I initially created Baseball Graphs to develop new and better ways of presenting baseball statistics. The 2003 season was my first full-season attempt, and it turned out pretty well. I now spend a lot of my time creating and formatting the baseball stats at The Hardball Times.

Along the way, I've also picked up the writing bug. I spend most of my energy writing for THT, but sometimes I like to write about more geeky stuff, baseball research and things like that. That's what this blog is for.

I'm very interested in graphics and other information display, so I'll probably post links to creative stuff like that. I also plan to write historical articles that complement the historical graphs. And I have inexplicably developed an interest in baseball win-related stats, such as Bill James's Win Shares and something called Win Probability Added. So you can expect a few posts about that stuff too.

If you're interested, I've created a complex spreadsheet full of WPA logic, which you can download at ftp.baseballgraphs.com/wpa. If you'd like to read more about Win Shares, try these links:

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The Tribune Company is for Sale

November 20, 2006

Just some rumbling about the economics of baseball

Reports are that the Cubs signed Alfonso Soriano to an outrageous contract: $136 million for eight years, or $17 million a year.  The dollars are amazing, but the it’s the length of this contract that astounds me.  Soriano will be 38 when his contract is up, and the years from 33 years old through 38 years old will represent enormous risk for the Tribune Company, or more likely someone else.

The Cubs are indeed owned by the Tribune Company, which is up for sale.  The latest I’ve heard is that observers are unsure if the Tribune Company will split up its businesses or sell them altogether, but the Trib, and the Cubs, are most definitely for sale.

This may be the most amazing thing of all.  A company on the block is committing itself to long-term contracts on a riotous scale.  I’ve been involved in several mergers and acquisitions, and I’m struck by two things:

• Companies don’t commit themselves to long-term contracts when they are up for sale.  They assume buyers don’t want to take on long-term risk.
• If they do sign long-term commitments, they usually have an accepted bid and are going through due diligence with a buyer, in which case they touch base with the buyer before making the commitment.

Which leads me to believe one of two things is happening here:

• The Tribune Company has a strong prospective buyer for the Cubs, or...
• The Cubs are worth more with Alfonso Soriano and Aramis Ramirez under long-term contracts than with cash in the balance sheet.

Last I heard, there were two strong prospective buyers for the Tribune Company but neither one was exactly into due diligence.  Of course, I’m not a part of the business circle.  I just know what I read.

In the end, I believe the Tribune Company thinks that signing Soriano and Ramirez will increase the value of the Cubs (and the Tribune Company).  Otherwise, you wouldn’t see these deals happening on the North Side.  As outrageous as they seem, these contracts may actually be good for business.  And if that’s true, it puts these outrageous free agent salaries in an entirely different perspective.

UPDATE: Maury Brown has an article covering this precise topic in today’s Baseball Prospectus.  Maury essentially thinks that the Trib just doesn’t care as much about saving money as they used to, since they won’t own the Cubs in the future.  I think he’s misreading the situation.  My guess is that the value of the Cubs is probably uppermost in the minds of Trib executives.

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