Baseball BeatJune 16, 2008
State of Major League Baseball
By Rich Lederer

Maury Brown, the Founder and President of the Business of Sports Network (including the Biz of Baseball), asked a number of baseball executives, writers, and analysts to comment on the state of Major League Baseball in 2008.

I was honored to serve as a participant, along with Peter Abraham (The Journal News and LoHud Yankees Blog), Chuck Armstrong (President, Seattle Mariners), Kurt Badenhausen (Forbes), Alex Belth (Bronx Banter), Tyler Bleszinski (Athletics Nation), John Brattain (THT, MSN Canada, Baseball Digest Daily), Craig Calcaterra (Shysterball), David Chalk (Bugs and Cranks), Fred Claire (Former Executive VP and GM, Los Angeles Dodgers), Jerry Crasnick (, Ken Davidoff (Newsday), Jeff Erickson (RotoWire), Brent Gambill (MLB Home Plate, XM Satellite Radio), Kurt Hunzeker (Active Marketing Group), Kevin Kaduk (Big League Stew), Jonah Keri (,, New York Sun), Jordan Kobritz (Professor Sports Management, Former Minor League Team Owner), Tim Lemke (Washington Times), Tim Marchman (New York Sun), Michael A. Neuman (Amplify Sports and Entertainment), Jeff Passan (Yahoo! Sports), Dayn Perry (, Baseball Prospectus), David Pinto (Baseball Musings, The Sporting News), Todd Radom (Todd Radom Design), Ken Rosenthal (FOX Sports), Joe Siegler (Ranger Fans), Charlie Weigert (CDM Fantasy Sports Corp.), and Andrew Zimbalist (Sports Economist and Author).

My contribution was as follows:

Despite major differences in revenues, the competitive balance in baseball has improved of late and is likely to tighten up even further over the next several years. This is great news for Major League Baseball.

The primary reason for this sea change is that more teams are signing younger players to multi-year deals than ever before. This new philosophy should prove advantageous for smaller market franchises and less advantageous for larger market teams because lower payroll clubs will keep their best players for a longer period and organizations that have relied heavily on free agents in the past will have fewer quality choices in the future.

Since the beginning of the year, more than a dozen young stars have been signed to long-term contracts that buy out their arbitration years and one or more free-agent seasons. To wit, the Colorado Rockies made history this year when they signed shortstop Troy Tulowitzki to a six-year, $31 million deal, the biggest contract ever given to a player with less than two years' experience. The Milwaukee Brewers topped that deal by giving Ryan Braun, the 2007 NL Rookie of the Year, an eight-year deal worth $45 million. Sandwiched between those two contracts, the Tampa Bay Rays signed Evan Longoria to a six-year deal worth $17.5 million, an unprecedented agreement for a player with less than a week's experience in the big leagues.

But that's not all. Miguel Cabrera, Curtis Granderson, Justin Morneau, Hanley Ramirez, Alex Rios, and Chris Young have all signed extensions that should keep them with their current clubs for at least the next five years.

Although these contracts are not without risk, there are valid reasons why clubs and players are entering into such deals. Given the historical salary inflation of approximately 10% per year, many of these deals will turn out to be at discounted prices at the back end as long as the players stay healthy and perform as expected. The players benefit by earning more money in the early years and have the peace of mind of long-term financial security for themselves and their families. As I like to say, the first ten or twenty million dollars are much more important than the last ten or twenty million.

Participating teams, players, and fans should reap the rewards of this new trend and that should be a major positive for the long-term health and competitiveness of Major League Baseball.

In addition to the above, I believe the willingness of teams to select players in the Rule IV Draft based on ability rather than signability (as demonstrated earlier this month) should also favorably impact the competitiveness of MLB. The combination should narrow the talent gap between the haves and have nots over time. The situation is far from perfect, but it appears to be moving in the right direction.

How do you see the state of Major League Baseball?


We've seen a definate shift of philosophy. Instead of the "Rich getting Richer" scenario, the "smart are getting smarter." Akin to small but brilliant businesses solving problems in creative ways, small market (and large market) teams are begining to buy into at least some sabermetrics.

So far in 2008, spending does not equal success. In fact, the bottom three payrolls all have a higher winning percentage than the top three payrolls. The top: Yankees (.529 winning %), Mets (.485), and the Tigers (.464). The bottom: A's (.551), Rays (.580), and the Marlins (.536). Has this ever happened since we have had payroll information?

To answer the question posed above, the short answer is "no." The bottom three payrolls have never outperformed the top three payrolls since this information has been readily available.

Just as "practice doesn't make perfect...perfect practice makes perfect," "spending does not equal success...only wise spending equals success."

The last hurdle of team-to-team inequity MUST be addressed: the draft must become economics-free - the worst performing teams must be free to draft the best available player.

This is an area where MLB's cartel-like monopoly MUST flex its muscle. Young athletes should have no leverage in negotiating, teams should keep their rights for 5 years after the draft date to avoid colleges being used as leverage for more money. Teams should be allowed to trade draft picks as well.

Cost certainty will lead to drafts that do not punish small market teams and will allow fans of the game to better assess the true intelligence of their general managers.

And then an international amateur player draft needs to be instituted or merged with the current draft.