Economy’s Impact On MLB Will Be Determined During Free Agency Period
The repercussions of the global financial crisis have sent tremors from Wall Street to Main Street.
Two recent events indicate that the Colorado Rockies don’t feel isolated from the economic turbulence. They are holding the line on season-ticket prices — a function of the economy and a poor showing last season — and aggressively trying to trade three-time all-star Matt Holliday after conceding they can’t sign him for the long term.
“The economy will have an impact,” general manager Dan O’Dowd said.
The St. Louis Cardinals remain the slight favorite to acquire Holliday, with all- star outfielder Ryan Ludwick and reserve outfielder Skip Schumaker the centerpieces of a trade package, according to a major-league source. What would seem an easy decision — Holliday paired with Albert Pujols is a delicious thought — is hardly a rubber stamp. White Sox general manager Kenny Williams illustrated why in describing how the economy might affect the industry.
“It’s been part of my message for the last couple of months when I got a look at my 401(k),” Williams said. “What it means ultimately is that you have to think long and hard before you give up a young player for a veteran player, because you have a greater cost associated with that veteran player. And at the end of the day you want to keep the lights on.”
The Cardinals’ risk is heightened because there’s no guarantee they could sign Holliday long-term before he enters free agency after this season. His agent, Scott Boras, believes baseball will be relatively insulated from the financial woes because of the way the sport is structured.
“I don’t think Citibank will go to the Mets and say let’s reopen the deal because the economy is tough. I don’t think TV contracts are going to be affected,” Boras said. “The core of baseball is built around these longer-term contracts and guarantees. That’s why the impact of the recession will not have anywhere near the impact that would have on another business that’s more immediately transactional.”
Boras correctly pointed out that baseball continues to set profit records, totaling more than $6.5 billion last season. Yet, commissioner Bud Selig delivered a videoconference message to the GMs, warning them to proceed with trepidation. Several teams are freezing season-ticket prices. One likely trend predicted by multiple GMs — more no-shows at games with families willing to eat the tickets rather than spend money on parking, food and souvenirs.
“How can it not impact the industry? In most cases, clubs are one face of a larger set of holdings on the part of owners,” Padres president Sandy Alderson said.
When and who will feel the hit is a matter of debate. In talking to executives and agents, most think superstars will get their money. There’s already talk that the Yankees will offer CC Sabathia a record pitcher contract. Manny Ramirez has received a Dodgers offer that would give him the second-highest yearly salary, and slugger Mark Teixeira is eyeing a $150 million deal.
O’Dowd believes the second-tier free-agent market will feel the pinch, with excess supply lowering the price as the winter drags on.
The feeling is the economic earthquake has hit, with teams bracing for individual aftershocks.
“In this position there’s a responsibility to stay ahead of the curve,” the White Sox’s Williams said. “Fortunately, we have built up equity with our fans more than some others, who will likely be affected more.”
- Troy E. Renck, The Denver Post
