Thursday, June 12, 2014
How much for a front office?
We talked about this a while ago, but Lewie has another article on the subject over at Deadspin.?
Basically, the whole thing can't add up if taken to its logical conclusion. If you have 1000 wins from MLB players, and then you have more wins from minor leaguers and then more wins from the front office, suddenly, you've got alot more than 1000 wins to value. And if you use the free agent dollars per win (7MM$ according to Lewie), suddenly, there's well over 10 billion$ in value, which is more than all the revenue MLB collects.
The problem is "the last guy" scenario: he's the guy who gets to leverage everything that's been built up. Say for example that this is the end of 2000, and a young Ichiro is a complete free agent. And let's say he says he will only sign for one year. What's that going to be worth? First, the only teams to bid on him will be the contenders (or more accurately, those on the highest $/win curve). Secondly, they will open the vault as Ichiro gets to absorb the higher value per win that those teams are operating under (for the 2001 season).
But, if MLB has decided that the 2001 season was going to be a full redraft of every player, even those signed, then what happens? Well, Ichiro would make far far less. He's not leveraging anything. He's in the same boat as Pedro, Bonds, ARod and everyone else. There may be some strategizing for players to leverage each other (think Miami Heat) to maximize $/win, but realistically, the market is going to behave pretty rationally.
So, I'm not a big fan of these "each win" is equal to "that amount". It's only true given the stable nature of the landscape, and so, can only apply to these very last few players or GMs signed. But you can't extrapolate that to all players, because suddenly, you'll have over 10 billion$ in salaries to pay out. The math doesn't work, because you are extrapolating beyond what the context allows.
This is why Charlie Finley was right, that the best way to lower the salaries of the top-end salaries is to make everyone a free agent. Everyone only signs for one year, and that prevents the new players from leveraging the landscape of the existing players.
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