Contraction in Baseball: An Economic Gain (Part 2)

4 11 2010

Posted by cubs223425

In Part 1, I looked at factors to consider before contracting baseball teams from the league. To add on, I evaluated teams that I ultimately determined were not worth removing from the league, along with presenting which teams I WOULD consider for contraction from the league. Those

The Mets have been known in the past to spend a lot of money on older veterans, leading to losing seasons

teams are: The San Diego Padres, the Florida Marlins, the New York Mets, the Pittsburgh Pirates, and the Cleveland Indians. This portion of the article will cover which teams would best serve the league by taking the fall.

Since my last posting, I have added on as to what I will use to determine for a team’s contraction considerations. Baseball is, first and foremost, a business. Forbes produces an annual list of team values, offering up a team worth, along with a percentage change from the previous years. This will be key to see how a team’s worth is measured in terms of dollars and cents. As I stated before, though, a pure dollar value is not all that affects a team.

Winning is the ultimate goal of a team, so while a team might not have a high worth in terms of dollar value, it can still be a winner and provide a solid baseball product. Attendance (provided by ESPN here) is to be considered too, along with local TV ratings (provided by Street & Smith’s Sports Business Journal’s RSN ratings). Payroll figures can be found here. Now, on to the teams:

All stats in parentheses are from 2010. RSN rating leader is St. Louis Cardinals at 9.70, and the lowest rank is shared by the Oakland Athletics and the Los Angeles Angels of Anaheim, at 1.23.

Cleveland Indians (Record: 69-93; Attendance: 17,395; RSN Rating: 3.13): If I was to name this team with a song, it would be Green Day’s “Boulevard of Broken Dreams.” I mean, what happened here? Cleveland was rocking and on the way up with masher Travis Hafner, up and coming stud Grady Sizemore, and two strong starting pitchers named C.C. Sabathia and Cliff Lee, plus a decent young arm in Fausto Carmona. They also sported one of the league’s top catchersi n Victor Martinez.

And since those days? Cleveland managed to have the lowest average attendance in the majors, and was tied for 28th in terms of attendance percentage (just 40.1). C.C. is now CC, and was shipped to Milwaukee for a flop in Matt LaPorta after a Cy Young season. Cliff Lee had a studly 22-3 season to win his own Cy Young, shortly before being shipped off to Philadelphia for four prospects that I’m pretty sure they don’t miss too greatly. Martinez was traded for Masterson (who is the master of inconsistency, if anything) and a solid, young arm in Nick Hagadone that we have yet to see in the majors. Hafner got hurt and looks like he is just done. His OPS+ has been solid, but he hasn’t broken 120 games played since 2007. Carmona’s 148 ERA+ in 2007 has been followed by a 2008-2010 stretch with a 72 ERA+. Sizemore looked like the superstar after a 2008 in which he hit .268 with 33 HR and stole 38 bases. Now he’s managed a combined 139 games in two seasons (just 33 in 2010). Still just 28, it’s way too early to write him off, but he might get too expensive too quickly and get jettisoned like Sabathia and Lee.

Despite being above Kansas City in the standings in 2010, they lack the rich vein of prospects that the Royals have. Still, they have some quality minor league players; one I particularly like is Drew Pomeranz. Just getting healthy and getting the young guys up should help them, so I think Cleveland deserves a chance to see the full return of their fire sale–we saw how it worked for Florida.

New York Mets (Record: 79-83; Attendance: 32,401RSN Rating: 3.25): Last semester, I did a PowerPoint presentation on how much a baseball team spends on wins. The highest cost per win average? The New York Mets, at over $2 million per win. In 2010, they upped their won total from the 70 in 2009 to 79, so that cost is likely lower. However, I would still put my money on the Mets as the team with the highest cost per win, though the Yankees and Cubs might be higher.

Their RSN rating sits at 16th, their payroll is fifth, they have had two consecutive losing seasons, and they haven’t reached the playoffs since 2006. The fallout with Francisco Rodriguez makes that investment look even worse, adding to the bad contracts of Luis Castillo, Oliver Perez, and Carlos Beltran, among others. However, the new front office should stabilize the team, and it would be rather unfair to not allow Sandy Alderson and the rest of the new management members a chance to fix this mess, as they aren’t THAT far removed from their last competitive run,

Florida Marlins (Record: 80-82; Attendance: 18,825;RSN Rating: 3.05): This one might seem a little odd. The Marlins have been consistently competitive, while keeping a very modest payroll. And with a new stadium on the way, scraping this club now seems like a very shaky and questionable move. A team settled with one of the best middle infield combos in the league in Hanley Ramirez and Dan Uggla, an overpowering ace in Josh Johnson, and a young stud in Mike Stanton probably shouldn’t be dismantled.

However, there are some problems with this franchise. Twice now, it has gutted its roster after a championship. It took baseball’s explicit complaints to get them to give Josh Johnson a modest, team-friendly extension. This new ballpark is also another example of their cheapskate owners’ dirty tactics to rob the fans of money and on-field production. This has led to a team whose ticket sales rank 28th in the league and 22nd in percentage. The local TV ratings are 20th in the league, and the payroll sits 26th in the league.

San Diego Padres (Record: 90-72; Attendance: 26,318;RSN Rating: 4.79): 2010 might have saved the Padres from the chopping block. The team was looking to move All-Stars Adrian Gonzalez and Heath Bell, but they managed to showcase a potential new ace in Mat Latos, while going from projected last-place finish to nearly reaching the playoffs, if not for a late-season collapse (a la the New York Mets) that opened the door to the World Champion San Francisco Giants to get their crack at the postseason.

But even this awesome surprise hasn’t saved the team. The payroll is still minuscule, ranked 29th in the league in 2010, ahead of only the Pirates, and one of two under $40 million. Ownership has still shown an unwillingness to spend to keep Gonzalez, so an early stumble could mean an immediate loss of Gonzo and Bell to trades and a full-scale rebuild mode. With the loss of those two, it becomes Mat Latos

Many fans speculate that Mat Latos could potentially become the Padres' next Jake Peavy

and a rather scary few years that will likely end with a decent team in around 2014, just when Latos is going to command a payday San Diego won’t pay, leading the loss of that ace. This could become an ugly cycle of rebuilds if the team won’t ever move the payroll into the $60 million+ range.

There is hope, though, even if it isn’t a lot. Latos, as stated before, is a stud. He could be what San Diego wanted out of Chris Young and more–maybe even their next Jake Peavy. Kyle Blanks was terrible this year, but he also did not have a lot of time to play, and his bat might be able to take over for Gonzalez in the long-term. Everth Cabrera showed some skills on the basepaths in 2009, and Donavan Tate is a promising hitting prospect in the outfield.

Pittsburgh Pirates (Record: 57-105; Attendance: 19,918;RSN Rating: 3.44): Here is a franchise that is hard to like at all. I cannot recall their last REALLY GOOD pitcher that actually stuck around (really, any guesses?). Jason Bay and Nate McLouth had talent, but they were sent away and have brought little back thus far (though we should hear from Gorkys Hernandez before all is said and done). The team hasn’t had a winning season in 18 years, and it is staring at yet another top pick–the first overall, in fact.

The TV ratings are actually rather solid at 16th in the league, but that’s where that ends. Pittsburgh was 29th in payroll in 2009, with a pitiful team salary just shy for $9 million. In 2010, they actually cut it to 30th in the league, spending just under $35 million on the MLB roster. Some of that went to scouting, but in a rather large market, this is still inexcusable. The Pirates were 27th in per-game attendance at PNC Park, and 25th in attendance percentage.

So, moment of truth. Who goes? I’ve been thinking of it a lot for a couple of days, and I am set on the Pirates and the Marlins. These teams have some of the most horrendous baseball showings in the league’s 100+ years. Why did I choose them? Read on…

The Pirates are the pinnacle of mediocrity. Even with young talent in Tony Sanchez, Pedro Alvarez, and the dynamic Andrew McCutchen, I don’t see any way this team avoids the big 2-0 in terms of consecutive losing seasons. Honestly, I wouldn’t be all that shocked if they broke 25 with the pitiful rotation they are marching out. They had plenty of opportunity to sell high on both Zach Duke and Paul Maholm, but now they are stuck with two mediocre lefties headlining a starting five that looks even worse as a whole. With the Marlins, the story is rather different.

It is hard to not appreciate what the Marlins bring to the field. They lack a big payroll, but they frequently challenge and beat the Mets and Phillies, and the scouting is top-notch. They managed to take their World Series ace Josh Beckett and a solid bat (well, he was) in Mike Lowell, and actually be the runaway winners in the trade. They netted a top-2 shortstop in Hanley Ramirez (and he was the #1 by far until this year, IMO), and they actually shelled out the money to keep him around long-term. Giong into 2012, this new ballpark of there will draw a big crowd in a more marketable area with a face like Hanley to lead away. But the ballpark

After winning the World Series in 2003, the Marlins dealt Beckett and Lowell to the Red Sox for Hanley Ramirez. That trade has panned out for them in a huge way

is why I want this team gone.

Rather recently, it was reported that the ownership of the Marlins lied about its financial status to get more money from the state to fund its new home. Of the $634 million to be spend on the ballpark, Florida’s ownership group (led by Jeffrey Loria) will pay just $155 million. That leaves the taxpayers to foot a bill of $479 million for the stadium, or over 75% of the price tag. According to Yahoo, the taxpayers will be paying for this for a LONG time. The loans won’t be paid off in full until 2049, and the interest will end up adding to a loan total of $2.4 BILLION!

Now, is it really fair to tell the sub-20,00/game Marlins fans that they are losing their new stadium and baseball franchise because of the lying and cheating of its owners? No. But is it fair for the entire state to pay over $2 billion to build a ballpark most of them might never even go to? No. And, when it comes down to it, a state’s economic health is more important than baseball. Ideally, the government or SOMEONE stops this, but the only sure-fire way to fix the matter at this time is to kill it at the roots. If there is no baseball team to provide for, then there is no egregious payments that will kill the Florida economy for decades.

So, the Pirates and Marlins are gone. Where does that leave baseball in terms of divisions? Well, we are sitting at fourteen teams per league, so nothing will be 100% even. We will try our best to get it close, though, meaning each league will carry two 5-team divisions on one four-team one.

For the AL, everything can essentially be left alone. In terms of ideal fairness, you would pull the Rays out of the East. You could move the Royals to the West and the Rays to the Central, leaving the East with the Yankees, Red Sox, Blue Jays, and Orioles. This would allow all 3 teams–the Yankees, Rays, and Red Sox–a chance to get into the postseason, which I think any pure baseball fan would enjoy. I think that is the best option to keep the Boston-New York rivalry intact while keeping competitive integrity intact.

The National League will require no other adjustments. The revamped NL East would open with the Phillies, Braves, Mets, and Nationals. The Central has the Reds, Cardinals, Cubs, Brewers, and Astros. The West rounds it out with the Giants, Padres, Rockies, Dodgers, and Diamondbacks.

As I said at the beginning of this article, contraction is highly unlikely in the league. Losing revenue is never a business’s first choice.  These choices are about more than just. Cutting these teams helps both to balance the leagues and to stabilize the long-term Florida economy. There are better, more complicated option that could be explored, and I might ramble on about them in the future, but this appears to be the most simple, immediate solution to the nation’s financial woes and the complaints from fans that the leagues lack balance.


Contraction in Baseball: An Economic Gain (Part 1)

30 10 2010

Posted by cubs223425

To start, let it be known that I do not believe that the following is what will occur within the game of baseball. It is simply what I believe to be the best course of action for the financial status of the league, along with the best course of action to achieve a better league. I want this to happen, but I do not think it will.

So, over the last several days on

Evan Longoria made it well known throughout the 2010 Season that he was not pleased with the Attendance numbers at Tropicana Field

the MLB Trade Rumors forums, there have been some discussions on baseball’s league and division formatting. People have stated displeasure with the 16-14 setup that is currently in place between the two leagues (16 teams in the NL; 14 in the AL). For some, they propose the league simply move a team over. However, that isn’t exactly a feasible solution.

As of now, baseball is a daily sport. Mondays and Thursdays are the only time that teams are consistently off throughout the year. Because of that, there are 15 games scheduled 5 days of almost every week. If the leagues were 15 teams each, then who would play the fifteenth teams each day? An odd number of teams will not work in a game that requires two teams to play. It would require considerably more doubleheaders or expanded interleague play to the point of almost one game per day. Since that idea has been mostly established as not being feasible, there are two other options: expansion or contraction.

Being the cynic that I am, I elected to handle the contraction article, and WAMCO is working on his own piece in favor of league expansion. In either instance, the idea is to add or subtract two teams, in order to set the American and National leagues on an even playing field in terms of team count, either at 16-16 in a 32-team league or 14-14 in a 28-team one.

Now this is not going to be a simple matter. To determine which teams would best be contracted, we will have to look at a variety of factors. For starters, the team’s popularity has to be considered. Even though the Yankees are a huge payroll with pinstripes, removing them would not be an option because they are also an enormous source of income for the league, which also means more for the other teams in revenue sharing.

Of course, winning is a large factor as well. Though the Rays might not even be drawing 20,000 fans per game, they have done an excellent job of building a winner through the scouting and player development departments. To reward an ownership group with playing the game the right way and succeeding with a giant axe in the back would be crazy.

Team history is also a factor. When comparing a constant loser like the Pirates to the Padres, the team with the 18-year streak of losing seasons might be the easy pick. Still, Pittsburgh has a rather rich baseball history, so just pulling the rug out from under that team might not be the best idea.

When it came down to it, I saw a lot of potential teams. For the sake of time and sanity, though, I elected the commonplace method of examining five teams is the best way to go. I’ve considered several portions of a franchise when I determined if it should be in the final five to be considered for removal from the league. When it came down to it, my personal preferences went to these teams: The San Diego Padres, the Florida Marlins, the New York Mets, the Pittsburgh Pirates, and the Cleveland Indians.

Before we begin, though, let us cover all of our bases. I am sure there will be fans of some teams that think my choices are without merit, but those questions will be answered in the main portion of the article. Meanwhile, those same fans will start to throw other teams under the bus, suggesting that they are more deserving of a boot. I will quickly voer those teams, just to put those complaints to bed beforehand.

New York Yankees: As I said, it is irrational to think that probably the biggest economic draw in the league would be an option, but many fans have a dire hatred for the way the Yankees operate. That is not their fault, though, as they are well within the league rules, and they feed back into the revenue sharing pool with the huge attendance and merchandise sales.

Tampa Bay Rays: The lack of a crowd draw for a playoff team is almost inexcusable, but they are winning, and how can we really fault them for that? There are plans for a new stadium in the next 3-5 years or so, meaning that the attendance woes will likely lessen over time.

Baltimore Orioles: This team has been a cellar-dwelling team for a long time, so looking at it would be reasonable as well. However, they are building

Building around young talent, such as center fielder Adam Jones, has kept Baltimore off of the hypothetical chopping block.

a great core of players, including  Brian Matusz, Adam Jones, Nick Markakis, and Matt Wieters. They have also been showing a willingness to spend on a big free agent that could change the franchise, such as their efforts with Mark Teixeira before ye got Yank(e)ed away.

Houston Astros: My plan was to only cover NL teams, but I thought that a bit harsh. They were the fifth NL club I considered, but they have done a good job in the fairly recent past, and IO would like to see how they do in a rebuilding effort.

Arizona Diamondbacks: There were thoughts with this team as well. I think that having a professional team near a spring training site is desirable as well, and the team has some young talent. Also, their last World Series was fairly recent.

Washington Nationals: Ultimately, I felt that this team is just in a good location. Having America’s pastime in its capitol is almost a requirement, I think. Like Baltimore, they have started to build  a young core of talent. They were also willing to spend on Adam Dunn, and still might.

Chicago Cubs: As a Cubs fan, this suggestion baffles me. I had someone on the forums mention that the Pirates were not a reasonable choice because of their losing, but that the Cubs are more logical because of their World Series drought. Granted, part of the omission is probably my bias towards my team, but that is a small factor. They have the oldest park in the game, so they clearly are not drawing money from taxpayers like teams that have recently erected new homes like the Yankees, Mets, Cardinals, and Twins. Even without being a title contender in a while (2007 and 2008 were major disappointments), the team draws one of the top-10 largest crowds each year, if not top-5. The farm has improved of late, and they have a new owner, so I see good going forward.

There are my defenses for those teams. In Part 2, I will cover the main idea of my post, so stay tuned.

EDIT: Part 2 is up.