Last season, the Detroit Tigers finished 74-88, last in the AL Central, in large part due to their disastrous pitching. The Tigers' 4.90 team ERA in '08 was the fourth worst in the major leagues.
Detroit's hyped lineup was good, but it didn’t produce the galactic numbers that a lot of people expected. The Tigers may be facing some difficult financial decisions if their disappointing play continues.
The Tigers were top three in player spending in 2008, along with the Yankees and Mets. They spent about $138 million.
The Tigers players’ salaries are projected to be about $135 million for 2009.
From Peter Gammons’ blog:
"Major League Baseball has warned club businesspeople that attendance is expected to be down 17-20 percent in 2009, and that it could be worse, especially for franchises such as the San Diego Padres, Toronto Blue Jays, Detroit Tigers, Cleveland Indians, Houston Astros, Colorado Rockies, and others that could be seriously impacted by the recession."
So far, Gammons’ report is looking like fact.
For Detroit, opening ticket sales are down almost two-thirds from last year:
2008: 177,180
2009: 66,163
Last year, before the 2008 season, the Anderson Economic Group predicted that the Detroit Tigers would sell an average of 40,000 seats per game.
Along with a big opening day, the team was projected to have a total economic impact of $117 million.
The basics of their prediction
$22.50 average cost per ticket
+ $20 additional expenditures (food, drinks, etc)
+ $5 Parking
= $47.50 per person cost of attending a ballgame
40,000 tickets per game
$47.50 * 40,000 tickets = $1,900,000 total expenditures
Direct economic impact: $905,000 (Subtracting MLB share and substitution effect)
Indirect economic impact: $543,000 (multiplier of 0.6)
Total impact per game: $1,448,000
Impact over 81 home games: $117,288,000
Season revenue from ballgames: $73,305,000
Attendance for the Tigers was actually closer to 39,000 per game, but this estimation was close.
What impact would cutting attendance by 20 percent have?
31,200 tickets per game
$47.50 * 31,200 tickets = $1,482,000 total expenditures
Direct Impact: $705,900
Indirect Impact: $423,540
Total impact per game: $1,129,440
Impact over 81 home games: $91,500,000
Season revenue from ballgames: $57,200,000
What about a 30 percent attendance decrease?
27,300 tickets per game
$47.50 * 27,300= $1,296,700 total expenditures
Direct impact: $617,663
Indirect Impact: $370,597
Total impact per game: $988,260
Impact over 81 home games: $80,049,060
Season revenue from ballgames: $50,030,703
So the Tigers could be looking at a decrease in total economic impact of at least $25-37 million, and revenue from ballgames could drop by at least $16-23 million.
Let’s take a look some of the big remaining contracts that Tigers GM Dave Dombrowski so generously doled out.
M. Ordonez: $16M, one year
G. Sheffield: $13M, one year
J. Bonderman: $25M, two years
C. Guillen: $36M, three years
Dontrelle Willis: $22M, two years
N. Robertson: $17M, two years
Brandon Inge: $13M, two years
C. Granderson: $17M, four years
The Detroit Tigers failed to move the contracts of Gary Sheffield and Magglio Ordonez over the offseason. It’s possible that some team will trade for Ordonez midseason, but that seems unlikely.
In fact, the Tigers need to make sure that Magglio doesn’t reach 135 starts or 540 plate appearances, or his 2010 money becomes guaranteed.
Bonderman (career 4.74 ERA), Willis (absolute disaster), and Robertson (career 4.90 ERA) aren’t attractive trade candidates with those salaries.
Carlos Guillen’s contract seems astronomical in the current market.
Granderson is a fan favorite and a relative bargain, so he is probably staying put in Detroit.
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Here’s my question: How will the Tigers shed salary?
It’s true that the Tigers will have potentially $50-plus million coming off the books in 2010 but that’s with the caveat that they will need to fill those holes (two SP, C, SS, 2B, two RP, two OF).
They will also have an additional $30-plus million coming off the books in two years (losing another two SPs and Brandon Inge).
If you were the owner of this team, wouldn’t you consider blowing it up and starting all over?
Does keeping Miguel Cabrera’s seven-year, $135 million contract make sense to the Tigers if they are rebuilding?
If the Tigers don’t trade Cabrera, how will they reload with young talent?
The Florida Marlins were faced with a similar dilemma and ended up dealing Cabrera for youth.
For Detroit, trading Miguel Cabrera is a very real option.
Cabrera’s contract:
’08: $11M
’09: $15M
’10: $20M
’11: $20M
’12: $21M
’13: $21M
’14: $22M
’15: $22M
If the Tigers wish to trade Cabrera, now would be the time. His contract is back-heavy and is about to get very expensive.
The San Francisco Giants could be one of the possible buyers
San Francisco’s new owner, Bill Neukum, might be looking to make a signature splash, like new Giants ownership did in 1993 with the signing of Barry Bonds.
San Francisco currently has Pablo Sandoval playing third base, but he does not have the defensive range to be a long-term solution there.
The Giants' general manager, Brian Sabean, offered short term contracts to third basemen Joe Crede and Ty Wigginton in hopes of moving Sandoval over to first base. He didn’t close the deal with either.
Sabean showed little interest in signing Manny Ramirez, even though the Giants have a glaring need for a big bat and could have afforded an offer to Manny.
San Francisco has a strong starting rotation and has the ability to compete in the NL West.
Sabean has contended that the Giants will trade for offense during the season because financially stressed teams will be looking to dump expensive hitters in exchange for young pitching.
His lack of interest in Manny suggests that he may have been saving money for exactly that.
Would Sabean be willing to go after Miguel Cabrera?
My inclination is that he would. It was rumored that the Giants aggressively pursued Cabrera when the Marlins put him on the trading block in 2007.
The Tigers won those sweepstakes by trading Cameron Maybin, Andrew Miller, Mike Rabelo, and three minor league pitchers to the Marlins for Willis and Cabrera.
Miguel Cabrera is only 25 years old, would fill the Giants' need at third base, and is one of the most talented hitters in the game.
Even if the Giants had signed Crede or Wigginton to a one-year deal, it wouldn’t have been a major obstacle in pursuing Cabrera. The fact that he didn’t seal the deal with either of these players gives Sabean even more flexibility in a possible trade.
This lack of action also confirms that Sabean is confident that a player will fall into the Giants’ laps.
With a well of young pitching talent, the Giants could be perfect suitors for Cabrera and the Tigers
Sabean has said that Tim Lincecum and Matt Cain are “untouchable.” The Giants probably won’t trade Lincecum, but I wonder if Cain is really “untouchable” by the strictest definition.
Sabean also mentioned recently that trading a bigger, stronger Jonathan Sanchez is out of the question because the Giants couldn’t get proper value for the young southpaw. However, that may not be the case, come midseason.
Among others, San Francisco could offer these minor leaguers in a trade: Tim Alderson, Madison Bumgarner, Connor Gillespie, and Angel Villalona.
I also wouldn’t rule out the trades of current major leaguers Fred Lewis, Emmanuel Burriss, Kevin Frandsen, and Eugenio Velez.
The Giants think of catcher Buster Posey in the same light as Cain and Lincecum, so he is also probably untouchable.
In a trade for Cabrera, the Giants may even be willing to eat some of the Dontrelle Willis contract as a reclamation project and to bring home a Bay Area personality (he was born in Oakland).
Is a change of philosophy on the horizon for Detroit?
The Tigers’ recent acquisitions of catcher Gerald Laird ($2.9M) and shortstop Adam Everett ($1M+) indicate that their current strategy involves bargain hunting.
If Detroit falls behind the AL Central early and attendance really starts to drop, this situation will become very intriguing.
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