Money For Nothing...

and your losses for free. There are some small market clubs that could be doing much more for themselves financially than they are. Meanwhile, there are some big market clubs who are also wasting a lot of money.

With all due respect to Mark Knopfler and Sting, there are plenty of Dire Straits to go around in baseball. Up until this week, one would have named the Kansas City Royals, Baltimore Orioles, maybe the Chicago Cubs, certainly Kevin Millwood, possibly Jason Marquis, without a doubt Charlie Morton, Cesar Izturis (he's below the Ordonez Line), very possibly Chipper Jones and very likely, the New York Mets, as being in Dire Straits in 2010. But wait, there's one name missing. How can you possibly speak to baseball's, tired, poor, huddled masses yearning to breathe free, the wretched refuse of your teeming shore, without including the Pittsburgh Cutrates?

Oh wait... the Pittsburgh Pirates made an unconscionable $29.4 million in 2007 and 2008, despite being in the midst of a skein of losing seasons that has now reached an American record (and we Americans love records) 18 years. So, they can't exactly be in Dire Straits, despite the fact that they stand 15th in attendance in the National League (trailing only the Florida Marlins, who shouldn't count anyway.) How is this possible? Especially when the Pirates play in a lovely, riverfront ballpark that barely holds as many as some true minor league stadii? Easy, the Buccos took in 69.3 million buccos in revenue sharing during that same period.

As Gil Klose taught me many years ago, it's basic Economics 101. If the Pirates' income, for the sake of argument, was, let's say $145 million in 2007 and 2008 (69 mil from revenue sharing, say 50 million from ticket sales, and another 25 million from various other sources), and they spent just $115 million in those two years (of which about 65 million was on player salaries and 50 million on various other things, including player development), well then they made $30 million over those two years. These numbers most likely aren't very accurate, but they don't have to be, the relationship is true no matter what… if you take in more money, from whatever sources, than you spend (on whatever you care to spend it on), you're going to make money. And, with the Monopoly money mentality of professional sports these days, you're going to make a LOT of money.

Now, one of the other things Gil taught me was that a business should generally try to put a good product on the street, so as to produce a decent demand for its product, or, at least, a demand sufficient to meet the supply inherent in that product. (Don't you just love economics?) However, that doesn't seem to be the case in Pittsburgh. With revenue sharing bailing them out, the Pirates don't have to field a winning, or even a competitive team, to make money. And this is part of a problem that DOES have the potential to put baseball in Dire Straits. The Pirates, and the Marlins, and the Rays (they've drawn just 100,000 more fans than the Pirates so far this year), none of which can draw flies to the stands of their respective venues, are raking in big bucks through revenue sharing. In effect, baseball's bucks are bailing out the Bucs, Billy the Marlin and the Bay Boys.

What's really interesting is how these three teams stand on the field as of Aug. 27, 2010;

Rays 78-49
Marlins 64-62
Pirates 43-84

One team great, one team mediocre and one team terrible. That shouldn't come as a surprise, because, when it's all said and done, there are only four permutations of a major league baseball team, given the two variables that ultimately set the course for the success, or lack thereof, of said teams… those two variables being Money and Management. Look at it this way...

Good Management Poor Management
Lots of money Yankees, Red Sox Cubs, Mets
Very little money Rays, Marlins Pirates, Royals
If your team has good management, even if said team is not rolling in dough, said team should, at the worst, at least hang around .500... like the Marlins and A's. Of course, if your team doesn't have money, or doesn't choose to spend it on developing a good major league team, and doesn't have good management, well then you have the Royals or Pirates. Readers with long memories will recall a "19 to 21" in July 2007 that dissected the Pirates' woes, noting that, not only do they not have any money, their personnel decisions since 1992 have been atrocious. Here's what was said at that time

"Pittsburgh has been undercapitalized since, well since they had to let Barry B*nds (as Bill Chuck calls him) and their ace, Doug Drabek, go through free agency after the 1992 season... an event that exactly matches their fall under .500. However, the problem has been marked by the loss of a lot more players than B*nds and Drabek. Without even mentioning them... here's a quick list of some of the better players the Pirates have shed through trades or free agency since the end of the 1992 season...

Danny Jackson
Tim Wakefield
Jay Bell
Denny Neagle
Jon Lieber
Esteban Loaiza
Jason Schmidt
Aramis Ramirez
Brian Giles
Kris Benson
Bronson Arroyo
Kenny Lofton
Reggie Sanders
Matt Stairs
Jeff Suppan

Of course, if this story was being re-visited in 2010, you could add Jason Bay, Nate McLouth, Adam La Roche, Xavier Nady, Freddy Sanchez, Mike Gonzalez and Matt Capps to the list of Pirates who have left the Golden Triangle, with very little in return (see the reference to Charlie Morton, above.)

Does this mean the Pirates aren't trying to win, that they're just trying to make money? Possibly. However, the list of Pirate players that have been lost (the expansion draft… notably Jackson), strayed (via free agency) or stolen (most of their trades) seems to point equally to pure and simple incompetence by several generations of management.

Still, lots of dough, and the willingness to spend it, doesn't guarantee success. Management still has to know what to do to win. The Mets are in much the same boat as the Marlins (they're 63-64 at the moment) and the Cubs (54-74) aren't much better than the Pirates, despite huge payrolls. In other words, you have to know how to spend the money effectively.

You might say that's the Yankees' and the Red Sox' M.O. And, that would be true, to a certain extent. Both teams have excellent management in terms of player evaluation, Brian Cashman (a highly appropriate name for the Yankees GM) and Theo Epstein (with help from Bill James) with the Sox. However, both teams have virtually unlimited resources, and no scruples about spending said resources. The Red Sox can throw a small fortune at The Nibbler, Dice-K. So what if he's afraid to throw a strike? They just go out and sign John Lackey. Most of the Sox' outfield gets hurt? No problem, they put in a claim for Johnny Damon. (Even though they didn't get him.) Curtis Granderson turns out to be overrated and Nick Johnson, surprise, surprise, gets hurt again for the Yankees? No biggie, they get Lance Berkman.

When you've got that much money, you can outspend your mistakes, and that's exactly what these two teams have done. For all the blather about parity in baseball, and eight different teams winning the World Series in the decade between 2000 and 2009, what you basically have are the Yankees and the Red Sox, and everyone else, revenue sharing be damned. The Sox missed out on the post season four times in those 10 years, but they finished in second place three of those years. The Yankees have missed the post season ONCE since 1995, and then (2008) they still won 89 games. And, of course, a similar situation took place in the National League between 1991 and 2005, when the Braves had Ted Turner's money to burn and John Schuerholz running the show, and made the postseason every year there was a postseason (although they might well have missed out in 1994, as the Expos were pulling away from them when the strike ended the season.)

In reality, the Dire Straits baseball faces isn't the Pirates getting money for nothing. (Although what is funny is that MLB seems more concerned with who leaked the story about the Pirates' Profits to the media, as if THAT was some threat to baseball.) That may not be right, and it may not be good for fans in Pittsburgh, but the Pirates ineptitude is hardly new. There have always been lousy teams and lousy management. And there have always been questions about teams' willingness to do what it takes to win. In fact, Connie Mack, when he was riding high above the American League, was quoted, though he denied it, to the effect that he'd rather finish second than first, because the crowds still came out, but it kept the salaries down. (Connie Mack was a businessman first.). However, revenue sharing, or the luxury tax, while helping line the pockets of the Pirates owners, clearly doesn't phase the truly rich, a grouping that includes the Yankees and Red Sox, but also the Cubs, Angels, Mets and, up until the McCourt divorce, the Dodgers. (Funny how those are the teams in the three largest cities, isn't it? What was that about large market vs. small market teams?)

Dominant teams aren't new to baseball, either. Mack had one from 1902-1914. The Cubs, Giants and Pirates collectively owned the National League from 1900 to 1913. The Yankees won every American League pennant, save two, from 1949 to 1964. The Dodgers ran rampant in the National League from 1947 to 1956. But... and it's a big but, this all happened before the era of free agency, which has unequivocally changed the face of baseball. It has changed the game's basic competitive parameters. Now, elite teams with virtually unlimited funds aren't at the mercy of their stars growing old... they just go out and buy replacements.

There's got to be a better way then revenue sharing or the luxury tax to bring organizations like the Yankees and Red Sox under control. Maybe the American League had the right idea after the 1939 season, when a rule was passed forbidden teams to trade with the pennant winner – a clear strike against the Yankees, who had won four straight pennants. And, what do you know, the Tigers won the AL crown in 1940, after which the league chickened out and repealed the rule. Maybe a modern day version of that would be to forbid the two World Series teams (or even the six division winners) from signing ANY free agents in the next season. That might not help the Pirates or the Royals, but it would level the playing field a bit.

Or how about a salary cap? Maybe (assuming the Players Association would approve same), but hopefully one that's a lot more effective in terms of competitive charm than the NBA's version of a salary cap. Unless you haven't seen ESPN lately, you know that the upcoming NBA season is going to be largely a contest between the Lakers, Heat, and Celtics, since all the superstars seem to be congregating with just a few glamour teams – the Red Sox and Yankees of basketball, if you will. The imbalance in the NBA is shocking… and while just a couple of superstars can influence the outcome of basketball games a lot easier than a couple of baseball superstars, let us hope that baseball isn't heading the same way, toward a few glamour teams and everyone else in Dire Straits, whether they make money or not.



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