What Shift of Wild, Big-Money Moves from New York to LA Means for MLB
Never mind New York. The grand MLB party is in Los Angeles now, and the Angels and Dodgers are throwing it.
The Angels and Dodgers have more giant rooms full of cash than Scrooge McDuck, and they don't mind sharing it with anyone who has talent. The stars are out in force in Los Angeles, and seemingly all of them are well-paid.
The league is in no position to complain. According to BizofBaseball.com, MLB revenues increased to $7.5 billion in 2012, with an increase to $9 billion possible by 2014. With so much money being pumped into the game, it's good for baseball that two teams in the same area are willing to take it and invest it on the field.
It's a dirty job, and the Mets and Yankees aren't that interested in doing it. They're looking to be cheap, thus taking two big-money destinations for free agents off the map. Their respective fanbases can only pout.
But no matter. Players know now that the money is in Los Angeles with the Angels and Dodgers. With their spending, they've cranked up the buzz for baseball in an area traditionally ruled by the Los Angeles Lakers, not to mention upped the ante for their rivalry.
The buzz could soon come from the diamond rather than the front offices of both clubs. A good situation for the league will become even better if the Angels' and Dodgers' spending translates to wins.
Big spending didn't work the first time around for the Angels, to be sure, as a $150 million roster featuring big-money players like Albert Pujols, C.J. Wilson, Jered Weaver and (regrettably) Vernon Wells couldn't get it done in 2012.
But by adding 2010 AL MVP Josh Hamilton to the mix, they're fixing to find the success that eluded them in 2012 with a more expensive team. All they need is a little more pitching, and they have the tradeable assets to go get some.
Next to the Dodgers, however, the Angels look like low-budget punks.
In a span of less than a year, the Dodgers have gone from being a sorry mess of a franchise under Frank McCourt to being the envy of baseball under Magic Johnson and his uber-rich business partners. Their Opening Day payroll in 2012 was a little over $105 million. They now have over $206 million in salaries committed for 2013, and the majority of that cash is committed to players with the right amount of talent.
On paper, the Dodgers are clearly a championship contender. The Angels don't look quite as strong, but the Hamilton signing at least put them in the discussion.
Meanwhile in New York, the Mets and Yankees are keeping their checkbooks in their pockets and constructing inferior products. The balance of power in Major League Baseball is shifting from New York to Los Angeles in part because the two New York clubs are allowing it to happen.
The contract extension the Mets gave to David Wright is probably the extent of their capacity to be generous with their funds this winter. The plan, according to ESPNNewYork.com, is for the team's payroll to be right about where it was in 2012, in which case the club will be operating with a payroll south of $100 million.
For their part, the Yankees have handed out some rich one-year contracts this winter and should once again have a huge payroll in 2013, but the quality of the product they've put together with these short-term commitments leaves a lot to be desired. The Yankees won't be a bad team, but they don't look like any more of a legitimate World Series contender than even the Mets.
And then we all know what's going to happen in 2014.
Managing general partner Hal Steinbrenner's goal is to get the Yankees' payroll under $189 million by 2014, and his front office has since done everything in its power to make his wish a reality.
Granted, $189 million is a lot of money to work with. But in reality, the Yankees are only going to have about $100 million to work with thanks to the contracts of Alex Rodriguez, CC Sabathia, Mark Teixeira and Derek Jeter.
This could result in them losing free-agents-to-be Curtis Granderson and Robinson Cano, who the New York Daily News says will not be taking a hometown discount to remain with the Yankees.
And let's face it, you just know that the Dodgers are going to be all over Cano if he hits the open market next winter. He's a lot better than Mark Ellis, after all, and Ellis has a club option that the Dodgers can easily waive to create space for Cano.
That would make it official that the Dodgers are the new Yankees. For that matter, they're already making it rain like George Steinbrenner used to, and Magic Johnson even sounds like The Boss.
"We did this for our fans," said the former Lakers star after the club signed free-agent right-hander Zack Greinke to a monster deal, via the Los Angeles Times. "We feel...we want to win now."
Or maybe Angels owner Arte Moreno is the true next coming of the late Yankees czar. John Harper of the New York Daily News thinks so, writing that Moreno has precisely the same motivations that The Boss used to have. He's "as determined to make the biggest splash as he is to win a championship."
Neither the Angels nor the Dodgers are biting off more than they can chew in imitating how the Yankees were under The Boss. Per the Los Angeles Times, the Angels' TV deal is worth $3 billion, and it helped them lure Pujols, Wilson and now Hamilton. Also per the Times, the Dodgers are circling a new TV deal with Fox Sports that could be worth $6 billion.
The Angels and Dodgers also have national-TV money coming their way, so they should be able to maintain their high payrolls without falling into financial ruin. The buzz they've generated for Major League Baseball in SoCal should live on.
However, that doesn't mean they won't come to regret so much excess. As the Mets and Yankees can vouch, excess in baseball comes with certain complications.
It's easy to bemoan the cheapness of the Mets and Yankees, but both clubs have darn good reasons for wanting to save money. These reasons could serve as warning signs for both the Angels and Dodgers.
The Yankees and the Mets are paying the price of having too many bad contracts pile up on them. In the case of the Yankees, the $275 million contract they gave A-Rod in 2007 is a leech sucking the life out of them, and the contracts of Teixeira and Sabathia are also starting to look a little iffy.
The Mets are more in the clear with many of the bad contracts they gave out in recent years now off their hands, but the huge deals they piled up did more harm than good. They also have the added difficulty of operating under an owner in Fred Wilpon, whose wealth was wrecked by the Bernie Madoff mess.
The Yankees are doing fine financially, especially with news coming out recently about News Corporation's acquisition of 49 percent of the YES Network. They can spend if they want to, but it makes too much financial sense for them to be under $189 million in 2014.
Because they would be a repeat offender of the luxury tax, Joel Sherman of the New York Post noted that the Yankees can avoid paying a 50 percent tax by going under. Basically, they're looking to avoid paying $15 million for a $10 million-per-year player.
The Mets and the Yankees have decidedly different tales to tell, but the moral of the story is largely the same: Buying big-name players certainly does make for great buzz and could lead to success on the diamond, but the risk of running into problems down the line is very real.
Both the Angels and the Dodgers have to worry about their most expensive players becoming old and useless. Particularly the Angels, who have a lot of money committed to two sluggers who aren't getting any younger. They're hoping to win a championship while Hamilton and Pujols are still useful, and they're also hoping that their contracts won't prevent them from eventually extending Mike Trout.
The Dodgers must also hope that their big-money players age well, but they need to worry about luxury-tax penalties far more than the Angels do. The Dodgers are assured to be over the luxury tax threshold in 2014, and they'll presumably continue to be over it in the years to follow.
Per MLB's new CBA, the Dodgers will hit the 50 percent tax that the Yankees are trying to avoid after their fourth violation of the threshold. By then, they could make like the Yankees and look to get their payroll down.
If it comes to that, they could find themselves wrestling with the same dilemma that the Yankees are dealing with right now: How do you shed payroll and keep winning when you have large contracts on your hands that aren't worth it and can't be moved?
The Angels and Dodgers must be aware of the tremendous risk that comes with taking on so many large contracts, just as they must know about the potential pitfalls and penalties that may await them in the future. Awareness of potential problems, however, may not lead to an ability to handle them if they come to fruition.
If all goes south in Southern California a couple of years down the line, SoCal will no longer be the happening place in the MLB. The Angels and Dodgers may not be ruined by what they're doing now, but they could be scarred and left scrambling to patch up holes in leaky ships.
But just as time may wear down the Angels and Dodgers, it may build the Mets and Yankees back up again. The Yankees aren't going to be down forever, and they could get back to their old big-spending ways after 2014 following the reset of their luxury-tax status. The Mets have some decent young players coming up, and a couple of years of frugality could eventually give birth to a return to excess.
It's hard not to imagine a seesaw with New York on one side and Los Angeles on the other. The SoCal teams are in the rarefied air now, with the New York teams down and regrouping.
For now, we celebrate the rise of big-money baseball in Southern California. Later, we'll likely be celebrating the return of big-money baseball to New York. The fall of one side could mean the rise of the other.
But there's an even better possibility to consider.
What if the Angels and Dodgers do end up learning from the missteps of the Mets and Yankees and find ways to keep their payrolls high and the wins coming? What if they're able to do so while both the Mets and the Yankees fully regroup on the other side of the country?
If this happens, the balance of power will not shift. It will even out. There will be two superpower teams in New York, and two superpower teams in Los Angeles. The money will be plentiful, and the power struggle will be fierce.
And Major League Baseball will be very, very happy.
Salary and payroll information courtesy of Cot's Baseball Contracts.
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