Friday, January 28, 2011

Could the Mets Sale Affect Baseball Salaries?

Mike Ozanian of posed an interesting question today:  Could the eventual sale of the Mets have an impact on baseball salaries?
"With their current roster the Mets cannot compete with Philadelphia for the NL East or even for a wild card playoff birth. There is no reason for fans to turn out at CitiField. Any savvy buyer knows that they will have to spend a lot of money to quickly improve the team and jack up attendance at ratings on SNY.
This means competition will heat up to sign free agents and other teams will have to either open up their wallets or be outbid by the Mets. After all, isn’t that how the late George Steinbrenner took New York back from the Mets 30 years ago? This is bad news for the other 29 owners but good news for Mets fans."
He certainly has merit, but it's all contingent on the Wilpons ceding ownership and control of the Mets to another bidder.   For the sake of argument though, let's assume that scenario comes true.

According to, the Mets are the third most valuable team ($858M) in baseball behind the New York Yankees and Boston Red Sox.  Any serious potential buyer will need to prove they can not only have enough money to purchase the team, but also secure financing in order to support it long term.  Furthermore, the new ownership will likely want to make an immediate splash by signing a high profile free agent in hopes of convincing the fan base that he (or she) is serious about securing a third Mets championship.  The easiest way of landing a major free agent is by overbidding for his services.  (Think:  Jayson Werth to the Nats.) This forces the competition to either match/improve their bid or drop out.  If the Mets overbid by enough, most teams will drop out.  If not, they could end up in a bidding war with another team (or teams), thus driving the price higher.  This could (and I stress the word "could") have an affect on comparable free agents for the next couple of seasons.  (Think:  Crawford's contract rate was set by the Jayson Werth market)

While this is a logical concept, it doesn't work in all, or even most cases.  During the 2000-2001 offseason, the Rangers grossly overbid (against themselves) for Alex Rodriguez.  Some in the industry worried his signing could set the new standard for elite players on the free agent market, but they were wrong.  In the ten years following A-Rod's landmark ten year $252M contract, only one contract has eclipsed it in terms of total dollars*:  A-Rod's ten year $275M extension he signed with the Yankees in 2007.  Furthermore, no player has received a contract exceeding $200M.  Albert Pujols is likely the only player who could receive a contract on par with A-Rod's in terms of total value or average annual salary.

* In 2007, the Yankees signed Roger Clemens to a prorated one year $28M deal.  This is the only contract to ever technically surpassed A-Rod's annual average salary.

While Ozanian's theory is not without merit, it remains to be seen whether an aggressive new Mets ownership would have a significant affect on baseball salaries league wide.  It's possible it could have a more localized effect (in terms of how it affects salaries in the National League of NL East), but it's also possible minimal effect would be seen.  Either way, it will be interesting to see how this all plays out.

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