When your fans’ rallying cry has become “the Pirates haven’t done anything either!” and your team’s moves have been surpassed by the announcement of a mascot, you know the Cold Stove has been unkind to your favorite franchise. Snow is piling up this morning in Cincinnati. Another polar vortex looms. Arizona and spring training seem like more than 2,000 miles and a month away. I feel another bout of off-seasonal affective disorder closing in.
So I’m going to write something positive.
To read this winter’s conventional wisdom about the Cincinnati Reds, dutifully repeated by the front office and others, you’d think the Reds don’t have enough money to operate a new hot dog stand, let alone take on salary through trades or free agent signings, or extend key players like Homer Bailey. If you read local reports you might wonder if the club is considering Austerity Über Alles! as the season’s slogan.
Thankfully, there’s considerable hope that the financial reality is different.
Last spring, in a 1,900-word article for Redleg Annual, I wrote that the Reds will add at least $100 million to revenues over the next handful of years. I carefully worked through the new national and local broadcasting agreements, the rapid growth in live digital platforms, higher attendance figures, occasional post-season windfalls and league revenue sharing. My conclusion was that the Reds could soon afford to operate like a $160-million payroll team, and that figure was conservative based on my (admittedly outsider) calculations.
When I wrote that, the Reds had spent an estimated $87 million in payroll in 2012. My view was (and remains) that they could reach the $160 million level by the 2017 season. The faster the Reds recognized and acted upon these favorable financial realities, the better off they would be relative to other clubs who were slow to adapt to the surging revenue streams.
The Reds seemed to validate that thesis when they unexpectedly bumped payroll to an estimated $107 million in 2013. There was no announcement of a higher target, no revised script by general manager Walt Jocketty, no change in reporting about the Reds being a small-market team and not having the money to take steps. The payroll just jumped in one year by roughly $20 million.
It’s yet to be seen whether the Reds will retrench around that budget or whether it was the first of similar-sized steps toward a considerably higher payroll. If you believe the former, then the Reds, indeed, don’t have the budget for sizable new commitments. If it turns out to be the latter, then the Reds can afford nicer things.
At a $160 payroll in 2017, the Reds could pay Joey Votto the $22 million he’s owed, throw in new contracts for Jay Bruce ($20 m), Mat Latos ($20 m) and Homer Bailey ($18 m), and still have $80 million to spend on the rest of the roster.
To be sure, those are enormous salaries, but consider the context. Even amidst the growing inequality in baseball generated primarily by varying local broadcast contracts, the Reds will be vastly better off in an absolute sense over the next few years. We shouldn’t discuss the Reds payroll as though it’s static when it’s likely dynamic.
That’s not to say the Reds can act carelessly. Just because they can extend those players doesn’t mean they should. The organization’s private judgement may be that Homer Bailey or Mat Latos (or Johnny Cueto etc.) isn’t worth one of those big contracts. That’s certainly fair and a reason not to sign them to spendy extensions. Maybe that’s why the organization didn’t take my advice and work out the extension with Bailey last off-season as a way to get a discount. But whether it’s Homer Bailey, Tony Cingrani and/or Robert Stephenson, the Reds have the resources to sign contracts like that going forward.
See, spending other people’s money is fun!