Wednesday, February 21, 2007

the spending spree that wasn't

now that carlos zambrano's cotract for 2007 has been arrived at, there remains very little about the final 2007 roster that isn't known. there are likely to be moves around the fringes, of course, and possible disasters await in mesa. but the economics of the club are largely set -- and the dimensions of what has been accomplished in this surprising offseason can be measured. jim hendry's efforts have been touted as a "spending spree for the ages" -- but was it?

sadly, dear reader, no it wasn't. that may come as something of a shock to many, considering the endless publicity that followed in the wake of signing aramis ramirez and alfonso soriano -- after all, didn't the cubs spend some $300mm?

that trope, oft-repeated by many a sports journalist this winter, isn't nearly so true as one would like to think -- indeed, it is a case of a thing being too good to be true. what has been handed out are contracts whose total value will, over the next eight years or so, dispense that amount. but this writer would submit that the cubs, if they didn't spend any more per season than they have in 2005 and 2006 in nominal terms, were going to spend about $800mm over that span. all that's been decided is how $300mm of it is going to be allocated.

is that a payroll increase?

indeed, one need only view the latest missive at the newly-re-retitled another cub blog to see that the cubs' obligations for 2007 amount to about $104mm. that is an increase over the season opening outlay for 2006, which came in around $95mm -- but that of course was itself a significant cut from 2005's $104mm. indeed, the cubs haven't added to payroll at all from the 2005 level -- in fact, by the dubious virtue of inflation, they are in real terms spending considerably less than two years ago.

how can it be, in light of these massive signings? the accounting was accomplished by heavily backloading the contracts of virtually all the signees of these last months. jason marquis, for example, though being owed $21mm over the next three years, will draw just $4.75mm in 2007. ramirez will draw just $8mm despite being owed an average of $13.6mm a year -- soriano just $9mm from a contract that averages $17mm a year.

the reason why this was done can be argued, of course, but it would seem that the tribune company was unwilling to part with the beloved cash flow that eminates from this minor unit in a short term plagued with declining corporate profits -- but still wanted to do something to pump up a potentially flagging brand. and so the trick was turned, making today's performance tomorrow's fiscal problem, having their cake and eating it too.

of course, one of life's great lessons is that there is no free lunch -- you don't get to eat the cake and have it for long -- and for the cubs that means having some $71mm tied up in just six players in 2009 (soriano $16mm, ramirez $15.65mm, derrek lee $13mm, ted lilly $12mm, marquis $9.875mm, mark derosa $4.33mm). if one adds to that the potential salary of zambrano, the number approaches $90mm for seven players -- quite possibly leaving not very much at all to fill the other 18 roster spots.

one could further surmise that this was done precisely because 2009 cash flow is not anticipated to be the problem of tribco -- that it plans instead to rid itself the team long before that ominous day. or one could hope that the team plans on expanding its payroll out to a more appropriate percentage of its monstrous revenues -- which would be truly rare for tribco. or both. or neither.

but what one can definitely say is that this "spending spree" -- trumpeted from every rooftop this dreary winter by any public mouth that could be bent to shouting to maximum public relations effect -- wasn't a spending spree at all. it was an allocation decision -- and one with quite troubling implications for the not-too-distant future for the club.

there is a way out of the payroll crunch. should the cub farm suddenly, after many moribund years, spark to life and start producing the talented and productive youngsters that any vorp-efficient club must have -- but in a quantity that can fill not just a few positions but several -- the crunch would be wonderfully mitigated while the team could retain some significant hope of winning baseball.

it is not impossible -- but that of course is something of a long shot nonetheless, in spite of a logjam of major-league ready pitchers in iowa, with the cub farm overall languishing in expert opinion and having produced so little of value in the last 20 years. and it constitutes in some respects the most irresponsible gamble yet taken with the club under the pecuniary aegis of the tribune.

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