The winter meetings were at the Loews Anatole Hotel in Dallas in December, 2000. They had opened with the Rockies stunning the baseball world by signing Mets pitcher Mike Hampton to a seven year, $121M contract, and a few days later the phone in my room rang at 4:30. It was Scott Boras and Jeff Musselman. Get to the room.
There, they laid it out. Ten years. $252M. Opt-outs. “This isn’t just a baseball deal,” Boras said. “This is a real estate deal. It’s about franchise value.”
So it never quite worked the way it looked like it could that morning, but even though the bloom became blunted and history later tainted elements of Rodriguez’s stay in Texas, it was he who wanted out, reaching out first to the Red Sox, then, eventually, to the Yankees. Tom Hicks bought the Rangers two years earlier for $250M. Now, it was Hicks’ financial problems—overseas, for instance—that necessitated reeling in payroll and moving the highest paid player in the game and eventually selling at a court set discount.
But right now the Rangers are valued at $764M, thrice the Hicks purchase price. They are one of the game’s premium franchises with a huge payroll, and one can ask: had Hicks not signed Alex, would they be worth three times the purchase price 15 years later, despite ownership issues distant from the team itself?
So when you hear the moans and groans about what the Mariners are paying Robinson Cano, remember, when Hiroshi Yamauchi bought the team in 1992, he did so for $125M. They haven’t had a winning record since 2009. This season, they drew fewer fans than the Oakland A’s, who play in the equivalent of a johnny-on-the-spot on some construction project. Their television ratings get clocked by the Seattle Sounders; thankfully, the Western League abandoned the Totems and all that remains are a junior hockey club.
After they beat the Yankees in the 1995 ALDS, Junior Griffey, ARod, et al, under the brilliant leadership of Pat Gillick, built up the value of the franchise to the point that they could afford to help build Safeco Field, one of the best venues in sports, and get a terrific regional television deal.
Well, that franchise has been devalued, and Robinson Cano is an investment in re-establishing and increasing value. Once, they put a few hundred million into a ballpark. Now, they’re investing in a player who will get the Mariners back in the Northwest conversation, help attract other players—like Cano’s good friend Nelson Cruz—and bring the fans back downtown and to Eliot Bay—as well as get folks watching Mariners-Rangers games and, eventually, get the sale price north of $1B.
One of Bud Selig’s many accomplishments as baseball CEO is to make it attractive and fiscally wise to purchase a team. Frank McCourt was not a big real estate player in Boston. His family and the Perinis were successful developers, but McCourt was hardly a part of the Big Players’ club in his home town. Hey, he was once my neighbor on Pleasant Lake in Otisfield, Me., so he wasn’t always in multi-million dollar condos in Manhattan. But he was able to get a loan a Boston bank considered a risk, went through a much-publicized divorce that could have been three seasons of “The Good Wife,” and got $2.1B—actually, more than that—for a team he bought for $371M and neglected.
Drayton McLane bought the Astros for $117M, won one pennant, and sold a last place team to Jim Crane for $680M. Albert Pujols was TV and marketing, and when the Angels get straightened out, Arte Moreno will still make a handsome profit selling the team. Worry not.
This December is another perfect storm, 19 years of labor peace, booming national and regional television deals, the incredible success of BAM, the inflationary values of teams and teams’ real estate all coming together at the right time for Boras, Jay Z, the Wasserman Group, Excel Sports… This same sort of storm hit in the winter of 2000-2001, when ARod and Manny (what did the Red Sox bring the Yawkey Foundation?) and Hampton all signed deals many considered foolhardy.
Will Cano make the Mariners winners? Probably not. It never happened for ARod in Texas, Hampton in Colorado. It hasn’t happened with Josh Hamilton and Pujols in Anaheim, at least not yet. But if Seattle’s young pitchers like Taijuan (Sky) Walker develop and their young position players mature, it’s possible, and if it happens the M’s will already be relevant enough to be back on the radar to be in the conversation with the Seahawks and Chris Petersen’s UDub and the Sounders. As well as the junior hockey Totems.
And when some prosperous Washingtonian—Eddie Vedder—wants to take them over, the team bought for $117M will be sold for $1.117B.