baltimoresun.com

« The GM search: A brief update | Main | Roberts free of concussion symptoms for two weeks »

October 26, 2011

The Lackey Logic: The big boys' real upper hand

News came out Tuesday that Boston Red Sox starting pitcher John Lackey will have elbow (Tommy John) surgery and likely miss all of 2012.

So, assuming he doesn’t pitch next year, Lackey will be 26-23 with a 5.26 ERA and a 1.50 WHIP (walks and hits per innings pitched) in the first three seasons of a five-year, $82.5 million deal.

Five-year deals rarely end well for a free-agent pitcher, so it was years four and five that originally were a concern when Lackey, now 33, signed the big contract in December 2009. That’s not a good sign for his future in Boston.

I write this not to make a point about the dangers of long-term deals for free-agent pitchers; they are pitchers, we all get how fragile a commodity they are.

Here’s my point: Lackey is the perfect example of the advantage that haves, such as the Red Sox and the New York Yankees, possess over have-nots like the Orioles. It’s not a whine; just reality.

There are so many excuses made about payroll and how an $80-something-million team like the Orioles can’t compete with the free-spending big boys. And then a $40-million-something club like the Tampa Bay Rays comes along and shatters those theories.

If an organization operates efficiently, if it develops its own core and supplements that with shrewd moves, including free agency, it can be a consistent force. As much as people want to hammer the Yankees and Red Sox, many of their superstars during their postseason runs (Rivera, Jeter, Posada, Cano, Papelbon, Pedroia, Youkilis, Lester) were homegrown.

Where the Red Sox and Yankees have the true advantage is the immense margin for error their overall profits afford them.

A.J. Burnett, a $16.5 million-per-year man, can be mediocre for the Yankees; Lackey can be a complete disaster for the Red Sox. And yet those teams can absorb those blows. They can absorb several of them.

But if a club like the Orioles or Rays or Toronto Blue Jays makes such an investment – the Orioles have never paid a player as much as Lackey’s contract, by the way – and it crashes, it takes years to rebound (see Belle, Albert or Ryan, B.J. in Toronto) both on the field and at the free-agent negotiating table. Nothing causes free-agency cold feet like a huge, free-agent lemon.

Interestingly, in Boston, Lackey’s situation may be viewed as a blessing in disguise. It may force the Red Sox to be even more aggressive for pitching in free agency this offseason because they can’t hope for a Lackey resurgence in 2012 – which may have been foolish anyway.

So they lose a $15 million pitcher for next year, and it may actually spur them into further action. That’s the advantage of the big-money teams.

It’s not the overall payroll as much as it is the margin for error when injuries or ineffectiveness hit one of their big purchases.

Posted by Dan Connolly at 6:00 AM | | Comments (14)
        

Comments

And I always feel that everyone fails to mention that while it is true that teams like the Red Sox and Yankees have grown a lot of their own talent, they then also have the financial resources to retain those homegrown talents. That is, they don't lose players like Jeter, Posada, Rivera, Cano, Youkilis, Pedroia, Lester, etc. to other teams through free agency (see Fielder, Prince and the Milwaukee Brewers) or by having to trade them because they know they don't have a chance to re-sign them at the end of their contract. You just know that if Mariano Rivera pitched for another team, he wouldn't have spent his entire career with them. But the Yankees have always been able to afford him, while also being able to afford to pay Jeter, Posada, Cano, and Bernie Williams to stick around ON TOP OF being able to pay for huge free agents, some of which are great investments for them and some of which, as you point out, end up being busts that the teams like the Yankees view as an "Oh well, that didn't work out. Time to move on."

Dan, thanks for giving a nod to this consistent problem. No one can argue that the Sox and Yanks don't have a better history of finding and developing their own players, but Epstien and Cashman get free rides b/c their teams make the playoffs. What AL East fans like us see are the expensive flame outs those teams can sweep under the rug with more money. Nationally all people see are teams with 95-100 wins annually. We simply don't have the margin for error those teams do. Let's be honest, barring September's complete collapse the wonderful story that is the Rays still would have ended in third place with no postseason.

I forgot the Orioles were so poor. I guess owning the lions share of a RSN that has millions of more potential TV households than Boston's NESN and forces monthly subscriber dues on cable viewers from Harrisburg to Charlotte like MASN does just isn't enough to get Angelos to actually field a competitive team.

Maybe if the Sun spent more time reporting on the O's/MASN real finances and book value instead of writing pity party articles like this, than more of the casual fans would know what's really going on in Birdland.

--

You are absolutely right Jedd. My apologies. Since i know you have the detailed books from a personal business, please send them to me. Oh wait, you don't? Huh.

Phil and Clay, you supplement Dan's good column with well reasoned thoughts of your own. I wish more bloggers would respond the same way. Too many write only to engage in wordplay with others while adding nothing to the blog's theme.

the sox and lackey proved as never before that teams cannot buy even a wild card berth. the orioles played like champs in the last sox series; further evidence that no one gets to the pros without the necessary talent.

ultimately 2011 just underscores the obvious - pro sports are not about fairness at all, but rather making the most money possible, for players and teams alike.

Why do you say the Orioles are limited to an $80 million payroll? Back in the late 1990s, when the team was a perennial winner, their payroll was $80 M and this was the highest in the majors. Based on an inflation adjustment since then, $80 M in 1997 is worth nearly $130 M now. So in real dollars the payroll has shrunk, and at least $50 M could be added. Of course, attendance has shrunk because of the years of mediocrity, but this would be reversed as play improved. And we don't even know how much MASN has added to annual revenues........One other point--Tampa Bay is a special case because they were SO BAD that they earned 4 overall first draft picks over a 7-year span. There is a world of difference between picking the #1 player in the whole draft compared with the Orioles' usual #5 or #7 each year.

I hear they are leaning toward co-GMs -- Duquette and Dempsey.

That list of homegrown talent by the Yankees (aside from Cano) is about as fresh as the magazines in a doctor's waiting room. Let's not elevate the Yankees and Red Sox any more than they elevate themselves. New York is getting long in the tooth and the Red Sox have more issues than Carters has pills!

Bad examples there, Dan.

Because teams have the option to insure long-term contracts, the Orioles were able to recover $23.7MM of the $39MM they owed Albert Belle from 2001 through 2003. They weren't dead in the water, paying Belle almost $40MM for three years that he didn't play. They recovered 60% of that money. So, since we're talking about the reality of the situation, the O's were only out $15.3MM on Albert Belle.

I'm much less upset about $15.3MM that was wasted paying for one of the best right-handed power hitters of all time to not play a single game than I am about all the money that has been wasted on mediocre corner infielders and relievers.

And I have zero sympathy for the Blue Jays for the disaster that was B.J. Ryan. A mid market team should never even think about signing a relief pitcher for four years and $35MM, even if they've ventured into the future to see that pitcher stay healthy and perform well in each of those four seasons. And that's why I cringed when I read that J.P. Ricciardi may be considered for the O's job. Though, what Ricciardi did with Ryan isn't much different from what has been done here with Kevin Gregg, Mike Gonzalez, Chad Bradford, Jamie Walker, etc, etc, etc...

Anyway, even thought you write that it isn't, this is still an excuse, Dan.

Sure, the Red Sox and Yankees can absorb big financial hits, and we can't. But what does that have to do with anything? Why should that stop us from winning? We've seen way too many examples of well-run small market teams winning over the past decade - Tampa, Oakland, Minnesota - to believe that we can't win because we can't spend as much.

And heck, look at St. Louis. Sure, they have Albert Pujols and they signed Matt Holliday, but where did the rest of their talent come from? Chris Carpenter came via trade a while back, and they generally build the rest of their starting rotation out of four guys that no one else has even heard of.

Look at Cleveland. They won 80 games this year after back-to-back 60-some win seasons. And with who? The only Indians I can name off the top of my head are Shin-Soo Choo and Grady Sizemore, and they were both hurt most of the year.

Look at Arizona. How much did they spend on their team this year? Look at Cincinnati - another mid-market team that can win without spending big. Look at the Marlins - how many times have they won the World Series in the past 15 years?

The big-money free agents (Lackey and Crawford) didn't perform in Boston this year, and the Rays took advantage of that and made the playoffs. What did the Orioles do?

Sorry, Dan. But, when it comes down to it, this post is about how the Red Sox and Yankees have money and the Orioles don't. And boo-hoo. Because of that, we're at a huge disadvantage. But why is it that we're the only one of the three "have-nots" in this division that complains about it every ten minutes? Why is it that Tampa has finished with a .500+ winning percentage and won the division twice in the past four seasons? Why is it that Toronto finished at .500 this year and won more games than they've lost in two of the previous three seasons?

Sorry, Dan. Sorry, O's. Sorry, fellow fans. No sympathy here.

Dan - while it was a little over the top, I think Jedd's point (or maybe the point he should have made) is that it's not clear why you assume the Red Sox and Yankees are the "haves" and the O's are the "have-nots." Your response to him admits of the problem with the assumption underlying your post, i.e., neither you nor Jedd have a detailed financial statement from the O's, so you don't know that the Orioles are indeed "have-nots." More realistically, none of us know how far behind the O's are from the Red Sox and Yankees in revenue terms. As Cyril correctly points out, the O's used to be a big spending club and, in real dollars, the payroll has declined. It seems to me that Mr. Angelos felt burned by the Albert Belle deal (but didn't insurance pick up most of the remainder on his salary?) and decided that he was done with big ticket deals -- from that point forward the O's would not be a big spending team, but would go through a prolonged rebuilding process. The bottom line is that there doesn't seem to be much evidence (as you admit) for your premise that the O's are a small market team that can't compete with the big markets in the AL East.

--
Fair enough. But they can't spend $200 million. Really, only two teams can -- the two most popular, highest-revenue generating clubs in baseball. I see your point about defining the have-nots, but I think the haves are defined. And, yes, I agree about the Belle signing causing a shift in philosophy -- that's the key here, not that insurance picked up a chunk of the salary.

We have got to get off the Angelos train of empathy. We have to stop pretending that the Os don't receive money via profit sharing from MLB. We have to stop pretending that ownership isn't pocketing a boat-load of "booty" from the revenue generated from MASN, as well as many other revenue generators found all around Camden Yards. The majority owner (Angelos) was worth over $1.5 billion 2 years ago and that's increasing. Insurance paid Albert Belle's salary when steroids took its toll on his hip. Not spending for talent is a choice of Angelos', not a situation out of his control.

Dan--

You don't know whether the Orioles can afford (or not afford) contracts gone awry due to injury. Your post is based on pure conjecture because iYOU don't know what the O's books look like.

The Sun would do Os fans a real service if it would work with finance experts to construct an expert-based opinion outlining the Os finances -- including the club owner income from licensing and MASN. But the Sun has not done this -- which I think is a real shirking of journalistic responsibility. This is particularly true given the public-financed interest Md citizens have in the Camden Yards.

There are plenty of tools available for you folks to do your jobs -- including actual MLB financials from other teams disclosed by other news organizations as well as through the L.A. Dodgers bankruptcy. It would be nice if the Sun -- for which I now pay -- took on this issue.

Dan -

how would MLB's profit sharing effect the Orioles? Does it lessen the blow? Usually the Orioles are in the bottom end of the mid market payrolls. Wouldn't that put them in the upper end of the profit sharing?

Also, aren't teams given insurance money on players who are injured on big contracts to absorb the lost? I'm thinking that was part of the bargining agreement, or maybe that just applies to the players.

--

No, teams can take out their own insurance though. The profit sharing ispart of it, but it's never come close to leveling the playing field. And, frankly, I am not saying the field has to be level. It's a capitalistic endeavor after all.

Even though revenue sharing is obviously helping out some small market teams, the system still isn't perfect. When a handful of teams can collect all of the free agent stars on a consistent basis, that forms a competitive disadvantage for the rest of the league. It also hurts the gate revenue if fans are more interested in going to see certain stars play as opposed to a team of no names or semi stars (an example-who wants to go see San Diego right now; outside of Heath Bell, I couldn't name a single player on their roster). I think what MLB needs to do is institute a policy where each team is allowed to have a certain amount of Type A/Star Free Agent Players on their current rosters; sort of like college teams having x amount of slots for scholarship players. This type of setup would prevent the NYs, Bostons, LAs, etc. from collecting all of the big star players when they hit free agency, while giving the mid and small market teams more of a chance to sign these types of players. It may also cause the free agents to stay with their original team (such as Fielder would more than likely stay in Milwaukee after seeing his choices reduced to teams that don't include Boston, NY, etc.). I admit the downside is that the free agent player wouldn't make anywhere near as much money as he would if NY, Bos, LA, etc. are in the mix to sign him. However, it would force these big revenue teams to think a lot harder about who they pursue and for how long they sign the free agent player for. So, there's a good chance that NY and Boston wouldn't always have their free agent slots filled up (that is, if they're managed smartly).

I feel that the Orioles' problems are their own doing and the result of bad management from '98 until now. But MLB has a problem when most of the teams in the league, especially Baltimore, have no shot at signing a free agent star in their prime years to help turn the franchise around. I consider myself a fan of the game but I have to say, I don't go to that many O's games per year because until recently, the O's haven't had many great players to watch and because most of the players I want to pay to see play are clustered on a handful of teams. MLB should recognize that that is a problem because if there are millions of people out there like me, then their bottom line is being affected. Making a change would make this post's subject be a dead issue.

Post a comment

All comments must be approved by the blog author. Please do not resubmit comments if they do not immediately appear. You are not required to use your full name when posting, but you should use a real e-mail address. Comments may be republished in print, but we will not publish your e-mail address. Our full Terms of Service are available here.

Verification (needed to reduce spam):

-- ADVERTISEMENT --

About the bloggers
A Baltimore native, Dan Connolly has been covering sports for 14 years, and baseball and the Orioles for 10 seasons, including the past six with The Sun. His first year covering baseball on a daily basis was Cal Ripken Jr.'s final season as a player. It's believed that is just a coincidence.

Steve Gould is an assistant sports editor for The Sun, overseeing Orioles coverage. The Columbia native joined The Sun as a sports copy editor in 2006 after graduating from the University of Maryland.

Peter Schmuck has been covering baseball for a lot longer than Steve Gould has been on this earth. He is now a general sports columnist, but has been a beat writer covering three major league teams (the Dodgers, Angels and Orioles) and also spent a decade as the Sun's national baseball writer. If you want more of his insight on the Orioles and other sports issues, check out his personal blog -- The Schmuck Stops Here.


Baltimore Sun coverage
Most Recent Comments
Photo galleries

Buy Sports Tickets from the Baltimore Sun Store

Search our new database for every home run hit hit by the O's and the opposition — home and away — since 1992.

Minor league resources
Web links to official sites, stats, schedules and more for O's affiliates and other area teams

International League (AAA)
News | Scoreboard | Standings | Statistics

Eastern League (AA)
News | Scoreboard | Standings | Statistics

Carolina League (A)
News | Scoreboard | Standings | Statistics

South Atlantic League (A)
News | Scoreboard | Standings | Statistics

New York-Penn League (A)
News | Scoreboard | Standings | Statistics

Appalachian League (R)
News | Scoreboard | Standings | Statistics
Sign up for FREE Orioles alerts
Get free Sun alerts sent to your mobile phone.*
Get free Baltimore Sun mobile alerts
Sign up for Orioles text alerts

Returning user? Update preferences.
Sign up for more Sun text alerts
*Standard message and data rates apply. Click here for Frequently Asked Questions.
Blog updates
Recent updates to baltimoresun.com sports blogs  Subscribe to this feed
Stay connected