Last night, or this morning, depending on what kind of person you are, Geoff Baker put up a new blogpost. The title is "How the myth that cost-effectiveness means something in baseball helps all teams get richer on other people's cash", and it is far from the first thing that Baker has written on the subject. Baker also recently gave a talk on the subject, which he links within his post. There are three parts.
A very quick and probably incomplete summary of Baker's position: fans worry way too much about their teams being efficient with their money, when they should be demanding that their teams spend more money. Teams don't get anything for being efficient. Teams get things for being good, and money buys good. Fans should stop letting certain owners get away with spending less money than they're able to.
Now, I see two things here. On one, Baker's probably right - I'm guessing a lot of teams could run higher payrolls than they do and survive, if not flourish. Owners are loaded. They pretty much have to be, to be owners. That's obviously a very simplistic view, and I can't sit here and prove anything either way, but taking the specific example of the Mariners, the Mariners could probably increase payroll a fair amount without ruining the people in charge. That is most likely an option.
But the other thing - there's a reason why fans care about efficiency. There's a reason why it's important. All teams operate with certain budgetary constraints. Baker feels like more teams should loosen the constraints. But as long as they aren't doing that - and they usually aren't doing that - it's important to maximize within the constraints as they're set.
Let's look again at the Mariners. It's one thing to talk about whether or not Prince Fielder makes good sense if the Mariners raise payroll somewhat substantially. It's another thing to talk about whether or not Prince Fielder makes good sense if the Mariners keep payroll around where it's been. We can sit here and clamor for the Mariners to spend more, because spending more would probably make them better, but as long as it's more likely that the Mariners don't spend much more, we have to address that situation. We have to talk about the Mariners as if they'll spend what they've spent.
And that doesn't only apply to the M's. The less money a team spends, the more efficient it has to be with that money in order to contend. That's very simple math. Let's say the target is 90 wins. Team A has a payroll of $50 million, and Team B has a payroll of $100 million. Team A has to be more efficient than Team B. That's where WAR/$ comes in. It is a consideration. It has to be.
The goal is not to maximize WAR per dollar. The goal is to win a bunch of games. But efficiency improves flexibility, or inefficiency reduces flexibility, however you want to look at it. It's good that the Mariners got John Jaso for pretty cheap, because that leaves them more resources to continue to add. It's good that the Mariners got Hisashi Iwakuma for pretty cheap, because that leaves them more resources to continue to add. If a team has a certain amount of budget room to work with, why shouldn't the focus be on being as efficient with that budget room as is possible?
The Mariners, so far, have had an efficient offseason. They got Iwakuma for cheap. They got Jaso for cheap. They got Sherrill for kind of cheap. They signed a bunch of guys to minor league contracts, including Munenori Kawasaki, who could fill a need. If the Mariners stopped now, no one would be happy. No one wants the Mariners to trim payroll. But the efficiency to date has left the Mariners room to add more. The Mariners might still have room to sign Prince Fielder. If not Fielder, then, I don't know, Carlos Pena and Jeff Francis, or Hiroki Kuroda. Or they could trade for dudes. The Mariners have options to improve - options they would not have had they been less efficient.
Efficiency is not the goal. Efficiency is a means towards a goal. To argue against efficiency is to argue in favor of inefficiency, which doesn't make any sense. The Angels will survive the Vernon Wells trade, but that doesn't mean things wouldn't be a little easier for them had they not made the Vernon Wells trade. They'd tell you as much, albeit maybe not on the record.
If we wanted, the underlying message for everything here could be "the Mariners should just spend more money." I do think the Mariners should spend more money, because it wouldn't make things worse. But that would get old, and we have to deal with the likely reality that the Mariners aren't going to spend much more money, at least soon. Given those constraints, then, we talk about how the Mariners can make the most of what they have available. By doing that, they'd end up in the best position.
Efficiency is important. It's critical. It's critical even for the big-spending teams. It's just a little less critical for them than it is for the others. Nobody wants their team to run a tiny payroll and generate a high WAR/$. But it's funny what happens when you generate a high WAR/$ at the established payroll you have. Most of the time, you win a lot of games.
15 recs | 98 comments
"Efficiency is not the goal. Efficiency is a means towards the goal"
Perfectly put Jeff. Thank you.
edgarrules - January 11, 2012
I second that.
Ackfan - January 11, 2012
Yeah, but could he put it in fewer or shorter words?
Matthew - January 11, 2012
Efficiency, val kilmer as batman but still no christian bale?
Efficiency, good start but not
N0body - January 11, 2012 via mobile
Geoff Baker is a funny man
By which I mean something else.
68GTCS - January 11, 2012
What do you mean funny? Funny like he's a clown? Does he amuse you?
d0nkey - January 11, 2012
I mean he's an idiot
Trying to get page hits and generate some controversy, as per usual, but still: an idiot.
68GTCS - January 11, 2012
Was just a reference to Goodfellas
d0nkey - January 11, 2012
[slaps forehead]
68GTCS - January 11, 2012
Baker also ignores the fact that if every team started spending like a big market club then your $130 million plus payroll would buy a lot less "good".
wetzelcoal - January 11, 2012
Is that an argument for collusion? Anyway, that would be like saying the Astros shouldn't really bother with the sabermetrics fad because they are the last ones to catch on.
It’s about not getting left behind as everyone else moves forward.
Mayo - January 11, 2012
I don't think it's an argument NOT to do it.
It’s an argument that eventual outcomes should be included when arguing FOR it.
Matthew - January 11, 2012
If all teams started spending a lot more
that could conceivably put teams in actual financially-stressful situations. I like the MLB with 30 teams and would prefer that all teams make at least some money so that we can maintain the league.
Two Rs and Two Ls - January 11, 2012
Right but,
Baker’s argument was basically that every owner should jack up payroll so they could win a lot of games, but he ignores the fact that that isn’t actually possible. If all 30 teams raised payroll to $200 million a year there wouldn’t be 30 90 win teams. That doesn’t mean you should spend as much as you can, but dollars don’t necessarily equal wins which is essentially what Baker is saying.
wetzelcoal - January 11, 2012
Close. The key is the non-conference schedule
The new efficiency will be scheduling games against the WAC and Mountain West teams. Then those dollars can be spent on 5 star recruits.
v-Skippy - January 11, 2012
Would I be right in thinking 2008 was a good example of spending a lot with very little efficiency?
Hopefulmsfan - January 11, 2012
Yes
Jeff Sullivan - January 11, 2012
The most frustrating thing about Baker's apparent position
is, to me, the fact that if he would just frame it differently, he might make a good point. I do think baseball teams, as quasi-public enterprises, should be subject to more investigative reporting on their finances and internal operations than they currently are. Beat reporters generally stay far away because it pisses teams off when they poke around, and bloggers often don’t have the resources to really dig in. Also, the subject matter just may not be interesting to a lot of people. In any case, I do think many fans, rightly, care about payroll and whether or not it is unfairly low given how much money ownership is making or how much ownership has benefited from taxpayer money in the past. That is to say, while I do not like Geoff, I think he could have a legitimate angle here.
But then he has to throw in the weird anti-efficiency argument into every post. What the hell is that about? It’s two totally different “issues” controlled by two totally different constituencies, ownership on one hand, and management (Jack Z) on the other. He seems to have a weird chip on his shoulder, like if he isn’t arguing against Dave, no one’s going to read his blog or something. Weird.
taprat - January 11, 2012
It's like he (Geoff) is asking for a daily MARINERS PAYROLL WATCH post
by including the part about how fans and such are discussing (or fixating on) efficiency at the expense of payroll. Since we don’t have much if any visibility into finances, it would be hard to do anything besides rehash ‘wow I wish/bet the M’s could afford to raise payroll!’
drtoofs - January 11, 2012
My favorite quote from that article.
How dare they not run their teams at a loss!
wetzelcoal - January 11, 2012
Occupy MLB!
d0nkey - January 11, 2012
Kind of amazing that this has to be said.
How can you do anything (well) in life without understanding this?
Isten - January 11, 2012
I find it hard not to psychoanalyze Baker.
It just makes no sense that he doesn’t get this. Is it a pride thing? Does he enjoy the negative attention? Is he just drumming up traffic?
taprat - January 11, 2012
I've always thought he enjoyed the negative attention.
It brings him page views and comments. It’s why I think he has published more than a few posts about how Edgar isn’t a HOFer knowing that every single Mariner’s fan disagrees.
Alex Kelly - January 11, 2012
It's fun to be the bad guy.
MT Olson - January 11, 2012
This is why he's dead to me
I won’t read his blog any longer because of the Edgar thing, along with his obvious trolling of the Seattle sports blogs. Don’t feed the monster.
short - January 11, 2012
Especially...
When the monster shits stupid.
teasethedog - January 12, 2012
Newspapers are on the wane and blogs seemed to initially get attention by being controversial.
He’s playing the game, as I see it.
JY - January 11, 2012
He's just a hypocrite.
No, really. He bitches about efficiency when he goes out of his way to be as efficient as possible in pissing off his readers.
twelveoutof10 - January 11, 2012
I kind of appreciate these efforts on Baker's part
People have maybe forgotten Bob Finnigan a little too quickly and I think its nice to have a beat writer who questions the Ms leadership over the team’s finances. But yeah, railing against efficiency is pretty misguided.
Bearskin Rugburn - January 11, 2012
He's bad in a different way.
Mariner John - January 11, 2012
Baker's Law:
Big name star contract = .25 x expected new tv revenue
Isten - January 11, 2012
I am really hoping that picture is featured in 75% of articles from here on out.
Mariner John - January 11, 2012
If the Mariners sign Prince Fielder, I hope this is the picture used.
Patrick Stites - January 11, 2012
I could go for a Sad Sexson bombing
just to show everyone that no, the site logo will NOT be changing.
Two Rs and Two Ls - January 11, 2012
When was the last time it changed?
/stillanewmember
Cascadian Man - January 11, 2012
It was a sinking ship icon a long time ago.
Before that, I think it had the Seattle skyline. I tried pinning it down using the wayback machine, but it’s malfunctioning.
JY - January 11, 2012
At one point it was a happy face I think, for like two days.
It originally used to be what the favicon is based off of.
Matthew - January 11, 2012
Geoff Baker is an efficiency expert, since he is highly efficient at trolling the Mariners blogosphere
Chris_FB - January 11, 2012
Damn
I just made essentially the same joke without reading all the way down the thread.
You did a better job though.
twelveoutof10 - January 11, 2012
I was asked by a non-Mariner fan whether I would like the M's to sign Fielder and this helps clarify my answer.
Of course I would like Prince Fielder to be a Mariner because I like watching the Mariners and I like watching good players and he is a better player then what they have now. However, I also like watching the Mariners win and I don’t think they are a Prince Fielder away from being a winning team, so it comes down to how much his signing would prevent the team from adding other needed pieces, now and down the road. Since I don’t know the answer to that, I didn’t really know how to respond.
quacker27 - January 11, 2012
I love not reading something I know will infuriate me
lemonverbena - January 11, 2012
I love not giving Baker the page hits
68GTCS - January 11, 2012
The only time I give Geoff Baker page hits
Is when I read something on LL that discusses something he says. Then I have to go see if he’s as big an idiot as everyone says. And he usually is!
extavernmouse - January 12, 2012
Of all of the roles Geoff Baker plays, self-important guy who
knows way more about baseball than everyone else because he has a journalism degree is my least important.
Ballard Erik - January 11, 2012
Unfortunately
Baker’s message is going to resonate with a lot of people until the Mariners show some progress. And while many of us see better future players and a minor league system being restocked with prospects and positional improvement in various roster spots, the visible progress measure that matters — wins — is going to suffer for a while.
Mariners_win - January 11, 2012
I just learned something new
You know why he hates Moneyball"? Because he’s in it!
link to google books search
And it doesn’t paint him in a flattering light.
MangoLiger - January 11, 2012
Let's invite Carlos Delgado to LL
“It was the most stupid thing I’ve ever heard. It doesn’t make any sense. You don’t see anybody writing anything about the Maple Leafs not having a black guy or the Raptors having 90 percent black players. It [race] has nothing to do with it. We don’t have any kind of problem in the clubhouse and we don’t need that shit.”
68GTCS - January 11, 2012
Let's invite Carlos Delgado to Geoff Baker Live
Chris_FB - January 11, 2012
That was one of my favorite parts of that book. Shit cracked me up.
sanford_and_son - January 11, 2012
Never got around to reading that book
That’s going to have to change.
short - January 11, 2012
Thank you for being the rational middle ground
Between “Break out the checkbook” Baker and Cameron and his army of stats nerds. Baker’s not out of line in suggesting that a team that has been amassing profits over the last decade should consider upping payroll to keep pace with divisional rivals, and Cameron is not out of line in suggesting that good teams focus on maximizing the value of players that have yet to hit their free agent payday. It’s a shame that both sides devolve into histrionics and name-calling rather than recognizing that the ideal path for the team (and any team) is somewhere in the middle – drafting well and making smart moves by buying low and selling high, while also knowing when to go big on the free agent market.
_Hutch_ - January 11, 2012
I'm pretty sure Cameron knows that
Matthew - January 11, 2012
I'm pretty sure Baker does, too
It is not difficult to understand that increasing payroll and spending money wisely aren’t mutually exclusive. Doesn’t stop either of those guys from arguing with each other.
taprat - January 11, 2012
Passionately arguing, in my opinion
It’s there, in the subtext.
Kermit. - January 11, 2012
The worst thing about Geoff's posts is their rambling nature.
It’s many times hard to get his point because it’s buried in wordiness and lack of structure. That’s unfortunate because he sometimes makes a good point.
No matter how much teams collectivelly spend, it is the same pool of players. If all the teams with low payroll started spending more money, which they should do according to Geoff’s blueprint for success, it would just inflate player’s salaries.
PackBob - January 11, 2012
I'll see your rambling nature and raise you some self-importance
68GTCS - January 11, 2012
I liked one paragraph of his article
I felt a little homage to LL there. Except when Jeff or Matthew says “Hey do it, or don’t” I usually end up doing it.
This time I chose don’t.
d0nkey - January 11, 2012
Jeff and Matthew don't add shit that makes the reader sound inferior if they choose not to though.
Mariner John - January 11, 2012
I really liked this post
Sometimes we get wrapped up in WAR/$ but forget to look at the net WAR we expect. Like you said, this offseason has had signings with very likely a high WAR/$ but unfortunately won’t vastly improve the team because our net WAR from these players we have acquired is probably going to be pretty low. 10 years ago I never worried about payroll efficiency. Now I might worry too much about payroll efficiency. Its nice to remember if the M’s jacked up their payroll I would need to recalibrate how efficient we would need to be.
Obviously all teams want high payroll efficiency. Its hard to do. While money doesn’t directly buy wins, if the M’s upped their payroll 25% it would help a lot. I guess since the M’s have had a roughly constant payroll for almost a decade now its one of those things I just take for granted but there isn’t any real reason why the M’s can’t increase payroll if they wanted to.
Edgar for Pres - January 11, 2012
Pretty sure all of the "saber" bloggers look at total expected war.
Dave has done it in like 5 different posts this offseason and Matthew has does team projections all the time at the beginning of seasons.
I almost never see WAR/$ figures written about explicitly.
stredarts - January 11, 2012
has done*
stredarts - January 11, 2012
Efficiency matters because it is the point that ownership and fan interest intersect.
You have to look at the relationship between ownership (and management, which acts on behalf of ownership) and the M’s fans and Seattle community. The goal of the ownership & management is to ultimately make money. The goal of fans and the community is to win. Efficiency is when a team maximizes it’s revenues compared to costs, and since costs (total payroll) is fixed by the club but known/estimable to the fans, both the fans and ownership want the organization to be efficient. It means the club made money and the team won games, which keeps everyone happy.
The problem, I feel, is that the marginal value of a win is less for the owners than for fans. We know that the payroll cost of wins 90-95 are greater than 80-85 and 85-90. Those costs are concrete and measurable for the club, but for fans, those 5 wins are invaluable- I mean, what percentage of your annual income would you personally pay for the M’s to make the playoffs? Wins provide no immediate monetary value to us as individuals (unless you had made bets on the team), yet there are some fans that would give their firstborn child for their team to win a championship. Of course, there are unfortunately some people who give up their first born child anyways, even without the promise of winning a championship. But I digress.
Wins do, however, provide direct monetary value to owners in the form of greater revenues from tickets, television contracts, and memorabilia sales. Obviously.
I guess what I’m getting at is that is this- what if instead of just looking at WAR/$, what if you looked at the other end, marginal revenue per win? If ownership were making more money per win, they could spend more per win and still operate with greater efficiency because the the revenues could more than match the costs.
But how does the owner of a baseball club generate greater marginal revenues per win? I’ve always believed that when a sports team achieves sustained success, it ultimately benefits the area it’s located in. Over time, it makes the city a more attractive place to live, raises property values, increases the tax base, and creates jobs. What is the value of the Yankees to New York, the Packers to Green Bay, Duke/UNC hoops to Raleigh/Durham? What is the value of the ski resort to the Jackson Hole area, Harley Davidson motorcycles to Sturgis, SD, and psychedelic drugs and youthful vigor to the towns of Empire and Gerlach, NV?
What the M’s need is an owner who would be capable of capitalizing not only on the income directly derived from the club’s operations, but also from separate sources indirectly attributed to the club but who’s value is at least somewhat derived from the club’s performance, popularity and entertainment value. Paul Allen is obviously the first person that comes to mind in this scenario, with his vast Seattle real estate holdings and his various investments in the community. The current ownership ultimately makes money when the operations of the Mariners organization is profitable. Regardless of whether the Mariners do well or poorly, Nintendo’s bottom line is unaffected. If someone like Allen were owner, the Mariners operating income would only be a portion of the bottom line on which they make business decisions. Even if current ownership was certain or confident that Fielder could make the M’s a short-term contender (he wouldn’t), the wins and strong possibility of the playoffs he would create might not be worth the $4-5M you are paying per win, and thus is a poor investment. Allen, on the other hand, might decide that the long-term benefits HE receives (increased property values, stronger economy, better market/area for his other investments) would outweigh the short-term operating efficiency of the club.
So, in summary: A win today could be worth more to Paul Allen (or someone similarly vested in the community) than current ownership, and thus I believe he would be willing to pay more for them. It’s particularly important in terms of short-term roster construction, and while I’m not full-board on Prince Fielder, the ownership situation is something to consider in the long run.
The purpose of a for-profit enterprise is to gain the highest return on it’s assets. According to Aristotle, the purpose of individual humans is to gain happiness. Happiness is a result of the “good of man”, which is “the active exercise of his soul’s faculties in conformity with excellence or virtue”. Supporting a winning team is virtuous to me, and I believe that rooting for a Mariners team that experiences sustained success would greatly increase the overall happiness I experience during my life.
The Mariners ownership and I seek different ends (return on investment vs happiness), but if Allen is the ownership, I believe the means used to achieve our separate ends becomes the same- WIN.
mkries - January 11, 2012
Wow, if I had realized I was writing a term paper, I would have included footnotes.
Sorry folks.
mkries - January 11, 2012
Sports value and local economic value are divorced.
There have been numerous studies that demonstrate this to be true. People substitute goods for entertainment out of a fixed entertainment budget. If the local sports team plays poorly, they go see more movies.
As someone who lives in NYC for school, I can attest property values are not high because of the Yankees. First off, fuck the Bronx. Everyone knows (A) the Bronx has no high valued property and (B) Manhattan is better. Second of all, fuck rent control. Finally, Green Bay is a tiny, sorry excuse for a “city.” There may actually be a local effect in that weird instance, but that is unlikely to be true for a large metropolis.
zeke5123 - January 11, 2012
It is problematic if our owners are more concerned about making money than winning.
Especially since most of their revenue is coming from a stadium which taxpayers paid for.
UW11Bowdown - January 11, 2012
Good thing that's not occurring here.
Come on. This is a talk radio-level comment. We expect better here.
Two words for you: Felix’s contract.
Two more: Ichiro’s contract.
rtang - January 11, 2012
Care to elaborate?
The way I see it, the felix contract was necessary to avoid a complete fan exodus (they would lose $), and the Ichiro contract was a reward for being both good and japanese at the same time. I can use the ichiro contract as an example of inefficiency so that doesnt support your argument either.
Also, the Ms DO set their payroll at a level where they project to make a profit. They lost money last year but hoped not to.
By tying payroll to expected revenue (and thus projecting expected profit) they LITERALLY are making profit their #1 priority.
Im not against a company for trying to make a profit, but their current model only allows for more money to be spent if they will STILL make a profit after spending the extra money.
Theyre not AGAINST winning, but they ARE against spending extra money unless they are sure that it will pay for itself in attendance/merch/concessions and future TV revenue.
So yes, they ARE more concerned about making money, and its not an opinion. Their own words and actions have proven it as fact
briwas101 - January 12, 2012 via mobile
Would you rather they up and left because they were losing money?
beastwarking - January 12, 2012
Your interpretation is not fact.
It sure seems like they’re running the business like a non-profit since any yearly profits go back into the business. Do you have any evidence that this is not the case?
morrow - January 12, 2012
How do you know these things you assert?
Do you have a source inside the Mariners organization? If the answer to that question is no, there is no way any sentence you typed with an all caps word in it can be said to be true. They are your opinion.
Their own words and actions have proven it as fact
That’s not how opinions work.
pdb - January 12, 2012
"So yes, they ARE more concerned about making money, and its not an opinion. Their own words and actions have proven it as fact"
Proven facts you say?
WORDS
Chuck Armstrong says signings here “kind of astounding” as M’s brace for big financial losses in 2011 (12/06/2011)
ACTIONS
2011 MLB Salaries
Mariners
2010: $93,376,107
2011: $98,067,684 (5.02% Increase)
MORE ACTIONS
Against spending money?
2006: $ 87,959,833
2007: $106,460,833 (Team contends!)
2008: $117,666,482 (Team implodes!)
2009: $ 98,904,166
MORE WORDS
M’s look for a new GM (10/08/2008)
M’s hire Brewers’ Jack Zduriencik as GM (10/22/2008)
Mariners GM Jack Zduriencik gets multi-year contract extension (8/31/2011)
Mariners don’t have the best owners in baseball but they certainly don’t have the worst. Ownership is looking to make money, just like every team in baseball is. That includes the Yankees who are trying to trim payroll to avoid paying luxury tax penalties in the future (12/05/2011). Mariners ownership has shown that they’re willing to change their philosophies (GM hire, payroll adjustments) to help put a winning product on the field. That they’re not doing it at all costs…well, that makes them like most owners in baseball. I will be concerned about ownership when they start financially preventing the team from getting better or staying good, but as of right now, I don’t see that happening.
ThundaPC - January 12, 2012
I'm not concerned with ownership making money in one way or the other.
As a fan, I’m concerned with winning, so I want the owner that is ultimately able to make the most per win, so that they will have incentive to expand payroll. I don’t expect ownership to treat it like an EPL soccer team.
I also realize that publicly-funded stadiums are the modus operandi these days. I believe that while SafeCo Field either has or eventually will pay for itself, the team does still have some obligation to try to maintain
a respectable productthe best product economically feasible.mkries - January 11, 2012
Where does this obligation come from?
morrow - January 12, 2012
Hypothetically, from being publicly subsidized.
Matthew - January 12, 2012
Plus, year to year profit isn't everything, since MLB franchise values keep rising. People don't sell stock if it stops paying dividends but keeps rising in share price.
yuniform - January 12, 2012 via Android app
Correct.
There’s obviously no legal obligation, but any time you have a quasi-public organization, there is pressure from the public for the company to provide value to the public. If the public realizes value, they consider it a wise use of taxpayer funds. If not, it is viewed as corporate welfare. If politicians and the taxpayers of Washington can provide financing for a company, I would imagine they could cook up some tax or regulation that “spanks” the company when it fails to provide the public value.
That said, I would be extremely surprised if the State of Washington nationalizes the Mariners if the team fails to sign Prince Fielder. Then the team would be cutting payroll (unless we can convince people that signing Ian Kinsler is more important than education.)
mkries - January 12, 2012
The Mariners aren't subsidized.
The stadium was. The Mariners are not a quasi-public organization. The public entered into a joint venture with a private company to build a stadium (which is owned by the public, not the Mariners). The obligations of both parties are spelled out in that agreement. There are no other obligations.
The state of Washington nationalize the Mariners? That’s not even possible. And even if it were, it certainly wouldn’t be legal. How much power do you think the government has anyway?
morrow - January 12, 2012
If the Mariners aren't subsidized
then why would they ever accept the terms of a joint venture to build a stadium? They could have done it all with private money.
Answer: It turns out that the terms of the joint venture resulted in a better outcome for their business. The subsidy they received is the difference between how their business would have fared in a purely private stadium-building-scenario and how it fared in the actual public-private joint venture.
MangoLiger - January 12, 2012
They didn't so much accept the terms of a joint venture as dictate them
They got free money. That’s why they didn’t do it with their own money.
pdb - January 12, 2012
But that wasn't a subsidy
it was a mutually beneficial agreement. Seattle also got what it wanted. You can’t look back and say the Mariners benefited more so let’s call it a subsidy. We have elected officials that are supposed to represent the public’s best interest. If they didn’t do that it’s not the Mariners’ fault.
The Mariners, for their part, were looking for a (better) place to play. Several cities were offering that. They were not looking to own a stadium. But Seattle was and the Mariners helped pay for it. It’s the classic win-win situation, except, as usual, the public actually lost.
morrow - January 12, 2012
Just because it might be mutually beneficial
doesn’t mean it’s not a subsidy.
When a private business gets special treatment from a government, that is a subsidy. Whether its tax breaks, bailouts, loan guarantees, stadiums, legal immunity, outright cash transfers, whatever— its a subsidy.
MangoLiger - January 12, 2012 via mobile
You wouldn't call every government contract a subsidy
but by your definition you could. Are states subsidizing Amazon by giving it tax breaks for building distribution centers in their states? I guess it becomes a political question at that point, but the states are clearly doing it because they believe it’s in their self interest (i.e., job creation) and not because they want to provide Amazon with aid.
morrow - January 12, 2012
I absolutely would call it a subsidy
You seem to be under the impression that things are only “subsidies” when nobody can come up with a justification for it.
A subsidy is what it is, regardless of whether it serves a higher societal purpose, or is a blatant corporate money grab. It doesn’t have to have a negative connotation.
MangoLiger - January 12, 2012 via mobile
But the argument is being made that there are strings attached to subsidies.
So the definition becomes very important. Does Amazon have an obligation to hire (or not layoff) during a recession because they’re subsidized? Do the Mariners have an obligation to spend a certain amount of money because they’re subsidized?
You can say a subsidy “is what it is”, but what it is isn’t exactly clear. The dictionary provides multiple definitions that may or may not support what you’re saying. But the connotation is what it is and it’s negative.
I think it’s fair to say that both Amazon and the Mariners would say they are not being subsidized.
What I’m saying is that an exchange of goods and/or services at fair market value should not be considered a subsidy even if government is involved. Regardless of which definition you want to use.
morrow - January 12, 2012
Ok sure
Exchange of goods at fair market value is not a subsidy. I agree. Though I’m not sure how the Safeco Field thing and the Amazon tax break thing could be construed as fair market transactions. But whatever. Semantics.
I think we agree on the end point, but get there in different ways. You are saying it’s not a subsidy, so the M’s aren’t obliged to increase payroll. I’m saying it is a subsidy, but that doesn’t mean that they are obliged to increase payroll.
The key point is, subsidy or not, the M’s are required to do certain things (lease terms, concessions revenue sharing, etc) under the terms of the Safeco Field thing, and are NOT required to do other things (i.e. increase payroll to the point that they don’t turn a profit).
If that is unfair to the public, then the target for our outrage should be the politicians who negotiated the deal.
MangoLiger - January 13, 2012
At the risk of being accused of needing to have the last word...
I agree.
One point of clarification… I’m arguing that from their perspectives, Amazon and the M’s are only seeking fair market value for where to locate their businesses. And that only matters because some people (not you, obviously) are implying the M’s owe something for the “favor” that was done.
morrow - January 13, 2012
I for one, wouldn't say or imply that the team does owe something.
But I will say and imply that they should owe something. i.e. I agree with:
Matthew - January 13, 2012
The nationalize thing was a joke.
As for subsidization, the Mariners are subsidized by the government by receiving the right to be the nearly exclusive users of a wonderful publically-owned baseball stadium. The difference in the costs they would have incurred to finance their own stadium through debt and the relatively small rent payments is an asset received from the public. It benefited the team when they built the stadium, and continues to benefit the balance sheet today with low rent and little debt.
mkries - January 12, 2012
Technically
The supreme court ruling in Kelo v. City of New London (2005) could conceivably give the State the power to seize the Mariners under the Takings clause of the 5th Amendment, so long as it is for “public use” and the private owners are paid “just compensation.”
MangoLiger - January 12, 2012
I'm not a lawyer
but I think it’d be a stretch to call the Mariners “for public use”. The stadium, sure, but the team itself? Probably not so much.
pdb - January 12, 2012
The alternative to "public use"
would be to declare them a “blight” which might actually be a stronger legal argument, given the team’s record these last few years.
MangoLiger - January 12, 2012
I really don't want to get into reading every bit of that case, but a cursory glance just seems to be that it's about eminent domain and the transfer of land. I don't see how it would relate to being able to transfer the Mariners.
Patrick Stites - January 12, 2012
Its been said before but I'm going to say it again
If the argument is that owner’s should not take a profit when they’re benefiting from tax dollars then fine. However, who in their right mind would suggest a manager of any organization would be better off not being as efficient as possible in spending limited resources. Microsoft has tons of money, but they won’t be spending money if they don’t expect a return (well windows phone aside).
universalguru - January 11, 2012 via Android app
I can hear Jon Stewart's voice in my head from his appearance on Crossfire.
This time he’s on Geoff Baker Live. “Stop. Stop hurting the Mariners”.
Easley - January 12, 2012
Here is an article on the subject written by my former boss.
The Efficiency Paradox
While this is written for a military audience, it can be applied to both Jeff’s and Baker’s posts.
It might not be for everyone, but I think the Lookout Landing audience is sharp enough to appreciate it.
TJDirk - January 12, 2012
High level summary?
Matthew - January 12, 2012
If I understand your question you're looking for the gist of the article.
Bottom line – while being efficient with limited resources is a good thing, trying to determine the exact minimum amount of force one needs for victory reduces flexibility. While a having reserve force can be perceived as wasteful, not having one reduces your ability to respond to changes ultimately costing lives.
For example, put in baseball terms, having exactly five good starting pitchers and no decent starting options in the bullpen or in the minors limits your ability to respond to changes (i.e. injury) and ultimately cost you victories.
The article has a lot of good points concerning why you should be efficient with your resources, but makes the point that quantity has a quality of it’s own.
If I didn’t adequately answer your question, please let me know.
TJDirk - January 13, 2012
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