Red Sox Hit Reboot, Dodgers Pick Up Pieces

While nothing has been made official yet, it appears that the Red Sox and Dodgers are going to soon finalize one of the largest (and most interesting) deals in baseball history. The deal is believed to inclue Adrian Gonzalez, Carl Crawford, Josh Beckett, and Nick Punto heading to Los Angeles, with a group of five players (including James Loney, Rubby de la Rosa, Jerry Sands, Ivan DeJesus and “a prospect”) headed back to Boston.

We knew a shake-up was coming in Boston. We’re a year into the team badly underperforming their talent level, and the general circus atmosphere around the organization couldn’t be sustained much longer. A shake-up was inevitable. Beginning the demolition in one fell swoop was less predictable, however.

In trading away Gonzalez, Crawford, and Beckett, the team is instantly divesting itself of three of their largest financial commitments. Even ignoring the remainders of their 2012 salaries, the Red Sox owed Gonzalez an additional $127 million through 2018, Crawford was due $103 million through 2017, and Beckett had $32 million guaranteed through 2014. Just in 2013 and beyond salaries, the Red Sox are potentially dumping $262 million if they’re not sending along cash to help facilitate the deal.

Even if you think Adrian Gonzalez is a great first baseman — and he has been before and could be again — the Red Sox shouldn’t have too many problems replacing the lost production for $262 million. Even if the Dodgers hadn’t sent them any talent in return, just clearing these guys off the books makes this a worthwhile trade for Boston. This is a deal the Red Sox couldn’t walk away from even if the Dodgers were only offering some of Frank McCourt’s old hair spray. The Red Sox were given chance to start over with a clean slate, and the opportunity was just too good to pass up.

That leaves us with the Dodgers. Along with officially purchasing the team back in May, the new ownership apparently also picked up a copy of How To Build A Winner by George Steinbrenner, circa 1984. The new ownership group has given the front office a seemingly blank check, and assuming they take on all future obligations to the trio from Boston, they’ll have spent approximately $420 million on player acquisition in the last three months, and they haven’t even locked up Clayton Kershaw yet.

The result of this lavish spending is a completely revamped roster, with Gonzalez now slated to join Hanley Ramirez, Matt Kemp, and Andre Ethier in the team’s line-up, and Beckett either pushing recent acquisition Joe Blanton or off-season signing Aaron Harang to the bullpen, or simply serving as bullpen fodder himself. In the span of a few weeks, the Dodgers went from having a questionable line-up and needing some rotation depth to having a stacked middle-of-the-order and too many pitcher’s to know what to do with. And that’s not even accounting for Carl Crawford, who just had Tommy John surgery but should return to the field at some point in 2013.

The new recruits will certainly improve the roster, but whether it will be enough to claim a playoff berth in 2012 remains to be seen – after struggling for the last week, they find themselves three games behind the Giants in the NL West race and a game behind St. Louis for the right to play Atlanta in the wild card play-in game. Gonzalez is a massive upgrade over the completely useless James Loney, but one guy can only do so much, especially in five weeks of baseball. Even with these moves, there’s a very real chance that the Dodgers are still sitting at home in October.

But, clearly, the Dodgers organization wasn’t content to give it a decent shot this year and then make their splash this winter. And this is where evaluating the decision from the Dodgers perspective gets tricky, because it delves into an area where we have few facts and lots of speculation.

From a purely baseball standpoint, this investment doesn’t make sense. Gonzalez isn’t valuable enough to make him worth taking on the albatross contracts of Crawford and Beckett, and the Dodgers almost certainly could have gotten a better bang for their buck in free agency this winter. However, making moves this winter won’t get people interested in the Dodgers in the same way that a deep playoff run this year will.

From 2004-2010, the Dodgers averaged at least 43,000 per game in each season, topping out at just over 47,000 per game in 2007. The McCourt divorce drove away far more fans than any losing season, and last year, the team averaged just 36,000 fans per game, by far the largest attendance drop of any team in baseball. The new ownership and strong performance have pushed the team back up to 41,500 per game this year, but it’s clear the team is still drawing fewer fans than they have the potential to draw, and that interest almost certainly spills over to every other revenue aspect associated with the franchise.

As Vince Gennaro has written, the long term revenue gains associated with deep playoff runs can be highly significant, with his estimates ranging up to $70 million for a World Series run in the right market. Making these deals now, rather than waiting until the off-season, seems to be a large bet on the team’s chances of striking while the iron is hot, and getting those lost fans back at Dodger Stadium sooner rather than later. And, if the Dodgers have the capital to spend in order to boost the franchise’s talent base, spending now and trying to recoup value from a 2012 playoff run could be a more effective way to get returns on the investment than waiting until the winter and delaying the playoff run by another calendar year.

As mentioned, though, all of this is speculative. We don’t have access to the Dodgers books, so we don’t really know the exact scope of the revenue losses the franchise sustained during the last years of the McCourt era. We don’t know how much of that revenue they’ve already gotten back, or that they would have gotten back had they simply stayed the course and made a run with their current roster. It’s quite possible that the new ownership had already done enough to convince most of the fans who left to return even before this deal, and the marginal returns from making another big splash will be less than what they got for upgrading the roster earlier. If the team falls apart in September and then the team isn’t as aggressive in free agency as they could have been because of these commitments, the moves could even backfire. As the Angels spending last winter showed, throwing a lot of money at big name players does not guarantee that your attendance is going to go up.

This could all fail miserably, just like the Angels, Red Sox, Marlins, and Phillies have failed to perform up to payroll and expectation levels this season. If anything, 2012 has been the year of the upstart, with Oakland, Pittsburgh, and Baltimore all contending after maker more meager investments in their rosters, pushing past higher payroll clubs in the process. This bet by the Dodgers is far from a guarantee of success, and if Gonzalez’s struggles in the first part of 2012 are more age-related decline than flukey-bad-months, then this could turn out to be one of the worst trades in the history of sports.

That said, evaluating the Dodgers financial position right now isn’t easy. Ever since new ownership took over, they’ve acted like Yankees West, and the Yankees have been overpaying players for years with few consequences other than having to clean up after some expensive parades. If the Dodgers make a serious playoff run and start selling out Dodger Stadium on a nightly basis again, it’s possible that the revenue gains associated with that run could offset a large portion of the cost of these deals. It’s also possible, though, that the team is taking on too many bad contracts in an effort to win in the short term, and that these deals will prevent them from making necessary moves down the road.

For the Red Sox, this was a no-brainer of a deal, and I’d imagine the entire front office is thrilled to have the opportunity to start over with a new core of players. For the Dodgers, it’s a huge bet on this year’s team making a September run and reigniting a fan base that can produce massive revenues when the team is playing well.

There’s no getting around the fact that the Dodgers likely just paid $20 for a gallon of milk. Given the prices everyone else is paying for milk, that seems pretty silly. If you happen to have lots of $20 bills and no milk, however, and there’s only one guy selling milk in your immediate vicinity, maybe you just complain about price gouging and hand over the $20. Depending on just how many $20s the Dodgers ownership has, this might not end up being quite as nuts as it looks on the surface.

Or, maybe I’m just over-thinking all of this, and the Dodgers just made a horrible, horrible trade. I’m honestly not sure.