Thursday, December 3, 2009
Are Pirates trying to win?
From Pirates president Frank Coonelly's recent Q&A with fans, in response to the argument that some franchises are collecting revenue-sharing money and merely pocketing millions rather than trying to improve the team:
The millions of dollars that a club spends in the Draft and in free agents and international signings, the millions that a club spends to support its entire Minor League system, the millions a club spends on its Major League team operations such as travel, medical expenses, are all over and above what is spent on a Major League payroll. A club like ours pays considerably more in player-related expenses than even the inflated numbers that several have speculated we receive in revenue sharing and from the central fund.
And, of course, all of this is before considering all of a club's other expenses such as stadium operations, front office, marketing, community and other expenses. In short, the effort by some to shift the debate from the real competitive balance issues in the game to assertions that low-revenue clubs are not properly utilizing revenue sharing receipts is a canard. I can only speak for the Pirates, but we utilize all of our revenues in an effort to build a winning baseball club by investing in all aspects of the acquisition and development of players.
It's easy for critics to say things like, "The Pirates get $70 million before they sell a single ticket, and spend only $50 million on payroll. The Pirates aren't even trying to win!"
Which is terribly simplistic. Revenues are coming in, and most of them are going right back out. To pay salaries, plus all those considerable expenses that Coonelly lists, plus (in many cases) to service the debt the owners assumed when they bought the franchise. Agents (and the wealthiest owners) get persnickety about debt service, but isn't paying off loans a highly rational action? As long as Major League Baseball allows ownership groups to buy franchises on credit, owners are going to use some of their revenues to pay off loans.
I've long argued that wealthy men don't buy baseball teams with the aim of losing games. Every one of them, I think, figures that within a few years he'll own a winner. Because, you know, he was smart enough to make enough money to buy a baseball team in the first place. More than anything, they want to win.
Which is probably a bit too simplistic. I'm sure that wealthy men buy sports teams for other reasons, among them ego and boredom. Still, I'm sure the vast majority of owners do care a great deal about winning, and I'm sure that all of them would rather win than lose. So why don't they spend more money? Because 1) they don't have it to spend, or 2) they realize that spending another $10 million will only get them from 70 wins to 75, so why bother?
Remember, there are only so many players to go around. If the have-nots all up their payrolls by 20 percent, will they all wind up with better players? Not really, because the haves will up their payrolls, too. When agents like Scott Boras rip the poor clubs for not spending more money, he's not arguing for competitive balance; he's arguing for the poor teams to force the rich teams to spend even more than they're already spending. He knows perfectly well that a rising tide will lift all salaries, which is the only thing that gets Boras really jazzed.
And if you detect a note of desperation in Boras' exclamations lately, you're probably not wrong. There's been a sea change, and he knows this, too. The best baseball players are in the 24-34 age range. Older players can be helpful. Younger players can be helpful. But the younger players generally are a great deal cheaper, and often it makes financial sense to pay a 23-year-old player instead of a 35-year-old player who might be just marginally better.
For a long, long time, most baseball executives did not understand this. Today, most of them do. My guess is that the percentage of revenues that wind up in the players' (and agents') wallets will continue to drop, as teams increasingly move away from expensive old players and toward cheap young players. And I won't be surprised if a salary cap, so long considered a non-starter in labor negotiations, looks a bit more palatable if tied to the players receiving a set percentage of revenues.