog. More recently, he’s been doing great things over at Baseball Prospectus. Just this past month, he was nominated for a SABR award.
Mains wrote a piece over at BP in the middle of January that I found to be of interest. It came shortly after the Pirates shedded Gerrit Cole and Andrew McCutchen, with Pirates owner Bob Nutting claiming he couldn’t afford to keep star players around at market rates.
Asked Bob Nutting what it will take for #Pirates to break cycle of "develop, then sell when gets too costly."
Answer: "I think you'd have a fundamental redesign of the economics of baseball, that's not what we're going to have."#Pirates
— Will Graves (@WillGravesAP) January 16, 2018
Mains’ piece is, in part, a meditation on what we ought to expect of a pro sports team’s ownership — and, in particular, if there should be a moral obligation, or civic responsibility, inherent to holding such an asset.
Buying a baseball team isn’t like other investments. The current ownership group (led by Kevin McClatchy; Nutting has since become the principal owner) paid $92 million for the Pirates in 1996. The owners could’ve done other things with that money. They could’ve built a hospital. They could’ve invested in a basket of no-load mutual funds. They could’ve bought shares of Microsoft. But they didn’t. They bought a baseball team. You know why? The people who buy a hospital don’t regularly get interviewed by the Associated Press. Investors in mutual funds don’t get to walk through baseball clubhouses with family members and friends, and have famous athletes call them “Mister.” …
Buying a baseball team and refusing to spend the money to make it competitive is the equivalent of buying a luxury car and complaining because it costs more than an $11.99 bulb to replace a headlight. You knew what you were getting into. If you didn’t want to have cash outflows, you could’ve spent your money differently. If you don’t want to pay up for star players, what’s needed is a re-examination of your motivations, not “a fundamental redesign of the economics of baseball.”
Baseball is a business, of course. And we find the business of baseball quite fascinating at FanGraphs dot com.
Owners of all businesses are naturally interested in running their concerns efficiently and at a profit. Billionaires generally do not become billionaires by operating at a loss. However, Mains strikes on a key point — namely, that baseball is not a typical business. Baseball owners are not selling widgets. They are selling a product that has the city’s name scripted across the chest of road jerseys. They own an institution that represents tribal and emotional interests.
It is a business, in other words, with an uncommon amount of public investment (emotionally and in the form of tax-payer-funded ballparks). A baseball team is a part of civic identity and following a club creates a common experience for thousands upon thousands to share in any particular region. While perhaps naive for doing so, a fan base would like its owner to view him- or herself also as a steward of an institution. And we have seen some owners act in well-meaning fashion.
For example, late Tigers owner Mike Ilitch spent irrationally on his Tigers, even appearing to frustrate other owners with his relative extravagance. There was also that moment, at the peak of the recession — with the automobile industry teetering on the brink of collapse — that Ilitch allowed General Motors to keep its prominent ad displayed over the center-field batter’s eye, even though the company couldn’t afford or justify the payment. For those in Detroit who extract some amount of pride from the city’s historical role in manufacturing, it was inspiring. That symbolic act transcended ownership. It was a display of community support and solidarity.
Nutting’s comments and Mains’ piece are related to something else that this author suspects might be at play.
We have heard small-market teams describe themselves as “small-market teams” so often, have heard about the constraints and the un-level playing field so often, that the general public and media has become conditioned to accept these claims as fundamental realities. We’ve come to accept — well, at least some of us — that certain teams can never afford certain players or even consider significant external help on the market.
It’s difficult to challenge such claims since MLB franchises’ books are not public; a Freedom of Information Act request cannot access them. Moreover, with extreme, tanking-style rebuilds now en vogue — responsible for championships both in Chicago and Houston — fans are perhaps being conditioned to accept longer down periods, as well.
We don’t know how poorly, or well, teams are doing. That said, I suspect the Pirates could cover this year’s payroll without selling a single ticket. In addition to the assets received from revenue-sharing and media/TV contracts, there is also the $50 million MLB Advanced Media payment. Applying the NBA’s soft cap-and-floor model to baseball, I found 11 teams would have been under the salary floor in 2017. (That study does not cover the player-development or minor-league expenses that are unique to baseball.)
To be fair, the Pirates were at the top end of their established spending levels before the McCutchen and Cole trades. Craig Edwards didn’t project the Pirates to have much, if any, payroll room — again, based on their established levels. But the club has since shed more than $20 million in 2018 salary commitments. They’re not currently connected to any significant major-league free agent. There are more than 120 players available as of today, Feb. 1. Even during the Pirates’ 2013-15 peak, they were never willing to climb out from the lower-third of MLB payrolls.
We don’t know what a club’s actual spending power is before an owner would have to consider deficit spending. But, as Mains suggests, perhaps being a good steward of a club should mean occasionally spending beyond ideal comfort levels. To use his analogy, these franchises are sports cars not Subarus.
But even before considering deficit spending, we have a pretty good idea there is money to be spent, that more teams could be trying to improve. This winter’s inactive free-agent market is likely due to a combination of influences. The economic model, from the players’ viewpoint, might very well be broken. This ice-cold offseason is not, however, a result of the owners’ inability to afford ballplayers.
According to Spotrac, teams have spent $746.8 million on free agents as of Jan. 31. Teams spent $1.429 billion on free agents last year, $2.418 billion in 2015-16, and $1.638 billion in 2014-15. While some like Yu Darvish are going to be paid, eventually, the lack of spending to date is astonishing, and much more is required to approach last winter’s spending.
Spending should rise this month, of course, but this offseason might very well represent a kind of recession compared to recent seasons.
The conundrum is that teams are correct to identify free agency, on the whole, as a losing bet — particularly with regard to long-term deals that cover the decline years of a player. Teams are operating logically and rationally within the structure of the game’s rules in treasuring young talent.
Still, while teams have rightly prized young talent, not every need can be filled internally. To put as complete and competitive a team on the field as possible, a club cannot spend efficiently on every 25-man roster spot.
With that backdrop, Peter Gammons gave Brewers owner Mark Attanasio a salute over at The Athletic.
The owner of a team in the game’s second-smallest TV market has signed the top position player to date, to the largest contract to date this offseason, in Lorenzo Cain. The Brewers have also bolstered their bullpen though spending and remain connected to top free-agent starting pitchers.
Can they get a free agent pitcher’s price down? Will someone be willing to trade a starter to get a Domingo Santana?
“We’ll see,” says [Brewers GM David] Stearns. “We’ll just keep trying every avenue. We know we’re in a very tough division, but we owe every ounce of our creative energies to the fans in this town . . .. We want to bring the postseason back to Milwaukee. We understand what it means. We know what it meant to Kansas City when Dayton Moore and the Royals did everything to win, which they did.”
No one believes the Milwaukee Brewers can afford a Jake Arrieta or tempt Manny Machado or Bryce Harper next offseason. But in a winter in which tanking and collusion and market correction have ruled, the Brewers have been both fiscally wise and aggressive, all while operating in the second smallest market in the game. They’re trying and that’s why their fans support them.
Yes, the fourth and fifth years of the Cain contract could be ugly. The fifth year is perhaps irrational. Yes, the Brewers have only $91 million in 2018 payroll commitments. Yet, the signings — and perhaps more to come — suggest Attanasio is really into this idea of trying to win.
Small-market fans, in some cities, have been conditioned — or at least come to expect — little action. Yet, the Brewers surprised some in the industry as aggressors this winter. It’s a good surprise. The game is at its best when the fans, players, and owners are all invested.