Aaron Rowand

Are the Giants ready to be a billion-dollar franchise?

The phrase “running the team like it’s a business” usually invokes thoughts of belt-tightening and pragmatism. And after the Giants won the World Series, there were several moves people pointed to that prove the Giants ownership group (which inherently makes the Giants more like a corporation than a dictatorship) was worried equally with the bottom line as with winning. Which is why some are surprised, even worried about the $22M, 2-year contract the Giants just handed to Aubrey Huff.

After being disappointed in some way by nearly every multi-year free-agent contract or extension they had signed in recent years (Armando Benitez, Dave Roberts, Aaron Rowand, Barry Zito, Mark DeRosa were/are complete disasters, while Randy Winn, Ray Durham, Bengie Molina, Jeremy Affeldt and Edgar Renteria were all considered overpaid but not quite as egregiously because they made contributions in some form), the Giants were committed to giving out 1-year deals heading into 2010.

Well, sort of. Before the Giants signed Huff to a tidy little 1-year, $3M deal a year ago, they had actually wanted to give a multi-year contract to Adam LaRoche, who took less money to stay away from AT&T Park. So the Giants’ multi-year deals went to Freddy Sanchez (who underwent secretive shoulder surgery in December but ended up being a valuable contributor) and Mark DeRosa, who can type with his voice.

Still, the Giants didn’t seem like they were overextended and then they went frugal throughout the entire season. Their additions (Pat Burrell, Ramon Ramirez, Javier Lopez and Cody Ross) didn’t cost that much, and they kept Buster Posey in the Minors as long as possible to decrease his service time (which they’re also going to do with Brandon Belt, so those of you getting your hopes up should keep that in mind when they say he “needs a little more seasoning” after hitting .360 with 5 HR in spring training). Granted, they paid for a full year of Bengie Molina to keep Posey’s clock on hold, but the long-term savings on the 2010 NL ROY will probably dwarf the $4M+ they spent on Mr. Chariots of Fire.

Back to “business.” If you’re a small market team, running things in a businesslike fashion means staying completely out of the free agent market and building from within through the draft (avoiding paying large signing bonuses whenever possible). For mid-market teams, it means being shrewd in free agency and maintaining financial flexibility. This also goes for so-called big market teams like the Dodgers, Cubs and Mets who haven’t won a World Series in a long time and get hammered in the press for throwing huge wads of cash at guys who ended up not being worth it.

Running a team like a business is completely different when you reach the upper echelon — the teams in large, energized markets who have positioned themselves as consistent winners. The Yankees, Red Sox, Phillies, and if everything goes according to plan, the Giants. Teams where winning championships is expected, and acquiring stars is a gamble you take to stay on top and build the brand. The Giants are no longer a nice team out west with a pretty ballpark. They have the chance to become one of the preeminent franchises in American sport (as opposed to the “World Sport” coverage that I watched while in Mexico) for the next 5-10 years, perhaps longer. A team with young, talented, likable (read: marketable) pitchers, sellout crowds every night and ticket prices higher than you ever thought possible.

The Giants made a lot of money in October. Want to know how we know this? Because we’ll never find out exactly how much money they made. They sold 300,000 playoff tickets, and if each fan averaged $100 spent (which probably is underestimating things by quite a bit), that’s $30M extra. Giants Dugout Stores all had huge lines like that sandwich shop that got shut down in the Castro. Season ticket sales increased just because people wanted access to playoff tickets, and that number is sure to keep improving in the coming months.

The ownership group was smart enough to institute dynamic pricing when the team was ascending, which means they should be smart enough to know that if they spend money this off-season, there’s a great chance that they’ll get an exponential return on their investment. Build a dynasty, and you can rule the area for years even if you don’t win (like the 49ers did until this year).

This takes us to Huff, who absolutely had to be re-signed because he hits for power, fields multiple positions and made Bruce Bochy’s job easier by becoming a vocal leader in his first year on the team (which is also why Juan Uribe will probably be brought back as well, as he performed the same duties for two years and his departure would leave a similarly huge clubhouse void).

The Giants are just lucky that everyone is shying away from multi-year deals these days (partly due to the Giants’ success that’s perceived to be in large part due to the 1-year “bargain” acquisitions of Huff, Uribe and Burrell), and they didn’t have to match a 3- or 4-year offer to Huff from another team. Huff also led the team in OBP (a team-wide weakness they won a championship in spite of) and is nowhere near as creaky as Renteria, who missed 62 games combined in the two previous seasons before signing with the Giants (Huff has played at least 150 games in each of the last four seasons, including 172 combined regular season and playoff games in 2010).

The question is, does this generous deal (at least per season) given to Huff mean the Giants are ready for the upper echelon way of doing business? Are they willing to take big gambles, like surprising the baseball world with a huge contract to a guy like Carl Crawford? How greedy is Bill Neukom, who looked downright maniacal during the clubhouse celebration after Game 5 in Texas? Will they coast on this World Series title, or is their oft-reported dream of ruling San Francisco with a sparkling new basketball arena next to AT&T Park the plan?

Here’s what I think the plan is: valued at $483M the last time anybody checked (although that number should probably be higher considering AT&T Park is privately financed, therefore not owned by the city/county in which it resides), the ownership group would like the San Francisco Giants to become a billion dollar franchise.

In this job-challenged economy, in a time when there are so many entertainment options, winning is the only way to expedite this.

The Yankees ($1.6B) are already there. The Red Sox are close ($870M). So are the Mets ($858M), Dodgers ($727M) and Cubs ($726M). While the Bay Area isn’t quite as large as those three markets, it’s bigger than the Boston area and has higher income levels than anywhere besides New York. Leapfrogging the Phillies ($537M), Angels ($521M) and Cardinals ($488M) should be a mere formality after the first World Series title in San Francisco.

For years the front office has run this team as if the liabilities/excuses they were dealing with (the mortgage/debt service on their privately-financed ballpark that they’ll be more than happen to own and rent out during the off-season for the rest of time; deferred money to Barry Bonds, the Zito/Rowand money; TV deals dwarfed by those found in East Coast markets) prevented them from spending more than $90M-$100M.

But next season (and I’m going to ask you to forgive me in advance for bringing this up 100 times before April), the Giants will draw 3.3 million fans — more if they make the playoffs — and dynamic pricing will lead to ticket prices that will make us wonder if the Rolling Stones are playing after the game. They will sell more merchandise than ever before. It’s going to be more crowded, everything is going to cost more, and if they continue to win (and with this pitching staff, they really have no excuse not to), nobody will mind. As long as the payroll soars above $100M, as it should.

When you’re talking about changing the value of your franchise by hundreds of millions of dollars, a few extra million to reward a guy like Huff who finished 7th in the MVP voting should be met with yawns. The question isn’t whether the Giants have the money, but what type of business they want to run. Do they want to grow in a safe, slow, low-risk way or would they rather grow exponentially? With the core they have and a region that is completely in love with everything orange and black right now, the smart money would be money spent on talent.

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