Win now, pay Later
The Dodgers opted to defer payments on some big contracts. The D-backs went down this road in their early days with mixed results. Plus: Why you can't blame legalized betting for the Ohtani situation.
TOP OF THE FIRST
The wage(r)s of sin?
I was shocked when I first saw tribal casinos as “official sponsors” of the D-backs.
And in the early days on MLB’s streaming service when they showed the local TV ads, and Foxwoods Resort Casino showed up — it seemed — between each half inning of Red Sox and Yankees games.
And when it became public knowledge that MLB had a stake in the daily fantasy site DraftKings.
And when Caesars opened a sports book in the restaurant across the plaza from Chase Field.
For decades, baseball distanced itself from sports gambling. Not any more.
So as we attempt to sort out the whole Shohei Ohtani-Ippei Mizuhara gambling situation/scandal, it is easy to blame the spread of legalized gambling and sports betting.
Journalists and bloggers have started already.
While I find the spread of legalized gambling, particularly sports betting, and MLB’s embrace of it unsettling, this scandal involves placing bets with a bookie operating in California.
In California, the laws are as firmly against sports gambling as you can get. You can’t even hold an NCAA basketball pool in your office. Not legally.
So this mess has nothing to do with DraftKings, BetMGM, Tipco.com, tribal casinos, or the rest of it.
Nada, zero, zilch.
HEART OF THE ORDER
Credit: Kirill Makarov | Dreamstime.com
Going for broke
Deferring salaries may help the Dodgers win a World Series or two. But the Diamondbacks’ experience shows the potential for pain that comes with the gain.
The Dodgers entered the 2024 season with a team payroll of $306.7 million.
And that’s not the half of it. Literally.
Over the winter, the Dodgers agreed to pay Shohei Ohtani $700 million for 10 seasons. But $680 million of that is deferred.
That’s on top of $115 million of deferred compensation for Mookie Betts’s $365 million deal, the $57 million of deferred money for Freddie Freeman on his $162 million contract, and Teoscar Hernández, who is only signed for one season, but will receive $8.5 million of his $23.5 million down the road.
The day before the season started — well for everyone but the Dodgers and the Padres who opened in Korea on March 20 — the Dodgers signed catcher Will Smith to a 10-year, $140 million contract with $50 million deferred.
The deferred salaries allow the Dodgers to avoid paying some luxury taxes and build a strong roster now.
It is an approach that has been tried in such a big way once before — by the Arizona Diamondbacks — and led to a World Series title and some lean years.
In the deep end
When Scott Brubaker suggested putting a swimming pool beyond the fence in the right field at the Diamondbacks’ home field, he incurred the immediate wrath of his boss CEO Jerry Colangelo.
“Jerry didn’t like the idea at all,” Brubaker recalled for me years later. “He didn’t want to lose the seating.”
Brubaker was the team’s vice president for marketing for the team and Colangelo’s son-in-law. But Colangelo didn’t kick the young executive out of the family, and he warmed to the idea eventually. The pool became the signature feature of the Bank One Ballpark when the team opened play in 1998.
As the franchise prepared for its first season, the Diamondbacks’ brain trust made a couple of miscalculations. The pool was not one of them.
One of Colangelo’s biggest worries before the first season was finding enough seating for the tremendous demand. They built the ballpark to hold more than 48,000. That’s 8,000-12,000 more than the team has needed for most of its existence.
The team drew well in the first season, attracting 3.6 million despite a 65-97 record.
The D-backs sold 36,000 season tickets that first season. By the time the season ended, it was obvious that season ticket renewals were not going well. The D-backs decided they needed to raise ticket prices to make up for the shortfall in revenue.
Bad move.
They announced the increase on Fan Appreciation Weekend.
Worse move.
Changing course
At this point, Colangelo decided he needed a new strategy. The idea had been to build the team slowly, assuming the fan base would be willing to wait for a contender.
Colangelo, who had been running the NBA Phoenix Suns since 1968 — first as general manager, with two stints as coach, then as owner and general manager — had never been afraid to make bold moves. He felt he needed to win now to preserve the enterprise.
So the D-backs added pitchers Randy Johnson, Todd Stottlemyre, outfielder Steve Finley, and acquired Luis Gonzalez in a trade. The team won 100 games, one of the greatest improvements from one season to the next, and captured the NL West title. But attendance fell to just over 3 million.
Johnson’s starts at home games in Houston and Seattle saw sizable bumps in attendance, known as the Randy Johnson Effect. But the Phoenix market was immune.
The team slumped on and off the field in 2000, finishing 85-77 and growing 2.9 million. The D-backs traded for Curt Schilling late in the 2000 season and signed first baseman Mark Grace in the off-season.
Pay later
It was no secret the Diamondbacks were not doing well financially.
During spring training in 2001, ten players — Randy Johnson, Matt Williams, Todd Stottlemyre, Brian Anderson, Curt Schilling, Jay Bell, Tony Womack, Steve Finley, Luis Gonzalez, and Armando Reynoso — agreed to defer their salaries.
“This is not a money story,” Colangelo, who was tired of money stories about his baseball team, told The Associated Press. “What this is is a human interest story about the character of a bunch of guys who were willing to make sacrifices.”
As they used to say on those MTV/VH1 “Behind the Music” bios of rock stars: “The good times wouldn’t last.”
The players who agreed to get paid later were veterans who had not won a championship. This meant the team wouldn’t make deals to save money at the expense of postseason hopes.
Later comes quickly
And it worked. On Sunday evening, Nov. 4. 2001, Gonzales hit the ball over a drawn-in infield and gave the D-backs a 3-2 victory over the New York Yankees in Game 7 for the World Series title.
As they used to say on those MTV/VH1 “Behind the Music” bios of rock stars: “The good times wouldn’t last.”
The next Sunday morning, the top headline on the front page of The Arizona Republic read: “D-Backs seek cash boost” with a deck that explained: “Will raise ticket prices, court new investors”
The upshot was Colangelo wanted to raise about $160 million. This meant his existing partners would have to pony up more for a smaller share of the enterprise.
Colangelo had put up only a small part of the cash for the franchise, but he ran the D-backs on OPM — other people’s money. He was the managing general partner.
The World Series victory no doubt helped Colangelo get the cash he needed.
One existing investor balked. Arte Moreno, an advertising executive and real estate investor, offered to buy out Colangelo, but Colangelo declined. So Moreno sold his stake and wound up buying the Angels in 2003.
The end for Colangelo
The Diamondbacks won 98 games and repeated as NL West champions in 2002, and Arizona saw its first increase in attendance, drawing almost 3.2 million. The D-backs slumped to an 84-78 record in 2003 and attendance fell to 2.8 million.
Then came 2004. Colangelo sold his stake in the team, then was fired in August as Ken Kendrick took control of the franchise. By this time the team was on its way to a historically bad season with a 51-111 record. If the D-backs had traded Johnson during that season — as was widely speculated — Arizona might have challenged the 1962 Mets’ record of 120 losses in one season.
The D-backs drew 2,519,560 that season. They have not drawn that many in any season since.
However, up until the pandemic, the team managed to draw at least 2 million fans every season. Not great but not terrible, usually ranking between 15th and 20th among the 30 MLB teams. The D-backs were able to build a stable fan base from the team’s early success.
D-backs CEO Derrick Hall told the newspaper the debts were a "huge challenge because the committed dollars are real."
Coming off the first pennant since 2001, the Diamondbacks were more aggressive this off-season in the free-agent market than at any time in the post-Colangelo era. They re-signed left fielder Lourdes Gurriel Jr. to a three-year deal for $42 million, signed starting pitcher Eduardo Rodriguez for $80 million for four years and starting pitcher Jordan Montgomery to a one-year $25 million deal.
The team entered the season with a payroll of around $170 million, a record, and Kendrick told The Arizona Republic the D-backs might add payroll at the trade deadline if needed.
That was then; this is now
So the whole spend-and-win-now strategy had a definite downside for the Snakes. Will the Dodgers be hamstrung for almost two decades in the future because of the deferred salaries?
Not necessarily.
MLB is better off economically than it was in 2001 when the teams claimed they collectively lost about $500 million — the MLB Players Association disputed this — and the owners voted to eliminate the Twins and Expos.
Statista estimated the D-backs’ team revenue in 2001 was $127 million. Forbes estimates the Dodgers’ revenue last season at $581 million.
Guggenheim Baseball Management, which owns the Dodgers, seems to have deep pockets. Controlling partner Mark Walter has a net worth of about $5 billion.
Finally, the Dodgers’ moves are not being made out of desperation.
Still, wouldn’t it make more sense just to pay as you go?
SHORT HOPS
The St. Louis Star had a complete report in print that afternoon.
An unforgettable game — that’s been forgotten
In their season opener, the Diamondbacks scored 14 runs in the third inning of a 16-1 win over the Rockies. The 14 runs is an MLB record for most runs in an inning of a season opener.
When the D-backs got to 12 runs, TV announcer Steve Berthiaume said that it was the most a team had scored in one inning of an opener since the Cleveland Indians scored a dozen in one frame against the St. Louis Browns in 1925.
So just for the heck of it, I checked on my phone for some details about that opener in 1925.
It had to be one of the more bizarre games in MLB history.
Unlike the D-backs’ blowout of the Rockies, the Indians-Browns game was a competitive affair. The Indians prevailed 21-14 and trailed going into the eighth inning.
This came after the host Browns had come back from a 7-1 deficit and held what seemed a safe 13-9 lead before the 12-run outburst.
Player-manager Tris Speaker hit a grand slam to put Cleveland ahead for good.
The Browns had 20 hits, including nine doubles, to the Indians’ 19. But the Indians had four homers, and the Browns committed 10 errors.
The Star reported that McManus married Miss Norma E. Wahl at 9:30 the night before.
Player-manager George Sisler led the Browns with four miscues. Marty McManus and Herschel Bennett chipped in with three apiece.
McManus had reported late to spring training after a holdout with owner Phil De Catesby Ball, and the Post-Dispatch speculated that his lack of preseason preparation might have affected his fielding.
In fairness to Ball, if there was an external cause for McManus’s poor fielding, it might have been something else. The Star reported that McManus married Miss Norma E. Wahl at 9:30 the night before.
Bennett was playing because Joe Evans was sick with flu and Baby Doll Jacobson was holding out for more money.
It was easy for fans to blame the owner. And they were already in a mood to let Ball have it.
The St. Louis Star and the St. Louis Post Dispatch estimated the crowd at 18,000. Sportsman’s Park held around 24,000 at the time.
The Akron Beacon Journal mentioned that “the stands were not nearly as packed as was to be expected for an opening game.”
The Beacon Journal reported that Ball was hissed at when he left his box, presumably during the Browns’ eighth-inning disaster.
Fans visited the press box after the eighth inning, asking the writers to pressure Ball to sign Jacobson, the Post-Dispatch’s J. Roy Stockton wrote.
“A Post-Dispatch reporter asked Ball Sunday if he would go so far as to consult Sisler to the extent of asking him whether he wanted Jacobson signed,” Stockton added. “ ‘No sir,’ Ball replied. ‘I’m running this ball club. And from now on it will be run (in) a business-like fashion.’
“Ball is a fighter with an iron will. The uproar yesterday would make him more determined to stand pat. Even empty stands would not influence Ball.”
Finally, all these runs, hits, and errors were difficult for the official scorer to keep track of. The Beacon-Journal reported that the poor fellow, who the paper did not name, was on his first day on the job — and his last. He was fired.
This is about swimming — and it’s about baseball
ASU won its first NCAA men’s swimming title on March 30. Two days later, Texas hired away ASU’s coach, Bob Bowman.
Texas is moving from the Big 12 to the SEC. ASU is in the Pac-12 and heading to the Big 12.
Simply put, SEC and Big Ten schools have more money for coaches and programs. Football and men’s basketball may bring in the bulk of the revenue, but there is more money to spend on the other sports, as well.
The Pac-12 is the most successful baseball conference in college baseball. Pac-12 schools have won 29 College World Series titles. And ten of its schools are headed to the Big Ten or Big 12 next season. Great for the new Big Ten schools.
No-so-great for the others.
It is not the end of college sports. But it is a new chapter that many of us will not enjoy.