For any sports econ nerds out there, this has been a big week. The always-popular sports blog Deadspin got their paws on a mountain of leaked financial data from the Tampa Bay Rays, Pittsburgh Pirates, Texas Rangers, LA Angels, Florida Marlins, and Seattle Mariners. In a Wikileaks-like move, they posted those documents online to give everyone a detailed look behind the curtain of baseball finance.
What do the statements prove? In short, that baseball is a lot more profitable than the league and the owners would like the public to believe—even for clubs that are losing a lot of baseball games and in turn, a lot of gate receipts.
If you’d like a window into how this is happening, I happen to have scoured the internet to find an excellent resource written exactly 1 year ago on this same topic. For a more detailed, wonkish breakout of the situation, I also highly recommend the ongoing series by The Biz of Baseball (starting here).
I’m not going to spend a ton of time sussing out the various financial realities because both Deadspin and The Biz of Baseball—along with numerous articles by the hometown papers of each franchise, which you can find links to in both of the above—do a much better job.
What I want to focus on instead is this question: now that we can be pretty sure that the Dolans are indeed turning a healthy profit on a losing team, should we really give a damn?
I say that we can be almost certain because of the documents leaked on the Pirates. Pittsburgh’s MLB franchise is of course a crap team in a similar-sized market with similar demographics which also has made the decision in recent years to consistently trade away their best and highest paid/arbitration-eligible players for prospects and cash savings. Any of this sound familiar?
In 2007, the Pirates finished in last place with a record of 68-94…and according to the leaked documents, they scored a net income of $15M. In 2008, they defended their last place title by going 67-95…and earned a net income of $14M in the process.
In light of all this, it’s foolish to believe that the Tribe lost somewhere between $12-16MM this past season, as Larry Dolan famously claimed. In fact, it seems probable that their own profits were similar to those of the Pirates’ ownership group.
Again, though, the question is whether or not this really matters.
First off, no one should ever assume that anyone important or rich enough to be worthy of an interview is publicly telling the truth about anything. So if these financial realities somehow make you feel betrayed by the Dolans’ cries of poverty, that’s really your own fault for being gullible. As I’ve said before, running a pro sports franchise is a business, not a charity. If the owners were actually getting killed financially, they’d sell the team. Period. The fact that it’s so difficult to buy a franchise in any sport tells you basically everything you need to know about their profitability.
I imagine that most Indians’ fans wouldn’t react negatively based on moral principle, though. If anything, the most popular gripe seems to be that if ownership is printing money off the poor performance of the team, they owe it to the fans to be pumping that money back into the roster to try to improve it—specifically in regard to re-signing their best players and chasing free agents.
The problem with this viewpoint is that it’s not a smart way to operate a mid-market MLB team. Profitable as the club may be, Cleveland is never going to be in the same league as the Yankees, Red Sox, and Phillies. They can’t succeed on the same business model that those chipped-up major-market east coast teams do.
Consider this: if we assume that the Indians netted $29MM in 2007-8 like the Pirates did, all but $8.5MM of that would’ve gone to pay Kerry Wood for his services in 2008-9. Or, another way of looking at it: the Yankees signed CC Sabathia for 6 years at $140MM, or an average of $23,333,333 per. Was he enough to make the Indians competitive in 2008? Uh, no. At that rate, it’s impossible to argue that he would’ve been anything other than a catastrophe for the team, considering that his contract would’ve put them $17.5MM in the red had all other factors remained the same. And considering that one great pitcher can’t pull an entire team into contention if the rest of the roster is deficient, that seems like a solid assumption to make.
As we’ve argued again and again in the past year, the Tribe needs to spend intelligently, not profusely. Throwing a bunch of money at the problem is far from a solution (see also: Browns, Cleveland, 2008-9). Instead, the only way for them to compete is to stock the farm system with low-priced developmental talent. So if the organization wants to spend money to make the team better, they should pump it into the scouting department. Assuming they get the right types of people to join up, the Dolans’ per-dollar return on that investment is going to be far greater than any they can make on the free agent market.
If you want proof of this, just look at one of the other teams involved in the MLB financial leaks: Tampa Bay. The Rays netted a cool $11MM in 2007 en route to a pathetic 66-96 record. This seeming failure was the final year of the exact same strategy I’m suggesting for the Indians. The following season, the Rays won 97 games and made the World Series. After falling back to Earth a bit in 2009, they are now in 1st place in the AL East and look like they’re poised to compete for years to come.
Did it suck to be a Tampa fan while they slowly built that roster of young players in the several seasons leading up to 2007? I’m sure. Did ownership likely endure the same kinds of pitchfork-and-torches threats from the public as Cleveland ownership has been subject to since 2008? Probably. But instead of caving to fan pressure and doing something stupid, Tampa stuck to the business model that had made their in-state buddies the Florida Marlins two-time World Series champs. Now their fans are thanking them for it.
So it is with the Indians. If we avoid the knee-jerk reaction that it’s offensive and evil for the owners to make a significant profit off of a bottom-feeding team, it becomes clear that the Dolans and the front office—again, assuming the comparisons I’m drawing are accurate—are doing the right thing. So don’t be fooled by the financials alone. If the team is being bolstered in the savviest ways rather than just the most expensive, what’s perceived as the Dolans’ greed can, in fact, be good for us all.
However, if they blow this, I promise I’ll be first in line at the hardware store for the pitchfork and torch sale.
This past week’s Sports Illustrated featured a two-part story about the running back’s decline in value in the new passing-dominant NFL. More specifically, Tim Layden’s contribution is structured around conversations with various runners at differing points in the basic trajectory of the position: rookies, former feature backs now on the other side of their peak, retired greats, etc. It’s a well-written piece and food for thought about the way the game is being played.
The point that caught my interest was about the number of hits a tailback takes per season. Larry Johnson (late of the Washington “Chief Wahoo’s Got Nothing On Us in the Institutional Racism Department” Redskins) brings up that in every offensive play, the running back can’t avoid contact. This is true even on pass plays, as the backfield is expected to pass-block for the QB.
If we try to quantify the number of hits a back absorbs per season, consider that high-usage runners can end up with 350-400 carries per season. (Chris Johnson of Tennessee led the league w/358 rush attempts in 2009.) Considering that on average there’s more passing than rushing in the modern NFL, it’s safe to assume that there are probably around 500 pass plays per team per season. (To stick with the same reference point, Tennessee’s two main QBs combined for 476 pass attempts in 2009.) This means that on average, a feature back is being blasted on somewhere between 800 and 900 plays. Even that’s not totally indicative of the actual amount of punishment they’re taking, since they’re often hit multiple times on the same play.
Apparently, there are a few coaches who try to control for this level of punishment in some small way. For instance, Layden has this to say about the San Diego Chargers during LaDainian Tomlinson’s prime:
Cam Cameron was offensive coordinator of the Chargers from 2002 to ‘06, during which time LaDainian Tomlinson averaged more than 400 combined carries and receptions a year. “With LaDainian, I would try to game-plan four or five no-contact touches every week,” says Cameron. “Maybe a swing pass where he could get out-of-bounds for three or four yards and not get hit. Maybe a sweep where he could flatten out and not take a shot. Five times every game, that’s 80 touches a season with no hit.”
Incidentally, I read this article on the same day that a forearm injury forced Washington Nationals’ pitching phenom Stephen Strasburg out of his start. This was the second time that Strasburg had gotten injured since being called up to the Majors. Considering his importance to the team, the analysts on Baseball Tonight agreed unanimously that he should be shut down for the season, and when he returned next year he should be kept on a strict pitch limit.
Pitch counts have been a big topic of conversation in MLB this season. Many managers have become devoted to the idea of trying to preserve their young pitchers by artificially controlling them in this way. It’s a difficult thing for some fans to understand, especially if a given pitcher doesn’t seem to be injury-prone and will profess to being fully capable of throwing deeper into the game than the coaches would otherwise allow. Yet managers and pitching coaches are determined to protect their young starters from the game—and themselves—by imposing these artificial limits.
I’m really beginning to wonder if NFL coaches shouldn’t use this same strategy for their running backs. Cam Cameron worked from the opposite end of the spectrum by determining how many times per game Tomlinson should not be hit; isn’t it only logical that someone will eventually limit how many times their running back should be hit?
In truth, some coaches may already be doing it. The concept of “rushing by committee” has gained a real foothold in the league over the course of the past few seasons. Reducing the wear and tear on individual backs certainly has to be a part of the calculus that led to that decision. Yes, runners seem to be easily replaceable in terms of performance. Mike Shanhan’s Denver teams became proof positive of the system’s importance over the individual plugged into it. But as I’ve written before, I think the league bears a responsibility for its players’ long-term health. Rushing by committee certainly helps in that regard, but it doesn’t solve the problem.
Would putting “hit limits” on a team’s running backs run counter to the spirit of the game? Yes, absolutely. But old school MLB players argue that pitch counts do the same. (Nolan Ryan has been particularly vocal about his opposition to the concept. In his mound, it equates to a kind of unacceptable new age pampering.) Yet with a few exceptions, limiting pitch counts has become an acceptable strategy for teams trying to keep their hurlers on the mound long-term. To me, the jury is still very much out on baseball’s future as a premier spectator sport. But I feel comfortable arguing that capping pitch counts is not the source of MLB’s problems, especially since the strategy is designed to preserve the stars like Strasburg that fans presumably want to keep watching for many years.
As more information about head injuries and their health consequences come to light among the NFL’s personnel, I would suggest that it’s in the best interests of the league to soften their philosophical stance in kind. In short, I expect that the game will reach a point where reducing the number and severity of collisions becomes critical. Is this point in time just around the corner? I doubt it. But when it does arrive, running back may be the position where that revolution begins.
I very rarely write about the Indians since I almost never get a chance to watch their games out here on the west coast. But last week ESPN’s Buster Olney blogged about whether modern attitudes toward blocking the plate have changed in light of injuries like the one suffered by Santana in Boston. I thought it was an interesting question. (I’ll link to the post here, but unless you have ESPN Insider, it won’t do you any good.)
For those of you who can’t or don’t want to read Olney’s post, the essence of it is that the GMs he spoke to in both leagues mostly agreed that it’s not worth it anymore. At least, not in the case of a guy like Santana, who’s your everyday catcher, arguably a franchise player, and someone whose bat you need every game.
However, I’ve also heard other people argue that this incident speaks to a larger problem—that Santana was behind the dish to begin with. Since the injury, multiple analysts (of admittedly varying caliber) have suggested that when he comes back next year, Santana should be moved to either first base or DH.
This raises a very simple question: how good a defensive catcher is Santana? I’m all for protecting a potential franchise player, but if part of the reason he’s a potential franchise player is that he’s a good or great defender, moving him out of his natural position (and possibly out of the field entirely) seems like a bone-head solution.
Keeping in mind that we’re talking about a total of only 40 games—in his rookie year, as well—I’ve compiled some relevant defensive stats for Santana below. Before looking at that, though, here’s a description of what these statistics mean:
Fielding %: A simple stat calculated by dividing the number of cleanly fielded opportunities by total opportunities for a putout.
Rdrs: Defensive Runs Saved Above Average. An aggregate stat meant to provide an overall defensive rating. In short, how many total runs does the opponent NOT score thanks to your player’s defensive prowess that they would score against an average player at the same position?
Rdrs / yr: Defensive Runs Saved Above Average per 1,200 Innings (~135 games). A version of the previous stat improved by standardizing for the number of innings played. To relate to basketball terms, Rdrs / yr is equivalent in a way to “per 36 minute” stats. In other words, if everyone played the same number of innings, how would they rate? In this stat, a back-up defensive specialist would rate better than a poor-fielding everyday player, even though the everyday player might look better in unadjusted Rdrs simply because he plays so many more innings than the back-up.
Rf/9: Range Factor per 9 Innings. Calculated as 9 * (Putouts + assists) / innings played. A more informed alternative to Fielding % developed by sabermetrics godfather Bill James. The idea here is that by calculating the total number of outs in which a player participates, you get a much better picture of how much ground the defensive player covers per 9 innings.
For instance, say you have a 350 lb catcher. He fields every ball cleanly, but only if the ball stops rolling within 6 inches of the plate. He only makes one play all year. His Fielding % is 1.000. On the other hand, a catcher with superhero agility gets to everything within 50 ft of home plate. He gets to 100 balls in a season, but makes two errors. His Fielding % is .980. Is the 350 lb catcher really a better defender? No, but only Range Factor would tell you that.
CS%: “Caught Stealing” percentage. A simple stat calculated by dividing the number of base-runners thrown out by the total number of steals attempted against a given catcher.
OK, with the mini-glossary out of the way, let’s see how our man Santana was doing in these categories during his 40 games. The number to the right of the vertical bar is the league average for catchers.
CARLOS SANTANA VS. LEAGUE AVERAGE - 2010 DEFENSIVE STATS
Fielding %: .989 | .991
Rdrs : 1 | N/A
Rdrs/yr: 4 | N/A
Rf/9: 7.07 | 7.40
Rf/G: 6.68 | 7.31
CS%: .353 | N/A
Since we don’t have league averages for half the stats we want to examine, let’s look at how Santana rates against last year’s AL Gold Glove catcher. I’ve included the 2009 league average stats where applicable:
JOE MAUER VS. LEAGUE AVERAGE - 2009 DEFENSIVE STATS
Fielding %: .996 | .992
Rdrs : 3
Rdrs/yr: 4
Rf/9: 7.24 | 7.48
Rf/G: 6.93 | 7.39
CS%: .260
What does this tell us? Well, for one thing, that the AL Gold Glove probably went to the wrong catcher last year. Mauer’s Fielding % was above average, but that’s about the only elite level qualification he had defensively—and even there we have to move to the third decimal place to see a difference. A 26% caught stealing rate isn’t scaring too many base-runners either, though I suppose CS% may not factor into Gold Glove consideration.
That said, while both 2009 Mauer and 2010 Santana were below average in Rf/9 and Rf/G for catchers, Santana was further below average in both categories (-.09 further below league average in Rf/9 and -.17 further below league average in Rf/G). However, Santana threw out a much higher percentage (+9%) of would-be base-thieves and was on pace to match Mauer in Rdrs / yr.
But considering the reality of Mauer’s numbers, we should compare Santana to 2009’s league leaders in each category if we want to get a more accurate picture of his skill level:
2010 SANTANA VS. 2009 A.L. LEADERS - DEFENSIVE STATS
Fielding %: .989 | .997 - Gerald Laird (DET)
Rdrs : N/A (Baseball Reference doesn’t break out league leaders for this)
Rdrs/yr: N/A (ditto)
Rf/9: 7.07 | 8.70 - Jason Varitek (BOS)
Rf/G: 6.68 | 8.27 - Jason Varitek (BOS)
CS%: .353 |.537 - Kenji Johjima (SEA)
Based on the above, there’s not a strong statistical argument for keeping Santana behind the plate next year. He was inferior to last year’s AL leaders in every category for which I can find a rating, and noticeably below this season’s league average in half of the them.
That said, we should keep in mind that we’re dealing with a rookie who caught for 25% of a full season. Projecting Santana’s entire career behind the plate based on this sampling is ludicrous. The most important thing is that in order for us all to know for sure, he should quit sticking his leg into the base path to save one run in a meaningless game in August. Especially since the comparison of his defensive numbers to Joe Mauer’s suggests that Santana could be an MVP candidate if his bat comes through (in a major way) for the Tribe. Whether or not it would be deserved is a question to consider in another post. Hopefully we have a good reason to write it in a year or two.
In my opinion, Major League Baseball is in danger of becoming irrelevant. Not only is the pace of the sport very 20th century - a pretty significant problem since we are living in the 21st century - but the league also refuses to use technology that 5-year-olds are capable of operating, presumably because doing so would take away from the “purity” of the game. Well, as the great General Eric Shinseki (?) has said, “If you don’t like change, you’re going to like irrelevance even less.”
According to CNBC sports business reporter Darren Rovell, the Cleveland Indians were averaging 15,530 fans per game as of June 8th. Progressive Field holds 43,345 seats. League wide in 2009, stadiums sat at an average of 30,297 fans (68.3% of capacity). This year, through about 40 games, both the team with the highest attendance (the Yankees) and the lowest (the Indians) had lower per game averages than the teams that ranked #1 and #30 last season. Although the economy has gotten better, attendance has gone down (this, of course, could change by the end of the year).
Additionally, the economics of professional sports have been altered. Cities may be wising up and realizing that it doesn’t make sense for them to pay egregious amounts of money to build new arenas and stadiums just so owners can gobble up higher concession prices and more cash for brand new private suite purchases. The Maloof Brothers have basically stopped asking for the city of Sacramento to build the Kings a new arena. That is partially because the state of California is on the verge of bankruptcy. It is also because, guess what, companies aren’t buying private suites anymore - which is why we could’ve bought tickets to a suite at the Q during the NBA Finals had the Cavs made it there - and why we could lock up seats in a loge at Progressive Field right now. Therefore, new stadiums mean a lot less to owners than they did only a few short years ago.
At the same time, pro sports - like every other form of entertainment - now have to compete with a multitude of other options when it comes to men, women, teenagers, and children choosing what to do in their free time. Digital technology and the internet have made content so easy to create and distribute that we are overwhelmed with options. In the past, I didn’t have the option of streaming a movie from Netflix on my iPad instead of going to or watching an Indians game - now I do.
Again, as far as I’m concerned, of the three major sports, baseball is the most at risk because, by and large, it is anachronistic. It also suffers from an amazingly long season of 162 games, making it seem as if there’s barely any reason to watch until September, players that often look out of shape, and now, apparently, a de-emphasis on hitting thanks to the crackdown on performance enhancing drugs.
In other words, baseball is on its way to becoming a niche sport - and it needs to start acting like it.
I would recommend that Major League Baseball start thinking a lot more like Minor League Baseball. Contract the number of teams, first of all. Make the league more competitive, and more fun to watch, by packing maximum talent into fewer places. Force the teams to play faster. If this takes preventing pitchers from stepping off the mound and batters from leaving the batter’s box, do it. Either abolish the DH in the American League or give the DH to the National League. Make the rules uniform. Institute a salary cap. I know baseball has had more parity - in terms of championship winners - than basketball or football recently, but inefficiencies in the market are being exposed. The Yankees and the Red Sox got smart; Billy Beane and the Oakland A’s can’t use stats to outsmart the big spenders anymore. Lack of parity is coming.
Stop building new stadiums. Or if you new stadiums are built, make them smaller. Give fans a more intimate viewing experience, akin to what they get at minor league games. Do crazy promotions. Bring back nickel beer night. The Indians are already veering towards this, with all you can eat seats and Dollar Dog nights. From what I’ve heard, they’re also ripping off the entire Cavaliers game operations scheme, with funny skits in between innings and PhotoShopped pictures of the players on the scoreboard. They even use the sound of Mario powering up in-game, like the Cavs use the sound of him nabbing a coin after successfully made back-to-back free throws. Toss in a cornhole tournament, and the Indians are only a few thousand lost fans away from being the Lake Erie Crushers.
Will any of this really, truly work? Probably not. Sports are still unparalleled as an entertainment experience because we have no idea what the outcome will be while the stakes are always clear - one team will win and one team will go home losers. To turn the game into, essentially, a big joke comedy experience does the sport a disservice. But when you’re a sport that’s becoming less relevant, and you’re a team within that sport that’s failing to be competitive, you need to do what you can.
Considering that the Cavs play 3 games in the next 4 days, I figured I’d try to post about one of the other sports tonight. And while it’s not technically Cleveland-related, I saw the ESPN update that the Phillies are on the verge of completing two simultaneous but separate deals: 1) shipping Cliff Lee to Seattle for prospects, and 2) nabbing the much sought-after Roy Halladay as his replacement.
Apart from my continuing affinity for Cliff, the main reason I want to look at this is because it functions as a good reminder that the Tribe is far from the only team in baseball that let economics override the prospect of success.
You’ll remember around the MLB trade deadline last season that Halladay was seen as the huge prize, and when the Phillies traded for Lee instead, there was somewhat of a backlash from their fan base. That said, the backlash was brief, since Cliff went on to be basically dominant for the stretch run of the season and the playoffs.
Fast forward to today. The Phillies essentially decide to trade Lee for Halladay. Is it because he’s a significantly better pitcher than Cliff?
The career comparison is a little skewed by virtue of the fact that Halladay has 12 seasons of experience vs. Cliff’s 8 seasons. And if you look at the year by year break-outs for Halladay (here) and Lee (here), Halladay’s performance has been more consistantly remarkable in all categories for longer (2001-9) than Lee’s. Cliff can really only go toe-to-toe with ”Harry Leroy Halladay” (true full name - thanks Baseball Reference!) the past two seasons.
However, if you isolate the sample size to just those two seasons, Halladay has still been better overall in the categories we care about — but not by leaps and bounds. And statistics aside for a moment, it’s impossible to say that Lee was the reason the Phillies didn’t repeat as World Series champs this past season. So “upgrading” him isn’t necessarily the move that I’d be trying to make if I were running the team.
That said, one thing that has always stuck with me from taking Econ in college was the concept that if you’re presented an opportunity that results in a net gain — no matter how small — you should take advantage of it, no questions asked. So from that standpoint, the Phillies’ “trading up” for Lee is completely defensible.
But since the Phillies are not directly trading Lee for Halladay, wouldn’t the best possible move be to retain Lee for the final year of his contract AND still make the deal for Halladay? That 1-2 pitching combo would instantly become the toughest in either league. Short of a meteor striking their spring training facility, it’s difficult to imagine a set of circumstances that would prevent the Phillies from getting back to the Series in 2010 if they were running those two guys out their back-to-back for an entire season in the weak-hitting NL.
Apparently the obstacle, though, is financial. According to ESPN’s Jayson Stark, if the Phillies were to use the nuclear option, so to speak, their payroll would balloon to something in the neighborhood of $160M. The franchise also has an internal rule to not sign starting pitchers to deals longer than 3 years.
After initial talks with Lee’s agents, the Phillies’ brass came away convinced that it would take a “CC Sabathia”-level deal to keep Cliff after this year. (As a reminder, the Yankees are paying CC 7 years / $161M, or $23M per). Halladay, on the other hand, has made it clear that he’s willing to take a voluntary paycut to come to Philadelphia. Reportedly, an extension of 3 years and $60M will put him in red through 2013, unless the trade breaks down in some other capacity.
This strategy brings up all kinds of questions that I don’t have the wherewithal to siphon through today. I’m most fascinated by the fact that the Phillies are taking a sort of third way between the extremes every other franchise seems to be gravitating toward. They’re apparently willing to spend but with definite caps and only with relatively short term deals.
However, I know this: if the Indians made these two moves I would be pissed. Throwing away a golden opportunity to have arguably the two best pitchers in baseball on your team is inexcusable — especially for a big market team like the Phils. I understand what they’re trying to do, but I don’t agree with it. You can’t make the hunt for the World Series title half of an arm’s race. Either go in and try to win today, or trade away Lee for prospects so you can save money. The middle road doesn’t end in victory.
