MLB: “Smart Money, Crazy Money!”

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.  .  .   SPORTS NOTEBOOK posts its columns Tuesday and Friday of each week. Ed. & Publ., Marvin Leibstone; Copy & Mng. Ed., Gail Kleiner.

EVERY year, financial wizards like Warren Buffet watch manufacturing and service-providing firms compete to be King Of The Hill, keying in on those that invest large in order to profit large, and on those that invest little and collar high profit. Ask these wizards if both strategies work to advantage, and they’ll probably answer, “Yes,” then massage their chins, and say, “Not always.”

Makes you wonder how either strategy applies inside one of the planet’s biggest money ventures, Major League Baseball.

Even a brief glance at 2012’s winningest MLB teams yields proof that spending large can have super-huge results. Nearly each of 2012’s 10 teams finishing the regular season with 88 or more wins has long been a franchise pouring more than $100 million annually into salaries and operational activities, while other teams have been spending much less.

Yet last year’s Oakland Athletics, a team among those that will be spending the least in 2013 (around $63 Million), won 94 games, only one less than the team that spent the most money in 2012 and that, in 2013, will again spend the most---the New York Yankees, its 2013 budget being close to $228 million.

For years, the Athletics have been a symbol of “lean and mean,” of least dollar for more than enough bang, which is why 2012’s last place team, the 55-107 Houston Astros (only 55 wins in 2012), will be the team spending less in 2013 than any other MLB club (approximately $26 million), and has chosen to follow many of the team-striving methods of the A’s general manager, Billy Beane, he of Moneyball fame.

The Tampa Bay Rays, they are another ball club that spent under $100 million in 2012 and managed to accrue 90 wins. The Rays will spend around $57 million in 2013, highest salary for LH David Price---$9.8 million. If the Rays end up with 90 or more wins this year, they’ll be the MLB club getting most per dollar spent.     

Still, of the 15 teams that continue to budget around $84 million or less per year, only three were well above .500 in 2012, the A’s, the Atlanta Braves (also 94 wins) and the Rays; and, 12 of the 15 were  the 12 clubs with least games won in 2012.

Much implied, then, is that big money can beat “lean and mean” in the first round, of MLB’s 30 clubs the A’s, Braves and Rays 2012’s exception.    

More puzzling is that investing high dollars in a single player isn’t always wise, often doing little for a team wanting win after win. It definitely wasn’t NYY money spent on IF, Alex Rodriguez, in 2012 that empowered the team for another post-season World Series opportunity, lost to the Detroit Tigers. For 2013, A-Rod will be the highest paid player in baseball, his salary around. $28 Million---he batted under .300 in 2012, partly due to a weakened hip. Last year’s World Series winning club, the San Francisco Giants, will this year spend a similar amount, “but for three position players instead of just one,” each with 2012 batting averages higher than .300, catcher Buster Posey, OF Hunter Pence, IF Marco Scutaro.

Odd, too, is that some of the marginal pitching staff of the Colorado Rockies will be earning lots more money than many of the team’s best position-players/batters that in 2012 performed in ways saving each starting hurler and receiver from full disgrace. The Rockies LH Jorge De La Rosa (still at the effect of an injury) will earn around $11 million in 2013, but All Star/.300+ hitter/OF Carlos Gonzalez will earn $7.9 million, and still super-hitter at 39 years of age/IF Todd Helton (the reigning face of the franchise), will receive around $6.5 million.

Last year’s MVP/triple-crown IF Miguel Cabrera of the Tigers will earn around $21 million in 2013, teammate IF Prince Fielder, $23 million, RH starter, Justin Verlander, $20 million, DH Victor Martinez, $13 million. That’s four players among 25 earning more than half of the Tigers 2013 budget, apprx. $148 million.

The only other team that will be spending more than $200 million in 2013 will be the Los Angeles Dodgers ($216 million, more than a third going to just four players). And, if 2012 repeats in 2013, the ball club getting least bang for total dollars spent will likely be the Chicago Cubs, set to spend around $104.3 million. The Cubs were second from the bottom last year, with 61 wins, 101 losses.  

An upshot is that were our nation’s top economists to analyze how money is spent in professional baseball, they’d surely be driven to hangovers from long hours spent at a local bar. There’s not the uniformity that they’d prefer to see, there’s too much risk here, not enough there, lots of cost/benefit ratios making very little sense, or cents. There’s monumental waste of revenue, there’s also excessive frugality.

For several years, MLB team-owners have been shouting about dwindling bottom-lines. Note to the game’s commissioner, “Maybe Washington’s budget-creating back rooms and Wall Street aren’t the only places needing the rational fix.”

END/ml