{"id":1481,"date":"2009-08-14T05:01:18","date_gmt":"2009-08-14T12:01:18","guid":{"rendered":"https:\/\/seamheads.com\/blog\/2009\/08\/14\/reading-the-new-economic-tea-leaves\/"},"modified":"2009-08-14T05:01:18","modified_gmt":"2009-08-14T12:01:18","slug":"reading-the-new-economic-tea-leaves","status":"publish","type":"post","link":"https:\/\/seamheads.com\/blog\/2009\/08\/14\/reading-the-new-economic-tea-leaves\/","title":{"rendered":"Reading the New Economic Tea Leaves"},"content":{"rendered":"

After Alex Rios was waived by the Blue Jays and claimed by the White Sox, CBS Sportsline’s Danny Knobler attributed J.P. Ricciardi’s decision not to seek compensation for Rios to “new economic realities.<\/a>“\u00c2\u00a0 Then the Brewers dumped J.J. Hardy and Bill Hall as much\u00c2\u00a0for money as performance.\u00c2\u00a0\u00c2\u00a0We may be\u00c2\u00a0watching a historic salary restructuring that witnesses the shrinking of\u00c2\u00a0both team\u00c2\u00a0payrolls and individual salaries.\u00c2\u00a0 That could be the very different\u00c2\u00a0message of the “new economy.”\u00c2\u00a0 <\/em><\/p>\n

Ricciardi was willing to let Rios walk away because he has a contract that averages almost $12 million a year stretching to 2015<\/a>.\u00c2\u00a0 The Toronto GM has a history of\u00c2\u00a0bad investments– B.J. Ryan\u00c2\u00a0another recent example.\u00c2\u00a0 But with so many others freeing up salary to be buyers in a bargain shoppers market, Ricciardi’s\u00c2\u00a0performance has been lost as just more of\u00c2\u00a0the newest\u00c2\u00a0economic trend.\u00c2\u00a0 Everyone is doing it\u00c2\u00a0with a few notable exceptions.\u00c2\u00a0<\/p>\n

The new baseball economy started in the winter of 2009 when the economy tanked and players were willing to take less in the face of genuine concerns about the bottom line by MLB teams.\u00c2\u00a0\u00c2\u00a0 It has continued with\u00c2\u00a0lower attendance across the board and lower revenues in general.\u00c2\u00a0<\/p>\n

Some teams–like the Blue Jays–look\u00c2\u00a0like banks with toxic assets on their books\u00c2\u00a0threatening to drag them under.\u00c2\u00a0\u00c2\u00a0Rios and Ryan were\u00c2\u00a0millions of dollars of bad debt.\u00c2\u00a0 The wholesale salary\u00c2\u00a0dumping in\u00c2\u00a0Toronto raises questions not just about the wisdom of the GM who committed ownership to that bad debt, but to the owership group’s overall financial health.\u00c2\u00a0\u00c2\u00a0Toronto’s ownership seems relatively sound financially, but there are plenty of reasons to wonder about the health of Milwaukee, Cleveland, Texas and other fanchises.\u00c2\u00a0\u00c2\u00a0<\/p>\n

The White Sox look to be one of the healthier ownership groups.\u00c2\u00a0 They have been willing to take on salary and added the over-valued Rios to solve their long term center field problems–as Keith Law <\/a>pointed out at ESPN.\u00c2\u00a0\u00c2\u00a0Rios and Jake Peavy are long term investments for a team that seems un-worried about their ability to meet payroll.<\/p>\n

Across town, the Cubs share the same market and have always been able to tap into the more affluent north side crowd.\u00c2\u00a0 The Tribune Company were buyers coming into 2009 amassing the third largest payroll in the game–ahead of every other non-New York team.\u00c2\u00a0\u00c2\u00a0 Attendance at Wrigley Field is high<\/a> and the team remains in competition in the NL Central going into the stretch run.\u00c2\u00a0 But the Tribune Company like most media conglomerates is in deep trouble.\u00c2\u00a0 They were extremely quiet during the June and July trading frenzy and seem unlikely to be buyers in the off season.<\/p>\n

Other ownership groups\u00c2\u00a0being hit hard\u00c2\u00a0by the recession may weather it quietly like\u00c2\u00a0the Cubs.\u00c2\u00a0 Detroit is also a contender but has been very quiet in the deadline trading\u00c2\u00a0market.\u00c2\u00a0 Their lead in the AL Central may be masking a wider Michigan reality bought by the collapse of the auto industry.\u00c2\u00a0 Attendance is off in the Motor City, but not sharply.\u00c2\u00a0<\/p>\n

Will the Volt and “Cash for Clunkers” save the Tigers?\u00c2\u00a0 Their off-season activities–like those of the Cubs–will tell the tale.<\/p>\n

Then there are the Cleveland Indians.\u00c2\u00a0 Last season the\u00c2\u00a0Cleveland Indians bought Mark DeRosa for the stretch run.\u00c2\u00a0 Now they have joined Pittsburgh and other rustbelt franchises in the small market foxhole and they have been bailing as fast as they can.<\/p>\n

For all of the economic gloom that has fallen over a wide swath of the two leagues, the rich are still rich.\u00c2\u00a0 They will continue to support high salaries for the best players the way the Yankees did in 2009.\u00c2\u00a0 Teixeira and company will continue to see fat, long-term contracts.\u00c2\u00a0\u00c2\u00a0\u00c2\u00a0<\/p>\n

The Red Sox have kept the market afloat almost single-handedly.\u00c2\u00a0 Bring me your failed Casey Kotchman project or your over-priced Adam LaRoche.\u00c2\u00a0 Their shopping frenzy made little sense to the Annie Hall franchises, but when you’ve got it, flaunt it.\u00c2\u00a0 So they kept going until\u00c2\u00a0they finally found what they were looking for in Victor Martinez.\u00c2\u00a0 \u00c2\u00a0<\/p>\n

Going forward it looks as if the Cardinals, the Los Angeles teams and the White Sox are the only teams that will\u00c2\u00a0try to keep pace with the Yankees and Red Sox.\u00c2\u00a0 After this elite grouping there is considerable falloff.\u00c2\u00a0\u00c2\u00a0The gap between the rich and the poor has not only widened, but the numbers of\u00c2\u00a0small market teams is\u00c2\u00a0expanding.\u00c2\u00a0<\/p>\n

Cleveland is the newest member, but there will be others whose membership credentials may surface in the off-season.\u00c2\u00a0 When the December meetings roll around this winter the relatively well-off teams will have the big ticket free agents to themselves.\u00c2\u00a0\u00c2\u00a0After the big dogs have had their way, the little dogs will have to feast on the remains.\u00c2\u00a0<\/p>\n

Fewer clubs will chance arbitration in the days after the season.\u00c2\u00a0 Who wants to trust that mechanism when the market is so skewed.\u00c2\u00a0\u00c2\u00a0So there will be a glut of free agents on the market and\u00c2\u00a0GMs across the board seem to be\u00c2\u00a0betting that salaries will drop, that come next February players will be squeezed to take much, much less.\u00c2\u00a0 The question is\u00c2\u00a0what kind of value will be left when it is your team’s turn?<\/p>\n

How should\u00c2\u00a0the smart teams play the game of new economic reality?\u00c2\u00a0 How do they position themselves to take advantage of the new economic situation?\u00c2\u00a0 My preference would be not having to wait for something to fall my way in the off season.\u00c2\u00a0 That\u00c2\u00a0looks like a crap shoot.\u00c2\u00a0 Bidding against the Yankees and Red Sox is a big loser, but\u00c2\u00a0waiting to find out who they don’t want–regardless what the bargain price–seems a loser’s bet as well.\u00c2\u00a0\u00c2\u00a0<\/p>\n

I still prefer the\u00c2\u00a0approach Cleveland’s Mark Shapiro has taken.\u00c2\u00a0 He not only shed some of his highest paid players, but at the same time he\u00c2\u00a0raided the\u00c2\u00a0best young talent of other organizations.\u00c2\u00a0 More than any other GM Shapiro has restocked his system.\u00c2\u00a0 If there are\u00c2\u00a0holes that young players cannot fill, he has salary room to go after other solutions.\u00c2\u00a0 He does not need to fill as many slots as Ricciardi and has more options in his minor league system.<\/p>\n

No one knows for\u00c2\u00a0certain who is reading\u00c2\u00a0the\u00c2\u00a0tea leaves of the new economy correctly.\u00c2\u00a0 Maybe those that\u00c2\u00a0stockpile\u00c2\u00a0young talent are ahead of the curve, maybe those hoping to bargain shop in February have it right.\u00c2\u00a0\u00c2\u00a0But either way, winning on the cheap has not been made easier by the “Great Recession.”\u00c2\u00a0 With the rich teams on a higher pinnacle than ever, and the rest of MLB teams in the economic soup,\u00c2\u00a0it has gotten much, much\u00c2\u00a0more difficult.\u00c2\u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"

After Alex Rios was waived by the Blue Jays and claimed by the White Sox, CBS Sportsline’s Danny Knobler attributed J.P. Ricciardi’s decision not to seek compensation for Rios to “new economic realities.“\u00c2\u00a0 Then the Brewers dumped J.J. Hardy and Bill Hall as much\u00c2\u00a0for money as performance.\u00c2\u00a0\u00c2\u00a0We may be\u00c2\u00a0watching a historic salary restructuring that witnesses […]<\/p>\n","protected":false},"author":73,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9],"tags":[],"class_list":["post-1481","post","type-post","status-publish","format-standard","hentry","category-general"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/seamheads.com\/blog\/wp-json\/wp\/v2\/posts\/1481","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/seamheads.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/seamheads.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/seamheads.com\/blog\/wp-json\/wp\/v2\/users\/73"}],"replies":[{"embeddable":true,"href":"https:\/\/seamheads.com\/blog\/wp-json\/wp\/v2\/comments?post=1481"}],"version-history":[{"count":0,"href":"https:\/\/seamheads.com\/blog\/wp-json\/wp\/v2\/posts\/1481\/revisions"}],"wp:attachment":[{"href":"https:\/\/seamheads.com\/blog\/wp-json\/wp\/v2\/media?parent=1481"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/seamheads.com\/blog\/wp-json\/wp\/v2\/categories?post=1481"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/seamheads.com\/blog\/wp-json\/wp\/v2\/tags?post=1481"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}