Chicago White Sox: Signed 1B Paul Konerko to a 5 year, $60 million contract.
New York Mets: Signed LHP Billy Wagner to a 4 year, $43 million contract.
New York Yankees: Signed RHP Kyle Farnsworth to a 3 year, $17 million contract.
Oakland A’s: Signed RHP Esteban Loaiza to a 3 year, $21.375 million contract.
Toronto Blue Jays: Signed LHP B.J. Ryan to a 5 year, $47 million contract.
Chicago Cubs: Signed RHP Bobby Howry to a 3 year, $12 million contract.
Chicago Cubs: Signed LHP Scott Eyre to a 3 year, $11 million contract.
No, this isn’t a “salaries are out of control” type of rant. Nor is it a complaint about superstar contracts being given to non-superstar players. The reason players this year are getting this kind of money is simple: MLB is swimming in money and owners are willing to spend it.
That’s a good thing by the way.
Some in the press will undoubtedly lament that it’s a shame that some “mediocre” players are getting exorbitant amounts of money but guess what? There are also a lot of mediocre franchises that—due to revenue sharing, luxury taxes, government subsidies, tax breaks and huge amounts of revenue from the Internet and merchandising—have been getting exorbitant amounts of money too.
I doubt you’ll read much lamentation or witness the beating of breasts and sackcloth-girded loins in the media over that situation.
There’s a ton of revenue coming into the game and the players are getting their fair share. That’s the sign of a healthy, vibrant business. In the case of a lot of players this off season they were simply in the right place at the right time and hey … more power to ‘em. Just don’t spend it all in one place.
However, I do worry what this will mean. There are several other circumstances coming into play that, when coupled with this offseason, makes me worry about what’s coming in 2006 and beyond. You see, Washington, D.C. is at loggerheads with MLB over the building of a new ballpark. The price was $535 million and there’s no way it can be built for that much and both sides are arguing about who pays for what. Bud Selig’s pal, super-leech billionaire Carl Pohlad still hasn’t gotten his close to a half-billion dollar gift from the not-so-billionaire residents of the state of Minnesota. The Florida Marlins are still 0-for-the-public coffers in South Florida and team president David Samson said there are seven regions interested in hosting the Marlins and willing to pay the ransom price for it. One must assume that two of them include Emerald City and Munchkin Land. Kansas City is not getting a new ballpark and might not get publicly-funded upgrades to Ewing Kauffman. The A’s are several light-years away from a new park.
So what do we have? Five cities with stadium issues without the D.C. bargaining chip that’s been used for years to extort stadium subsidies. Coincidentally (and unhappily), the collective bargaining agreement expires at the end of 2006. MLB is the only major league sport without a salary cap and Bud Selig is still in charge.
Adding to the sizeable pit in my stomach is the fact that the Major League Baseball Players Association is an organization clearly on the defensive: They got their butts kicked pretty badly during the last round of negotiations, they were strong-armed into reopening it twice (drug testing), and ownership can unilaterally contract franchises without union approval.
Now this much is certain, the business of baseball is doing amazingly well. Revenues are at an all-time high and forecasts are rosy—heck Wall Street firms offered $3 billion for MLB.com. Put another way: MLB is in the money.
*cha-CHING* (Yeah, yeah, that’s soooo 90s.)
Why wreck this? The golden goose has never laid bigger or better eggs. Bud Selig has the contraction card. The contraction card can be played both ways, both ways potentially incredibly lucrative. It can be used to try and wrangle a salary cap out of the MLBPA and it can be used to blackmail Kansas City, Minnesota, Miami, Washington, D.C. and Oakland into building stadiums. A salary cap is a guaranteed way to increase profits annually and five new stadiums on the public dime adds up to anywhere between $2-3 billion in free money—corporate welfare—for Bud and his minions.
A salary cap also fixes owners’ labor costs—their single biggest expense. With predictable labor costs coupled with the revenue coming into the game causes each owner’s franchise values to increase significantly.
It’s a pretty big payoff don’t you think? Every owners benefits big time and five clubs potentially get a massive windfall of public dollars, which lessens the revenue sharing obligations of the large revenue clubs.
Best of all, the owners don’t have to work for it. They just have to be willing to gamble. Willing to gamble what they have now, willing to gamble what they’ll get by simply maintaining the status quo. They have to be willing to gamble that the major league baseball players of 2006 are like hockey players, basketball players, and football players.
How many players active in MLB have even been part of a work stoppage? (The last one was over ten years ago.) How many players remain from the collusion era? (Which was almost twenty years ago.) Former player’s association head Marvin Miller wrote in his autobiography “A Whole Different Ballgame”: “In the type of labor management situation in baseball, attempting to hold your ground, marking time, is an invitation to being shoved backward.”
In case you haven’t noticed the MLBPA has been shoved backwards pretty consistently of late. Let’s face it, this is not Marvin Miller’s MLBPA and ownership knows it. The owners have a large war chest, a huge bargaining chip, an inexperienced opposition when it comes to labor unrest, and a huge payoff if they succeed.
Financially, Major League Baseball has never been healthier. The contracts handed out this offseason are proof of the vibrancy of the game. The future looks bright. There is no logical, rational, intelligent reason for MLB to threaten contraction towards either the MLBPA to get a salary cap in the next round of negotiations; or to threaten communities to get half-billion dollar stadium subsidies.
And that worries me.