TV money the biggest player in baseball free agency
According to reports, Shane Victorino has signed with the Boston Red Sox for three years and $39 million.
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NASHVILLE, Tenn. -- Baseball's offseason, and the winter meetings in particular, represent a chance for front offices across the league to issue contracts worth large amounts of money.
These winter meetings, entering their third day today at the Gaylord Opryland Resort and Convention Center, might not contain the type of expenditures witnessed last year, when the Los Angeles Angels spent $331.5 million on Albert Pujols and C.J. Wilson. Like last year, however, increased television revenue will enable the big spenders.
The Los Angeles Dodgers, reportedly considered serious contenders in the race to sign free-agent pitcher Zack Greinke, were negotiating an agreement with Fox Sports worth approximately $6 billion, according to a report last week in the Los Angeles Times. That means an average of $240 million per year in revenue over the 25-year life of the contract.
News Corp. recently bought a 49 percent share of the YES Network, the rights-holder of the New York Yankees. According to reports, that will increase yearly payout by YES from $85 million this year to $300 million in 2042, the last year of the new deal. Those contracts affect the concerned clubs and, to a lesser extent, the rest of baseball.
"The more money in the game, the more money that comes back to the clubs as a benefit from revenue sharing," Pirates general manager Neal Huntington said. "It doesn't change how we operate."
A new TV deal helped the Angels afford Pujols and Wilson, and a similar TV deal provided the Texas Rangers with plenty of room on their payroll for years to come. According to various reports, the Pirates received $18 million to $20 million this year from Root Sports.
"We've got what we have," Huntington said. "There have been some successful teams, teams that have been in the lower threshold of payrolls and have been successful, and we're expecting to be among them."
The new collective bargaining agreement strengthened the luxury tax penalties for teams that violate the threshold, set at $178 million for next season and increasing to $189 million through 2016, by increasing the tax to 50 percent for teams that surpass the threshold four or more times. First offenses cost 17.5 percent, second offenses 30 percent and a third is worth 40 percent.
"I think the reaction over what happens over the next two to three years will dictate where major league baseball and the union go over the next CBA," Huntington said.
Whoever signs Greinke will pay handsomely for him. Greinke and New York Mets starter R.A. Dickey, the NL Cy Young winner who might sign an extension or be traded, will influence the rest of the pitching market. Huntington said it was tough to determine their impact on the market, but "typically each year you see one guy that kind of breaks the backlog."
"I don't know that it's one guy in particular," Huntington said. "I think a lot of clubs are working through their boards and their offseasons and trying to find matches right now."
Huntington reiterated his Monday statement that the Pirates are in no hurry to make moves and can be patient after filling their main hole with Russell Martin.
"We're not going to make the big splash in the offseason during the winter meetings," he said. "That's the reality of probably half the clubs in the industry.
"Our focus is doing what we need to do, doing what we are able to do to put a winning team on the field in Pittsburgh, to build an organization that can sustain winning once we get there. It may not happen today, it may take some time. It may be a work in progress. I don't think any single move is going to make it all happen."
Once those millions of dollars of TV revenue help Greinke and the rest of the top free agents decide where they're going, the trickle-down effect will impact the rest of the league.
NOTES -- MLB.com is having an online auction to benefit Stand Up To Cancer, organized in large part by team public relations directors. Fans can bid on items and experiences from all 30 teams, including a suite experience at PNC Park and a signed Bill Mazeroski replica statue. The bidding ends Thursday. ... Matt Hague, who was designated for assignment when the Pirates acquired three players via trade, was sent outright to Class AAA Indianapolis.
First Published December 5, 2012 12:00 am