Best Interests of Baseball (Conclusion)

So egregious was the treatment of the Expos by MLB and Commissioner Selig that a group of Canadian business interests associated with the Montreal Expos tried to file a RICO complaint, listing Jeff Loria, David Samson, and Bud Selig as defendants. An arbitration panel ruled that, although Loria had not exactly done business in a stand-up manner, he had not committed fraud as it was laid out in the complaint. Selig promptly announced on the final day of the 2004 that Montreal Expos baseball was being relocated to Washington, D.C. under new ownership. This time the movie did not have a happy ending. But it did have a sequel.

Despite winning the World Series in 2003, Jeff Loria ordered the dismantling of the team, selling off all the high-priced talent until, in 2006, the Marlins were operating with a 40-player team payroll under $15 million dollars (smaller market Colorado spent over $40 million).  Jeff Loria would go on to be the subject of SEC investigations and the Major League Baseball Players’ Association would cite him for pocketing revenue sharing dollars instead of reinvesting them in the team and talent. In 2008, despite over five years of pocketing massive amounts of money from MLB, Jeff Loria went to the Miami commissioners and made it clear that, without a publicly funded stadium, baseball would be dead in Miami and all the money and work dumped into the team to that point would have been for naught. Unlike Montreal, Miami decided in a very controversial move (that led to the SEC investigations and the ousting of several politicians) to publicly fund a stadium for Loria and the Marlins. The move would go on to burden the Miami-Dade taxpayers to the tune of over $634 million dollars, all to save baseball in the area. The amount would represent approximately 80% of the cost of the new stadium.

In 2012 Marlins Park was completed. To usher in the new era, Loria and Samson proceeded to spend wildly on talent to establish goodwill within the community.  The team negotiated over $100 million in heavily back-loaded, guaranteed contracts. Superstar Free Agent Shortstop Jose Reyes was signed, along with star pitchers Mark Buehrle, and Heath Bell. Spirited Latino manager Ozzie Guillen was brought in to lead the team. The Marlins even made a serious run at MLB’s biggest and brightest star, Albert Pujols. Negotiations with Pujols broke down however, when the team refused to include a no-trade clause that would guarantee Pujols would not be moved at a future date. It was a matter of organizational policy that no-trade clauses were never issued, and, no exception would be made for the game’s biggest star and future Hall of Famer.

Before the first pitch of the regular season, turmoil developed on the team. Ozzie Guillen made public remarks that upset a large portion of Miami’s Cuban expatriates. The team’s star shortstop balked at moving to third base, claiming, quite rightfully, he was a lesser player there. However, he was forced to move anyway in order to make room for newly acquired Reyes.  Despite the talent that was brought in during the offseason, the Marlins still fielded a team that was largely made up of developing players. This, combined with personality conflicts between Guillen and the team, led the Marlins to have a rough start. On July 25, 2012 with the Marlins holding a record of 45-53, Hanley Ramirez was traded to the Los Angeles Dodgers. The trade of arguably the team’s best young pitcher, Anibal Sanchez, to the Detroit Tigers soon followed.  The Tigers rode Sanchez’s arm to the World Series; while the Marlins, not sure of their identity, and fielding an even more inexperienced team, finished in last place.

After the season, on October 22, 2012, major offseason acquisition Heath Bell was moved, along with $8million to the Arizona Diamondbacks for a minor league player. The next day, on October 23, Ozzie Guillen was fired as manager. Less than one month later, on November 13, the Marlins sent team ace Josh Johnson, newly acquired Mark Buehrle, newly acquired Jose Reyes, super-utility speedster Emilio Bonifacio, and catcher John Buck, along with $8.5 million to the Toronto Blue Jays in exchange for a troubled star shortstop in Yunel Escobar and a handful of minor league prospects.  Escobar, making $5 million was then traded less than two weeks later to the cross-state Tampa Bay Rays for a middle-quality prospect.

Less than one year after the Miami taxpayers watched Jeff Loria usher in a new era of baseball to the community, the entire new product was gone, every last piece of it. The team that went into the season with high hopes and over $100 million in payroll for the season was gone. In 2013 the Miami Marlins will be fielding a team with payroll obligations, including the $12.5 million owed to Toronto and Arizona, of just under $34million. The Marlins will be spending a fraction over $20 million on talent actually fielded by the team (by comparison there will be 21 players in MLB in 2013 making more than that individually). Because he was developed by the Miami system, Giancarlo Stanton, the team’s rising star, and a bonafide up-and-coming superstar of MLB, will be making league minimum while playing on a team filled with minor leaguers.  In 2014, after subtracting the final $4 million dollars to be sent to Arizona, Loria’s Marlins are currently slated to spend $1.5 million on guaranteed contracts.

So much for saving baseball in Miami. The night that Loria shipped out all the newly acquired talent and the back-loaded contracts, Giancarlo Stanton turned to social media outlet Twitter. “Alright, I’m pissed off!!! Plain & Simple.” Giancarlo Stanton was upset. The people of Miami were upset. Baseball fans and enthusiasts were upset. Yet, unlike during the McCourt fiasco, Bud Selig was nowhere to be found defending the “best interests of baseball.”  It’s beginning to look like the sequel may end even more tragically than Loria’s first go-around at recreating Major League. At least the people of Montreal are only saddled with bad memories, and not a generation’s worth of tax debt.

A few days ago I asked a very pointed question:  If an owner fielding a competitive team that finds a way to clean up his own financial messes can be stripped of a team, then how is it an owner found to be in violation of the CBA, that fails to regularly field competitive teams, and may have defrauded an entire city still has his team?

Answer: Bud Selig takes care of his friends, especially those from the days when MLB played fast and loose with the good-ol’-boy glad-handing of franchises.

Not too long ago, the country saw a Powerball jackpot of over $500 million awarded. I admit, I had five tickets invested in the drawing. Going into the night of the drawing, I wondered; if I won, would I have enough financial clout to partner with others and run Jeff Loria out of Major League Baseball? After all, if Bud Selig isn’t going to look out for the best interests of the game I was raised on, someone needs to.  I’m not sure I’m up for the task, but at this point, I would sure be willing to try.

Best Interests of Baseball (Part III)

Unhappy with the end result of the negotiations and the financial resources that would be required to continue fielding the 1994 team; the Expos’ managing general partner, Claude Brochu ordered a fire sale of all talent. A year later the team’s General Manager quit over the decision to dismantle a quality franchise. By 1999, the team was a shell of itself. Talk of the team being a target for contraction started to swirl. Enter Jeff Loria and stepson David Samson.

In 1989, Morgan Creek Productions and Mirage Pictures developed a film, Major League, starring Tom Berenger, Charlie Sheen, Corbin Bernson, Bob Uecker, and little known up-and-comers Wesley Snipes, Rene Russo, and Denis Haysbert. The premise of the film was that the owner of the perennially terrible Cleveland Indians had died, leaving his team to his spoiled, self-absorbed, middle-aged daughter. The daughter desperately wanted to move the team to Miami, but, in order to do so; she needed to find a way to exploit a loop-hole in the team contract in regards to poor attendance. So, she arranged to sabotage the team by hiring scrub players, and providing sub-par facilities and accommodations. The plan was, the team would be so bad, that attendance would drop below the threshold, and she would be free to move the team to Miami. Unfortunately for her, the plan backfired; the Indians took the challenge personally and went on to win the American League Pennant. I remember going to see the film with my father. We enjoyed the comedy, laughing throughout. It’s amazing how something can be so funny in fiction and yet, so sad and tragic in real life.

In December of 1999, American art dealer Jeffrey Loria purchased Claude Brochu’s ownership stake and made himself the Expos’ chairman, CEO, and managing general partner, and naming his stepson, David Samson, executive vice-president. His first act after acquiring the team was to instill some goodwill by spending big on talent while trying to force Montreal to fund the building of a new stadium. Loria insisted that the team simply would not be viable without one. With schools and hospitals were closing due to a lack of public funds, the province decided it could not justify funding a stadium. About the same time, Loria allowed the television rights and rights to English language radio broadcasts of the all the team’s games to expire. Suddenly, the only way to see the Expos on television is if the other team happened to be broadcasting the game, and no one could catch an Expos home game in English on the radio. Attendance dropped precipitously. In 2001 Loria fired the long-time face of the franchise, former player and current manager Felipe Alou while watching attendance drop below minor league attendance levels.

Later that year, Major League Baseball voted to contract two teams, the Minnesota Twins and the Montreal Expos. However, an injunction was won by the people responsible for Minnesota’s Metrodome, the home of the Twins, preventing the team from being contracted as they had not yet fulfilled their commitment to the stadium. This forced MLB to abandon the plans for contraction for both teams. But, Montreal was not off the hook yet.

In 2001, the ownership of the Boston Red Sox decided it was time to move on. The team was eventually purchased by a group led by John Henry, who just so happened to own the Florida Marlins at the time. Since it is a conflict to own multiple teams, Henry divested himself of the Florida Marlins, selling the team to Expos owner, Jeff Loria, for a little over $150 million, $38.5 million of which was provided for through an interest-free loan made by MLB to Loria. Major League Baseball then turned around and purchased the Expos for $120 million and assumed operational control. Only two years prior, Loria had purchased the team for a paltry $67 million.

Upon completing the sale of the Expos, Loria took the entire executive front office, scouting reports, computers, and all other assets he could with him to South Florida, leaving the incoming manager, Frank Robinson with nothing but players and a decrepit stadium with which to field a team. In the true spirit of Major League, the players rallied and made a push for the playoffs in 2003. Despite Bud Selig’s decision to move 22 of the Expos “home” games to San Juan, Puerto Rico, the Expos endured the long travel and shoddy facilities and, on August 28, 2003 were in a five-team-tie to go to the playoffs with only a month to go. With a budget somewhere between $30-40 million dollars (the New York Yankees spent $153 million on payroll alone), and no true home facilities, the Expos were turning in a successful season. That’s when Bud Selig decided that it was not in the best interests of the game to afford the team the extra $50,000 necessary to facilitate the September call-ups of minor league players, a move that would allow veteran players to remain fresh and heal small aches while up-and-coming talent helped push teams past the finish line. While every other team (all 29 of them) was able to call up minor league talent, an exhausted Montreal/San Juan Expos limped through the final month of the season, posting a 12-15 and finishing eight games out of the final wild card slot. Meanwhile Jeff Loria’s Marlins would go on to win the 2003 World Series.

Best Interests of Baseball (Part II)

Growing up in my grandmother’s house was an interesting experience. Although she was a devout Catholic, the real religion in the house was the national pastime, Major League Baseball. By the time I was six years old, I understood more about the ins and outs of the game of baseball than many grown men. Her team, and thus my team, was the Chicago Cubs. This was in the days before cable television, brought the likes of the Braves and the Cubs into households across America, and the only games to watch were the games televised by one of the big three networks, ABC, NBC, or CBS. As a result, although the Cubs were the household favourite, I was raised to appreciate the game as a whole, and to find players on all teams across both leagues to watch and admire. Locally, the teams to follow were the Arizona State Sun Devils and Phoenix Giants, the AAA affiliate of the San Francisco Giants.

Such close association with the Giants organization led to an appreciation of the National League team, but e team that always stood out to me as fascinating was the Montreal Expos. Looking back, it’s hard to put my finger on what it was about the team that so fascinated me. Perhaps it was the funny looking red, white, and blue “EMB” logo they sported (though die-hard fans from Montreal would be quick to point out that, despite the order they appear in the logo, the official colours of the team were actually blue, white, and red). Maybe it was the really unique stadium they played in, Olympic Stadium, which was a domed stadium with a great big circular hole in the top that rather defeated the purpose of being a domed stadium. Or maybe it was because whenever I watched games being played in Montreal, there were signs all over the stadium written in French, adding an extra layer of mystique to the storied game. Undoubtedly, all of these things held certain amounts of appeal for me as a young boy. Yet, more than all those reasons combined, there was my grandmother’s advice. I had spent time learning to appreciate great players, and oh my, did the Montreal Expos have some great talent.

Starting with the team’s inception in 1969, until its demise in 2003, the Montreal Expos were littered with talent. At one point in time they fielded a team complete with current Hall of Famers Gary Carter, Tony Perez, and Andre Dawson. Current strong Hall of Fame candidate Tim Raines was also a part of those teams. In 34 years of existence, the franchise managed to produce at least three, and possibly four players and two managers that went on to the Hall of Fame. By way of comparison, the Minnesota Twins have existed in one form or another since 1894, and in 118 years have only produced 8 players. It is still perplexing to this day that those Montreal teams never finished above third place. Over the years the Montreal Expos would continue to produce loads of gifted talent with names like; perfect game pitcher Dennis Martinez, Larry Walker, Moisés Alou, Maquis Grissom, Cliff Floyd, Vladimir Guerrero, Andrés Galarraga, and Liván Hernandez, all making their way through the organization as well as sure-fire future Hall of Famers Randy Johnson and Pedro Martinez.

In 1994 fortune became the franchise’s fickle friend. It was a historic season all across the game, but for all the wrong reasons. In 1994 Matt Williams of the San Francisco Giants had 43 home runs after 112 games played. That put him on pace to hit 62 for the season, which would have set a new single-season record for home runs, breaking the mark of 61 set by Roger Maris all the way back in 1961. The Montreal Expos, with a record of 74-40 were six games ahead of the second place Atlanta Braves, on pace to win 105 games on the season, a total rarely reached. The United States and Canada were abuzz with excitement and the Montreal Expos were on the verge of finally breaking through and making their mark. Then tragedy struck. On August 12, 1994, the player’s went on strike. Negotiations progressed slowly, extending into the fall, prompting the cancellation of the rest of the season and also the World Series. There would be no historic run to break a hallowed record, and the Montreal Expos would never again see a level of success that would carry them into postseason play.

The Best Interests of Baseball (Part I)

Last year, after a rather long, drawn-out feud, Bud Selig managed to wrest control of the Los Angeles Dodgers away from owner Frank McCourt using the “Best Interests of Baseball” clause of the powers granted to the Commissioner’s office. The reason McCourt was stripped of his ownership was, he and his wife had been caught with their hand in the cookie jar, using the team’s assets as their own personal slush fund/piggy bank. That’s a big no-no. Things got so bad that, for a while, there were questions about whether or not the team would be able to meet its payroll commitments.

Obviously, when fielding a sports team, about the worst thing that could happen is not being able to afford to put players on the field. This led Bud Selig to invoke the little-used “Best Interests of Baseball” clause to strip Frank McCourt of ownership, putting the Office of the Commissioner in charge of the team. This action was taken to protect the integrity and reputation of one of the most storied franchises in the league. Los Angeles fans rejoiced. The egomaniac McCourt was going to be gone and magically, the Dodgers were going to be a perennial contender again. But therein was the rub. From 2004 through 2012 (the period during which McCourt owned the team), the Los Angeles Dodgers made the playoffs four times, winning the NL West three times and settling for the NL Wild Card once. Additionally, McCourt managed to find a way to clean up his financial mess by convincing Fox Communications to provide a lucrative $1 Billion television deal to put the Los Angeles Dodgers back on track.

However, Selig was unhappy with McCourt’s solution. By “settling” for $1 Billion, McCourt was devaluing the value of future lucrative television deals for other teams in other markets.(In fairness to the league, this was a deal light in cash – but it was a deal negotiated between one team and one broadcaster in a free market, and both sides were happy.) So, despite fielding a team that was still winning (even if there were areas for significant improvement) and getting his financials in order, McCourt was stripped of the team. This set a precedent.

Shortly after the league kicked McCourt to the curb, the Los Angeles Dodgers were sold to a group that included NBA legend Magic Johnson. The new ownership, looking to redefine the team, and to make a bold media statement that a new era had begun then proceeded to make a historic trade of mind-boggling proportions with the Boston Red Sox. The Dodgers received Adrian Gonzalez, Josh Beckett, Carl Crawford and Nick Punto in the biggest waiver trade in league history. In return, the Red Sox received salary relief, James Loney, Rubby De La Rosa, Ivan De Jesus, Allen Webster and Jerry Sands. In one fell swoop, the Los Angeles Dodgers acquired a stable of star names, and a quarter of a billion dollars in salary commitments. On the other side, Boston shed their commitments, obtained some marginally decent talent, and the financial freedom to rebuild the storied franchise.

The trade took place after the non-waiver trading deadline. No one else was able to offer counter-proposals. And all it took was a phone call on a Saturday afternoon in August. Despite the enormity of the deal, and the dearth of comparable talent going to Boston, the Commissioner’s office signed off on the trade, and it was done. It seems that, in this case, the best interests of baseball were served by allowing the Dodgers to suddenly take the sort of debt and contracts that would render a smaller market team insolvent. This should have been a warning sign. This is where sane minds should have spoken up. But, they didn’t Apparently, the deal was so mind-boggling that no one ever imagined anything like that might ever happen again.

Question: If an owner fielding a competitive team that finds a way to clean up his own financial messes can be stripped of a team, then how is it an owner repeatedly found to be in violation of the CBA, that fails to regularly field competitive teams, and may have defrauded an entire city still has his team?

Time to Fix the NPB Posting System

This year, like every year it seems, a top tier talent wishes to leave the Japanese NPB via the posting system, the world of MLB is awash with rumblings about how the system is inherently broken. Some claim unfair trade practices by large market teams such as the Yankees or Red Sox. Others complain that it is unfair to the player, giving MLB teams that win the posting all the leverage a la, “Sign with us at this low figure or go back to Japan.” Still others claim that it is simply a matter of NPB getting fat by engaging in the athlete version of human flesh peddling. All of these complaints are to one degree or another basically true. What is also true is that without some sort of system in place, Japanese baseball would suffer greatly, and not just the NPB, but the entire Japanese Baseball system, all the way down to school-aged talent.

So what can be done then? Well, let’s look at what the posting system is first, then we can address the various issues that it addresses or creates.

Most, not all, players playing professional ball in Japan are subject to a type of reverse contract that stipulates that players who are not yet free agents are prohibited from negotiating with any other team once their current contracts expire. Most players reach free agency by putting in nine to ten years of service in the league. Additionally, if a player and the team he is beholden to cannot reach a new contract agreement, the team can choose to grant him free agency. They are not required to do so, but they may if they wish. Any free agent is exactly that; free to sign anywhere, including MLB. Needless to say, it’s pretty apparent where reverse contracts seriously impair the rights and earning privileges of a player. That’s why in American in the 1970s MLB was introduced to a player named Curt Flood that forever changed the landscape of player’s rights, collective bargaining, and free agency. Don’t hold your breath for the Japanese Curt Flood anytime soon. It’s not going to happen.

Moving on though, we now come to the posting process itself. Any player in the NPB that is still not a free agent may ask to be posted. The team that he is obligated to however, are the ones that determine whether or not to accept the request. More often than not, it appears that they do. There have been notable exceptions however; most notable being in 2005 when then Yomiuri Giants pitcher Koji Uehara asked to be posted and the ownership refused because they do not support the posting system as fair and valid. Once a player is posted, there is a four day window in which MLB teams may place a closed bid. No one knows what everyone else is bidding, or even who. At the end of four days, the highest bidder is revealed and the team can choose to accept or decline. It should be noted that no posting has yet been declined by a team. The winning poster then has 30 days of exclusive negotiating rights with the player. If the player signs, the posting team gets the posting fee and the player is now a member of the MLB franchise. If no contract is reached, the posting fee returns to the MLB team and the player returns to the NPB and nothing changes. This eliminates a player competitively marketing his skills. He has one and only one MLB destination to negotiate with. It also opens the door for teams like the Red Sox to pay $11MM more than another team in order to win said negotiating rights because of the closed auctioning system. Such increases in the posting fee seriously hurt the willingness of the team to negotiate higher priced contracts with the player.

At any time, either the MLB team or the NPB team can pull out of the process. The player has no leverage at any point in time. In fact, the only thing they can do is ask for the process to be started.

This system obviously favours major market teams such as New York, Boston, Texas, and Los Angeles. Sure, not every posted player is going for Matsuzaka or Darvish money, but such players are always and forever completely unobtainable by small or mid-market teams while the player is in their prime. How’s that for competitive balance?

So why not just do away with reverse contract and the posting system and put together an international draft that includes Japan you say? Because to do so would cripple the NPB to the point of becoming irrelevant. And that’s just bad for baseball and Japan altogether. Without some sort of compensatory system in place, every top tier piece of Japanese talent would be leaping to MLB with a quickness and there would be little or nothing that NPB could do to stop it. The most money and the best chance to become the very best player possible exists in MLB, and nothing is ever going to change that. Yet without a strong NPB there is a decided trickle-down effect. Eventually the many baseball academies that are funded by the NPB to develop the rich pool of Japanese talent would all wash up. Without a strong NPB there simply isn’t the call for or the resources for them. And without the developmental academies and the opportunity for young ball players to aspire to playing on a high level stage, eventually the great depth of exceptional talent in Japan begins to dry up. It never completely goes away, but stars out of Japan become a rare thing.

But enough with the doom and gloom. The real issue at hand is what to do about this great big mess? Obviously the system is broken, and some folks like super-agent Scott Boras have had ideas on the matter. However, the agent-driven solutions are not likely to be accepted since the only real winners in the process are the agents. So how to fix things? Well, here’s my take.

First, any player in the NPB with more than one year of service time may request to be posted. The request cannot be denied by the team, it must be honored. Then, once the posting season starts and teams select who they want to bid on, things change. The posting period goes from 4 days to 10. The bidding however is not done through closed auction, but is an open auction for all teams. The highest bid is then guaranteed negotiating rights (no refusal allowed). Teams can place competitive bids instead of trying to out-guess what others might bid. The winning team would then have 30 days to negotiate a deal. But here’s the new catch, whether the team is able to sign the player to a deal or not, they lose the posting fee (with one exception, which I’m getting to). The open auction will keep teams from seriously overpaying for the rights by simple virtue of knowing where the real bidding market it. The guarantee loss of the posting fee will ensure that the larger market teams do not overbid just to block other teams from having the chance to sign. Heck, a total posting cap could even be instituted that behaves much like the total signing dollars for the Rule 4 draft. Sure, gone would be the days of $50MM posting fees (probably) but in this case there is at least a measure of insurance for the NPB team that they will be getting compensated. Next step, after a team wins the bid and puts the money in escrow they then negotiate a contract with the player. Sign and trades are entirely acceptable and may be negotiated by the player if they wish. If no contract is reached, the player returns to the NPB. The NPB team can then choose whether or not to accept the second highest bid and allow the player a second chance to negotiate a contract. If the team accepts the second highest bid, the first MLB team is off the hook and they go on their merry way. If the NPB chooses to retain the player and not make him available to the second place bidder, the initial winner of the auction still forfeits its posting fee. The same would go for the second team if they failed to sign the player. By ensuring that a posting fee is forfeit regardless of whether a player is signed or not, the player is given exceptional leverage compared to what he has now. But wait, there’s more. Once a player accepts a contract with an MLB team, the NPB team that posted him has 7 days to match the contract. A matching contract would be rare, but it would be a way for a team to attempt to protect its assets. If a contract is matched, the posting fee returns to the MLB team and the player returns to the NPB. However, to protect the player, any years in the contract that would extend beyond ten years of service time become mutual options. So for instance, player A has seven years of service and is posted. They sign a 5 year contract but the NPB matches it. The player returns to the NPB. However, after three years the player has reached 10 years of service, eligible for free agency. The player and team then both have the option to continue the last two years of the contract or to opt out. A player opting out is a free agent and goes wherever they want, including MLB, and with no further compensation to the NPB team.

Nothing is ever going to stop the very best talent from leaving Japan to play in MLB. But it’s about time that the playing field was leveled. Players need more rights and leverage, MLB teams need more parity in the ability to grab high-end talent, and the NPB teams need some sort of compensation for losing treasures.

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