Economic state may affect spending
Big names head toward free agency with impact unknown
Manny Ramirez had an October most players fantasize about: In eight postseason games he batted .520 (13-for-25), homered four times and drove in 10 runs.
If you'd told me when the playoffs began Manny would make this kind of a mockery of opponents' pitching, I'd guarantee the Los Angeles Dodgers would be heading to their first World Series since 1988.
That, of course, won't happen. The Phillies are going to October's promised land.
The Dodgers are off to the golf course; Manny is headed to a mind-boggling payday.
Or is he?
Ramirez tops the list of free agents who swing bats for a living and it remains to be seen if the Dodgers will open their vaults to keep him. Considered a distraction, if not poison, the Boston Red Sox had enough of his antics and traded him to the Dodgers on July 31.
Not only was the enormously talented Ramirez born again in Hollywood, his new persona and bat led them to the National League West title, an upset of the favored Chicago Cubs in the Division Series and the loss to Philadelphia in the just-completed NLCS.
As a free agent he's probably looking for something that compares to the 10-year, $275 million deal the Yankees' Alex Rodriguez has. But at 36, he won't get that many years.
Even more important, though, is what effect the USA's financial meltdown will have.
Economic uncertainties facing virtually every professional sports team, every player and, of course, each and every fan undoubtedly will have a trickle-down effect during baseball's offseason.
And unless there's a dramatic reverse, the economic downturn will carry over well into the 2009 season.
Premier free agents such as Ramirez, C.C. Sabathia, Ben Sheets, Mark Teixeira, Francisco Rodriguez and Derek Lowe will obviously get lucrative contracts, but teams are expected to be more cautious, if not conservative, in locking up those not considered superstars.
"The majority of the teams should not be spending outside their means," says former New York Mets and Baltimore Orioles general manager Jim Duquette, now an MLB.com analyst. "Payrolls should be attached to revenues. Some teams must factor in potentially serious declines in revenues."
Scott Boras, who represents many of the game's top players, including Ramirez, Teixeira and Lowe, believes revenues of 2008 give owners "the ability to advance their businesses for 2009. Since those were record revenues, every team, whether it be clubs receiving revenue sharing, or clubs with extraordinary seasons at the gate, trickle-down effects of a recession have historically not dramatically affected baseball.
"Certainly, in the current circumstance there are no signs baseball will be affected," he says. "If so, it won't be something club owners will be able to approximate until after the 2009 season."
Commissioner Bud Selig refuses to hide behind adjectives and rhetoric when discussing the situation.
"Yes, I'm concerned," he says. "Gross revenue for the sport is at an all-time high. But, plenty of factors jeopardize that stability."
MLB's gross revenue for 2008 is over $6 billion.
With the credit crunch and other economic downturns in full bloom, attendance began to sag late in the season. The total of 78,614,880 fell short of 2007's record of 79,503,175.
Selig had hoped baseball would reach 80 million for the first time, but considers the 78.6 million "a tremendous accomplishment, given the uncertain economy" and weather problems teams had to endure during September.
"We need to protect our ticket prices," Selig adds. "This is family entertainment. I tell the clubs this all the time. I think a lot of clubs have; I think there are some clubs I'm obviously a little concerned about.
"It's something we have to concern ourselves with the future. We should be very careful not to get too cocky and overprice ourselves."
Players union chief Don Fehr says "we don't know how the economic problems will affect baseball. Historically, the sports industries have been resistant to most economic downturns, but we're in an atmosphere right now I haven't seen in my lifetime. We have to do our best and the future will take care of itself."
Smith College professor Andrew Zimbalist, an authority on baseball economics who's written several books on the subject, believes the economic collapse will have broad impacts throughout the economy.
"In Major League Baseball," he says, "the effect will be seen in lower demand for tickets variously resulting in diminished attendance as well as lower price points, a reduction in advertising and sponsorship dollars, including naming rights for stadiums."
Zimbalist adds that financing will be more expensive for facility renovations and construction projects. He also believes "more parsimonious capital markets should dampen franchise prices."
That remark comes at a time when the Chicago Cubs' coveted franchise remains for sale, with estimates of the price approaching $1.3 billion.
"The good news is that MLB is in the middle of already-negotiated long-term media contracts and has a head of steam behind it that will help mute what will be devastating effects elsewhere in the economy," Zimbalist says.
During the Great Depression, baseball was a great soothing factor for the general public.
Radio was just coming in as a popular way to experience baseball during the Great Depression in the 1930s, and it was just about the cheapest way for people to be entertained. For obvious reasons, attendance at ballparks plummeted, with a few exceptions like when the Yankees were in town or when a handful of night games was staged. Radio was the key then and drew fans to the game during those tough times.
The internet may be the "radio" of this era.
Boras says "the great thing about baseball is when it comes to the entertainment dollar it is the least expensive professional sport. And even if the family does stay home the game may be watched on the internet and those dollars have dramatically increased the revenues of the game."
For selfish reasons Boras refuses to believe owners will back down on signing premier free agents.
"For most owners in baseball the success of their franchises and the dollars coming in allow them to operate certainly at the standards they're at," he says.
He's also quick to point out that the Los Angeles Dodgers have earned an additional $12 million in ticket sales, parking, concessions, etc., since Ramirez rejuvenated the team when he was obtained July 31 from the Boston Red Sox.
"It's truly good business to attract franchise players and to build their teams so they're in the hunt every year," he says.
Manny Ramirez fits that description.
Hal Bodley is the senior correspondent for MLB.com. This story was not subject to the approval of Major League Baseball or its clubs.