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Vernon Wells, and why the contract matters

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When we were taking geometry in high school, my friend Henry Harya created what he called the "Inherently Obvious Postulate."  He said that, if something is inherently obvious, we shouldn't have to do a formal proof of it.  If you are trying to prove something, and an element of it is provable through the "Inherently Obvious Postulate," then you can skip those steps by invoking the postulate and move on to the more meaningful parts of the proof.

The fact that Vernon Wells is owed $86 million over the next four years -- way more than he would get on the open market right now, or that any reasonable person would presumably agree to pay him -- is relevant to analyzing the Angels adding him is something that I didn't need to expound upon, I thought, because of the Inherently Obvious Postulate.

Apparently, that's not the case.  While most people have pointed out the folly of the trade from Anaheim's perspective because of the contract, there are a few hardy holdouts who insist otherwise, on the "there's no salary cap/its not my money" grounds.  For example,Angels' beat writer for the official Angel website Lyle Spencer:

Predictably, the Angels' acquisition of Vernon Wells at the expense of Mike Napoli and Juan Rivera has the critics howling. They do that largely because that's what they're paid to do, and you can't really fault a person for that. It's the carping of fans that is somewhat baffling.

The Angels just landed a three-time All-Star at 32, with four years on his contract, for two players who might not have had starting jobs but will get shots to play every day in their new environment. You have to be reaching hard not to like that.
The big talking point is Wells' huge contract, which wouldn't have been an issue back in the day when it was the game that mattered, not economics. If I'm an Angels fan, I ignore this aspect of the deal. Arte Moreno gave it his OK. If he doesn't have to raise ticket prices, the bottom line should be of no concern.

For all the slow people on the blog, I'm going to spell this out, while typing real slowly so that you can keep up...

Every team has a finite amount of resources that it can devote to expenses.  Any expenses, not just payroll, and any team. 

You can say, "Hey, what about the Yankees, they can spend whatever they want!"  But that's not really true.  In the first place, if the Yankees start spending $400 million per year on payroll, and give Cliff Lee a 6 year, $240 million deal just to make sure they land him, you can believe there will be consequences.  The luxury tax will go up, or there may be more of a push for a soft cap, or there may be some other reaction...but part of the reason the Yankees don't spend more, even though they can if they want, is that they are maintaining a sort of equilibrium with MLB, understanding that if they get too aggressive with payroll, MLB will be forced to slap their hands and put tighter restrictions in place.

In addition, you have the fact that the Yankees owners want to make money.  They want to win, sure...but they also are in this to make money, lots and lots of money. 

In any case, the Yankees have a finite amount of resources they can spend.  If they didn't, they'd have given Gerrit Cole a billion dollars to sign, they'd have given Cliff Lee whatever he wanted, and every major free agent that hits the market would be offered double or triple from New York what anyone else would pay.

So even though Anaheim is a large market team, they still have finite resources to devote to their various expenses.  The amount of resources they choose to devote is, I imagine, flexible...they can spend more if certain opportunities arise, they can spend less if they don't feel value is out there, or Arte Moreno can go all Gene Autry and decide he's going to spend whatever he has to to guarantee a title in his waning years.

And Anaheim has chosen to devote a good chunk of its finite resources to a player who isn't all that great, who doesn't make them that much better this year. 

Again, you can take the Lyle Spencer approach and say, well, who cares, the team is better, if it doesn't affect ticket prices, what should the fans care?*

*  Spencer is also pushing a fallacy common to sports journalists and fans alike, linking ticket prices to expenditures.  In reality, ticket prices and other sources of revenues are what ultimate determine expenses, not the other way around.  Let's not pretend that any owner isn't going to charge as much as he thinks he can get for a ticket, regardless of what payroll is.  If ticket prices go up, it isn't because payroll is going up, it is because the owner thinks he can make more money by increasing ticket prices.

The fans should care because the Angels can find better ways to spend $86 million.  Spencer, and some others out there, choose to view this as a binary decision -- either the Angels spend $86 million on Wells, or they create a big bonfire in the parking lot and set the money on fire.  Clearly, the Angels are better with Wells than with a parking lot filled with the ashes of 860,000 one hundred dollar bills, so this is a good move.

But that's not the case.  The management of any sports team is about resource management.  Do you want to devote $4 million more to amateur signings in a given year, which could pay off big down the road?  Or do you want to devote that money to payroll in the current year, which could lead to more wins, and thus more fan enthusiasm, and higher attendance, and more revenues that will end up possibly more than covering the $4 million more you spent in the current year's payroll?

When people talk about "Moneyball" being a business book, that's what they are talking about...if you've got finite resources to devote to your organization, how do you best allocate them?  Spending $86 million on Vernon Wells means the Angels have that much less to spend on extended Jered Weaver, or pursuing C.J. Wilson this offseason, or building a fancy new scoreboard for their stadium, or going above-slot to sign a draft pick.  That's $86 million they are spending on a guy who, most likely, will be a good, not great, player, that they can't spend elsewhere.

And that's why, as a Rangers fan, I'm happy Anaheim made this move.  Yes, it may, if Wells works out, mean they win an extra game or two, in a season where they look like the third best team in the A.L. West, a team that should finish around .500.

But it also means that they have that much less of an ability, going forward, to spend money in a way that could provide more benefit for the team.  And that's a good thing for the Rangers.

And finally, this notion that Spencer pushes, that this " wouldn't have been an issue back in the day when it was the game that mattered, not economics"...when was that, exactly?  Steve Carlton got traded to the Phillies from the Cardinals because of economics.  Connie Mack broke up the Philadelphia A's on multiple occasions because of economics.  The Black Sox scandal in 1919 was about economics.  The Federal League in 1914 was about economics.

Baseball has always been about economics.  Fans and the media just don't try to stick their heads in the sand about that issue anymore.