Spend it on what, exactly?

Commenter Pete Toms, who has a great blog of his own, brought up some interesting points about the Devil Rays' situation, particularly in terms of exactly how the Devil Rays are spending their not-hard-earned revenue sharing lucre. He referenced a recent post on the also-excellent The Sports Economist that discussed the absolute abortion that is the current revenue-sharing system in baseball. Essentially, the ownership group for the Devil Rays have pocketed eight digits' worth of other teams' largesse while dropping the team's overall payroll between 2006 and 2007. Correctly, the authors of TSE see this not as a failing of the Devil Rays, per se, but more a failing of the system that attempts to redistribute wealth among the already insanely wealthy.

I'll not cop to economics as a personal area of expertise, but as an avowed libertarian I can confess to an intense loathing of corporate welfare, which is exactly what MLB's revenue-sharing system is. It will be a cold day in hell before you can make me feel bad for the owner(s) of a baseball team, who entered into their situation fully cognizant of the situation before them. In the case of the Devil Rays, they knew that the Trop would be the stadium, the AL East would be the division, and the Tampa area would be that from which they hoped to cull fans. Before the contracts were signed. I feel as bad for the Devil Rays as I do a man who spends his last $5 on a trifecta; you weren't worried about losing money when you had your eyes on the potential windfall, so don't come bitching to me after it doesn't work out.

But here's my question: Why should the Rays spend that money on payroll (which would mean spending it on free agents)? As I've detailed before, most high-priced free agent contracts are a bloodbath for the teams involved, and in today's market high-priced deals are being shuttled toward some patently mediocre players, particularly if they ply their trade with a single limb. The message inherent in revenue sharing is that small-market teams, instead of being prudent, should start dumping money into the same kind of dumb contracts the Yankees have made famous in recent years.

(Aside: I will concede this about payroll restrictions, or a lack thereof: The Yankees have been able to retain their best homegrown players once the arb-eligible/free agent years hit, which is a HUGE advantage. If Carlos Beltran came up with the Yankees instead of the Royals, he would still be employed by his original team today. This is the one area in which big-market teams have a decided advantage over their small-market counterparts. However, this doesn't mean that the Yankees are automatically winners in the game of life, either. First, you have to develop the talent, and then you have to properly assess the value of that talent once it reaches arb-eligible/free agent status. Yes, it's an advantage to have Jeter come through the system and then keep him once the big bucks are his for the taking, but if Jeter came up for the Pirates, a savvy GM could have gotten a king's ransom for him in a trade as well. In fact, it's entirely possible that a team would be better off trading a Jeter when he's approaching free agency than spending the money to keep him, provided the return in a trade is good enough. This is the situation faced by the Padres (Peavy) and Twins (Santana), for instance. While the fans of those respective teams would assuredly like it if management would/could lock each up in long-term deals, it's probably a bad idea for both teams. And not just because they don't have the money. But, I'll leave it there, in an effort to not have a longer aside that the post in which its contained.)

If I'm the owner of the Devil Rays, I would probably do the same thing the non-imaginary ones are doing as we speak. The marginal value of any free agent on the market isn't anywhere close to what would be paid to any of the individual players, particularly when one considers that a long-term contract for a veteran would probably serve to block a top prospect. The Rays are wise to plan for 2009 as the year everything comes together, because by that time they'll be fielding a team that could bring a prospect evaluator to tears, and almost all of those guys will have enough major league experience to justify high expectations. Anything the Rays do between now and then on the free agent market, with the possible exception of locking up Carlos Peña (provided they can do so reasonably, both in terms of dollars and years), is probably going to undermine their potential for success. In the meantime, anyone stupid enough to fork over millions of dollars, without attached strings, deserves to be robbed.

As for Pete's second contention, I will recite it here before dealing with it:

The D Rays, Jays ( woe is me ) & O's are at the biggest competitive disadvantage in MLB, playing nearly 1/4 of their games against the Evil Empires. I am an embittered Jays' fan who thinks it's bullshit.

Pete's is not an uncommon refrain for fans of the lesser-endowed AL East teams, and the last decade has done little to convince anyone that it's anything but unfair. I'm not sure I had pubic hair the last time the Yankees weren't in the playoffs, and the Red Sox aren't far behind. If weren't going to define the term "competitive disadvantage" to mean "constantly has to play two of the best teams in MLB," then the plight of the O's, Jays and Rays surely fits the bill.

However, as far as the Jays and O's go, I've got absolutely zero sympathy (the Rays, as an expansion team, are not really the same as the other two, so we'll leave them out [also, the Rays are going to make the playoffs by 2009, mark my words]).

In the case of the O's, their fate has been sealed by some of the worst management seen in baseball the last decade, in spite of advantages in terms of ballpark, market and payroll that more than half the teams in the majors would offer a metaphorical left nut for. Baltimore spent more than $93 million in 2007 to field a team that would have struggled to place third in any division in baseball, mainly because most of that $93 million went to shitty baseball players. I would compare the O's to the Dodgers if it weren't for the latter's farm system, which ranks as one of the best in baseball (even if the current GM would rather get sodomized than actually clear the way for any of his top prospects). The O's have everything that a team needs to compete for the playoffs annually except a functioning brain in the front office and a non-self-immolating owner.

The Jays are a little bit of a different story, because the SkyDome Rogers Centre is a titanic piece of concrete shit, Torontonians prefer almost anything to baseball, and the currency conversion situation has historically put them at a disadvantage (Canadian currency in, American currency out). HOWEVA, I again place the blame on the front office, which has consistently botched the job when it comes to understanding what needs to be done. The previous Ash regime was a relic of the Gillick years, when the Jays ran up massive debt to buy playoff/WS appearances, and the Riccardi years have been even harder to swallow, particularly when one considers Riccardi's pedigree as a Billy Beane disciple. In fact, the day I renounced my allegiance to the Jays — which will be regained by the team of my youth when Riccardi is fired and Chris Antonetti is hired — was when Riccardi publicly stated that he needed more money to compete with the big boys. No, J.P., what you need is a willingness to not spend money on horrible contracts, like those given to B.J. Ryan, A.J. Burnett, Vernon Wells, John McDonald and now Matt Stairs. The Jays probably could have won as many games last season for $20+ million less, which bothers me more than the fact that they didn't just win more games. The reason Canada's last man standing isn't cracking the top two positions in the AL East anytime soon is because they abandoned what was once one of the best scouting and development programs in baseball and convinced themselves that the Lyle Overbays of the world are the key to success.

I don't mean to paint the situation as one in which perfect management for either the O's or Jays would mean that the Yankees or Red Sox's effect would be negated. As our legal system proves on a regular basis, wealth means you can get away with more mistakes than the common folk, and that's the situation for the current pole sitters. But it would be a better argument for both of the "poorer" teams if they didn't spend so much time shooting themselves in the foot.

And that's all I gots to say about that shit, at least for tonight; I got a Vegas trip to pack for. Thanks to Pete (shout out to Ottawa!) for giving me some good stuff to chew on; everyone should really read his blog, which is much more thoughtful than ours.

The Helmet Law of Sports

You know how most girls hate the word "panties?" That's how I feel about the word "parity." It's a gross-sounding word, and even more it's been beaten to death in a manner befitting a non-ferocious dog at the Vick Ranch.

Parity is often provided as a main reason for the NFL's meteoric rise in stature and eventual usurping of Major League Baseball as the country's prime male addiction that doesn't involve pornography. There may be some truth to this, but it's likely an overstatement; people are obsessed with the NFL because football might be the most fundamentally American sport imaginable. It's the perfect mixture of violence and strategy, and the league has never shied away from using sex to help sell it, too. Plus, the concentrated nature of the game's season — 16 games, as opposed to 164 — seems a better fit for recent generations of Americans who have not only been raised to think they have ADD, but probably have psychosomaticaly contracted it because they want the drugs.

This is not meant to impugn football; I am a football fan, though admittedly I've always preferred the college version. I do suggest, however, that there are a myriad of reasons why the NFL is more popular than baseball these days, and I don't think it has a whole lot to do with the fact that one sport has a salary cap, and the other doesn't. That assertion is supported by the fact that both the NBA and the NHL have caps, and no one gives a shit about either of those leagues unless the Suns are playing.

My other beef with the whole parity thing is that it really isn't true. Yes, the structure of the NFL's salary system makes it so that tons of players are cut every season, which means there's a constant stream of acquirable commodities for struggling teams with a keen eye for talent. But if that's the case, why have the Lions continued to suck right through the parity era? And the Cardinals? Furthermore, why is it that the Patriots and Eagles are almost always division favorites? If financial clout — the ability to spend more than another team — is the primary ingredient to superior roster building, then in the NFL's universe, all teams should hover around the same level, with random fluctuation in W-L records and jersey colors serving as the only methods of differentiating teams. We see that's not the case, however, and immediately know that the answer is: Some teams are better run than others. Yes, you can point to an example like the New Orleans Saints' one-year turnaround as an example of "parity," but I'm not sure that's the case. The Saints got better because they landed one free agent who was undervalued on the market because of an injury situation, benefited from an incredibly productive draft leading into that season, continued the development of young players who had underperformed in years past, and implemented a new coaching and management strategy under Sean Payton. That kind of story can happen in any sport; look at what's happening with the Brewers right now.

The Brewers, in fact, serve as an excellent illustration of the non-necessity for a salary cap in baseball, but they're not alone.

Cleveland 55-39 $ 61,673,267
Minnesota 49-45 $ 71,439,500
Milwaukee 53-41 $ 70,986,500
San Diego 52-41 $ 58,110,567
Arizona 50-46 $ 52,067,546

All five of those teams are among the best teams in their respective leagues. All fall well below any kind of reasonable salary cap MLB would institute.

And here's another four teams:

Chicago 42-51 $ 108,671,833
Baltimore 42-52 $ 93,554,808
San Francisco 39-53 $ 90,219,056
Houston 40-55 $ 87,759,000

All four of these are among baseball's worst teams. All would probably be right around, or above, any kind of reasonable salary cap MLB would institute.

I know, I know. I'm cherry-picking the examples which support my argument, right? In a sense, that's true. Most of the teams who spent close to, or more than, $100 million a season are in playoff contention. But that's really only eight teams, five of which are in the American League. And four of the six division leaders are among that group, thanks to the big-spending Dodgers recently overtaking the Padres in the West by a half-game. But, for most of the season, half the division leaders have been "small-market" teams, and Cleveland has been in a dogfight with Detroit all season long, despite spending almost $34 million less than the Tigers.

The point is that while there is some correlation between money spent and on field results, it's far from guaranteed that a large salary will equate with success, and the correlation is in fact fairly weak.

(Apropos-of-nothing aside: I checked the calendar before writing this, and have confirmed it's 2007. Why the fuck does almost every rap CD still have skits? This shit was old by the time De La Soul dropped De La Soul Is Dead, and that abortion was released in 1991. Yet, here I am listening to the otherwise excellent Like Father, Like Son by Birdman & Lil' Wayne, and I'm forced to skip through ridiculous cliché Godfather-ripoff skits about "being a part of the family for life." Really? Really? I feel like kicking Lyor Cohen in the nuts every time I hear a rap skit, because he's smart and probably could have put a stop to this trend in its infancy.)

There are a few big reasons for this. One of the prime ones is something I've posted about before, which is that many big-ticket free agency acquisitions are disasters for the teams involved. Activity does not equal improvement when it comes to the free agent market, and it can often mean the opposite; I'm quite positive that the Dodgers would be running away with the NL West right now if they hadn't signed (or re-signed) Luis Gonzalez, Juan Pierre and Nomar Garciaparra in the offseason, and instead had let Kemp, Loney, Betemit and LaRoche take up those at-bats. That would also trim more than $25 million off the team's 2007 payroll. Money spent is not always money well spent.

Furthermore, there already exists an artificial market constraint that serves to allow lower-income teams to compete without the benefit of a Warbucksian approach to free agent acquisition; it's the fact that a player needs to earn three years of major league experience before they can begin receiving compensation more in line with their value on the open market. I can't find the specifics on this, but a player needs to log between two and three years of major league service before he's eligible for salary arbitration, and (I believe) six years of major league service before he's eligible for free agency. During this six-year period, a team essentially controls the player; the player has no leverage, outside of a holdout, to negotiate a better deal for himself. Arbitration is binding for both sides, but only the team can opt out of the process; the player has no say. And even an arbitration award in favor of the player rarely nets him close to what he could earn on the open market. So, a team is essentially guaranteed six years of service (roughly) at bargain rates from any player it develops. In addition, savvy teams like the Indians and Braves have sustained success by signing players to long-term contracts at below-market values early in players' careers. Recently, the Padres were able to do this with Adrian Gonzalez and Chris Young, both of whom are making at least $7 million per season less than either would on the open market.

All this proves is that there are lots of ways to skin a cat when it comes to building a competitive major league baseball team. In fact, it's become clear to teams like the Yankees and Red Sox, Exhibits A and B for those who argue for a salary cap, that the way the Indians and Braves operate is actually preferable; the administration of both teams have made it clear that their days of opting for pricey free agents over young, home-grown players. This isn't to say that the money for free agents is going to completely dry up, but it does suggest that there will be some market correction in the future thanks to the lessened interest from the league's two biggest spenders.

All of this argues for there actually being a situation that allows for competitive balance. And I believe the results are there: The last seven World Series winners have been St. Louis, the Chicago White Sox, the Red Sox, the Marlins, the Angels and the Diamondbacks. Even the NFL, paragons of parity, can't claim six different champions in six years. In fact, there's only been three.

There's one remaining reason — and it's a big one — for there to not be a salary cap in baseball; it really serves to protect owners from themselves. Owners have created the problem by offering ridiculous deals to players who aren't deserving the money. In many cases, they've done so while really only bidding against themselves. It would not require collusion for the market to undergo a correction; it would just require owners to stop allowing, as one blogger put it recently, Scott Boras to convince them that Barry Zito is Steve Carlton.

Small Market teams love to claim that its a lack of money that keeps them from competing, but it's simply not true. The reason the Pirates have sucked since Barrold left town was because they've made horrible decisions with the money they actually have. Same goes for the Royals, who can be counted on to load their roster up with overpaid veterans almost every offseason. Interestingly, those two teams can be counted on to make a healthy profit every season, thanks to the revenue sharing that takes place in baseball; they're pocketing the money that's supposed to be going toward player salaries, all the while protesting the unfairness of the system. The players — or agents — aren't to blame for the problem, yet the solution serves only to restrict their ability to make as much money as possible. Not only do I not think a salary cap is needed, I actually think it's wrong. It will be a cold day in hell before you can convince me that millionaire owners, who already have the run of the shop, need even more help to properly run their affairs.