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A few years ago, when I was playing more music than I am right now, I was sitting on the patio of an Austin, Texas hotel with some friends during South By Southwest.
In the lot next door to this hotel, there was a large billboard. I started thinking that if I bought that billboard the next year, I could reach a ton of influential music people at the conference in one fell swoop.
I decided it didn’t make good financial sense for me as a musician who made most of his money waiting tables and juggling freelance jobs, and I let go of the idea.
Before this week’s Major League Baseball Winter Meetings had even officially begun, the Washington Nationals signed 31-year-old former Philadelphia Phillie outfielder Jayson Werth to a seven year deal worth $126 million.
One rival general manager told writer Ken Rosenthal, upon hearing about the seven year contract issued to Werth, “Absolutely bat—- crazy.” Boston Globe writer Pete Abraham said on Twitter, “The degree to which baseball execs are incredulous and mocking of the Werth deal can’t be understated.”
When it comes to the baseball that the Nationals will get from Werth, it’s hard to argue that they didn’t overpay, particularly when you consider he’ll be 38 by the time the contract ends and that he’s only put up noteworthy numbers for three seasons, while also playing in a Philadelphia line-up that provided him much protection. He’s good, but they spent a lot to get him to D.C.
But in addition to paying for some baseball with this move, the Nats figuratively bought that big billboard over top the conference. They went into the winter meetings with a big megaphone and told the baseball world they are serious and ready to spend what it takes to be noticed, sign big-name players and be thought of as a contender. There’s a good chunk of marketing within this deal along with the baseball.
Take what the Nationals will pay Werth and subtract from that what you feel he would have signed for with a team that would not need to overpay him. In addition to this money being what it took to get Werth to sign with Washington rather than with a big name, recently competitive franchise, that difference can also be thought of as a marketing expense or ‘free agent marketing dollars’—the cost of getting other players to pay attention and consider the Nats. This deal was part advertising and PR directed at the rest of the league’s players.
If the Nats can lure a couple more big names via free agency or trade this year or next, and then capture an NL East crown or two in the next few years as a result, those marketing dollars will have likely been worthwhile.
Granted, the team very well may have to overpay the next couple of free agents too. So let’s say they overpay them and Werth each by $3 to $5 million per season. Is it worth that extra $9 to $15 million per season over the going rate for those three players, plus the money you may now potentially have to overpay Ryan Zimmerman, Stephen Strasburg, Bryce Harper and others, to be a contender? Maybe it isn’t worth it (or affordable) for every team. But it could be when you have a net worth of $3 billion and are one of the richest owners in baseball, as Nats’ owner Ted Lerner is.
And then once you’ve established yourself as a team that will do one of the things that attracts players—paying them substantial sums of money—you might start doing one of the other things that attracts them—winning. And suddenly the extra tens of millions spent each season look well worth it.
So, I say, go after Cliff Lee hard. Pay him whatever it takes to get him to D.C. Give him the extra year or however many extra million it will take for him to sign here over New York, Texas or elsewhere. Baseball people are calling the Nats crazy right now in part because they have disrupted things, because this isn’t how it’s supposed to go. And I love it.
D.C. is a power city and a major media market. That, combined with the deep pockets of its owner, should put the Nats right up there close to the Yankees and Red Sox of the world when it comes to being able to lure the biggest free agents.
If you’ve got the money, Mr. Lerner—go all in! Get Lee and stop there for now if you’d like. Then re-evaluate at the trade deadline or next off-season and pick up some additional pieces.
But don’t stop part way, with one foot of the team in a grow-your-prospects plan and the other foot with just a toe in a spend-like-the-Yankees model. The only way the Werth deal will look really crazy is if you stop with this one big signing and let all the “Hey everybody, look at the Nats! Sign with us!” money that you just spent go to waste.