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$16 mil more than the next best bid
Posted by Bret Cohen at 12/7/2006 11:29:00 PM
View more posts by this author

 

Perhaps, as evidenced by some of the comments to some of my recent baseball market-themed posts, I'm a bit naive when it comes down to basic economic concepts. But if no one else is bidding on Barry, why give him $16 million? I understand for prestige purposes, but objectively, given his injury history and defensive liability, I'd expect a player of his track record to sign an incentive-laden deal much like Frank Thomas did last year, especially if no other team was offering him nearly that much (if any, according to some reports) money.


Comments....

I think because he's not like another player in the sense that the Giants can make a lot of money on him for his non-baseball performance, ie. the home run record.

The Giants will make tens of millions this year if Barry breaks the record even if their team stinks (which it looks like it will).

I'm not sure any other team could capitalize on the record and make money on him, since his reception would be luke warm in a lot of places.

So he had leverage on the Giants that not many baseball players or athletes have.
Posted by schoenke at 12/7/2006 11:40:00 PM
 
A player only has leverage if two or more clubs want him. If one club wants him, they should be able to name the price. I don't get it at all. I could completely understand an $7-9 million deal but this seems very stupid to me.
Posted by iknowbo34 at 12/8/2006 5:06:00 AM
 
I saw this as Bret did - the Giants outbidding no one but themselves. But hey, it's their $16 mil.
Posted by spianow at 12/8/2006 6:49:00 AM
 
But as Peter points out, it's not 16 mil out of pocket, but rather venture capital on the projection of his health and remaining ability to get at least close the that magic number. His leverage is simply "I won't play," and the Giants see that cash cow dissipate.
In this market, that was one of the easiest deals to assess; it had absolutely nothing to do with player market/value, much like the Red Sox and their Japanese purchase.


Posted by arwen at 12/8/2006 7:06:00 AM
 
But at some point, the leverage he has on them based on his ability to generate revenue has to be mitigated by the leverage they have of **no** other teams wanting him. And perhaps the leverage that Barry knows his time is running out to break the record, and they're the only team with the willingness to give him the chance. But none of us is within Peter Magowan's mind.
Posted by bscwik at 12/8/2006 7:53:00 AM
 
I think that's two key points - one is obvious, it's Barry Bonds and anything goes. Could anyone say with certainty that he wouldn't walk away? Second, this is a deal right up Magowan's alley, who is far more blueblood than unwashed baseball guy. And my take on him would be he won't nickel and dime and probably has a pretty good grasp on how much Bonds will make him this year, and how much any Bad-Barry press would cost had they tried hard ball negotiations. Btw - Forbes has a fairly hefty franchise value fall calculated if Bonds is not a Giant. Not that Magowan paid attention to that story, right?
Posted by arwen at 12/8/2006 8:52:00 AM
 

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