January 05, 2010

Wow. Surprises me too. Pujols, Holliday at 3,4 in the lineup is potentially, very, very dangerous. I didn't expect the Cards and Holliday to come to terms much less a 7-year no-trade. Oh, and YYYYYYYYYYYYYEEEEEEEEEEEEEEEEESSSSSSSSSSSSSSSS.

posted by BoKnows at 07:56 PM on January 05, 2010

How excited will the Cardinals fans be when the team announces they can't match the offer from the Yankees for Albert Pujols in 2011 because they don't have enough payroll space?

Is Holliday going to be worth it when he's 36 years old? Probably not.
I hope he can contribute big time for the first 3 or 4 years of that contract.

Holliday was instrumental in the Cards' run to the postseason last year.

Wuh? Albert Pujols was instrumental in the Cards' run to the post-season.

Holliday was instrumental in the Cards run FROM the post-season.

[Edit: What holden said. Stupid slow typing.]

posted by grum@work at 08:39 PM on January 05, 2010

IMO, Pujols was given the opening to be instrumental in that run because he had Holliday hitting behind him, rather than Ryan Ludwick.

In my reveling about the present, I may not have thought about the future too much. However, I think I shall shoot for optimism on this one. (crosses fingers)

posted by boredom_08 at 08:47 PM on January 05, 2010

Does Boras even live in the same world as the rest of humanity? My dream for the game of baseball as it moves into the future is for him to vanish.

Huh?
What has Boras done that is so despicable?

It's not like he's holding a gun to the owners' heads and telling them to pay that much money.

Owners CAN show restraint, and agents don't ALWAYS get what they ask for. Just ask Bobby Abreu last year.
It's not often a player gets 100 runs, 100 RBI, 120 OPS+ season and then has to take a > 66% pay cut during free agency.
2008 $16,000,000
2009 $5,000,000

posted by grum@work at 09:33 PM on January 05, 2010

Huh? What has Boras done that is so despicable?

It's not like he's holding a gun to the owners' heads and telling them to pay that much money.

We can't always hate the Yankees, Mets and Red Sox for what they've done to the game. They outbid smaller market teams for players and Boras and others are the middle men who make sure it happens.

A couple of Bobby Abreus don't account for the fact that fiscal spending does lead to more consistent winning over the long term. The owners that live in a market where that kind of spending can still lead to a profit cripple those that don't by creating comparison contracts for other players on the small market teams that they can't compete with. When those contracts don't work out in the big markets, they just buy a replacement because they can. When they don't work out in the smaller markets, the teams are handcuffed. Boras understands this well and is a master of manipulating the system to maximize the profit he and his clients make.

Is he just doing his job? Sure. Is that an absolution for being a face of the evils that plague the average fan? Certainly not. He's profited greatly while fans pay more to watch the same game. It's like someone making money off the stock market failures; fair, but people have a right not to pat you on the back for it.

posted by dfleming at 10:50 PM on January 05, 2010

Here's a link to some thoughts from the Cardinals' regular blogger on MLB.com. Interesting note from that: there's a possible eighth year in the contract.

posted by boredom_08 at 11:12 PM on January 05, 2010

Does Boras even live in the same world as the rest of humanity?

I don't know how he does it. Very impressive man. Comparing him to someone making money off of a falling stock market doesn't seem fair to me.

As for Pujols, all indications appear he loves it in St. Louis and would be willing to take a [small] reduction in pay to retire a Cardinal.

I suspect Pujols told management something to the effect of: "Sign Matty long-term."

posted by DudeDykstra at 03:57 AM on January 06, 2010

Other than the success of the Red Sox over the last decade, why are they lumped in with the two New York teams? If you look at market size, Boston/NE is only 7th, behind NY, LA, Chicago, Philadelphia, Dallas, and San Francisco/Oakland (and just ahead of Atlanta, Houston, and Washington).

I appreciate (and agree with) the point that Boston has been smart about its money, but Boston is lumped with NYY and NYM because Boston is a high-revenue team (if not a "big-market" team). Looking at the 2007 revenue charts posted here (which appear to come from Forbes), Boston had the second-highest revenues in MLB in 2007, at $263MM to the Yankees' $327MM (with the Mets coming in third). Part of this is due to gate receipts, but part is due to merchandising ("Red Sox Nation" is a large, widely dispersed group of fans throughout the U.S. -- I probably see more Boston hats here in Chicago than any team other than the two local nines), and a big part is also due to broadcast revenues, which are enhanced by the fact that the Red Sox own 80% or so of NESN. Which brings me also to the point that the Nielsen DMAs understates the Red Sox market area, considering that Providence/New Bedford is listed separately and the scope of the Red Sox market extends beyond MA and southern NH into more or less all of Maine and parts of Vermont to the north and down into more or less all of Rhode Island and some of Connecticut to the South. The Red Sox basically can spend more money than any team but the Yankees or the Mets (presumably the revenue numbers are going to bump up for the Mets post-opening of Citi Field, notwithstanding the crappy product last year and I'm sure the Yankees' were up as well).

That they spend their money more wisely than some of the other high-revenue teams (and many lower revenue teams) is great, but let's not pretend that they are middle-of-the-pack in terms of resources. Many teams could not have afforded to take a chance last year on Brad Penny at $5MM and John Smoltz at $5.5MM and then just cut them loose when it did not pan out. Smart move for the Red Sox at the time in terms of risk and reward, but only when viewed in light of the revenues and payroll flexibility of the Red Sox vis-a-vis other teams.

hincandenza -- I know your broader point is that the Red Sox do not act like the Yankees and Mets (which I agree with), but it is worth pointing out that they are about the only team that can act like the the two New York teams.

posted by holden at 09:53 AM on January 06, 2010

It makes no sense whatsoever.

A business charges what it does based on two factors:

a) Covering its operating costs and/or whatever profit margins it hopes for. b) What the market will allow.

Section a) is where salaries come into effect. Is it a direct correlation? Certainly not, but it's would be foolish to think that an increase in the cost of payroll doesn't lead to an increase in the end product's cost.

Markets are not completely demand side driven. Buying what the owners are selling makes sense when the owner's profit margins aren't very high.

posted by dfleming at 11:14 AM on January 06, 2010

So grum, you're saying that no team ever signed Charlie Kickass to a big contract thinking a) they'd sell more tickets and b) we'll raise the price a little?

Demand for the product increases as the product's desirability grows. You might sell 1.9M tickets at an average of $20 with a bunch of schlubs, or you might sell 2.5M tickets at an average of $24 with, say, Barry Bonds (I'm looking at you, Toronto).

It's why the Bills signed Terrell Owens, and it's why the Sixers brought back Iverson -- sometimes you have to put more money into the product to get more out.

posted by wfrazerjr at 12:48 PM on January 06, 2010

A business charges what it does based on two factors:

a) Covering its operating costs and/or whatever profit margins it hopes for. b) What the market will allow.

Completely inaccurate. You're confusing or conflating a normal business with a monopoly. Businesses in non-monopoly situations only do B. An easy thought example:

A company builds 10,000 units of a product that costs them $100. Competing firms introduce a similar product and sell it at $80. The result of your two scenarios:

a.) Company charges $100 to cover their costs. They sell 0 units and lose $1 million dollars.

b.) Company charges $80 as that's the price the market will bear. They lose $200,000.

Please don't argue that major league sports represent a monopoly. They are a monopoly as far as the labor force is concerned, but they are not a monopoly when selling their product. The product is fairly elastic: it's essentially an entertainment good that can be replaced with a minor league version of the game, TV subscription to the game, movie tickets, etc. depending on your level of commitment to the specific sport.

So grum, you're saying that no team ever signed Charlie Kickass to a big contract thinking a) they'd sell more tickets and b) we'll raise the price a little?

You're simply asking if a team ever signed a player to increase demand. Of course they do. That's the only reason they do. Spin it any way you want, making the team better, putting asses in seats, sentimental value, there's no way to state it that doesn't boil down to increasing demand, which is the only way to increase marginal revenue (without cutting costs).

posted by yerfatma at 01:09 PM on January 06, 2010

Does Boras even live in the same world as the rest of humanity? My dream for the game of baseball as it moves into the future is for him to vanish.

While Boras certainly can seem greedy, he can actually do a reasonable deal when the climate is right. Last year's circus with Teixeira was done in order to drive the price as high as possible in a competitive market. This year's deal with Holliday, in a market was much tighter than last year's, while it may be for too long, is not really that bad in terms of dollars per year. $120 million over 7 years factors into a little over $17 million per year, which is a reasonable figure for a top hitting outfielder. One Boras deal that went under the radar is the Adrian Beltre contract with Boston. Boras went from 3 or 4 years at $12 million+ per year to a one-year deal with an option. The year is worth $9 million, and the player option is worth $5 million. This greatly eases the potential salary tax hit on Boston and gives Beltre a lot of flexibility next year. When the market dictates, Boras is a realist.

posted by Howard_T at 03:48 PM on January 06, 2010

One can make a case that Pujols -- of whom one pitcher famously said "I'd rather punch a priest than pitch to him" -- is worth quarter-billion crazy A Rod money.

The original quarter-billion contract that ARod signed was before he began his age 25 season, as a shortstop.

Pujols will be over 30 years old when he signs his next contract, and will be playing 1B.

Maybe with salary inflation, he'll get to that level, but I suspect he'll be getting $20million/yr for 8 years.

posted by grum@work at 04:31 PM on January 06, 2010

I think Pujols gets much closer to $30 million a year.

Pujols will get no higher than $22-25MM per, if he wants to stay in St. Louis. And I do think he wants a Stan Musial-like career cradle to grave legacy with the redbirds. He will undoubtedly have to take a hometown discount to stay, though. Could he get $30MM per on the open market? Perhaps, although the Yankees are pretty much set at first base for the foreseeable future, and Pujols is not a DH (actually, he and Teixeira are probably the two best 1B gloves in baseball right now). I suppose the Mets, Angels, Cubs, and Dodgers could potentially make a play for him, but I think A-Rod's current deal is the upper limit of what Pujols could reasonably expect even with multiple suitors.

posted by holden at 07:17 PM on January 06, 2010

Why do you think that Pujols would turn down an extra $5 million per season to stay with one team, when that almost never happens in baseball since free agency began?

Roy Halladay just did it a few weeks ago.

posted by holden at 10:14 PM on January 06, 2010

I don't think Roy Halladay is much of an example. He was traded by Toronto, presumably for affordability reasons, so he won't be able to play his entire career for one team.

That could happen to Pujols someday too. Teams don't show their lifetime players loyalty any more, which is why I think few players would give their team a big discount in free agency. If the Cards keep Pujols, and it would be insanity to let him go before his next long-term deal, I think it will be because they backed up the money truck.

posted by rcade at 08:22 AM on January 07, 2010

I don't think Roy Halladay is much of an example. He was traded by Toronto, presumably for affordability reasons, so he won't be able to play his entire career for one team.

That could happen to Pujols someday too. Teams don't show their lifetime players loyalty any more, which is why I think few players would give their team a big discount in free agency. If the Cards keep Pujols, and it would be insanity to let him go before his next long-term deal, I think it will be because they backed up the money truck.

As I noted above, Roy Halladay is not an example in that he took a hometown discount to stay with one team, but he did take a steep discount for whatever personal reasons he had. So players do leave considerable money on the table for things such as location, legacy, opportunity to win championships, etc. In the case of Pujols, leaving $5MM per season on the table is a lot in light of the average MLB salary, but if he signed for $25MM instead of $30MM, he is still getting about 85% of what he otherwise could get and we are still talking massive raw dollars over the life of the deal -- it's not like a situation of someone leaving $5MM on the table to take a $10MM deal, for example.

But the bigger point is that Pujols is a Cardinals icon and he knows his place in the community and his importance to the city and the team, as well as his place in baseball history. He truly is a once-in-a-generation type of player, and only Derek Jeter is really is close in terms of how closely a player is identified with a particular team and how devastated a fan base would be to have him leave. All of these "intangible" factors play into my conclusion that the regular rules probably just don't apply here -- the Cardinals will certainly give Pujols the largest contract they have ever given, but Pujols will likely take less than he get on the pure open market. I typically hate arguments that are not based on fact or objective bases, but there is an intangible dynamic here with St. Louis baseball in general and with Pujols in particular that takes this outside the realm of the ordinary course of baseball contracts and "rational" economic decision-making.

Back to the original topic, the Holliday deal really does not change how much the Cards will be able to give Pujols (although perhaps it is more likely that Pujols will have a contract with a fair bit of deferred money), it just means that in the middle to late years of Holliday's deal, the Cardinals will have to have very good cheap young talent coming up through the farm in order to field a good team, because they will have a ton of money tied up in one great player and one good one.

This is all (obviously) speculative, but I do follow the goings on of the Cardinals and this is informed speculation to some extent. As someone who has been to multiple Cardinals games in all seasons of Pujols' career and have also followed his career remotely with interest, I sure hope I am right.

posted by holden at 10:13 AM on January 07, 2010