The Great Mets Experiment

An article by posted on May 21, 2014 0 Comments

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Much of the mediocrity we’ve witnessed on the field these past few seasons is the result of policies instituted years ago due to financial hardship on the part of our current ownership group. Late in 2010 Mets ownership cooperated with MLB in a “stay afloat” plan involving a $25 million dollar bridge loan and some important institutional changes — namely, massive cuts in payroll. There is more than some conjecture that Bud Selig wanted Sandy Alderson – who at that time was on assignment in the Dominican Republic – to head the process of transitioning the Mets from what they had been for decades, to what they would become.

In order to understand the current state of the Mets franchise a little history might be in order. In 1890 there was a player revolt against the two leagues operating at that time (the National League, and the American Association) that resulted in the establishment of a Player League. It was a corporate entity featuring profit sharing, no unilateral contract transfers and, most importantly, no reserve clause (the reserve clause was an agreement featured in the established leagues banning the pursuit of players already under contract). The reserve clause effectively made players bound to their parent organizations for the duration of their careers unless they were released or traded. The NL and AA leagues effectively broke up the fledgling Player League after only one season by allowing some player league teams to purchase existing NL and AA franchises. The reserve clause would not be challenged again for another 80 years.

The Major League Baseball Players Association as we know it today goes back to 1954. It was ineffective for the most part until 1966 when they hired Marvin Miller, a former negotiator for US Steel Workers, who managed to mount a case against ownership in 1972.  Flood v. Kuhn went all the way to the U.S. Supreme Court, where Curt Flood‘s case was backed by the testimony of former players. Initially unsuccessful for lack of testimony from active players, the historic challenge paved the way for federal arbitration of salary demands (Ownership gave in to some of those demands in 1973) and in 1974, an arbitrator effectively reversed the court’s earlier verdict, throwing out the reserve clause and opening the door for the modern free agency. Average salary skyrocketed from $45,000 in 1975 to $289,000 in 1983, to $3,440,000 in 2013. A shell of the reserve clause still exists today in the form of the short period of exclusivity that teams are granted for players they have developed in their own minor league systems. Teams have a 6 year window of service time and are bound by specific salary requirements and arbitration guidelines.

Labor disputes in MLB have shifted in recent years from centering on player exploitation to concerns about parity. Player salaries continued to rise over a period of years beyond the budget capacities of some smaller market teams. There may have been a poverty argument with a few select distressed teams in the late 1980’s and early 90’s, however, today’s game is awash in cash, and television & media revenue alone provide a sizable cash-flow infusion for most major league clubs. It is no wonder we see teams like Pittsburgh and Tampa Bay increasingly testing the waters of free agency.

Since 1974 we’ve nevertheless witnessed a back and forth wrangling between Ownership and the Player’s Association over MLB revenue and fair player compensation. In this era of plenty, Ownership is wary of increased player demands and has frequently been the subject of inquiries accusing them of conspiring to keep salaries down. This is where we come full circle to the present and the current state of the Mets.

Baseball ownership is not what it used to be. It is far more common in today’s game to see corporately owned franchises. The reasons for this are many with perhaps the biggest being the tax benefits available to baseball clubs that can demonstrate negative net earnings while showing a positive cash flow – thereby potentially securing considerable tax relief by offsetting income from other businesses. Another benefit of corporate ownership is the ability to promote merchandise through media exposure and television rights to market related business enterprises. The Mets are one of an increasingly fewer number of teams still owned by a family partnership. As such not only are they less inclined to channel losses into other business domains (although SNY theoretically offers them that venue), but they are more vulnerable to fluctuations in their personal fortunes, and here’s where it gets messy. The Wilpons post-Madoff, are not the owners they were before. They are, in effect, a small market team which happens to reside in the largest market in baseball.

So what does all this have to do with the “Great Mets Experiment”? Selig hoisted Alderson onto the Mets as a counterfoil to the behemoth across town that routinely drives salaries up and makes things awfully difficult for small markets (like his former Milwaukee franchise) … so really the great Mets experiment involves building a winner by means of small market operational tenets and resources, independent of market forces.

This would theoretically drive the cost of running a major league ball club down in any market, if (and it’s a big “if”) the Mets can serve as a model. The implications here for Mets fans are significant, Fred Wilpon basically sold out the N.Y. Mets fan base so Selig could promote his small market philosophy. If MLB had denied the Wilpon’s their bridge loan and pushed them to sell with a vote of no confidence, it would have been far less painful for the fans. Sadly, the fans don’t seem to matter much in these machinations. It seems it’s more about undermining free agency and pocketing a greater share of the profits.

The experiment? So far, not so good to be honest, but there’s still time. If in the coming years the Mets emerge as a perennial contender with a sustainable payroll based on staggered big contracts and a top-notch farm system, Sandy Alderson will have done his job (and will probably be sitting in the Commissioner’s chair some day).

It remains to be seen whether the experiment is a success, and furthermore, whether it’s enough of a success to cause other clubs to follow suit. The Mets and Yankees have shamelessly pilfered each other (both in terms of players and ideas) as cross-town rivals over the years, and I think it’s interesting that with the Mets embarking on this era of austerity, we (for the first time in forever) began to hear whispers of “restraint” coming from the Bronx, actually watching them drop to #2 in total MLB payroll.

The other incentive of course is that Ownership will in effect be colluding to keep salaries down in a perfectly legal manner if more teams focus resources on their farm systems, thereby exploiting that last vestige of the “reserve clause,” their 6 year window with their own emerging players. Ownership has always known there is a relatively short time from the expiration of arbitration eligibility to the onset of decline, and it tends to be during this period that players strike gold by signing massive contracts that contain hundreds of millions in sunken costs (across MLB) as these players enter their declining years.This is a big problem for ownership and MLB might just be inclined to take a page out of Sandy Aldersons “no to Cano” approach, again if the Mets are successful.

By focusing on developing a farm system that can routinely churn out quality players that remain under control for 6 years (or more if you can extend them) you give your major league team quite the window to instal a competitive, dynamic, youthful, but most importantly cheap roster. Contracts that absorb arbitration and tack on 2 or 3 years can often be huge bargains for Major League clubs, especially when you consider many players begin to decline past the age of 30. The strategy effectively undermines free agency and makes contracts like the ones Pujols and Cano signed even more onerous. With only supplemental resources directed at free agents, a team with an upper echelon farm system (like the Braves and Twins) and a few carefully targeted extensions can sustain contention almost indefinitely.

What better place to model this than the biggest stage of all? New York, New York baby!

mmo

About the Author ()

I’ve been a Met fan since August 1969 when a fire resulted in the Red Cross placing my family on the 6th floor of a building in Willets Point. I could see Shea from our balcony and I knew something big was going on. I followed them through the dark years and the resurgence of the 80’s only (sadly) to miss the fall of 86 because I was in Boot Camp. I've been serving penance ever since in Minnesota where I'm an SLP. I've written a lot about the Mets in an effort to share with my kids (and anyone else who might listen), a sporting tradition that made much of my childhood worthwhile. Follow me on twitter: https://twitter.com/MatthewBalasis