Commentary

Dodgers make capital improvements

If staff can conceive it, controlling owner Walter will help them realize it

Updated: August 27, 2012, 3:21 AM ET
By Ramona Shelburne | ESPNLosAngeles.com

DodgersStephen Dunn/Getty ImagesNew-look Dodgers: Big changes like the acquisitions of Adrian Gonzalez, Nick Punto (both pictured), Josh Beckett and Carl Crawford should no longer come as a surprise to Los Angeles fans.
LOS ANGELES -- For most of the baseball world, the monster trade that sent four players and $262 million worth of contracts to the Los Angeles Dodgers this weekend was a stunning pronouncement of wealth, ego and largesse.

General managers across the land were appalled. Rival owners cringed. Agents salivated. Pundits gasped for air. Fans were dizzy with joy. Sabermetric wonks threw their calculators at a wall.

It was impossible not to have a reaction to the trade that sent Adrian Gonzalez, Carl Crawford, Josh Beckett and Nick Punto and more than a quarter billion dollars from the Boston Red Sox to the Dodgers.

It was impossible. Unless you're the man who authorized the financial outlay.

You know what that man, Dodgers controlling owner Mark Walter, calls it?

[+] EnlargeMark Walter and Magic Johnson
Kirby Lee/US PresswireWith stellar reputations to uphold, Mark Walter and Magic Johnson can ill afford to handle top-tier deals haphazardly.
"Payroll."

I'll let him explain.

"I think when you look at the size of this market relative to the size of other markets, our payroll isn't out of line," Walter told ESPNLosAngeles.com on Saturday afternoon after completing the historic trade.

"I mentioned the Cubs' payroll earlier. A few years ago their payroll was around $165 million. Our payroll was around $100 million. A hundred? That's way down. Way down for a market like this."

In other words, get used to this. After their latest moves, the Dodgers now have 19 players under contract for next season totaling $183.45 million. The team's Opening Day payroll this season was $105.4 million.

Walter and his partners weren't kidding when they said they would run the Dodgers more like the New York Yankees than the notoriously stingy hand former owner Frank McCourt guided the franchise with from 2004-12.

During the McCourt years, the Dodgers often operated like a small-market club. Those days are long gone, even if it will take a long time to forget them.

But with every swaggering, big-market kind of move this new ownership group makes, the more apparent how different things are now.

"I think the value of this franchise is represented in the price that we paid and what other people would've happily paid," Walter said. "That doesn't go up or down with one or two players' salaries.

"We feel like we're trying to build something for the long term. I think that's important, too. Obviously we want to win now. But we also want to win a decade after that. So if that's what we have to do, we will."

I asked if there was a ceiling to that commitment.

"Somewhere, I suppose," Walter said blithely.

Before we go any further, you should know that Mark Walter isn't just a wealthy man who bought a baseball team for all the accompanying "psychic benefits."

He's a wealthy man who still spends the first part of his day as the CEO of Guggenheim Partners, a global financial services firm that manages hundreds of billions of dollars in assets. The Dodgers are now a tiny speck in that empire.

So you can imagine just how inconsequential $262 million in payroll is to a man who oversees $125 billion (that's billion, with-a-B!) in assets.

"It's a $160 billion now," Walter says, politely correcting me.

It's about this moment in the conversation when I understand why the historic financial outlay Walter just authorized the Dodgers to make on Gonzalez, Crawford, Beckett and Punto does little to his blood pressure except when he thinks about what those players can do on a baseball field to help his team win.

I said $125 billion. He said $160 billion. The $35 billion in between felt like a number on an accounting sheet, not actual money.

Business at this level is conceptual, which is how Walter and his partners are now running the Dodgers.

The team, the franchise, what they want them to become, all of those are ideas right now. And the core principle is pretty simple: Run the Dodgers as a first-class organization and good things will follow.

Team president Stan Kasten articulated it well on Saturday: "We start and operate with the bedrock assumption that if we start and get our jobs done, if we do our job right, we will be rewarded by the support of our fans and the support of our strategic partners and sponsors and media partners.

"We're making a gamble, but that will all come back to us to the good if we do our jobs right. We have to get our job done first, and we think if we do the payoff will be there and it will all make sense."

Kasten has publicly said on numerous occasions the Dodgers have no set payroll this year. They might not even have one next season.

That timing does make sense, of course, because next year is when Walter and his partners at Guggenheim will have a real figure to use when calculating future revenues after the Dodgers negotiate what's expected to be a historic new television rights contract.

The Los Angeles Lakers' new contract with Time Warner Cable, which has been reported as a 20-year, $5 billion deal, is often used as a the point of comparison for what the Dodgers could get.

The two brands are comparable, although the Lakers have won far more titles. But there is a key difference: The Lakers play 82 regular-season games a year and the Dodgers play 162.

That doesn't mean the Dodgers will get twice what the Lakers got, but the amount of inventory and content should affect the price.

With the television contract so close on the horizon, in some ways the Dodgers' midsummer flurry of acquisitions is casting.

Casting for a World Series contender. And, yes, casting for television programming.

Stars matter. And they matter even more in Los Angeles. Nobody knows this better than two of the partners Walter adroitly teamed up with to buy the franchise last winter: Lakers legend Magic Johnson and Hollywood mogul Peter Guber.

The cynic might wonder if the spending spree will slow a bit once the new TV deal is completed. Or if the increased payroll doesn't result in enough success.

One need look no further than the Dodgers' opponent this weekend -- the newly rebranded Miami Marlins -- for an example of an owner shelling out a lot of money in a short amount of time to impress a fan base in the hopes of filling a new ballpark, then disingenuously cutting bait as soon as things got rough.

Nothing can or should dismiss that cynicism entirely, especially after the McCourt era.

But so far this doesn't have that feel.

Magic Johnson has a sterling brand. Guggenheim Partners are as well-respected as (get this?) a "conservative shop" in the financial industry. Guber is a mogul. Each has a reputation to lose if they do this poorly.

Super agent Scott Boras is a constant figure at Dodger Stadium. His box seats behind home plate are among the best in the house. While not an entirely objective voice on the subject -- Boras is one of the salivating agents eager to do business with the newly flush team on the West Coast -- he's also one of the savviest financial analysts in baseball. And he had no business interest in any of the players who joined the Dodgers on Saturday.

So what does Boras think of the Dodgers' new, audacious ways?

"It's just flat out good business," he said. "The value of content is why this franchise was purchased and building that, increasing the star power of the content, will more than pay for both the franchise purchase and for the player's salaries."

Yes, Gonzalez is a star. But what about the $102.5 million owed to Crawford, a player who underachieved in Boston and won't play for the Dodgers until early next season as he recovers from Tommy John surgery? Or the $31.5 million owed to Beckett, a pitcher with questionable character and a ballooning ERA?

Boras shrugged.

"You're getting contracts that are, frankly, favorable to the Dodgers," he said. "In free agency you'd have to give more years and more money to get these kind of players.

"There are a lot of GMs in this business who are saying, 'I'd never take on these kind of contracts,' but the fact is they probably would if they could. They just don't have the opportunity to do so."

Dodgers GM Ned Colletti has been asked how different it is to do his job under this new ownership group than it was under McCourt about a hundred times in the past few months.

He was asked it again on Saturday.

"In this position, you have to be aggressive. You can't be reckless, but you have to be aggressive and creative and think outside the box," Colletti said. "For a while there we weren't really able to do that. From a baseball standpoint, it's far more conducive to be as good as you can be now."

In other words: If Colletti and his front office staff can dream it, Walter will help them believe it's possible.

On Friday at around 10 a.m., Colletti sent Walter an e-mail to let him know Gonzalez had cleared waivers and the mega-trade was no longer just possible but probable.

The Dodgers had been close on a very similar deal with the Red Sox near the trade deadline, but it fell apart. Since then Colletti and Kasten had kept in touch with the Red Sox almost daily.

Then Walter and Kasten met with Red Sox owner John Henry at the owners' meetings in the middle of August. Walter thought the personal meeting had done some good, but he didn't get his hopes up as he knew how complicated it would be to pull off a deal at this point in the season.

By the time Colletti's email arrived on Friday morning, he was a wreck. All nerves and sweaty palms. He let the email sit, unopened for more than 30 minutes.

It wasn't the quarter-billion dollars he was about to authorize that was making him nervous though.

"It's fun to dream about the players that we did get," he said.

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