I Read the News Today, Oh Boy: Matheny Retires

As announced in a variety of media outlets, like the Merc, Mike Matheny retired today. I had guessed this on Lefty Malo when Bonds signed and Lefty asked who goes off the 40 man, but it does me no pleasure that I was right in my guess. I like Matheny and was glad that he was our catcher, though, again, the free agent bad karma hit us again (Christiansen, Alfonzo, Durham, Alou, Benitez, Rennie Stennett, to name a few big let downs) and the player is way more expensive than the production we got from him.

As Lefty very nicely opined here, on 2/2 in "What's Cooler Than Cool", we need to keep things in perspective about the price players pay as athletes, as their abused bodies betray them in their post-athlete period and they suffer the consequences of pushing their body to the limits.

On the Other Hand

However, I'm sorry, but if certain Dodgers were to bite the dust due to injury, it is not like I wished it upon them, and if it helps the Giants win, well, I'm going to cheer, like mad. I'm crazy competitive like that. And if a player makes a mistake and I think he could have done better, I'm going to cuss him out (see Benitez, Armando, if you question this). Lastly, while I will feel some sympathy for athletes who cannot do normal everyday things with their body when they get older, it is a choice they made, that they gladly made, and they were well paid for what they do.

It's A Lifestyle Choice

Everyone takes risks with their body and mind with their work, some much more than others, and there is some level of responsibility there for some of these choices. For people who have to work in mines and suffer for that, they have my utmost sympathy, as some of them have no or little choice, oftentimes. And I feel similarly sympathetic for any of the heroes who help protect us or who help teach us, they are all woefully underpaid for what they do and they chose to do that for us.

But athletes are doing what they want to do, and they willingly do it, and they are paid well to do it, as they are entertainers. Matheny, I can feel the utmost sympathy for, because his severe injury is not something that regularly occur, at least bad enough to retire a player, particularly in baseball. I have no problem feeling for player like him or Joe Theiseman or Alonzo Mourning (I think he's the one with the kidney problems or something), where unusual injuries or conditions limit their careers.

But Burks and Bonds, yes, I'm sorry their knees will be gone, and they might not be able to do what other people do with their children, but that's a choice they made. They know (or should know) the dangers of going into such a profession and having a long career. Same with executives or sales people who need to travel everywhere and leave their families behind. These people have choices in their lives, maybe not ones where they could make as much money as in the profession they chose, but there are still choices made, and they chose to risk some part of their personal life to earn that money.

Meanwhile, there are people like I who chose jobs that don't earn as much money (as I could), that don't require as much travel, so that I can do what I want to do most of all: spend time with my family, to be there for my children. I made this choice because my father died when I was relatively young (15) and, basically, I never saw my dad much once he took a swing-shift job when I was 5, only on weekends. And being the typical stupid teenager, I didn't always want to go out on family outings, though I did make 99% of all family outings (I didn't always go of my own choice :^).

And I make good enough money, so don't cry for me, but there comes a time when a choice is made and maybe you didn't realize all the ramifications when you made the decision when you were young, I think by the time you reach the majors, and been there for a few years, before the wear and tear sets in, you can see that in the vets, in how they are after games, and how they complain about their bodies, like Bonds in every other interview I hear. I don't wish their injuries or body breakdowns upon them, but there are more worthy people in this world to feel sympathy for than highly paid athletes.

Within the world of pro sports, there are some clear areas of sympathy for me besides the ones I noted above. I feel sympathy for the players who played long ago, when the pay was low and now they don't have the money to support the medical care they require today. Some NFL greats are currently rallying to get more money to these vets and I think that's great, these long-ago players helped build the foundation so that the athletes of today can benefit greatly from the sport. I think the others sports should do so too, if they aren't already. And they should gladly contribute to support their predessessors in their time of need.

But the players today are making very good money, and they are being paid for the risks they are taking with their bodies. And if they do not think that the pay is good enough to compensate for future expected aches and pains, then I suggest that they find another job where they don't have to worry about not being able to play with their children, about not being able to get out of a chair without your body creaking. Their children, their wives, and their bodies will thank them.

As the Barry Turns

When we last left our story, our protagonist, Barry Bonds, had gotten his physical and finally signed his contract with the San Francisco Giants, the financial details of which were agreed upon nearly two months ago, but which legalese, clauses, and codiciles were holding up the signing (as it did with all the other signees). Finally with agreement on both sides, the signing was done and the happy press conferences and media interviews commenced with great huzzah.

Skreeecht! Today, the needle went off the record, as it was disclosed that the powers who be in the MLB management would not allow a particular clause, which the Giants had granted Barry to allow him to capitalize on his march to Aaron by permitting him more freedom to do personal appearances, as it appears to violate a part of the collective bargaining agreement.

In addition, in a snarky rejoiner from Barry's agent, Borris noted that Barry is not only not signing the revised, new documents, but, in fact, all the reports that the Giants could terminate Barry if he is indicted is incorrect because it violates the CBA and thus is unenforceable. The Merc's article on this confirmed this with an interview with a former MLB executive who is a lawyer. The Giants, and league officials, however, think that they "could win if taken to arbitration over the issue."

Someone also speculated that the Giants might have done the clause, full knowing it might not be enforceable, in order to present the image that they are trying to do something about it. That they want to publicly appear to be dealing with Bonds's issues and not giving him free rein, and not just his willing enablers, as, ironically, they are being presented on the Merc. Thus they put in strong language even though they know it might not hold up in court when push comes to shove because they want to show that they are doing all they can to limit Bonds.

Giants Thoughts

And the unspoken word here is that the Giants might also be trying to show the world that "hey, our hands are tied by the CBA. You can say we are enablers and bending over to the superstar, but there are limits to what we can actually do to Bonds because of the CBA. If you have problems with that, bring that up with the commish the next time the CBA is set to expire."

The Giants have clearly been worried about image before, with Magowan's infamous "feud" with Dusty Baker because Baker took all the claim for success of the team when Magowan thought it was a team effort and thus chafed under Baker's self-promotion. It is clear from Sabean's press conference releases of information that the Giants want to shape public opinion and present a certain image of what they are and what they represent. Sabean is always on guard and never says anything that the Giants don't want to release, he is always careful about the phrasing of his statements and about what info he releases. So it would not be surprising to me if the Giants did the contract knowing that it might not be enforceable.

But in the end, despite posturing by both sides, Barry isn't going to get this type of money anywhere else and the Giants need a hitter like him batting 4th, for this season. This contract will get done by spring training and everyone will be all hugs and smiles again. And all will be forgotten once the season starts.

However, if Klesko comes back like Bochy says he will, and can hit 900+ OPS, despite Barry's interest in playing in 2008 (I think he wants 3,000 hits) and interest in remaining with the Giants, they will have a viable option in Klesko for LF (assuming he doesn't sign elsewhere, I assume the Giants will try to sign him to an extension once they think they have the real thing) and Barry won't have the Giants stuck with relying on him. Lots of "ifs" and there's the example of Frank Thomas leaving the A's, but it's something to think about.

Bonds's Deferred Money

I posted most of this (I am an inveterate tweaker, so actually, I've added a bunch of new stuff now... :^) on Lefty's the other day and thought I would post it here as well, since I've never really discussed this issue in great detail here. The issue is where is Bonds's deferred money coming from and what is this mysterious other "bucket" of money the Giants are funding the money from that is not this year's payroll.

Where is the Other Bucket?

The main crux is that the old CBA does not require the team to fund deferred salaries for about 2-2.5 years, then the team must put up the deferred amount, at its present (discounted) value, at that time, then presumably that amount will accrue interest and reach the $5M when it is due. I presume that this clause was not changed materially in the new CBA, a copy of which I have not seen yet.

I think that there's two ways to interpret the "other bucket" issue.

One is that they have been adding the amount paid into this fund from each year's payroll, an amount reduced by the $2M exemption for the first deferment, then each year reduced by the amount of the discounted amount, which I think would roughly be about $1M.

The other is that the Giants, instead of bumping up the budget for the payroll each year, absorbed the payments within the growth of their revenues each year, while keeping everything else static.

Either way, it could be semantics. The money for the deferral due this year is not from this year's budget because contractually, the CBA demands that the Giants fund an account specifically for Bonds deferral a couple of years before it is due. However, they could be funding in this year's budget the deferral from the 2005 season, if I understand the legalese in the CBA correctly, but not the deferral for the 2002 season, which is usually how the question is phrased.

Giants Thoughts

My take would be that the Giants did not want to raise the payroll each year and set the expectation with fans that payroll will rise constantly and with huge leaps, as they were not certain that revenues would continue to be strong, both once Bonds retire and once the original charter contracts ended.

This jibes with my past calculations of the Giants payroll based on player salaries and comparing it to the total publicized budget amount, as I've always left out the deferments (a reported Giants insider said to do this at Fanhome long ago), and the only way I could make the total of salaries be close to the budget was to subtract the full deferments. The actual total was significantly higher and I would adjust salaries based on when trades were made and partial season's worth of play. If the Giants were allocating any of their payroll for deferments, then I was still be off by a fair bit the past few years, as $4M would go each season to fund Bonds deferment plus all the other deferments done for Alou and others.

So therefore I think that they absorbed the deferrals with the increases in revenues. I assume there was some boost from the contractually slight increases in ticket prices to charter seat holders plus the standing room tickets they sold plus the increases in advertising rates. But then they were offset by increasing contributions to the "poor clubs" revenue sharing fund, payments to keep the Expos afloat, and decreasing interest expenses from their ballpark loan, among others. But all together, I think revenues rose, allowing the Giants to dip into this "other bucket", and kept the announced payroll budget relatively low so that should revenues take a hit (Camden's revenues eventually dropped a lot, after opening plus should the team happen to suck too badly and lose attendence), any reductions to the reported payroll will be minimized by these other "buckets" of spending.

In accounting terms, they created separate accounts to handle the deferred salaries for each player, and thus their "payroll budget" never budged much over the past few years while they labeled this new outflow of money, say, "deferred contracts". Of course, when you get to the P&L, the payroll will be the much higher figure with the deferred salaries subtracted as expenses, but then a balancing entry would be made in the liabilities section to account for the new debt they owe. Sorry, I know there's a missing step somewhere to balance everything nicely and foot the entries, but that's the limit of my accounting terms that I can recall, though I think that is basically correct.

Managing Expectations

If I were running the Giants, this would make sense business and public relations-wise. You defer money to future years where you expect more revenues. Meanwhile, you manage the fans' expectations by announcing that the payroll budget isn't changing much or at all for a number of seasons, so that if revenues do dip - for whatever reason - they can keep the budget up at the "same" publicized level, so that fans don't think that the team is cutting back and rattle the bars of the cage louder.

Some fans may and have wondered where all the money is going, but it is publicly known that the Giants have a number of big drains on their revenues - the park's mortgage, the revenue sharing (which rises each year), paying in to run the Expos, plus paying in to buy the Expos - so they can obsfucate what they are doing exactly with their money, which most private companies want to do anyway.

And the Giants do that by publicly keeping the budget about the same each year. Can you imagine what fans would say if the true amount was given each year and it climbed high and then the Giants had to reduce it due to declining revenues? Actually, we don't have to imagine, last season Sabean set off a mild maelstorm of consternation and protest among some Giants fans when he announced that the payroll would be reduced some. Don't know if that caused the Giants to change their minds but they then ended up keeping the budget the same amount after all.

Saving for a Candlestick-like Day

So it would make sense - kind of like how public companies smoothed out their earnings in the past so as not to disappoint investors and, more importantly, the security analysts who say "aye" or "nay" on whether to invest in the company - for the Giants to "smooth" out their publicly released payroll budget, so that the Giants are covered in future years should revenues do fall short and they need to cut back, but they cut back on this "other bucket" instead of the public payroll budget figure, keeping it boosted high in lean years, should they come to pass.

Afterall, it was not all that long ago that the Giants could not draw huge crowds to see their games. It would make sense to save for a rainy day in whatever fashion you can, whether by having larger operating profits, as Forbes has reported during the 2000's, or this "other bucket" so that the budget can seem to be static, when it varies depending on the deferred money. Should the revenue shortfall come, they can reduce the budget while keeping the public figure the same, plus dip into their accumulated profits of the past 5-6 years, should they need to go that far. It is all about managing expectations.