Sunday, April 08, 2012

A Lazy Sunday Off the Bat

Opening Day has come and gone and now we settle in for the long (and glorious) haul of an MLB season. As much attention is paid to Opening Day, for whatever reason, I’ve never been all that into it – of course, I’m excited about the return of baseball to the North Coast on an everyday basis until September, but if you’ve been visiting this space for any amount of time, you know that I generally eschew the “pageantry” of Opening Day and opt to sit with my people, the Game #2 crowd. Apparently, I’m not alone in that thinking (and click this and the linked piece about Opening Day in Detroit) as the Game #2 crowd is not full of the St. Patrick’s Day Party People (who see Opening Day as a reason to day-drink on a weekday in April) and don’t cause you to sit behind an Indians’ “fan” who says that a 45-year-old Omar Vizquel is the best player on the field and wonders why the Indians didn’t sign Manny or Thome in the off-season. No, my Game #2 people bundle up in their Tribe gear, pull out their scorecards, slap on the remote radio headphones to listen to Hammy and enjoy baseball...and that’s exactly what I did with my 5-year-old (well, not the radio headphones) on a gorgeous Saturday afternoon.

That’s not to get on a high horse on this and say that I like baseball more than anyone who was at the game on Thursday, and I realize that I’m seemingly in the minority on Opening Day, but enjoying baseball and seeing games that matter (and Game #2 counts just as much as Opening Day…and perhaps more because Ubaldo pitched in it) is what really matters and what this time of the year is all about. Baseball has arrived on the North Coast and the hullabaloo is over about predictions and projections as we get to actually watch some games that count.
That’s a reason to celebrate…

The rhythm of games nearly every day is back and (as the first couple of games have shown) the season promises to be a roller-coaster, full of highs and lows, complete with exhilarating moments and points in time when we all wonder why we subject ourselves to being baseball fans. Complain all you want about one game or one inning (Chris Perez…harrumph, harrumph, harrumph. Hey, I didn’t a harrumph out of that guy!), but baseball’s back and we have a LONG way to go on this journey that is the 2012 season.

As much as Opening Day events and results get inexplicably put under the microscope (well, not inexplicably – it’s when the Cleveland media and “fans” pay the most attention to the Indians until they turn their attention back to the NFL Draft and who the Browns should take in the 3rd round), let’s all take a step back and breathe. Certainly there were things that did or did not happen in the first two games that none of us hope become trends – specifically the offense looking inconsistent and not winning two games that should have been won based on the starting pitching performances by Masterson (huzzah) and Ubaldo (HUZZAH) in the first two games. However, as much as “trends” and “worries” easily consume us this early in the season, let’s remember that nothing really has happened of note as they’ve played all of two games, which breaks down to 1.2% of the season and anyone asserting anything as fact after one or two games…well, they’re not doing it right.

If you want to talk about how Perez’s performance was concerning, particularly in light of the idea that Tribe trainer Lonnie Soloff implied that he wasn’t in shape in Spring Training and how he really didn’t get “his work in” during a shortened Spring Training for him or how the onus of scoring runs is going to fall heavily onto the shoulders of Santana, Choo, Cabrera, and Kipnis in the lineup as it’s presently constructed?
That’s fine…but let’s hold off on the absolute proclamations for a while here. Remember that the 2008 Opener claimed Victor via injury and that the White Sox (whose 2011 was a disaster) beat the Indians in the 1st two games of 2011 by scores of 15-10 and 8-3, right before the Indians won 30 of their next 42 games. That’s not to say that there aren’t red flags that are starting to rise over the corner of Carnegie and Ontario…it’s just that it isn’t worth analyzing any of those “red flags” after two games.

So instead of overanalyzing the first two tilts against the Blue Jays or combing over this “manage by the book” thing that got overblown because it was Opening Day when local writers who pay very little attention to the Indians (or to Cleveland sports at all) get a burr under their saddle, let’s go back to the biggest news of the past week as Asdrubal Cabrera’s extension with the Indians became official on the day before Opening Day, which will keep the current Tribe SS on The Reservation through the 2014 season…or at least under contract through the end of 2014. So, for the rabble-rousers who spent the off-season worrying that no Indian was guaranteed a contract past 2013, relax and realize that…the Indians don’t have anyone under long-term contract past 2014.
So, delay the worrying by a year…

Tongue out of cheek, Cabrera’s deal represents a nice surprise after a Spring Training during which every report seemed to intimate that the Indians and Asdrubal’s camp were miles away from an extension of any kind. Despite the fact that Cabrera’s deal only buys out one FA year, it still does buy out that FA year as the breakdown the Droobs’ salaries for the next couple of years look like this:
2012 - $4.55M (already agreed upon prior to going to arbitration)
2013 - $6.5M
2014 - $10M

Those numbers aren’t outrageous and the $10M payday in 2014 is unquestionably what compelled Cabrera to “lose” that scheduled 1st year of FA. Truthfully, I’ve spilled too much e-ink on the possible parameters and justifications for those parameters to get too much into those salary numbers but for comparison’s sake, this is what I had suggested it would take to get Asdrubal to “give up” a FA year back at the end of September, with a couple of options thrown on there, not listed:
2012 - $5.5M
2013 - $8.5M
2014 - $10M

So the Indians netted another year out of Cabrera for a little less than what was thought a few months ago and didn’t include options, which is interesting because the Indians’ contracts of the past have almost always included options. Truthfully, I probably would have preferred an option year on there for 2015 (with a buyout attached for protection), though I’m not going to pretend to know what took place during negotiations or guess why option years weren’t included when every Tribe deal over 3 years has included one since John Hart steered the ship. Perhaps Cabrera wasn’t interested in any option years (and in the presser announcing the deal, he said he’d be interested in another deal when this expires…which I’ll believe when I see because I’ve heard that before) or maybe the Indians are really only interested in Asdrubal’s services until the supposed heir apparent, Francisco Lindor, is ready to emerge. Lest you forget, Kevin Goldstein of B-Pro (who is likely sending Lindor something for Sweetest Day this fall) projected Lindor’s arrival to MLB in 2015, or the season that Cabrera will no longer be an Indian.

As we all know, a lot can happen between Lake County and Cleveland (and I’m not talking about the stretch of I-90 connecting the two stadiums) and assuming that Lindor will seamlessly take over at SS four Opening Days from now is lunacy, but the Indians bought themselves some cost certainty with Asdrubal and bought out one of his FA years in the process. While that may come as a surprise to those who were SURE that no long-term contracts were going to be handed out by the current ownership group because…well, because the Dolans are looking to sell, what the Cabrera extension does is “extend” the current group of players’ time on the field together. Sure, that “extension” may only be for one extra year past where the Indians’ controlled Asdrubal prior to this contract, but while much attention has been paid to this current “window” (admittedly by me), it certainly represents a positive step in the Indians’ taking the financial risk associated with guaranteeing money to a sometimes-less-than-motivated Cabrera in the interest of upside and keeping him in Cleveland.

What is interesting to see in the Asdrubal extension is how it relates to the other contracts meted out this past week, and one in particular. Of course, I’m referring to Joey Votto inking a…um, healthy deal to stay in the Queen City and while some have pointed to his extension as a sign that MLB is healthy, in that not just the large-market teams can keep their homegrown stars) and that the trickle-down of TV money and club value is having an effect on EVERY team, let’s all remember that there was a similar chorus when Mauer signed his deal to stay in the Twin Cities and how those deals (and particularly Votto’s) causes some major worry – particularly for small-to-mid-market teams.

By that I mean that the big news in MLB in the last couple of weeks has been the Dodgers’ impending sale for a little over $2B, which caused some warm and fuzzies this Opening Day as Selig and talking heads everywhere touted labor peace and the state of the game, but there are undercurrents here that don’t bode well for teams like Cincinnati or Cleveland. Grantland’s Jonah Keri examined the Votto deal and the message that it sent across the league, surmising thusly:
Current and prospective owners see an industry that grew revenue through a tough recession and now stands poised to rake in far more money, with media deals rising, the economy improving, and the game in the midst of its longest period of uninterrupted labor peace since the advent of free agency.
Moral hazard plays a big role here, too: If owners know they can always sell their teams for huge profits, and general managers know they probably won’t be around to see a 10-year deal (or even a five-year deal) all the way through, why not pay a premium to lock down a top player now?

The final takeaway from Keri is where the trouble starts though as he concludes, “So you can either fight fierce headwinds playing Moneyball with your roster every year … or give in and pay whatever it takes. The Giants, and especially the Reds, have chosen the latter.”

The bit about the Giants refers to Matt Cain’s extension, but this line of thinking is interesting to look at in the context of the last year of Travis Hafner’s deal (that was only for FOUR years as Votto’s is really for 12 years) and as Joe Mauer enters the 2nd year in which he’ll be paid $23M by the Twins, a salary that will continue until 2018 as I’m not so sure that this option to “fight fierce headwinds playing Moneyball with your roster every year” looks so awful compared to the alternative for small-to-mid-size-markets. Though I’m not sure there are those two extremes – either to play “Moneyball with your roster every year…or give in and pay whatever it takes”, it is interesting to examine in the context of Cabrera’s deal as the Indians kept things pretty close to the vest the whole time and gave Asdrubal a deal that will keep him in Cleveland for an extra year, but by no means keeps him here for the remainder of his career.

Of course, I understand the difference between Asdrubal and Joey Votto, but while much of this assumed future revenue in baseball is supposed to be driven by local TV contracts, let me remind you that Cincinnati is actually the smallest TV market in MLB and as much as the Reds would like to believe that their about-to-expire TV deal is about to become more lucrative, just as the Dodgers’ price tag was tied to the impending TV deal for them, let’s go to the Nielson list for 2011 TV markets and see how many households each market contains:
CIN – 896,090
LA – 5,569,780

Yes, Cincinnati has a market size that is 16% that of LA and, even if you figure that there are two teams in LA, that doesn’t change the number of subscribers in LA per month or half it. Remember, the Dodgers were just bought for over $2 Billion, but early indications are that their TV deal could be double that (yes, $4 Billion is the number being thrown around), based on the number of TV’s in the Dodgerland market and the reason for that is all based upon the that number of TV’s and the “per subscriber per month” fee that is tied to each of those TV’s.

For a clearer illustration of that, check out these numbers:
ESPN (including ESPN HD) gets the highest fee at present for its national network, $5.06 per subscriber per month.

Among regional sports networks, the highest fee goes to Comcast Sports/Washington (D.C.), which gets $4.02 per sub. The New England Sports Network, which carries the Boston Red Sox and others, commands $3.56 per sub, according to analysis by SNL Kagan.

It is estimated that a Dodger network would get a similar $3.50 per sub. Time Warner has about 2 million subscribers in the greater Los Angeles market. That would be about $7 million a month in sub fees, or $84 million per year (not counting advertising and sponsorship revenue).

Never mind the monstrosity that ESPN has become with those numbers as it is worth noting that the “2 million subscribers in the greater LA market” refers only to Time Warner customers and does not take into account satellite subscribers or other providers that add up to that 5.5 million number from above. Though I’m not going to pretend to know what the sub fees are for the Reds (or for the Tribe, for that matter), we’re in a Brave New World in MLB. Back when Pujols was signed, that was obvious and SI’s Tom Verducci has the cause and effect broken down:
“The separation is going to grow,” said one GM, referring to the haves and have nots. “There is only so much room for growth in small and middle markets. St. Louis is a great baseball town with great fans, but they can’t generate this kind of [TV] money because the market isn’t big enough. Markets like that have a ceiling. Places like L.A. have incredible room for growth.”

What does that mean for a team like the Indians or another team in a similar situation?
Well, after watching the deals for Hafner, Sizemore, and Carmona/Hernandez weigh down the team (with Hafner’s deal being FOUR years long – signed when he was 30 – and with the deals for Sizemore and Carmona/Hernandez being seen as immensely club-friendly when they were signed), you start to worry. That is, if you really think that the Reds can absorb the 28-year-old Votto experiencing a major downturn like the Angels could with Pujols, they’re not noticing the difference between the TV money that the two markets will afford them. Maybe it could be said that the Reds are taking a “risk” with a potential “reward”, but it’s hard to see how that helps them in the short-term (perhaps hindering their ability to add pieces) or in the long-term (where “sunk cost” becomes a part of the nomenclature) and they probably won’t be alone in the coming years.

Perhaps this is all heady and (slightly) depressing stuff at a time when most of us want to focus on baseball and are looking forward to getting back to the minutiae that following a team on an everyday basis provides. But the landscape of MLB is changing dramatically and quickly before our very eyes and simply sticking one’s head in the sand or burying one’s head in the box score becomes counter-productive when trying to figure out what direction the Indians are going and why.

The Cabrera extension represents an obvious example of the Indians looking to act prudently in this “newest” age of financial imprudence. Some will paint that as apologizing for the way that the Indians are run/have been run in the last decade, but what 2012 seems to represent is the beginning of a new group of players that is supposed to mature and gel together as a team. How long the current group stays together – either due to contract status, attrition, or injury – remains to be seen and the road doesn’t always look to be smooth.

But, as we begin this 2012 season, the thrill and the agony of the ride is what always brings us back…

1 comment:

MTF said...

At Opening Day yesterday in Philadelphia, I was briefly introduced to Bill Giles (who said nice things about Tribe management), but also made an interesting comment in talking about our need to trade Cliff and CC.

Local TV revenue is worth a ton right now to teams like Philly, making it possible to sign other teams development work, but all markets have tops. Most of us can't know when we are seeing a top, and he was speculating that we might be seeing a topping out of cable revenues. He wasn't saying he knew where the correction was coming from (I suggested my favorite, but he wouldn't speculate), only that sooner or later a correction would come and well run franchises would benefit.