Jonah Keri wrote a great article about the Dodgers/Red Sox trade. While he makes many astute points within the piece, the main theme is this: the idea that fiscal responsibility in baseball is anything other than a way to maximize owners’ profits is a sham.
Ask The Lords of the Realm, and they’ll claim that the luxury tax is a way to keep the richest teams from spending too much, thus aiding competitive balance. This is total bullshit. The luxury tax exists to save owners from themselves, and to provide a convenient excuse for teams that could easily spend more to pocket the money instead.
You’ve all heard by now about the trade that sent Adrian Gonzalez, Josh Beckett, Carl Crawford, Nick Punto and the quarter billion dollars they’re owed to Los Angeles. You’ve also probably heard folks describe the Red Sox as “winning” the trade, since they aren’t a playoff team this season and they were lucky enough to find an impulsive team which allowed them to shed all that excess payroll in August. But as Keri points out, the Dodgers are poking a hole into the agreed-upon idea that payroll efficiency is the best way to judge MLB front offices.
The Dodgers don’t care about luxury tax thresholds. As Keri points out, “They’re perfectly cool with losing the dollars-per-WAR championship.” Here’s what Dodgers ownership cares about:
1. Having fun with their $2 billion investment … NOW.
2. Reversing the last 30 years, a period that has seen both the Lakers take over Los Angeles from a fan and media perspective, along with the Angels growing into an erstwhile competitor for LA’s “casual” baseball fans (they call these people “swing voters” during presidential elections).
3. Pouring a vat of bleach on the stench at Chavez Ravine left from the McCourt years.
4. Strengthening their position as they enter the negotiations phase for their soon-to-expire local TV deal(s), as Forbes notes:
Quite simply, the Dodgers roster moves are designed not just to boost on-field performance but also the team’s market value as a television asset. This Dodger team now feels like can’t miss TV with the stars it has assembled.
Going into a 2013 contract year as their media rights expire, this is savvy business by Mr. Walters and company. Because the more marquee attractions the Dodgers have and the better they play on the field between now and the end of next season, the more likely the team will fetch a media rights deal near the upper-echelon of the Desser* estimates.
And hence, the more likely these seemingly outlandish salary expenditures will ultimately seem just a drop in the Pacific Ocean.
*Desser Sports Media estimates the Dodgers’ next TV rights deal could net the franchise up to $8.5 billion over the next 20 years.
The “Rainy Day Fund” mention near the end of last season, and the near religious adherence to the “B-word” in the months following (we’re referring to “Budget,” not “Barry”), showed the Giants to be one shrewd outfit — fiscally speaking. Without opening up the books, the Giants were able to look at what their competitors (the Dodgers and the Athletics, and to a much lesser extent the Rockies, D-Backs and Padres) were spending, what it would cost to field a team with several premier starting pitchers and an offense that might not be historically bad, and determine what payroll number they could get away with.
For the 2012 season, that number turned out to be $130 million. Top 10 in MLB, but still profitable enough to toss cash into a rainy day pile? That sounds good. Let’s do that. BUDGET, Y’ALL.
As a result of the Dodgers’ spending, the next 34 games for both teams could change everything — not in terms of how much money the Giants spend, necessarily, but in how they’re perceived around here by the people who’ve made the AT&T Park sellout streak possible.
If the Giants hold off the Dodgers … it will be seen as a triumph for teamwork and chemistry over the Dodgers’ wanton disregard for the budgetary constraints that the Giants have agreed to pin on themselves.
If the Dodgers overtake the Giants … there are a few scenarios that could occur, each with different ensuing reactions:
- Dodgers win NL West, Giants win Wild Card play-in game: Giants good, Dodgers evil.
- Dodgers win NL West, Giants lose Wild Card play-in game: Giants hosed, Dodgers evil, Giants better increase the “budget” by at least 10% this winter.
- Dodgers win NL West, Giants don’t finish as either the first or second Wild Card: We’re all screwed (and the Giants better throw that budget talk into the compost dumpster with the unsold garlic fries).
We knew this was coming
The Dodgers weren’t going to be a nondescript franchise forever, and the Giants enjoyed a nice little run while the Dodgers floundered in McCourt mediocrity. That’s over now, as Keri writes:
Maybe one day the Dodgers will go the way of the Orioles and Mets, teams that tried to spend big and make a splash, found themselves not winning as much as they’d hoped, then rushed to dump as many big contracts as possible before finally starting to rebuild in earnest. Maybe one day all of the Dodgers’ current bravado will turn to remorse.
But that day is not today. The Dodgers are now officially the National League’s answer to the Yankees, only more willing to accept smaller profit margins and thumb their noses at artificial spending limits. Baseball’s new financial superpower is reckless. And maybe a lot smarter than we’d like to admit.
I can almost hear Larry Baer on KNBR saying, “Well Tom, the Yankees don’t always win.” But they do always win. The Yankees have missed the playoffs once in the past 18 seasons, in 2008 when they won 89 games (and would’ve been a Wild Card team with the current system).
No longer will the NL West be thought of as a veritable runt division, where hitters are few and far between and 88-92 wins is the benchmark. The Dodgers must be considered a 90+ win team for the foreseeable future until proven otherwise.
Here’s where the “Rainy Day Fund” comes in. This theoretical RDF could be used in a couple of ways. If the Giants become a bad team and fans stop packing the place, the revenue hit won’t be as painful to the ownership group because there’s a big pile of cash over there in the corner, underneath the dart board with the A’s logo pinned onto the center. That’s the obvious one.
Here’s another angle — what if the competition throws a wrench into this whole “AT&T Park + marketing + social media + Buster Posey = forever flooded revenue stream” thing? What if Giants fans look at the (dynamic) prices they’re paying and ask: why does my team have a budget, while the Dodgers do not? What if the very idea that the Dodgers are an unbeatable empire stops the fans from flooding AT&T Park the way they do now, even if the Giants continue to succeed with their time-proven model of “stay competitive into September and, at the end of the day, let the chips fall where they may with due diligence and tire-kicking”?
If the Giants continue to beat the Dodgers in the standings, those questions will be buried under a pile of commemorative DVDs and hats. If the Dodgers one-up the Giants this soon after their new owners’ first clumsy attempt (those Beckett and Crawford contracts are beyond horrible, and Keri points out that Gonzalez isn’t the same hitter he once was) to Hollywood-ize their image (and there will be more attempts to grab the L.A. spotlight, you can be sure), Giants fans are going to freak out … in the 2012 Lincecum sense, not 2007-11.
As the Dodgers’ new world order takes shape, there will be even more questions:
If the Dodgers’ budget is infinity, how much extra spending by the Giants would be enough?
With the Dodgers out-Yankeeing the Yankees, are we looking at an era where salaries escalate into the $50 million per year range and beyond?
How long until the Giants look at their current deal with Comcast and say, “Yeah, that’s nice. But with the Dodgers destroying the idea of competitive balance within our division, this just won’t do.”?