Wednesday, June 2, 2010
Oliver Perez Doesn't Make Business Sense
As much as we love our teams we often overlook the fact that this is a business being run by people who are beholden to the almighty dollar. Winning brings in dollars, but if a losing team can still make a profit that's not a bad deal for these guys either.
So let's look at the Oliver Perez situation and you'll see why it's bad business for the Mets to hold on to him as they currently are.
Perez is estimated to make about $12 million over the next two years. He's signed a contract stating such. So you know what that means? That money is basically spent. Sure it's allocated on a balance sheet for the next two calendar years, but in reality that money is already gone. The Mets are not making that back.
The only way the Mets could get out of paying Perez is by trading him and the other team picking up his full contract. Of course, it's logical to assume that whatever team he is traded to will send an equal valued contract back to the Mets so there's no cost savings. So basically holding onto Perez doesn't make the Mets any more profitable.
In fact it could make them lose money.
Fans come to the ballpark to see a winning team or see an exciting team play. The Perez situation is turning away fans from coming to the games. Sure the stands still have fannys in the seats, but it's the fan that comes to 3 or 4 games a season that is less likely to spend the money to attend a game because of the bad taste the Mets are leaving in their mouths with Perez.
Now let's say the Mets DFA Perez. Money is already spent for his contract so they're not losing any money. They may have to bring in another pitcher, maybe from Triple A or maybe a free agent. Let's say that it costs the Mets $3 million for this season to bring in a free agent pitcher.
Let's also assume that now that the Mets are rid of Perez, Mets fans are now more pleased with the team and more fans are likely to come out to the ballpark. For the sake of argument let's say that Perez's leaving the team causes on average 300 more additional fans to attend a game for the rest of the season and there's 50 home games left. The average amount of dollars this fan spends to attend a game is about $200 including tickets, parking, food, drinks and memorabilia. Those 300 additional fans would equal about $3 million additional dollars coming in to even out the money spent on the free agent pitcher.
Now the more spent on a pitcher, especially if the pitcher is a known name and established talent, could cost the team more money, but also drive up attendance as well.
We're also not quantifying in dollars the state of the clubhouse and how an improvement there can produce better performance on the field. Or the games that Ollie may blow in the bullpen that causes additional fans to not attend games. Or any other number of scenarios.
But what it boils down to is that keeping Oliver Perez on this team not only makes poor baseball sense, but bad business sense as well. If Oliver Perez were an employee of a business, he would be given a package and sent on his way to bring in a more productive employee and to prevent others in the department from being brought down by his poor performance.
Cut him loose Wilpon. Talk to your accountants, your financial planners, your marketing employees. They'll all come to the same business conclusion. Perez is bad for business.