Baltimore Orioles: Penny-pincher or Big-spender?

One tug-of-war we often see in sports is between fans who want to win now, and an owner who ultimately has a business to run. Think of the owner of any team in any sport (including Peter Angelos of the Baltimore Orioles) in the same vain as you would your local tavern or store owner. Granted the likes of Angelos, Steve Bisciotti, and Ted Lerner are glofified versions of small business owners, but they’re business owners none the less.

Sports is an interesting business because unlike most others there can in fact be more than meets the eye to just the bottom line. My father owns an auto repair shop; his success or failure is based soley on his bottom line number at the end of the day. In the sports business, the bottom line is certainly important…however there’s also the business of winning games. I also think that the clientele for sports is a bit different. If you own Supermarket A and that ceases to be a decent place to shop, people are simply going to go to Supermarket B. For the most part that’s not going to be true in sports, save for extreme situations.MOSTpeople are going to root for their hometown teams, and that won’t change.

However as we know, sometimes sports owners pull back the reins on salaries so as to protect revenues. The Tampa Rays recently traded James Shields and Wil Myers to Kansas City for prospects. Was that the owner of the team trying to potentially make the team better in the future, or dumping salary? Or perhaps both? One knock on Peter Angelos from the fan base has always been that he wasn’t willing to spend money. I’m not sure that’s totally true, however that’s the perception amongst the general public. So is he sitting on a pile of cash just so he can have it without any regard for the fans?

I’m not sure that any owner puts the bottom line before winning, or vice-versa. That’s what makes sports such a unique business; both have to be minded. It’s also easy for fans to raise heck about a team or owner not spending money…ultimately it’s easy to spend someone else’s cash! However the fact is that spending money doesn’t necessarily guarantee winning or championships. Do the New York Yankees win the World Series on an annual basis? Granted they’re always in the mix, but when you spend as much as they do you’re expecting to win and win big.

Moreso than spending or not spending, the key is that the owner should want to spend intelligently. Spending $147 million over six years on Zach Greinke might not be the most intelligent move for a team such as the Orioles. However spending two years on Nate McLouth probably is. McLouth had an immediate impact in Baltimore last year, and furthermore he became a quick fan favorite. However all most people see is that a franchise like the Dodgers is spending money, and the Orioles aren’t.

I’m not suggesting that fans are wrong to demand that the owner spend money, and I’m not suggesting that the owner is wrong to not spend. The fact is that the more the owner spends, he’s going to expect to take more in so as to protect his profit margin. Investing in a big-name free agent is a major risk for an owner. First off, he’s assuming that merchandise sales are going to go up. That’s almost a given, but in business what kind of guarantees can be offered? The same is true of ticket sales; it’s not unreasonable for an owner to think that more people will come to games. But you can’t force people at gunpoint for sure. However that’s the “bottom line” side of things; let’s go over to the win/loss side. Who’s to say that the player will continue to produce the way he did for his previous team?

Courtesy of Matthew Emmons-USA TODAY Sports

Again, there are no guarantees in business. If that were true the 2012 Orioles would have finished dead last. Instead we all know how things turned out. However here’s one thing on which I disagree with Oakland Athletics’ GM Billy Beane; I don’t feel that fans should be asking questions about whether someone’s worth the money they’re making. Beane’s “Moneyball theory” was that he could put a winner on the field for less than what teams such as NY and Boston were doing. This is not to say that teams and GM’s shouldn’t look for good value and so forth, however are we to expect that Beane would have turned down the likes of Babe Ruth because he could get that same production for less out of someone that’s not on the radar? It really makes no sense to complain that someone’s making more than they’re worth, and in the same breath still expect the team to compete. It’s really either/or.

When you look at sports you can find owners who are notoriously cheap such as the Bidwells of the Arizona Cardinals and Ralph Wilson of the Buffalo Bills (both in the NFL). I suppose that cheap isn’t the right word, but needless to say they don’t want to spend money. Then you have owners such as the Steinbrenners (NY Yankees) and Daniel Snyder of the Washington Redskins (NFL). They’ll spend whatever is necessary to get quality players. Does one side care more about winning or about money than the other? It’s tough to say, however the fact is that fans can complain all they want one way or the other. But odds are that particular ownership group won’t change. But the fact is that big spenders don’t always win and penny pinchers don’t always save. He who toes the line between the two the best will generally come out on top.