Wednesday, November 6, 2013

Money Matters

An interesting article over at MLBTR got me thinking about those things I really don't like thinking about, namely, economics and finance. The game--that is, professional baseball--has always been a business despite our best attempts to disguise it as a pastime. Being a fan is a pastime, but running a ballclub is serious business. The San Francisco Giants, despite a poor 2013 season, are big-time players in the business of baseball. This ain't your mid-market team no more, buckos, the Giants are in the upper echelon and plan to be there for a while. We like to think of Los Angeles and New York as the centers of gravity when it comes to baseball Benjamins, but the Giants are no slouches with payroll. The Giants spent about $136M last season, up from $131M in 2012 and $118M in 2011. The 2010 bill was a mere $96M, which was a $14M jump over 2009. The team has already committed $110M to 2014 with several roster spots to fill and arbitration cases to settle, and $109M to 2015. Only five players are signed for 2016, but those five (Matt Cain, Buster Posey, Hunter Pence, Angel Pagan, and Madison Bumgarner) have a hair over $80M coming. Those five become four when Pagan's deal is up in 2017, but they will still cost over $70M. Only Buster is left by 2019, and he's in orange-and-black until at least 2021 with an option for 2022, all to the tune of $20+M per year.

For better or worse, that's the core. The team is "all in" with the guys they have. This is The Window. If the Giants are going to win another World Series ring, it's going to happen with these guys. This season and the next is how long the band stays together. After that there are some huge obligations and a hell of a lot of holes. We've seen the Giants bring in the young studs and win championships, but now those young studs are well-paid veterans. With the possible exception of Brandon Belt, the team is counting on richer, older guys to deliver the goods. That may work, but it's not like it was before. Take a look, like I said, at the article on MLBTR by Jeff Todd. He has a graph showing which teams have the most money committed going forward, and to no one's surprise the Dodgers lead the way by a lot. The Giants, despite being $100M short of LA, are right up there in third place. And that got me thinking, which isn't always a good thing.

The good news is that the money is flowing into the game at an unprecedented rate. Fox and ESPN are ponying up huge bucks for the TV rights, and every team stands to benefit. Wendy Thurm at FanGraphs has an article worth your time that looks at revenues and payrolls. Again, the Giants stand out as big spenders. I'm not saying that's bad, just weird. I never thought my team would be one of those rich ones! And big expenditures come with big expectations. I mean, here we are. This is The Window. The money has been shelled out for the guys we love, and some more money will have to flow before the team is set, and by god we will be damn disappointed if they don't kick some NL West ass and take another playoff run. And we will be equally disappointed if the brain trust can't conjure up some serious young talent to take the open spots and keep up the new standard of excellence the team has set for itself. It's a long way from frigid nights in Candlestick, ain't it lads?

Tell me what you think.



Brother Bob said...

The ballpark continues to be the MVP. Back in the bad old days out in the Candlestick bleachers, who could have dreamed of a team that sold out every game over and over and over. Money will not be a problem ever for the SF Giants.
It's a good thing huge payrolls can never guarantee championships. I just love it when The Yankees and the Dodgers come up short year after year. I also like it that The Boston Red Sox are far superior to the Yankees and are entitled to brag about it. I now have increased hope that the Giants can also win a third title and also get to achieve that at home, at the MVP, and give the home crowd the ultimate thrill.

M.C. O'Connor said...

Fellow Giants blogger and long-time RMC heckler Shankbone posted a similar thing over at his site You Gotta Like These Kids.

The post is "Luxury Tax - Bidness of Baseball - Giants Big Spenders" from 11-7. He also called RMC 'the best little blog in the Gints blogosphere' which is a dandy compliment. So, be sure to drop in at his site some time and chime in.

M.C. O'Connor said...

Bloomberg rates franchise values. Giants come in at 6th, about $1.23 billion.

Zo said...

Excellent article today by Schulman in the Chronic about the Giants best pitching prospects. Also a note that says that the minors are not stocked with major league ready bats. This is not news. It suggests, however, that we will be fishing in the free agent market for a short term veteran pitcher, but may angle for a highly rated young hitter in trade for one of our highly rated young minor league pitchers.

M.C. O'Connor said...

Grow an arm, sign a bat.

Zo said...

I find the graphs of salary obligations interesting, and what jumps out at me is the huge jump to get from anyone else to the doggers. They have put some serious money down (as though baseball salaries were not serious enough) and where will other teams be if they do not follow suit? I am less impressed with the ratios. What this tells me is not that the Giants and Reds are "overextended" but that the Giants have some young players that are worth long term contracts (if there is an update, watch to see how much the doggers jump when Kershaw is signed long-term). Who wouldn't want a future obligation named Buster Posey? The doggers vacuumed up salary in trades, but these are guys who are getting the big bucks now. The guys who you want on your team for years, those guys are on the Giants. I do agree with your analysis that our time is now within the next few years. Regardless of whether we can afford to keep our core together in the not-too-distant future, we have the talent and opportunity, with some tuning, now, and I am betting that the Giants salaries will increase with at least one addition from the free agent pool.

M.C. O'Connor said...

From Adam Kilgore at the Washington Post:

"A lot of contracts are going to raise eyebrows and cause jaws to drop this winter. And at the end of the day, owners are still going to collect far, far more of baseball’s skyrocketing revenue than the players. Player contracts have not caught up to television rights deals, and a shift toward contract extensions has shrunk the free agent pool. The combination of more money in the game and fewer available players to freely spend it on means more cash for free agents."

Hat tip, Baseball Musings.