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I'm waiting to be edited on two stories, I'm giddy over the Mookie Betts news and so, for all of you who share my dual passions for baseball and economics, here's a storm, if you will, on why I think it's genius that the Dodgers just paid last year's market price for a star. 1/
Long story short, apologies to anyone who had this take already today (I have truly not seen it if so) but...
Money is the new Moneyball. 2/
Money is the new Moneyball. 2/
What I mean by that is, COVID-19 has upended the trends of the last couple decades in baseball, where teams rigorously quantified player value and sought to pay for bargains -- the more bargains, the farther you could go on your budget. 3/
That trend still applies to most teams. In fact, even more so. The shortened season, uncertainty about next year, no fans, plunging revenues: it sure seems like a lot of teams now have a lot less money to spend on players.
But not ALL teams. 4/
But not ALL teams. 4/
If you're a big-market club with a strong financial position, you have the ability to ride out these revenue uncertainties in a way other teams do not. You can keep spending big to get top talent, because, well, you're the Yankees. Or the Dodgers. The $$ will be there again. 5/
Good point, @MikeMadden: The Nats are not in this group. https://twitter.com/MikeMadden/status/1286057722492968963 6/
Actual baseball reporters (hi @dylanohernandez @ByJamesWagner ) can correct me here, but it feels like a small group of teams that can afford to just keep spending like there's no pandemic: LAD, NYY, BOS (ironically), maybe the Cubs? 7/
It's a double win for those teams: They can keep spending big, and they have far less competition. I'd be stunned if the Stras or Rendon free agencies played out the same way if they'd been this coming offseason.
If you're one of those rare clubs, you can't miss that chance. 8/
If you're one of those rare clubs, you can't miss that chance. 8/
Maybe the Dodgers could have paid a bit less for Mookie if they'd waited to see if the playoffs get canceled or something. But why take that chance? Their legacy capital has given them entry to an elite group, possibly temporarily. They should buy all the talent they can! 9/
Which brings us to a fear I have about this recovery in the broad economy - something that small business owners mention a lot when I talk to them. Some big companies are really well positioned to just buy up market share right now, while small companies drown in uncertainty. 10/
The incentives of this moment are just built for that, at a time when business dynamism is already deep in a multi-decade cycle of decline. What's rational for the Dodgers (or for a big box retailer) might be quite bad for the game (or the economy) overall. 11/
I want the Dodgers to win the World Series, but I don't want all of the great free agents in the next few years to land in NY or LA.
I like buying lumber at Home Depot, but I don't want my neighborhood hardware store to fail.
These are the pressures of this crisis.
/fin
I like buying lumber at Home Depot, but I don't want my neighborhood hardware store to fail.
These are the pressures of this crisis.
/fin
