Just a friendly reminder

Yesterday Svrluga posted about the inherent risks of multi-year 100 million plus pitcher contracts. We can take a deeper look at it some other day, but the base truth can't be denied. There is a lot of variability in multi-year deals especially for pitchers.

But the variability is all in the years, the money should be basically ignored. Or at the very least fans should not simply give in to the "money bucket" way of thinking.

The "money bucket" is the term I use for the idea that there is a single source of known limited funds available to run the baseball team. Once that source is used up, once all the money in the bucket is spent, that's it. So if you use 20 million to sign a pitcher, that's money that doesn't go to other players. Worse yet, the bucket is usually seen as the source of funds for all baseball operations. So that 20 million is money that also can't go to managers, statisticians, minor leaguers, international scouting, etc.

Owners love this way of thinking because it allows them to treat running a baseball team as any other business, ensuring yearly profitibility. SABR guys fall in line too because when it comes to team construction a spending limit is necessary for their to be a problem to solve. (What's the solution to getting a better team if you have unlimited funds? See : the Yankees. You spend as much money as you can) But fans, regular Joes, they buy into it, too. They shouldn't.

Why? For several very good reasons. The biggest one is that the profitability of a sports team is less about day to day operations and more about increasing franchise value. The potential yearly losses pale in comparison to the payout in the end. Anyone purchasing into a sports league knows this.  Running a team to avoid yearly overruns is for most teams, like adding that cherry on top of the sundae. It's an extra few million a year when in 20 years they expect to get paid out in the hundreds of millions.

Along with understanding the above comes the understanding that most owners are incredibly wealthy. They have the money to burn on investments that are yearly money losers (think of taxes on undeveloped land). You may argue that that is not how they became wealthy but owning a sports franchise should not be seen like running any other business. Stop it!

Then of course there is the reporting of revenue. When the teams report how much money they make, and from there how much money they have to spend, it behooves them to underreport as much as possible and thus set up the players to expect smaller chunks. This is not tin foil stuff, it's common.  Teams say that national broadcasts on TV stations they own don't count as "local broadcast revenue". They say that the parking money - well that's money raised by their incredibly profitable parking company completely separate from this baseball team you talk of. Money is moved around to make the team look as least profitable as possible.
 
I admit, the idea every team can spend a ton isn't true 100% of the time. There are some teams that can run into financial issues. If they don't own their stadium or the parking around it. If their national following is non-existant and their local fanbase a joke. If say... they play in Tampa. Hypothetically. But these teams are the exception, not the rule. And I'm not saying there isn't an upper limit on the amount of money teams can spend, but I guarantee you it's not at the levels we see now.

Also let's avoid the trap of considering on the field baseball value all a player brings to the team. It's easy to do. "He made 5 million last year and was "worth" 4.5 million in wins" But what about the merchandise he may sell? The games that he helps win that drive attendance up, which means possibly more concession money, more ad money, more parking money? What if that guy helped you get into the playoffs? What about the extra funds from a handful of more sold out games? It's one thing to say an player isn't worth X dollars on the field. It's another thing to say a player isn't worth X dollars in total. Trust me, that's factored into these contracts as well even if it can't be reported on a stats page.

So sign ZNN, Desmond and Fister, right? Well... you still want to make smart deals because of roster composition and tendencies to favor veterans and the like. In DC you've seen what just throwing money around with little thought can do by watching the Redskins. But really the thing is... the above is a dream, a dream where you wake up and your team spends money like it should. It's not going to happen in reality because the impetus to spend is weak.

Let me explain. Sure spending less it makes it difficult to compete on some level over the regular season against the tiny number of teams that do spend like that. But you can still get into the playoffs as long as there aren't two teams like that in your division (and now that the Red Sox are scaling back there aren't) and once in the playoffs spending like a madman doesn't afford you a big enough advantge. Plus there is enough variability that even spending a ton of money doesn't guarantee anything in the regular season.  Players fail out of nowhere and get injured. Spending money is just increasing odds of wins, not giving them to you. You spend a lot more for a little return.

So what's the point of all this? The point of all this is the more we let owners off the hook, the more they feel empowered to spend less. Things get worse, your odds decrease, and you just buy into it. You have to make noise. Yell, kick, scream and remind the owners you know they could be giving you a better team. It's not that they can't sign, it's that they choose not to. That whatever their plan is of trying to win the most by spending the least, it better work or else there will be hell to pay (well, as much hell as a bunch of fans can make). That's the point.