The Tigers should be in better financial shape than their peers

One of the key themes of the Detroit Tigers 2017 teardown was the abysmal timing of the final collapse. From the club’s perspective, the inability to win on the field and the number of major contracts on the books made it unavoidable, but there couldn’t have been a worse time to be both saddled with expensive, unmovable contracts. As teams began avoiding big ticket free agents and hoarding their prospect talent more closely, trying to acquire high level prospects for expensive stars like Justin Verlander and J.D. Martinez became more difficult as well.

The league was going through a transformation in 2016-2017, one that is more obvious in retrospect. Teams’ willingness to give up their top prospects was reaching an all-time low. Corresponding to that desire to hoard underpaid, controllable talent was a growing resistance to offering major long-term contracts for all but elite players in their twenties. The Tigers themselves, holding an ill-fated deals with Victor Martinez and Jordan Zimmermann, as well as a monster legacy deal to Miguel Cabrera, served as the cautionary tale about living in the moment too deeply.

That the club to date doesn’t appear to have gotten even one average player in the Verlander or Martinez deals was the original sin of the rebuilding project. However, it’s been obvious in the years since that the Tigers couldn’t have picked a worse time to try to acquire top prospects for expensive stars in their 30’s. The market had changed, and the Tigers, saddled with major contracts, found themselves on the wrong side at the worst possible time.

So, it’s hard to ignore the fact that three and a half years later, the Tigers are sitting in the cat bird’s seat relative to most teams. Their pro-rated payroll in 2020 was just $43.2 million, 9th lowest in baseball according to Spotrac. Their local television contract—estimated by FanGraphs to be $64 million a year for the Tigers—easily covers the whole payroll. It’s possible that some amount was refunded due to the lack of games but it’s hard to escape the conclusion that the payroll was largely, if not totally, covered by local television revenue alone. The Tigers are also set to finally sign a new television deal following the 2021 season which should boost their earnings significantly. Meanwhile, postseason broadcasts, a lucrative font of the league’s revenue sharing, which made up 25 percent of the average team revenue in 2019, were also expanded in 2020, making them even more profitable than normal.

The argument that losing ticket sales hurt the Tigers badly just doesn’t hold much water. Gate and in-park revenues accounted for just 39 percent of the average franchise’s yearly revenue in 2019, and the Tigers projected low attendance would have put on them toward the bottom of that scale relative to the rest of the league anyway. Results will vary from franchise to franchise, and some are more capable of absorbing huge losses than others, but it’s hard to escape the conclusion that the Tigers should have been hurt less than just about any team in the game.

After three seasons of modest payrolls, free from the onerous Jordan Zimmermann deal and owing Prince Fielder no longer, the club has no reason not to be pursuing bigger game in free agency or in trades. This should be one of wilder buyer’s markets we’ve ever seen if all these teams really did get crushed financially as badly as they’re arguing. While other owners cut costs, and the league sues insurers claiming billions in losses due to the inability to sell tickets and concessions, the Tigers should be in quite good shape relative to most of their 29 competitors.

Relative to their peers is the key phrase. FanGraphs had a fine piece from Craig Edwards on Monday that took a dive into the financials of the Atlanta Braves, the only publicly held team in major league baseball. The other teams aren’t going to open their books, but the article provides more context about sources of revenue and probable losses for major league baseball franchises this year.

Certainly the Tigers didn’t have the year they were expecting. But relative to most teams they had less exposure to losses due to the coronavirus, and relative terms are all that matter in a closed market with 30 partners “competing” for the same talent.

Sure, leviathans like the New York Yankees and the Los Angeles Dodgers may be the major beneficiaries as they can absorb losses more easily than many clubs. Low payrolls the past three years and less exposure to losses in 2020 doesn’t put a team like the Tigers on a par with the big boys in terms of spending power. The 2020 theme of the rich getting richer as the result of disaster is not going to pass baseball by either. But in another 2020 theme, if you didn’t lose your shirt in the stock market when it temporarily collapsed and instead had relatively more cash than others at hand, you were suddenly in great position to buy the drop and reap the rewards.

Buy the drop, Tigers.

None of this means they have to run out to sign George Springer, J.T. Realmuto, or Trevor Bauer to a long-term deal this offseason. It does mean that if they got a good price for a player like that, when normally they’d have to overpay substantially to fight off more attractive destinations, they should. If they can set the stage for their top prospects by adding two quality position players and a starter on short multi-year deals, they should. Some teams will be looking to shed money. If they’re willing to trade a good player for prospects outside the Tigers top five, they should consider those moves as well. Is a cost-controlled pitcher like Spencer Turnbull or Daniel Norris suddenly a little more valuable in a trade for prospects? The Tigers need to explore all those possibilities. This offseason should be one of opportunity rather than austerity.

There are still enough uncertainties about the outlook for 2021 attendance that this week’s Winter Meetings are likely to be pretty unproductive in terms of free agent signings. Perhaps we’ll get some serious trading underway, but teams are still trying to figure out how to budget for a season that may start with limited attendance. Until the situation becomes clearer, the better free agents are likely to wait out the general managers. Expect a slow moving market that doesn’t start to sort itself out until January-February.

In the coming weeks, we’ll continue rolling out profiles of available free agents. We may suggest some wild trade ideas with teams looking to shed payroll. Many of these will be met with reasoned skepticism from our good-looking and highly baseball-literate readership. That’s perfectly normal. But it’s high time the Tigers’ fanbase stops feeling beat down when talk of signing a top free agent or making a big trade comes up. There’s nothing wrong with having some expectations of a bold move or two in an offseason where the levers are finally tilted in their favor.