Sunday, July 16, 2000
Can baseball save small-market clubs?
Blue-ribbon panel's ideas may be last hope
By Scott MacGregor
The Cincinnati Enquirer
Just when you thought payroll disparity couldn't get worse in baseball, it has. Even commissioner Bud Selig admits, “It's getting worse by the day.”
And you don't have to look any farther than Cinergy Field for the most recent — and perhaps most telling — example.
The Reds can't afford to keep players like Denny Neagle, whom they traded to the ultra-rich New York Yankees Wednesday, unless those guys are willing to take less money to stay.
And they can't afford to get superstar prospects like Drew Henson, one of the four minor-leaguers they got in return for Neagle, unless they trade for them later.
This is Baseball Economics 2000.
“The bottom line is, in baseball today, if you want to have a legitimate chance to be competitive year-in, year-out, for most teams you have to be able to lose significant dollars to do it,” said Houston Astros general manager Jerry Hunsicker.
“It hasn't changed,” Florida Marlins general manager Dave Dombrowski said. “It's just coming into more focus.”
Baseball owners addressed the payroll problem Friday at their meetings in New York. A blue-ribbon committee urged them to impose a 50 percent luxury tax on payrolls above $84 million; proposed sharing 40-to-50 percent of local revenues after ballpark expenses; and recommended that national broadcasting and licensing revenue be distributed unequally to assist low-revenue clubs, provided they meet a minimum payroll of $40 million.
They also recommended including players from around the world in the amateur draft, and allowing teams to trade draft picks, which they currently can't do.
“Those are both positive steps,” Reds general manager Jim Bowden said. “If you can't afford to sign them, at least you can trade them for equal compensation.”
“We do not pretend to believe these changes will be easy or universally popular,” said former Senate Majority leader George Mitchell, a member of the panel. “We do believe them to be a solution to the alarming disparities between baseball's haves and have-nots.”
Said Hunsicker, “Hopefully that panel will shed some light on what most of us already know. We need to find some way to put the brakes on our spending habits, not only at the major league level, but the amateur level as well.”
Don't blame anyone in particular for the Reds' situation. Just accept the reality that is baseball.
Sure, the Reds traded for arguably the game's best player, Ken Griffey Jr. But trading Neagle for minor-leaguers shows how small a corner mid-market teams like the Reds are backed into.
They offered Neagle a three-year, $18 million deal. He said he wanted to become a free agent, so they had to get something in return. He'll probably command in the $8-to-$10 million a year range on the open market, which the Reds can't afford.
Even with Griffey, the Reds' payroll is $48 million. By adding Neagle, the Yankees' jumped to $107 million.
The Reds say Griffey pays for himself because his home run power and stardom put so many extra people in the seats. And remember, he took significantly less money — about $40 million over the life of the contract, with much of his $116 million deal deferred — to play here.
“It's about how you want to proportion your dollars,” Dombrowski said. “In our case, our payroll is about $20 million. With a $20 million payroll, you can afford any one player. But then who do you surround him with?”
The old thinking used to be if you couldn't buy a contender, you could at least build one through the minors. But with top high school and college prospects commanding huge draft signing bonuses — and Latin players able to engage in free-agent bidding wars because they aren't subject to the draft — even building from the ground up isn't what it used to be.
If the Reds had let Neagle walk as a free agent at the end of the year, they would have received one late first-round draft pick and a “sandwich” pick between the first two rounds as a compensation. But those players simply command too much money for unproven talent, and it becomes cheaper to acquire other team's top minor-leaguers than draft your own.
Henson received a $2 million signing bonus from the Yankees out of high school in Michigan. Jackson Melian, the outfield prospect the Reds got in the Neagle trade, set a then-record when the Yankees gave him a $1.6 million bonus — as a 16-year old from Venezuela.
The Reds wanted Henson badly in the spring of 1998. Bowden even flew to Brighton, Mich., to meet with the Henson family. But Bowden knew he couldn't afford a $2 million bonus for a kid who might end up playing football, so the Reds — and other teams — passed.
“I said, "He's a guy the Yankees will have to take, and I'll have to trade for him later,'” Bowden said.
This year, the Reds drafted David Espinosa, a highly-touted shortstop out of Miami, who was expected to be a high first-round pick but slipped to No.23 because teams were wary of negotiating with his agent, the notorious Scott Boras.
The Reds decided to take Espinosa because they feel they can work out a deal. But he remains unsigned, as are sandwich pick Dustin Moseley, a higher school, and second-rounder Dane Sardinha, from Pepperdine.
“It all comes down to dollars,” Bowden said about the trio's signability.
Espinosa, 18, could receive a bonus up to $3 million. Moseley and Sardinha could get up to $1.5 million each.
That means the Reds could spend as much as $6 million on three players who have never played one pitch of professional baseball.
Add in the other recent bonuses paid to top draft picks (Ty Howington, $1.75 last year; Austin Kearns, $1.95 million in 1998 and Brandon Larson, $1.22 million in 1997), and add Henson and Melian's bonuses from the Yankees, and the Reds could have a whopping $14.5 million worth of players in their minor league system — apportioned to only eight players.
That's about the cost of two pretty good major league pitchers.
But the Reds have no choice; when you're trying to build for 2003, as Reds management is with the opening of Great American Ball Park, draft picks are crucial.
“You have to be creative. Sometimes you may have to trade players on the major league roster,” Bowden said, although that's not why Neagle was traded.
Until baseball makes some serious changes, things will just keep getting worse.
“The best way to do it is to try to get every club in the same revenue range,” Bowden said. “That will help with competitive balance.”
Said Hunsicker: “There are no easy answers.”
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Can baseball save small-market clubs?
