A week has passed since the Los Angeles Angels of Anaheim made the biggest splash of the MLB offseason. First came the surprising news that they signed the prize of the free agent market − former Cardinals first baseman Albert Pujols − to a ten-year, $250 million contract. To top it all off, they then signed one of the top free agent starting pitchers of this year’s class, former Rangers left-hander CJ Wilson to a five-year, $77.5 million deal.
The initial reaction was that the team had lost their mind. How could they pay an aging slugger – whose power statistics have been on the decline – all that money? And for 10 years?
Between Pujols and Wilson, team owner Arte Moreno shelled out over $331 million, nearly double what he paid to buy the team ($183.5 million) in 2003.
The Angels? The team that’s always been the suitor in free agency, only to be jilted by the likes of Mark Teixeira, Carl Crawford and Adrian Beltre? Yes, there’s a new Angels team in town; not sure if that town is Los Angeles or Anaheim, but we’ll get back to you on that.
Clearly, team owner Artie Moreno and new General Manager Jerry DiPoto are determined to field a World Series contender in 2012. Missing the playoffs two years in a row and watching their rivals in Texas win both the division and the AL pennant can inspire such a spending spree.
But these deals are about more than just baseball and statistics. While one can justifiably question the merits of paying so much for one player who may soon be nothing more than a DH and another who badly underachieved in the 2011 playoffs, there are other factors that may cause it to make sense from a business perspective. They are:
- Television. The Angels recently signed a new TV deal with Fox Sports, reportedly valued at $3 billion over 20 years. That equates to $150 million a year – which means that these revenues would hypothetically pay for Pujols and Wilson after just over two years. The Yankees and Red Sox can also attest to the importance of TV revenue in 21st century baseball.
- Increased revenues. By making such an (expensive) effort to improve their roster, this will result in other increased revenues, such as ticket sales, concessions and team merchandise. And if the team starts making the postseason again, that’s even more revenue that could potentially come in. After all, you have to spend money to make money, right?
- The Dodgers. How would the team’s rival to the north (the one that actually plays in L.A.) come into play? Here’s how. The Angels have steadily been taking market share away from the Dodgers since they won the World Series in 2002. That gap has narrowed even more with the Dodgers’ ownership issues, bankruptcy and the horrific Brian Stow beating on opening day 2011. The Angels seized this opportunity, spending big bucks while the Dodgers are unable to do much of anything in free agency. This makes even more sense when you consider that the team will likely have new owners by this time next year, and that owner will likely want to aggressively sign free agents. Advantage, Angels.
Now we all know that “dream teams” haven’t fared well of late – just ask the Heat, Red Sox, and Eagles. And the Yankees can submit the A-Rod contract as Exhibit A as to why long-term deals for aging sluggers are risky.
I fell into this skeptical category as well. But on the other hand, I realized that Moreno is a shrewd businessman and an excellent marketer.
Then last weekend, my kids and I walked into a Sports Authority store. What was the first thing we saw on display? An Albert Pujols t-shirt; name and number on the back. I asked the cashier when they got these shirts, and she said just that morning – just days after the signing. I became less skeptical.
Welcome to the big-business elite of baseball, Angels fans. The Yankees and Red Sox fans now have company. Just be aware that you can no longer accuse their teams of trying to buy a winner.
However, you can now begin to complain about the luxury tax.
Used with permission of the author.
Chris Lardieri runs the “West Coast View” column for Sports Climax. A veteran to the keyboard, Chris also covers the Los Angeles Dodgers for Examiner.com and has written about Major League Baseball for Inside Edge, a scouting company that provides content to ESPN Insider and Yahoo Sports. Follow Chris on Twitter for more sports observations.
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