March 4, 2009

6-4-3

I Will Sell This House!

by Gary Huckabay

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In the first of several 6-4-3 conversations, BP's Gary Huckabay sat down with one of baseball's leading agents for a conversation about Manny Ramirez and his observations about the impact of the economic downturn on the industry.

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Gary Huckabay: Thanks for taking the time to talk with us. So, I don't really know where to begin the conversation, largely because I don't really know all of the facts, and I don't know that anyone really does. I guess my question is this: What's going on with the Manny Ramirez situation?

Anonymous Agent: I think that Scott and Manny think they took one gamble, but in fact, lost another one. The playing field has shifted against them, but it has little to do with the negotiations. The economic environment has deteriorated so significantly that accommodating a deal of the magnitude that Ramirez is looking for is very difficult for any team.

GH: Do you think that Boras and Ramirez can get one of the deals that they've supposedly passed on earlier?

AA: I'd be surprised. I think they had a chance to get ahead of the collapsing economy and sign before the fear of a lousy 2009 and 2010 set in, but now that the news leads with disaster every day, and season-ticket renewals are coming in low, everyone's budget has been slashed. The Abreu and Cabrera deals are, I think, more instructive about where the market is than anything else.

GH: OK, so it's kind of like selling your house in this market?

AA: Sure. We're on the downslope. If you chase the market, you probably don't sell at all. I don't know if the window of opportunity is still open for Manny to get somewhere near where he wants.

GH: How much of it has to do with Manny's baggage?

AA: I don't know that his baggage is really all that bad. No question that he's not a perfect ballplayer. But there's also no question that he's one of the best right-handed hitters of any generation. In the field and clubhouse, he's a disaster, but it's not like that's a surprise. That didn't cut $5 million a year off his value between the end of January and now.

GH: So where does he end up, and for how much money?

AA: I don't really know, I could only speculate. I do know that the public's view isn't usually very insightful. A lot of players, once they've earned enough money to live on forever, just want to be in a good circumstance where they can play and win. They all want to win. I don't know Manny's view of what he wants. Maybe he doesn't know himself. I think he'll end up wherever he wants to. Maybe the Dodgers can't make a deal work at $22 [million] a year, but probably ten teams could make a deal work at $15 [million], and if they're contenders, and Manny likes the feel of the place, he ends up there.

GH: Nice dodge. Can I pin you down?

AA: I'd give you an answer if I thought I had one. I really don't know.

GH: Subjectively, what will we see this year in baseball that's likely to be different because of the economic circumstances?

AA: For my clients, I talk to lots of people, and the thing that strikes me is not so much the economic downturn itself, but the uncertainty that it has created. Things are taking longer. Definitive answers are hard to come by. Everyone seems to be waiting for something to change or some event to happen. I don't know what that event would be, but there's definitely uncertainty, and some sort of apprehension. And, be fair, that's really a question I'd ask you.

GH: Do you think that arbitration might become more of a driver of salary inflation than free agency, at least in the short term?

AA: I would take issue with your label of salary inflation. Profits for teams are way up. It's not like G&A expenses are on the climb. People are coming out to the park to see the players, not the owners.

GH: OK, I'm going to cut you off there. How about salary increases for the deserving, oppressed gulag workers that we know as the players?

AA: My focus isn't really on that right now. But if things go down 20 percent a year for two or three years, sure, that will be one more piece of information to include in a case, should it come to that. I don't think that'll be a big factor, though. There's not really that many cases, and educating the arbitrators on changing economic environments isn't difficult. They're not fools.

GH: OK, here are some random questions. Which team is in the worst trouble?

AA: Oakland. That's easy. They need a new stadium, and they're not going to get one. The economy up there is decimated, they're the second child in the market, and the disposable income available to them up there is just brutal.

GH: But it's not from a talent perspective?

AA: Well, it's not that simple to untangle everything. Every team is limited by their revenue, and their revenue is dependent on a bunch of factors. Right now, it's very difficult for a good outcome to happen for those guys. It's going to be a tough year or two, maybe more. I just think they're particularly vulnerable to the economic downturn. The state is out of money, the city's a complete sinkhole of unemployment, crime, and decay, and I just don't see them drawing fans, money, advertisers, corporate partners, or any sort of support for a new stadium. They're in danger of becoming just background noise.

GH: Worse than, say, Kansas City or Detroit?

AA: Detroit's economy is certainly in trouble, but at least the new stadium is there. Kansas City is already just background noise. I feel bad for them. There are a lot of good people there, and they deserve better circumstances.

GH: Thanks for sitting down with us.

Gary Huckabay is an author of Baseball Prospectus. 
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