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THE 'C' STANDS FOR CRAZY

[December 20th] -- The Chicago Cubs made another addition to their team on Tuesday, finalizing a 3 year, $21 million dollar deal for former Cadinals' pitcher Jason Marquis.

Three years, $21 million dollars. That works out to $7 million a year.

Cubs GM Jim Hendry, in a post-signing presser, had this to say about his newest Cubbie: "Obviously, we think that Jason can come back and return to the form he was a few years ago."

Now, correct me if I'm wrong, but when you sign a player who hasn't been good for a few years, doesn't that guy then get an incentive-laden deal with little up-front cash so if that pitcher continues to be bad, the team doesn't get screwed? Marquis, 28, has only started 30+ games three times in his career, 2004, '05 and '06:

He's had one good year in the major leagues. One. His last two years reveals a combined 27-30, 5.02 record. He's allowed 13 baserunners per 9 innings and only 5.5 strikeouts per 9 innings.

And for this he's going to get $7 million dollars per year.

And then there's Ted Lilly.

Lilly, signed last week by Chicago for four years / $40 million dollars. That's $10 million a year.

Over the last two years with the Blue Jays, Lilly had a record of 25-24, 4.93. His career record of 59-58, 4.68 is at least better than Marquis'. I guess that's why he's making the "big bucks."

[Note: some readers have left comments that I was being too hard on Ted Lilly, and perhaps they are right. Overall, he's a decent pitcher, a guy that would fill a #3 or #4 hole in a team's starting rotation. The problem is that his $10 million dollar salary demands more from him than he can produce. It's like Alex Rodriguez's 10 year/$252 million dollar deal with the Rangers. No matter go great his season was, it wasn't enough to warrant the contract. I'm afraid that Lilly will be facing that same "Rodriquez Syndrome." ]

Lilly and Marquis have combined for a 4.98 ERA over the past two seasons. Over those two years, they combined to lose two more games than they won.

And they are earning a combined $17 million dollars per year.

If they play at their very best (something they haven't been able to do in their careers thus far), if they combine for, say 6-8 games over .500, the Cubs still won't have gotten their money's-worth out of their two new pitchers. The more likely scenario, I'm afraid, will see these two guys losing 3-4 games more than they win.

High priced players are appreciated in the off-season. But Cubs fans are going to assume that Alfonso Soriano is going to hit .280-40-100, that Mark DeRosa is going to repeat his .296-13-74 season that he had with the Rangers, and that Lilly and Marquis are going to win 14-15 games each. Just as likely, however, could be the following stats:

If those four players produce those type of numbers, there is going to be rumblings so loud at Wrigley Field that Ernie Banks won't want to "play two." The Cubs have sunk nearly $40 million dollars into those four players - roughly the entire Nats' payroll for 2007 - and have much of last year's $95 million dollars still on the books (save Greg Maddux' paycheck).

What happens if one or several of these players have an average to below-average year? What if the Cubs aren't chasing the Nationals for the worst record in the NL come July? Jim Hendry calls another team and wants to unload Lilly or Marquis or DeRosa and their salaries.

Ha-ha-ha-ha-ha-ha!

What do teams most often do after they've over-spent on free-agents trying to buy a pennant? They try to trade them all away for prospects, drastically reduce the payroll and recoup their losses.

Ha-ha-ha-ha-ha-ha!

I sold cars for many years before I went back to college. Every once in awhile, there would be one of those "super deals," discounts, APR reductions, rebates, sometimes all three on one of our vehicles. In a month where we would typically sell 20 Sunfire's, we'd sell 200. "Wow!" all those new customers thought, "I bought it so cheap, I can trade it in in a couple of years and I won't be upside-down!"

Nope.

In a couple of years, the first red Sunfire would hit the lot and we'd give them full book. But by the time the 20th red Sunfire hit the lot, we'd glance over at the used lot and see alllll those red Sunfires and we'd hit them at $2,000 below book just so they wouldn't trade. No sale.

In a couple of years, the market will have stabilized, and guys like Ted Lilly aren't going to be earning $10 million a year. If he remains true to his career statistics, he'll likely have under-performed during his stint in Chicago, and the Cubs, still smarting from signing all those free-agents, will try to get rid of Lilly and the gang. As an opposing general manager, you may be apt to take that first guy and pay "full book" for him. But by the 6th or 7th trade offer, he's going to offer you less than the player is worth and demand money to cover his salary. And he still might say no anyway.

Hendry (though more likely his replacement after he's fired) is going to have three options in two years:

  1. Keep these players, keep their contracts (and risk being a very bad team)
  2. Trade these players, eat parts of their contracts, get back unequal value (and risk keeping the Cubs in their "can't win for losing" rut)
  3. Cut the players, eat the contracts (and have no money to replace them)

In four years, the Cubs will likely have realized their mistakes of 2007, and will have watched at least two, possibly three of their "big time" free agents play at a level far below that of their income. At some point, an owner, a president, a general manager - maybe all of them - will say, "look guys, this isn't working. Let's get young and go with the prospects."

In four years from now, the Washington Nationals will have suffered through some difficult times, but will likely be in a position where their growing pains should have created a pennant contender, if not a pennant winner. In other words, the Cubs will probably be starting in 2011 what the Nationals would be just finishing.

I was a Braves' fan when the New York Mets went on their buying spree in 2002-2003, bringing in players such as Mo Vaughn, Tom Glavine, Roberto Alomar, Jeromy Burnitz, Cliff Floyd, Tony Clark, and Jay Bell. I thought for sure that 2003 would be the end of the Braves' run in the National League East.

The Mets won 66 games in 2003, and 71 games in 2004. They began to clear out the dead wood in 2005, brought up kids like David Wright and Jose Reyes from their minor league system, and signed some "intelligent" free-agents (save Pedro Martinez). The Mets won 83 games in 2005 and became the first team other than the Braves to win the division since 1990.

In 2000, the Tampa Bay Devil Rays brought in a slew of free-agents and built their team around Fred McGriff, Vinny Castilla, Greg Vaughn and Jose Conseco. They won 69 games that year while Toby Hall, Jose Guillen, Randy Winn and Aubrey Huff languished on the bench.

So, please don't hate the Cubs because they committed to $300 million new payroll dollars this off-season. Feel sorry for them. Oh sure, they'll win more games than the Nationals, but those will be inconsequential wins, because they won't get the Cubs any closer to their pennant. They are, you know, like that guy Charlie Manson -- you know, "Helter Skelter." No plan. Just money.

The Nationals have a plan. It'll suck for a couple of years, but like a good investment, it will pay dividends for years to come.

That is, as long as we don't go bankrupt in the meantime.


Comments:
"In a couple of years, the market will have stabilized, and guys like Ted Lilly aren't going to be earning $10 million a year."

Probably not true. Baseball salaries don't really cycle - just rise rapidly, then rise less rapidly.

Here's an interesting article: http://www.hardballtimes.com/main/article/the-free-agent-cycle/

I like the Lilly signing. He'll probably give the Cubs a 180IP of league average lefty ball 3 years out of 4, with a decent chance for something better. I think you do him a disservice only looking at the past 2 years. 2005 was an injury aberration for Ted. Since 2002 he's been better than average every other year - just not lucky in the win dept. I think that IS what 10 mill a year is worth now.

I hate the Marquis signing. We don't know if last year was an aberration but he's always been a bit on the lucky side (lots of HRs, very few Ks). It's not worth 21 million and 3 years to see if he can be what Lilly is.
 
Pitchers are paid to do two things: pitch and pitch well. Some can do the first but not the second; some can do the second but not the first. (And the best ones, the ones most highly paid, can do both.)

Marquis can do the first. He's proven over the past three seasons that he can log innings. Granted, he was awful/awful/awful last season (and despite not being awful in '05, there were signs, like his K rate, that pointed to him being awful in '06), but I guess $7M/yr is the cost for the first attribute. It makes sense, at least in a certain sense. The Cubs threw anyone and everyone out on the mound last season. I think they'd bet on Marquis recovering back to near his '05 form if it went they could depend on him to take his turn every fifth day. It's a pretty strange looking contract, granted, but I guess there's some sort of rational basis there.

As for Lilly, he's got a bit of the first attribute, a bit of the second attribute, and he's "a lefty." Terms look outrageous, and he might not be for the Cubs any better than a next-generation Greg Hibbard (though hopefully with better health), but lefties are usually paid on a premium.

Basically, the Cubs are paying money to guys they think they can rely on to 1) stay in the rotation consistently and 2) pitch pretty okay . . . maybe. They're just caught up in a salary explosion, but there's no real indication salaries are going to implode on themselves in the near future.

So the contracts are sort of "indefensible but justifiable," if that makes any sense at all. ;-)
 
I was an NBA fan and went to many games. Then salaries started getting silly--$16 million a year for Antawn Jamison and Cleveland's Larry Hughes? $6 million a year for Antonio Daniels until he is 36? Then I started to realize that we have to pay over $100 per ticket, say $220 per couple, to sit in the lower bowl--just to pay these guys many extra millions more than they truly need or deserve. I stopped going to the games because I felt I was being played for a sucker to give these guys all this extra money.

Baseball is still affordable for most or at least many fans. But I don't like seeing where skyrocketing salaries may be leading us.
 
With respect, El Gran, there are several points along the free-agent path that had salary spikes with contracts after the spike close to (but still above the year before the spike). In a couple of years, even though there may still be a surplus of cash to spend, I think most all of the teams are going to think twice giving those types of contracts to players like Marquis and Lilly.

Also, I noted Lilly's career numbers as well as his last two years -- I think what a person has done over his career is a good barometer of what he 1) has done and 2) will do.

And Ed, you're right 100%, and that's exactly the reason I don't want these salaries to begin to effect the affordablilit of the game. The Utah Jazz are just down the road from me in Salt Lake, and there is no way I could afford to take my family to a Jazz game.

No matter how many people say these extra dollars are coming from advertising, profit sharing,etc., teams will still find a way to increase the cost of tickets and say, "hey when we pay $17 million to Lilly and Marquis, we've got to recoup it somewhere."

That's what I'm afraid we're heading for.
 
My reaction is a bit like EGCN's, if less informed. From everything I hear, MLB is flush with cash and on sound financial footing for the foreseable future. If all (or most) teams can now afford to pay more, that fact will inexorably lead to salaries being bid up to the limits of the teams' capacity to pay. This salary range we're seeing may well be the new "normal" for the next 4-7 years, until we hit another plateau. Which is not to say that all these trades necessarily make sense, just that there may not be as much air in them as you suspect.

However, I am increasingly convinced that the Nats are wise to sit on the sidelines of the free agent market for now.
 
The Tribune Company is going for the BIG PAYOFF. Hoping to build a contender, maybe a playoff team, let the Cubs reach their Zenith, build HUGE LOCAL FEVER, even more so than know, and SELL THEM FOR MUCHO DOLARES. Its been rumored--I can see it happening. Just like Disney selling out The Angels after winning the World Series.
 
But -- and this is a big but - (kind like mine now that I'm getting older), twenty years ago, some teams overpaid for their free-agent players then just like the Cubs are now. 20 years ago, we were talking a few million total, instead of the $300 million that the Cubs committed to this off-season.

But it didn't work then, and it won't work now. I can't think of a single time where an owner blew a wad on 5-6 players and his team won it all the next year. The '97 Marlins came close, but they also had young players and some wise trades.

$100 million, or $500 million, or $20 million -- the dollars don't matter. It's the hap-hazard way of collecting players that is the problem.
 
I stopped going to the games because I felt I was being played for a sucker to give these guys all this extra money.

With respect, Ed, I think this is somewhat backwards. The NBA's collective bargaining agreement guarantees the players will receive 57% of the league's revenue. This is true whether the league's revenue is $100 or $100 billion in a given season. The owners will always be looking for new revenue not necessarily because they've got to pay the players (in fact, once league revenues fall below a threshold, that 57% cut goes down), but because they want more revenue. If people will pay those prices for seats, they'll price those seats that way. The players may be undeserved in getting such ridiculous amounts of money, but that's a byproduct of being employed by a successful modern professional sports league.

It's much the same way in baseball---though, IIRC, the absence of a salary cap means the players aren't guaranteed any set % of league revenue. Right now, the league is humming along, and naturally the owners are going to be more free and easy with the spare change. And perhaps stupidly, at that. I think Farid makes some excellent points assailing what the Cubs are doing baseball-wise.

But I don't think salaries themselves have tremendous bearing on the affordability of the game. I've always thought this site explained that best. It's just that salaries reflect the success of the game, and the success of the game means that baseball is bringing in all kinds of revenue, including from you and me (or others who are willing to pay).

When I blame something for high ticket prices, I look straight at the new stadiums, what with their shiny natures and natural demand and smaller capacities, creating artificial demand. In most cases, they're quite nice---and, yes, you get what you pay for.
 
I agree Farid. But you know what? Even if it did work, that's not how I'd want the Nationals to be built. You fall in love with your wife because you found each other and grew together over many years. There is a bonding.

That's how it works in basball. A player like Ryan Zimmerman is drafted, signed, plays in the minors and - finally - makes it to the major leagues. in five or six years, Zimmerman will be like an old friend. We know that his mom has MS, that he's from southern Virginia, and that he's a great guy.

What do we know about Esteaban Loaiza? Or Ramon Ortiz? or Cristian Guzman?

Free agents are like Christmas presents. They are bought and given to us -- we have no ownership in them. A $10,000 wall size plasma tv doesn't mean as much to us as a $500 regular tv that we bought with out own money.

Free agents are like those plasma tv's -- they just show up at our doorstep one day, and we demand immediate results from them.

Sorry. Give me a team laden with kids that came up through our system, players we know inside and out. They are easiser to root for, and more fun too.
 
The reason why (I think) salaries will go back to normal is because this was the first year that the owners had all this extra money. They didn't know what to do with it or how to make it help their team. Kinda like when the DH first came to be. Teams didn't know exactly how to use the DH, or what kind of player to play there.

I think the teams are going to say "man, we screwed that up" and they won't be spending $10 million for Ted Lilly and his buddies any more.
 
Basil,

That is a good site you gave us. But I don't think giving ridiculous amounts to players is free money, without consequece to ticket prices.

In the NBA, it seems rational to give players their 57% of revenue. But owners cheat on this, as they are allowed to go over the salary cap in the NBA to build the team's success and long term value of their franchise.

The ticket price formula for the NBA is to have largely affluent fans (except for some people who are too addicted to this scene that they can't resist) pay for lower bowl seats, while promos lure others into worthless nosebleed seats. If Jamison would settle for $8 million a year and Daniels $3 million, ticket prices would drop. But everyone likes to be filthy rich, so that won't happen. It is too late.

For MLB, it is not the fault of expensive parks, many of which are given virtually free to owners by generous taxpayers.

For MLB, I think we may be heading for something similar to the NBA. Already you are seeing bleacher and outfield grandstand seats priced for affordability, a marketing gimmick to induce good will. I think we are being set up for big ticket price increases in the future all over MLB, pricing many average fans out of good seats. Player salaries are part of this, even though there are other factors driving up prices, as you point out.
 
For MLB, it is not the fault of expensive parks, many of which are given virtually free to owners by generous taxpayers.

Yes, but generous owners don't pass along this benefit to the fans, who are, in many cases, . . . the taxpayers. ;-)

New stadiums are, well, new. They open with interest. Interest creates demand. And with good reason, because it's an exciting thing to get your own Camden Yards or PNC or whatever (even if it won't necessarily look like those parks). Ticket prices rise with these new ballparks, with an additional "artificial" premium on each seat because there are fewer seats in each park.

Anyway, I guess that's a side point. Thanks for a good discussion, Ed.
 
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