Two days after Stephen Strasburg made his record-breaking debut for the Washington Nationals this past summer, my friend's one-year-old girl was tottering around the house in a brand-new #37 jersey. She wasn’t alone. In fact, I was at that first start vs. the Pirates on June 8th. Before the last out was recorded, the line to the team’s clubhouse shop stretched practically around the concourse, and the next day, it seemed like everyone in the DC area was wearing one.
I should be clear off the bat: I’m confident that before long, Derek Jeter and the Yankees will agree to a new contract that’ll keep the captain in pinstripes for the rest of his career. But if his free agency evolved from a cat-and-mouse game between the team and their franchise player to a real bidding war with multiple teams, I wouldn’t be shocked. The baseball media who assume that it’s a foregone conclusion that Jeter re-signs with the Yanks are missing a huge part of the equation.
What does this have to do with Steve Strasburg? Running a baseball team in 2010 really means running two separate -- and sometimes conflicting -- businesses. The first is the business of producing a quality on-field product. The second is building a team that makes the most possible money for the team’s owners and shareholders.
Yahoo! Sports speculated that the Strasburg debut was worth at least $1.5 million in additional revenue for the Nationals, based on additional ticket sales, concessions and parking. They predicted that Strasburg’s rookie season alone might generate enough revenue to more than pay his 4-year, $15 million deal.
The prevalent view that a Jeter/Yankees deal is a foregone conclusion is probably right on the baseball side of the ledger, but might be wrong on the business side. True, the current 3-year, $45 million deal on the table would almost certainly pay Jeter more than he produces on the field. According to Fangraphs, Jeter was only worth $9.8 million on the field in 2010, and that total should continue to decline as he ages into his late 30s.
But what about the business side of the ledger? Nate Silver considered this a few days ago and concluded:
"How much those off-the-field contributions are worth is hard to say. Baseball statisticians are just starting to get a handle on how to value on-the-field performance, and there has been little work done on the attendance and marketing premium provided by popular players."But one thing’s for certain: Derek Jeter is worth more outside the foul lines to almost any team besides the Yankees. All those pink Jeter #2 shirts the Yanks sold to every teenage girl in the Tri-State area? They won’t go out and buy another one if Jeter re-ups for three more years. Much of the merchandising value Jeter has for the Yanks has already been realized. Same with ticket sales: the day the new deal is announced, you won’t see a surge in 2011 ticket sales (nor, I would suspect, would you see a dramatic drop in sales if Jeter departs).
But let’s look at it another way. The Giants are known to have contacted Jeter’s agent. The Nationals apparently have money to spend and could use a veteran face of the franchise. Maybe Jeter wants to return home to Michigan, and the Tigers always seem to have money to throw around. If one of these teams -- 0or almost any other -- announced that they had signed Jeter, they would score the PR win of the century. Ticket sales would skyrocket. And there’d be an entire new city of teenage girls to buy those pink shirts.
Maybe it would take a 4-year, $80 million deal to get it done. Would that kind of money make sense from an on-field performance measure? Heck no. But it just might pay for itself in ticket sales and merchandising. The value of bringing the sport’s most beloved and recognizable face to your city can’t be understated, yet it seems like most observers of these contract negotiations are all but ignoring it.
Not every team will see it this way, but all it takes is one for these contract talks to get interesting. In a sense I admire Brian Cashman’s hardline stance that Jeter’s agent should talk to other teams if he doesn’t like the Yanks’ offer. It shows a radically new tactic in the aftermath of the absurd extension the team gave Alex Rodriguez after his opt-out tantrum. Cashman’s poker face is impressive, but all it takes is one adventurous team to call his bluff.
By night, David Meadvin is a diehard Yankees fan and Yankeeist reader. By day, he is president of a Washington, DC speechwriting and communications firm, Inkwell Strategies.