Washington Post doesn’t understand basic stadium economics, free agent spending, Twitter

If you read this site at all regularly, you should already be familiar with Betteridge’s Law of Headlines. So you know what to do when you see this in the Washington Post:

Could the Nationals’ spring training project be affecting their offseason spending?

The genesis of this story appears to be that Jim Bowden, former GM of the Washington Nationals who is now an ESPN analyst, tweeted that the team may hold off on signing free agents this winter because they “are way over budget on [their] Spring Training Complex, making [their] decision difficult.” A Nats spokesperson immediately countered that “one has nothing to do with the other,” but still, Washington Post story.

Basing an entire article on one stray remark from a guy paid to come up with bulk-size opinions on camera is bad enough, but this report also displays a stunning failure to understand the concept of sunk costs. Think of it this way: You’re about to buy a new computer because you’ve determined it will increase your productivity and allow you to earn enough money that it will pay for itself. Then you find out that your roof has a leak, and you need to spend more than you thought to repair it. Unless you’re short on cash — which is unlikely since you have a net worth of $5.4 billion — you’d be foolish to skimp on one investment just because another cost arose that you’ll need to pay regardless.

For the Nationals to cut back on free agent spending because their spring training complex is running over budget, in other words, they’d have to be incredibly stupid. Which isn’t to say it’s impossible — teams all the time set “budgets” for payroll based on little more than how much the next guy is spending, even though player salaries are sunk costs as well once you’ve signed them. But taking it this seriously is a sign that the Post not only is jumping to write articles based on off-handed tweets, but has a serious misunderstanding of economics. Good thing there isn’t anything happening soon that’s likely to exploit those weaknesses.


8 comments on “Washington Post doesn’t understand basic stadium economics, free agent spending, Twitter

  1. I’d say that Katharine Graham is turning in her grave this morning, but if such a thing is actually possible she has been spinning constantly for years given the tragic state of her once great newspaper.

    The list of things the current management and staff of the WaPo doesn’t understand extends far beyond economics.

  2. Chelsea Janes is very good young writer for the Post, but like most of the local sports writers she does not break a lot of news of inside info from the Nationals front office, as in this case typically the local writers are repeating statements from team spokesmen. This article was not a reaction to the Bowden tweet as much as it was in response to the Nats fans on Twitter, Reddit, and the blogs to tweets from Bryce Harper and Adam Eaton who encouraged the front office to spend money on players instead of a “team store”. The part of that article that interested me the most was why the Nats issued an anonymous statement. There was nothing controversial in that quote so why didn’t the team official go on the record?

    Since I’m not an expert in economics I’ll take your word, and the word of the unknown Nats official, that the team payroll is not being affected by ballpark cost overruns. However, some sort of turmoil is happening inside of the Nats front office that is starting to leak out. In addition to the Bowden tweet, Ken Rosenthal just published an item indicating that the Nats baseball operations “await ownership approval to spend further”. So there is a story there somewhere, hopefully Janes is able to dig it up.

    And how about that Bryce Harper? The Nats just paid him $4 million per year more than what was projected for arbitration, an unusual move. Less than a week later he publicly scolds the team ownership about their budget priorities. The vast majority of us without guaranteed contracts at our work would be unemployed within 30 seconds following such a move.

    • I fail to see the difference between writing an article in response to a tweet and writing an article in response to Reddit uproar over a tweet.

      In any event, though, there’s a right way to do this story, if you fell you must do it: Report on the controversy, then explain how the Nats deny it and it doesn’t make any damn sense, and discuss what, if anything, might really be going on. Running a story and headline that comes down to “Wild internet speculation: Is it correct?” is just fanning the flames, and a really bad sign for how the Post will meet more important tests to come.

      • Well I’ll admit that I didn’t read the article so I can’t comment on whether it is a sign of the future of the Washington Post. I just read Janes’ tweet with the quote from the Nats and figured that was 100% of the information that interested me. :-)

  3. An excellent point to raise, PowerBoater.

    Harper’s contract could be greater evidence of the team’s economic mismanagement than anything related to the rest of their business is.

  4. With respect to the comment “even though player salaries are sunk costs as well once you’ve signed them” note that player signings represent future commitments to spend, versus sunk costs that represent funds already spent.

    But the point that Bowden tends to spout off a lot of interesting but frequently inaccurate info is well taken.

  5. Just remembered that this same situation came up back in 2007, the team publicly stated that ballpark costs were affecting team payroll.

    “The team’s ownership believes that spending on the new park and on player development should take almost complete priority over 2007 payroll. ‘We’ll get through next season somehow. And we may not be as bad as people think,’ one team source said. ‘Then, ’08 will be a whole new world.\'”

    http://www.washingtonpost.com/wp-dyn/content/article/2006/12/22/AR2006122201353.html

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