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Feature
 
 
Weekend Report: Cheese Platter

Belter
on 09/13/2002

 

I hope the following article is not a reflection on me. Instead, I intend it is a slap in the face to some other "professional" writers. When the players and owners sat down and worked out an agreement like adults, my first two thoughts were "Finally!" and "I won't have to write another business piece for quite awhile". And then I moved on, because frankly there was little point in talking more about baseball economics. Then, I read the following article (link) at Baseball Prospectus. As you may have guessed by the title of this weekend report, the Prospectus take was the biggest whine fest since the millennium celebration in Napa Valley. I'm sure even Don Fehr and good 'ole George Steinbrenner didn't complain that much. For all of their alleged intellect, they spewed forth more doom and gloom in their round table than Bud Selig has since being named commissioner. The fact that they were so utterly convinced that this labor deal was terrible was a strong mark against any of them actually having thought about what the deal really meant. Why? It's too poorly explained and Byzantine to have a clear picture of what it will really mean. The details that were out at the time of their pow-wow were fairly sketchy. Anybody looking at it seriously can't hope to predict what will happen any more than you could predict the 2004 Super Bowl winner right now.

To give the article some meat, I will offer some of my insight on where I think things will head under the agreement and why it will be a little better than it was before.

Really obvious point one that was missed - George Steinbrenner is the only owner seriously impacted by the deal. If it was that bad a deal for all of these large market teams, how come they all voted for it except George?

Contradictory point that any idiot can figure out - The players George isn't going to be able to pay next year are exactly the players that BP spends oodles of electronic ink saying are overpaid. Even Bob Klapisch got the point that this deal doesn't mean either Derek Jeter or Jason Giambi are going to get traded. It means that George isn't going sign Sterling Hitchcock again because he's a nice guy or trade for Raul Mondesi II, when he realizes that the original Raul is a dud.

The subtleties of this point warrant another paragraph. The Yankees biggest affect on player salaries was never on driving up the top end salaries directly. Kevin Brown, Alex Rodriguez, and Carlos Delgado have been the major market setters for the last 5 years. The Yankees affect has been two-fold. They gave Mariano Rivera 10 million in arbitration, and paid average talents above average wages in the name of team continuity. The other thing they have done is contributed to the perpetuation of the veteran myth. By building their team with so many expensive role players, they create a natural model that other teams want to emulate for success. They have had a double effect on the demand for middle of the road players inflating their salaries, exactly the sort of behavior that BP thinks should be corrected.

Reality strikes for point three - The cap only really affects the Yankees. The other large market teams had more or less already decided to go cheaper than trying to race the Yankees to a 200 million payroll. Boston has some decisions to make, as they tread lightly around the cap, but I don't see that in the end this new deal strongly affected their spending patterns over the next few years, particularly since the cap goes up leaps and bounds each year. Even if the Yankees decide to just pony up, they should have no trouble getting under the cap in later years. On some level the Yankees were approaching a limit to what could possibly be spent on a team any way.

Yes, but they saved a ton of money too, point four - Both sides had amassed strike funds. While it's not likely the union will immediately liquidate that into checks, it should cut back on the amount they have to raise for next time. The same thing applies to the owners whose war chest was pretty sizeable. It truly is a peace dividend, at least some of which will go to players. There's also all the money that they didn't lose in present and future revenue.

Incentives, strange but true, point five - There's this little line in the collective bargaining agreement that seems to have been missed. Revenue sharing is from local media revenues MINUS BALLPARK EXPENSES. Now I'm not a rocket scientist (but I am a biochemist), but that seems to explain why the Giants are actually getting more revenue in this deal despite having a favorable media income. They get to write off that horrendous debt service (twice effectively if you count the tax benefits). The other implication of this is pretty simple, and if George realizes this, the whole punish George effect will go right out the window. Effectively, this gives the Yankees a huge incentive to build or renovate the stadium at their own expense. It won't actually cost them much/anything, because every dollar they would spend would be one less they have to share. They also get the fringe benefit of hurting the competition by taking away their money.

And finally, blatant hypocrisy, point six - There has been a whole lot of complaint from many quarters about the lack of a minimum payroll. This puzzles me greatly, since the teams that are likely to go cheap are exactly the ones that should go cheap, according to the "talent cycle theory". So what if Wendy Selig-Prieb chooses to not flush money down the drain on another Eric Young, Jeffery Hammonds, or Sean Berry? It certainly seems to me that retiring debt rang up in the 90's for non-ballpark expenses is investing in the club.

My honest assessment of the whole mess is pretty simple. This deal isn't perfect revenue sharing wise, but no deal was going to be from the outset, since neither side was going outside the box enough to find a true competitive balance resolution. The deal is good enough, though, towards that end that there is hope that any team with competent management can contend and do so for awhile. John Sickels had the best take on it, it's done. We didn't lose any games so lets move on. I'll stop my rant with a quick condemnation of the lame fans who are upset because there almost was a strike.

Player of the Week

After Sunday I had a good feeling that Ginter would be my player of the week, but alas, he cooled off the rest of the week and total weekly performances for player of the week usually require more then an .800 OPS. So for what I believe to be a record third time our player of the week is Eric Young. Eleven hits, 3 walks, and 6 SB to 1 CS are definitely player of the week material.

 




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