Wednesday, January 21, 2015

Why All Your Complaining About The Max Scherzer Contract Is Wrong

Former Detroit Tiger and possible Best Pitcher On The Planet Not Named Kershaw Max Scherzer signed a 7 year deal with the Nationals over the weekend with a reported dollar value of $210M. This has produced the usual freaking out from all quarters, all of which is conspicuously absent when an NFL player signs a big deal and all of which is complete hooey. To wit:

The contract is too long! It'll cripple the team when he's 36! - Vaguely rational, but largely incorrect. For one thing, a huge chunk of Scherzer's money is deferred, meaning that the Nats are not going to be shelling out $30M a year when Scherzer's 36 and his arm sounds like going uphill on a roller coaster. Also, it's a dirty secret of the industry that the last few years of contracts like this are known losers, a necessary evil that teams are resigned to shelling out for if they want the value on the front end. Or, to put it another way, if the Nats win the World Series in the next couple of years no one will care what the contract looks like in 2020, and if they don't, it's the next GM's problem anyway.

He's getting paid too much money! - Yes, he's getting a lot of money. That's because he's one of the best in the world at what he does, and what he does generates obscene amounts of revenue. MLB brought in $9B last year. Nine. Billion. Dollars. That they'll admit to - remember, these guys are masters of crying poor when they smell new stadium money. Compared to that, Scherzer's deal is a drop in the bucket. And since none of that money gets generated without the players, you know, playing, there's every moral justification for him getting as much money as he can in his limited earnings window.

Salaries are too high! Deals like this are driving up ticket prices! - Wrongareeno. Salaries are driven by revenues, not the other way around. Anybody who claims that is shilling for the owners, who'd like a larger slice of that announced $9B for themselves. Teams are building smaller stadiums to reduce the number of tickets available, and yet salaries are still going up. Clearly, it's not the ticket revenue that's driving this, it's the TV money. Even the Rays have bumped up their payroll, and their attendance has been flat for years. Ask yourself this: when was the last time a team that did salary dumps and slashed payroll cut the price of tickets - I mean, really cut them, not just fake-discounting the stuff they were having trouble selling? Go on. I'll wait.

It's the owners who should be getting that money, not the players! They take all the risks! - Oh God, not this again. Listen. Owners make leveraged deals to buy assets in an antitrust-exempt industry that are guaranteed to appreciate in value, in part because the tax laws surrounding team ownership are sufficiently warped that you can amortize player salaries. These guys also get enormous public subsidies, to the tune of hundreds of millions of dollars, prime real estate, and ridiculous perks. If there's a risk in there, I don't see it. And nothing they're "risking" is equivalent to the risk of blowing out a shoulder, or a knee, or any of the other career-enders players deal with on a regular basis.

It's a mistake to give that kind of money to a pitcher! - True more often than not. Then again, if you're going to splurge on a pitcher in this market, Scherzer's the guy to do it on. He's durable, has relatively low mileage on his arm for a 30 year old ace, and has a skill set that should age well. Could he fall off a trampoline and wreck his elbow tomorrow? Sure. But you still need to run 5 starters out there, and if you can afford the best available one, why not grab him?

Tom Brady and the Patriots would have won that game in with regular inflated balls! - @#$@#$#ing Patriots fans. They're everywhere.
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