Pirate Logic

Over the last three years the Pittsburgh Pirates earned about 11 million dollars in profit annually, profit from a franchise recently valued a bit less than 300 million dollars. That return is about what the owners would get in a bond fund if they had sold the franchise and invested the money. A conservative return, certainly not a great return. Now with that knowledge, with 300 million dollars as the denominator, imagine how things would change if the owners changed the numerator, the earnings, by investing in players. How could the owners invest that profit, that numerator, so that the earnings would add more to the numerator than was spent? In other words, how could money from profit best be spent that guarenteed a net larger numerator?

This is a tricky question because the Pirates are paid to lose and such disincentives are extremely complex. The Pirates receive revenue sharing money from more profitable teams based on the money the Pirates do not make; if they start making more money, they receive less in revenue sharing. Moreover Bradbury's new book shows, according to him, that a team spending money to move from 60 wins to 70 wins actually loses money and the positive return doesn't appear until the team reaches the middle 80's in wins.

The problem, then, is more than improving the quality of the team, it must be improved in a quantum manner. Not only does money invested have to result in an improvement, that improvement must allow an improvement to at least 85 game wins. Under these conditions, a team owner must be very careful. Improving his roster may not help and may hurt his bottom line. Put another way, the team's success and the owner's success may not coincide. Indeed, they may be in opposition.

Consequently, the team cannot simply get better, it must get significantly better. Say, for example, Pujols decides to do missionary work in Pittsburgh and agrees to work for them for 5 million dollars a year. I doubt his addition, while interesting and entertaining, would make much difference; the opposition would pitch around him and offence is only part of the game anyway. The Pirates can't pitch either. But with Pujols' 5 million dollars--as much as a bargain as he would be--the ownership has already spent half--half--of the money they have to spend. Pujols is still batting fourth on a team with a lineup of seven other number six hitters and no, zero, pitching. And, if Bradbury is correct, with some luck and a few career years in the lineup the team could win 75 games, qualify for much less revenue sharing as a result and not even afford to pay the charitable Pujols the following year.

Building with free agents requires tremendous insight from scouts and the general manager. It also requires tremendous luck because the free agents would have to agree to a contract of more than a year or two. The available money would thus be tied up for years in free agents who would have to be had at a bargain, be willing to sign a long term contract and all of those investments would have to be successful. The team would be betting its solvency on several turnaround situations.

The other way is the draft, a longer but cheaper route although fraught with the uncertainties of untried youth. But the losses are limited, the players are locked up for 6 years and the luck is homogenized among the teams. And a team with good judgment of talent can succeed. The Marlins do it every cycle.

So the owners are making a reasonable return, they probably should not gamble in the free agent market and it seems likely their only option is the draft done with a good eye. They should hire a good eye. The city of Pittsburgh should be happy they can see major league baseball visit 82 times a year. And until the team management shows they can draft well the city will have to settle for pirogi races, nostalgia, mascots, fireworks, aging rock band performances and, generally, going to a county fair with a baseball team attached.