Wednesday, August 12, 2009

Wanted: Better Blue Jays owners

One of the most interesting themes around the Blue Jays lately is the discussion of how their ownership has changed [Stephen Brunt, The Globe and Mail] since the death of Ted Rogers. Rogers CEO Nadir Mohamed recently said the company remains committed to the Jays in a conference call, but talked of "bringing costs in line" [Jeff Blair, The Globe and Mail]. Those comments, as well as the recent trade of Alex Rios for nothing [Bob Elliott, Toronto Sun] and Scott Rolen for prospects, have led to speculation that Rogers may sell the team, as well as plenty of indignation over the team being run like a business.

However, that indignation is misplaced in my mind. There's nothing wrong with running a team like a business; after all, a business-driven approach led to Billy Beane's Moneyball strategy in Oakland. That exact approach is more difficult to execute these days, but the business principles behind it of finding undervalued assets, developing them and then selling them for more than their true value still hold true. In fact, they often apply across sports; see Mike Gillis' "Moneypuck" plan with the Vancouver Canucks.

The problem is that Rogers is currently approaching the problem from the wrong end. What they see is declining revenues. Perhaps the best example is the rapidly falling attendance) [Sports Business Daily]. The Toronto Star's Garth Woosley wrote that the Jays' average home attendance is the 25th-worst in baseball this year and that they're the worst draw in the majors on the road. Now, the Jays' attendance hasn't always been bad, even recently; Baseball Reference indicates that they were in the upper half of the AL for the last two years and eighth the year before that.

The apparent solution for Rogers? Bring their expenses in line with their revenues. Reduce payroll to a level that will allow them to make a profit despite diminished attendance. You have to think that's at least a factor [Drew Fairservice, Ghostrunner on First] in the deal that sent third baseman Scott Rolen to Cinncinnati, even if general manager J.P. Ricciardi pulled a song-and-dance about "personal reasons" [Robert MacLeod, The Globe and Mail] (where have we heard that one before?). Moreover, they'll actually only save around $5.25 million thanks to sending cash to the Reds in the deal, as Ian Hunter of Blue Jay Hunter reported on Twitter. Still, from a fire sale point of view, it's a start. The Rios trade is another logical step in that direction (Jeff Blair, The Globe and Mail), especially as it's being called "the largest salary dump in MLB history" [Buster Olney,]. The real revelation of their intent will come this winter, though, when they have to make decisions on again trying to trade Roy Halladay and other veteran players.

In my mind, though, cutting payroll to match revenues will only beget a vicious cycle. Toronto is not a market where most people go to view talented prospects or enjoy a day at the ballpark; Toronto fans tend to get behind winning teams or teams that have a buzz around them. The best example is the Toronto Argonauts; during their Grey Cup campaign in 2004, they drew a ton of interest, but they've struggled since then and are barely noticed in their home market these days. The Raptors are also a strong case in point; they attracted relatively little interest during the early years when they weren't all that good, but have been coming on strong in recent years with a couple of playoff runs. Last year's step back hurt them a bit. It's a similar story with Toronto FC; sure, they haven't acheived much on the field yet, but their fans have been incredibly restless considering how new they are to the league. Even in the first season, there were plenty ticked off that they weren't already in the playoffs, and that discontent has grown over time. That's motivated the team to add older veterans like Dwayne DeRosario in hopes of winning now.

NFL International vice-president Gord Smeaton gave me the perfect quote on this when I interviewed him for the Queen's Alumni Review last fall about the NFL and their games in Toronto. "Toronto isn't a sports city," he said. "It's an entertainment city." To me, that's a perfect way to describe it. Sure, there are plenty of diehard fans who will go to games whether their team is awesome or atrocious, but they're not the ones most important to the bottom line. The difference between making money and losing it are the fans who show up only when there's something to see, and those fans are a significant force in Toronto.

Now, the Leafs are largely an exception to this, as they get plenty of interest and support even when they're awful. Part of that's due to sheer demographics, though; there are so many diehard Leafs fans in the area that there's tremendous demand for tickets regardless of how they're playing. However, for many years they stuck to the "middle way" of doing enough to make the playoffs but not enough to win it all, never really taking time to rebuild; in my mind, that was at least partly due to business-driven fears of what would happen if they ever missed the playoffs. Seeing as MLSE's largest stakeholder is the Ontario Teachers' Pension Plan, there's a good reason one of the best Leafs' sites out there is called Pension Plan Puppets. Ironically, since then, the Leafs have taken several steps in the right direction, hiring general manager Brian Burke and going into full rebuilding mode. They're still getting great fan support, and they'll be good again in the future.

Unfortunately, the Jays under Ricciardi have adopted the Leafs' old business plan; do enough to keep fans coming, but never enough to contend. They never increased their payroll to a level where they could compete with the Yankees and Red Sox in the present, but they were just as unwilling to go into a rebuilding mode and try and compete with cheap prospects a few years down the road. The middle way is inoffensive, as the team's always good enough to offer false hope (see their hot start this year) despite their lack of accomplishments. Moreover, it gives some fans a smug sense of superiority; "Well, at least we're not as bad as the Orioles or the Pirates!" That is misplaced; those organizations may be worse at the moment, but they're attempting full-fledged rebuilds and could be very good down the road. Look at Tampa Bay's turnaround last year. Meanwhile, the Jays persist in the long journey towards mediocrity.

There is perhaps some hope, though. If the team is sold, new owners may be more willing to invest in building a solid franchise. Even if Rogers hangs on to them, they may not be as tight-fisted as many fear. Toronto Sports Media reported that Prime Time Sports host Bob McCown said last night that Ricciardi should be gone by the end of the year and the payroll next year would jump to $100-120 million. With the Jays' promising young pitchers, that might just be enough to contend. A contending team with a new general manager would likely restore the fans' faith and dramatically increase attendance and interest (as well as ratings on the Rogers broadcasts of Jays content on The Fan 590 and Sportsnet), paying for itself and more in the process. There is a risk, though; if that money isn't spent wisely (hello, Vernon Wells!), the team could be worse off than before, with a losing record, lacklustre attendance and a massive payroll. I can't see the cautious suits at Rogers making that kind of a gamble on their own, but interim president Paul Beeston might be able to convince them; after all, Beeston was there during the glory years and knows just how well the city will support a good baseball team. He also knows what it takes to build a winner. If this payroll increase is in fact the case, the Rios deal might actually make some sense, as it would give the Jays more room to maneuver [Dustin Parkes, Drunk Jays Fans]. Given Rogers' track record, I'll believe it when I see it, though.


  1. If the Jays use the money they saved on Rolen and Rios to give Halladay an extension, then I'm happy. But I have a sinking feeling that it will go towards signing some aging free agent slugger (Jason Giambi perhaps?).

  2. Very true, Ian. A Halladay extension would make me very happy, even if the price was Rolen and Rios. I don't see it happening at the moment, though, and Giambi's a perfect fit for the Ricciardi model: overvalued and on his way down.

  3. "The Ricciardi model" is actually more like drafting young talent. See their pitching staff for proof.

    But I get it; signing B.J. Ryan, Frank Thomas and Vernon Wells now makes those contracts "the Ricciardi model." Right.

  4. Also: see Adam Lind, Aaron Hill, and Travis Snider.

  5. And Rolen has come out and said that he wanted to be back home, in the Midwest, so what's this nonsense about Ricciardi's "song and dance"?

    I don't know why I bother.

  6. Rogers wants the NFL. The NFL historically wants its owners to only have a football team. That might be their angle.

    From a baseball perspective, Ricciardi is a side issue. He is out of there in October and Alex Anthopoulos likely becomes the straw man for all the people who are angry at the Blue Jays because they can't get mad at the Leafs.

    Andrew, I also thought you would be above cracks like the one about Giambi. If the Jays didn't pick up Bobby Abreu, they are not adding Giambi. Besides, unlike 2007-08 they have young players who will be ready to take 1B and DH slots (Lind, Snider, David Cooper).

  7. The Blue Jays are in a weird place, in that J.P. should tear down and rebuild for three to four years from now, but J.P. definitely won't be around that long. I think Keith Law or some of the BP guys called this a moral hazard.

    While he hasn't done anything ridiculous this year, I think his work the past couple years - the huge contracts to Ryan and Burnett - have damaged the team a lot. The Jays don't have as wide a margin of error as some other teams out there.

  8. Excellent point on J.P., Steve. The contracts are certainly a big issue; I enjoyed Joe Posnanski's piece today where he talked about calling bad contracts "Ricciardis". Those ill-advised contracts have certainly hurt the team. Good point on him not being around to oversee the rebuilding as well.

    Neate, good point on the NFL. Rogers can't actually own most of an NFL franchise though, thanks to the individual provisions, so I'm not sure it would be such a big deal if they had only a minority stake. I could see them selling because of that if it became an issue, though. Also, for the record, I wasn't saying they would sign Giambi; just that signing him would fit right in with some of Ricciardi's other moves. Ricciardi isn't solely to blame for the Jays' struggles (the point of this piece, after all, was about Rogers), but he isn't innocent either. A good GM would have done a better job of developing prospects and handing out contracts, leaving the Jays in a much better situation than their current one. Ricciardi's Middle Way must bear some of the responsiblity for the Jays' problems in my mind.

  9. @eyebleaf: True. J.P. and his staff have proven able to find talent from time to time. They've also done plenty of whiffing, though, both in the drafting and scouting departments. He's not the league's worst GM, but in my mind, he should no longer be in charge in Toronto.

  10. Fair enough, Andrew. You know me, I love the back and forth, and I love your detailed and thoughtful writing. Cheers.