According to Forbes.com the Detroit Tigers took about a $400,000 loss in 2013, hardly a drop in the bucket when you consider the massive scale that they operate on. In 2013, the Tigers made $89 million dollars on ticket sales, $81.5 million dollars in TV revenue, and an other $69 million on everything else. They spent about $150 million dollars on players and coaches, and another $88 million on everything else (other employees, executives, and operational overhead). Again this goes without mentioning that a four hundred thousand dollar loss is hardly a drop in the bucket when dealing on the scale of about a two hundred and fifty million dollar annual revenue business.
Here’s the kicker. Each team will get another 25 million dollars from new national TV contracts that begin in 2014 per Crain’s Detroit. All other things equal, that means the Tigers can expect to have 25 million more to spend. Revenue across baseball is only growing. The Tigers can afford to take long term financial risks.
Yes, the Tigers have 9 arbitration eligible players all due for a decent pay raise, especially Max Scherzer who is in his last season of eligibility.
If you go with the MLB Trade Rumors predictions for 2014 salaries (and they are usually spot on with their predictions) for the arbitration eligible players, the Tigers will have an additional $16.5 million dollars in salary requirements. At the same time, this has you not re-signing your 7th inning guy (Jose Veras, $1,825,000 in 2013), your closer (Joaquin Benoit, $5,500,000 in 2013), and 2nd baseman (Omar Infante, $4,000,000 in 2013). You may have in house options for at least one or two of these guys, Hernan Perez at 2nd base, and Bruce Rondon at either the 7th inning or 9th inning who will make a major league minimum or only a few thousand more.
It will take $7 million dollars annually for 4 plus years to get Infante to stay in a Tiger uniform and probably$7 million dollars annually for 3 years to keep Joaquin Benoit in whatever roll you wish to use him. Infante will strike in a weak 2nd base market for a contract more than he’s actually worth and Benoit has had his best years over the last several seasons. Veras had his rather affordable club option declined by the Tigers, meaning he’s likely not going to be coming back.
Baseball America ranked the Tigers Farm System 29th out of 30 teams, which means there isn’t a stockpile of guys that can perform at the major league level where you can just let your guys walk, much like the St. Louis Cardinals who have been able to let their free agents leave because of the stockpile of MLB ready talent. If you wish to continue on as a championship level team, you have to spend on keeping your own free agents or spending on other club’s free agents.
Yes, the Tigers have a lot of potential anchor contracts. Most franchises have a couple of contracts that could bomb the team for several decades. There isn’t any difference here between the Tigers and most clubs throughout the MLB.
You want them to continue to be relevant, let alone competing for championships every season, which means they have to continue to spend like drunken sailors. They don’t have the farm system to just reload. The Tigers aren’t bad at acquiring young talent, they are just like the Yankees of old, they trade it away to acquire the sure thing. They are always signing the big time free agent, much like you want them too, which means they lose top draft picks most seasons. The Tigers don’t ever bid on the high priced Cuban defectors or Japanese youngsters with tons of miles on their arms, they just never have. They have to continue to build their team this way, otherwise you will be the Minnesota Twins before you know it, a team with a star or two and a bunch of bums on the field around them, all because they won’t spend money on young talent or sure thing free agents.
Baseball contracts will always keep growing, whether it is because of increased revenue, inflation, or market forces. A $24 million dollar salary for a Prince Fielder may be a total bargain by the time the contract is up, because a player of his talent may cost $35 million dollars a year on the market by 2016. Justin Verlander’s $28 million dollar salary may be a deal, especially after Clayton Kershaw sets the bar even higher when he gets his $30 million per extension here soon.
You can afford to keep the gang together. The revenue of the franchise and the MLB as a whole is only going up and you can afford to spend bigger. Mike Ilitch’s business made $2.4 billion dollars last year alone, so he can dip into his pocket and afford a couple of million more to keep a Max Scherzer. You’re getting $25+ million more this season, let alone the record deal you are set to get in 2016 when the local TV deal is up. Fox Sports Detroit has the best ratings in all of baseball for a local TV market.
The average ticket cost for 2013 to see a Tigers game was just over $36 dollars compared to the MLB average of 46 dollars. If you as a fan base are willing to see a $3-5 dollar increase in the average ticket, multiply that by $3 million plus fans and you get another $9-15 million to spend. It can happen folks, there is no reason to panic trade a potentially expensive player in their prime.