Votto Hits Lotto
Contract secures future.  Is it good for the Reds?
Contract secures future. Is it good for the Reds?
Publisher
Posted Apr 4, 2012


Small market Cincinnati ponied up like one of the big boys when they inked their star first baseman to a ten year extension. The Reds front office had already shown their willingness to roll the dice by signing Ryan Madson and trading top prospects to beef up the pitching rotation. Those moves pale in comparison to making Votto the fourth player in baseball history to receive a $200M+ contract.

Small market Cincinnati ponied up like one of the big boys when they inked their star first baseman to a ten year extension. The Reds front office had already shown their willingness to roll the dice by signing Ryan Madson and trading top prospects to beef up the pitching rotation. Those moves pale in comparison to making Votto the fourth player in baseball history to receive a $200M+ contract. This was done despite his current contract that keeps him through the 2013 season. To put it in perspective, Bob Castellini paid $270M when he bought the Reds in 2006.

The first impression is that fans will be elated knowing that the Reds now have the option of having him at first base until he’s 40 years old. Of course I can’t help recalling those same feelings after the 1999 season when Ken Griffey Jr. engineered the deal that brought him home. The Reds had just come off an exciting 96 win campaign ended by a loss in game #163. It was a joy to call up fellow Reds fans and discuss the inevitability of a world championship and plans to watch him break Hank Aaron’s record. Cincinnati acquired him for the Mike Cameron, Bret Tomko, and a couple of prospects. It was a slam dunk steal. They got the best player in the game after refusing to include Pokey Reese in the package.

Of course expectations and reality soon parted ways. Griffey had a good 2000 season, but breakdowns in the rotation reduced their win total to 85. The next year began a long history on the Reds DL. He never played on another Reds team that finished above .500. The deal, which at that time was perceived to be a discount from perceived market value, hamstrung the team’s payroll until his departure. During his tenure there was a rumored attempt to swap him for Phil Nevin.

Compromises to the rest of the payroll had the Reds running out some atrocious rotations. Reds’ pitching never had an ERA below 4.50 in the six years from 2003-08. During that span they had one of the four highest ERA’s in the NL five times. The only team to do worse played half their games at Coors Field. Frugality in the draft kept it from producing a single significant contributor to the parent team, neither by promotion nor trade return, from 2002 until Votto made his debut in 2008. Eventually they ate half of the buy-out in the option year of Griffey’s contract to trade him in 2009. He was never paid more than $12.5M to play ball in a season.

It’s not fair to compare Votto or any player to Ken Griffey Jr. in his prime. He broke into the big leagues as a teenager and was a lock for the Hall before leaving Seattle. Though he put up his best seasons during the steroid era it’s generally accepted that Griffey did not use while his competition did. If HGH does indeed cause players to recover from injury faster, then there’s some compelling evidence that he remained clean. Griffey won gold gloves while playing in center field. Conversely a case could be make that playing a less demanding position might protect Votto from injury later in his career.

It’s also not fair to ask anyone to repeat MVP performances every year, even if they are bringing down $20 mill. Part of Votto’s decline in slugging percentage came from opponents changing the way they pitched him. He didn’t get as many outside pitches like the ones he pushed over the left field wall for half of his 2010 HR total. Often they opted to throw him ball four instead because he led the NL in BB and was a repeat leader in OB%. Unless he gets better protection he’ll never be able to make adjustments to counter that.

It’s no secret that the market is giving monster contracts to elite first basemen, in spite of the supply of hitters who can play the position. There might have been a chance that Votto’s payday after the 2013 season be reduced since many of the big spenders would be in the middle of long contracts. Still, any such reduction would be modest for a player with Votto’s skills. The automotive industry is just a few years removed from asking the country for a bailout. That didn’t prevent Detroit from reaching deep into their pocket for Fielder despite already having Cabrera. New Dodger ownership is making some noise that they are anxious to become players in the free agent market. Perhaps those were contributing factors to the Reds’ decision to get the deal done sooner rather than later.

The obvious question: Was it a good deal for the Reds? I’ll take the chicken route and say that time will tell. Though the Griffey experience is foreboding, that’s no guarantee that history will repeat itself. It’s hard to imagine a contract that long not covering a few lean years in a small market. A deal like this is made with an expectation it will return some hardware along the way. If that assumption is correct, then kudos to the front office. One thing for sure is that for it to be a success, Reds ownership must be committed to putting a sufficient cast around him.

Long term success will require a bump to the overall payroll. Can the Cincinnati market bear this? That is difficult to answer. I fancy myself as proficient at deciphering stats from performance on the field, but understanding the total resources derived from the multiple revenue streams of a major league franchise is a different animal. In a March 2012 article Forbes estimated that the Reds cleared an operating income of $17.1 in 2011 from revenues of $185M. It is a private business so those numbers are up for debate. Plus there’s more to the story than profits. Forbes also estimated the net value of the Reds at $424M which ranks 24th out of 30 MLB teams. That is an average appreciation of +$25.7M/year since the 2006 purchase. I suspect Castellini had a knack for making money before he became a baseball owner and I don’t know how he feels about an average gain of +9.5%/year, but it beats what he would have gotten from T-bills.

Votto will put butts in seats and so will wins. In his MVP season the club jumped from sub-.500 in 2009 to a postseason berth in 2010 causing an increase in season attendance of 300,000 (+18%). They increased another 150,000 (+7%) from high expectations coming into 2011. By estimating an average ticket price of $40, the 450,000 increase generates extra revenue around $18M compared to 2009 before considering concessions. Ownership can claim that it’s repaying fan support by reinvesting money back into the payroll.

Who knows what the future holds? The economy should recover over the next ten years. If the market value of elite players escalates along with it we might see a 36 year old Votto mashing the ball at a bargain price. It’s not my money and if ownership is willing to keep him around without compromising the overall quality of the team, then God bless them.





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