For sportswriters of all stripes, Cot’s Baseball Contracts is an invaluable resources. It provides an accurate, one-stop shop of contract information for all Major League contracts. On a slow Hot Stove weekend, John Donovan interviewed Jeff Euston the man behind the site. As with so many of these non-beat writer sites, Jeff administers his site in his spare time, and he does one helluva good job with it.
Coming in 2009: More Delta commercials than we ever wanted
Delta Airlines and the Yanks announced a major sponsorship deal yesterday afternoon. The Atlanta-based airline will now become the Official Airlines of the New York Yankees. In return, Delta gets extensive signage throughout the new stadium, a fancy luxury suite behind home plate and advertising in Yankee publications and on the game broadcasts. Terms of the deal were not announced, and I’m sure John Sterling is already practicing his Delta commercials as we speak.
Biz of Baseball updates: CitiField and Mark Cuban’s troubles
I ran across a few business-of-baseball related stories that I found interesting. They’re not Yankee-related, but perhaps you’ll like them too…
- While CitiGroup is going to wind up cutting 52,000 jobs over the next few months, the Mets are claiming that the stadium naming deal is safe for now. Citi has contracted with the Mets to pay $20 million annually for the next twenty years for the rights to name the team’s new club. We’ll see how much of the $400 million payout the beleaguered financial institution can make. I wonder if a naming rights deal is the best use of the bank’s government bailout fund.
- The SEC levied some insider trading charges against Mark Cuban today, and that will probably be the final nail in the coffin containing his bid to buy the Cubs. The MLB owners have long resisted allowing Cuban into their exclusive club, and this development gives them the perfect excuse to turn him down. Sam Zell would do well to hold onto the club until the economy improves a bit.
- The AL Champion Rays, despite finishing 26th in attendance in 2008, plan to raise ticket prices for next season. As questions have emerged about the long-term viability of baseball in the Tampa area, it will be interesting to see how potential fans react to the higher ticket prices.
Benefitting from a bad economy
Over and over again, this week, we’ve heard how the Yankees are going to benefit from a bad economy. The team is flush with money. They have some high-priced contracts coming off the books; attendance remains at record-setting highs; and with a new stadium set to open, the Yanks’ coffers will be full for years to come.
For Yankee fans hoping for a return to dominance, that is, of course, good news. Few teams can afford CC Sabathia, and as the Yanks illustrated on Friday, they’re willing to outbid themselves to show just how willing they are to use their position of economic strength.
Similarly, not many teams are in a position to make offers to Mark Teixeira or A.J. Burnett that will be in line with what these players want. It’s almost as if they’re the Yanks’ — or Angels’ or Dodgers’ — for the taking. The rich will emerge from this Hot Stove League richer.
On the flip side of this economic argument are posts such as this one from Buster Olney. Somewhat spuriously, Olney, playing off of a column by Richard Griffin, claims that this off-season will prove the popularity of the hidden gem or the free-agent bargain. “All of the baseball world is looking for a bargain, so Penny, Johnson and Pettitte could have a wide range of choices,” he writes.
For his part, Griffin parlays the story of Randy Johnson’s inability to come to terms with the Diamondbacks as a sign that third- or fourth-tier free agents may have a tough time finding homes. For once, I’m inclined to believe that it’s not the economy, stupid.
What Olney fails to recognize is that Major League teams are always looking for bargains. That, in fact, is the real message of Moneyball. How do you put together a cost-efficient team with a lot of flexibility and the chance to win? By signing the Brad Penny’s of the world to one- or two-year contracts. Similarly, in Griffin’s case, Randy Johnson isn’t getting a deal that he wants because of his age. How many teams would be willing to give a 45-year-old with a recent history of back problems an $8 million deal, even for one season?
The real story of this baseball economy isn’t personnel based. It’s market based. As the Yankees, Mets, Phillies, Dodgers, Cubs, White Sox, Red Sox, Angels and a few other teams can weather this financial storm with ease, baseball’s middle- and small-market teams are in trouble. In Detroit, for example, the U.S. auto industry is in danger of collapsing. In other markets that don’t enjoy the benefit of a large population, attendance will suffer, and teams’ financial bottom lines may not emerge from 2009 unscathed.
Every year, the free agent bargains get the phone calls, but not every year do the stock markets collapse. How Major League Baseball handles the disparities in wealth that are sure to be magnified this year will be a real testament to Bud Selig’s legacy. Brad Penny? He’ll be fine no matter what.
Looking ahead to 2009
While we’re still a few long months away from Spring Training and Opening Day, it’s never too early to look ahead to next season. To that end, Maury Brown penned a great piece on the top 10 business-related story lines for next season. From the economy to the new stadiums to the second iteration of the World Baseball Classic, the ’09 season will keep everyone pretty busy.
Baseball and the economy
While free agents are in for some rather large paydays this year, Front Office folks aren’t as lucky. Over the weekend, the Diamondbacks announced they would be laying off 31 Front Office employees for a cost savings of about nine percent. While news like this will probably become de rigeur over the next few months, it’s also fairly mind-boggling that a team as consistently mediocre as the Diamondbacks had the largest Front Office staff of any Major League team.
Comptroller: Yanks owe $11M in back rent
It looks like the Yanks forgot to pay the rent. According to a rather boring and technical audit — aren’t they all like that? — by New York City Comptroller William Thompson (available here as a PDF), the Yankees misreported some attendance, revenue sharing and cable numbers. As a result, the team owes the city $11 million in Yankee Stadium back rent. The Yanks do not dispute these findings — which include some lofty numbers on concession sales — and have submitted $7 million to the city. The rest the team will fork over in March. It looks like in the midst of a financial crisis, New York City is going to crack down on delinquent bills.
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