Sports team owners say the craziest things, Los Angeles Angels edition

Los Angeles Angels owner Arte Moreno addressed his team’s lease situation in Anaheim yesterday, if by “addressed” you mean “said some mumbly nothings meant to both keep up the pressure on local officials while reassuring everyone that so long as they play along, nobody will get hurt”:

The Angels’ lease runs only through 2020, and the team would like the city to make some upgrades to the ballpark before they commit beyond that.

Moreno said the talks with new Anaheim Mayor Harry Sidhu have been “very positive, a lot of good communication.” In past years, Moreno had not spoken as optimistically about the team’s relationship with the city.

I’d love to try to more closely read that wan bundle of tea leaves, but it looks like the OC Register was the only news outlet to report on Moreno’s press conference, so that’s all we’ve got. And we already knew that Mayor Sidhu has been way more amenable to meeting Moreno’s demands than former mayor Tom Tait, so really this doesn’t tell us much new.

Instead, I’d like to focus on something else Moreno said, about spending on player payroll, which may sound innocuous at first but which is actually pretty bizarre if taken at face value:

Owner Arte Moreno said Monday that the Angels base their budget on their revenue.

“Typically for us, we allocate about 50 percent of our revenue towards payroll, but I bust through that every year,” Moreno said. “A small-market team would go about the same. Sometimes the larger market teams would only use 40 percent. Every year is a little different with your needs.”

If you’re a fan concerned that your home team is chintzing on signing good players, or a player concerned that your employer is trying to lowball you on salary, that “50 percent of revenue” line sounds good — the more money you make, the more you share the wealth with players and invest in new talent! As far as any kind of rational economic decision-making goes, though, it’s insane: Just because you’re bringing in more money doesn’t mean you should rush out and overspend on players just to not have cash burning a hole in your pocket; and just because you’re not bringing in more money doesn’t mean you shouldn’t go out and spend more on players in the hope of winning more games, especially since that will bring in more money.

It’s not that it’s unusual — it’s the same logic companies use to meet revenue targets by cutting the employees who generate revenue, thus leading to a death spiral — and it’s the kind of bizarre logic there’s plenty of other evidence teams use in deciding how much to spend. And it’s not necessarily all bad, even, as the alternative is for owners to realize that how many games they win doesn’t have all that much effect on their bottom line, so might as well not try too hard to win at all.

But it’s still crazy, and should lend ammunition to anyone who would like to argue that if Moreno is deciding whether to give Albert Pujols way too much money to grow old and terrible based on how much cash he has lying around, maybe the Angels’ profitability shouldn’t be the city of Anaheim’s problem. Not that the Angels aren’t plenty profitable anyway — you know what, maybe the most insane part of all this is actually Moreno trying to demand stadium improvements as a condition of signing a lease to stay in the league’s second-largest market, as if he has any other real options. It’s so hard to tell with billionaires when they’re being crazy like a fox, and when they’re just being crazy.

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4 comments on “Sports team owners say the craziest things, Los Angeles Angels edition

  1. Moreno really has no leverage. The Angeles are valued at $1.8 billion in souther California. Moving to any non MLB city would almost cut that in half. Unless he can secure a billion dollar stadium subsidy. Hello Las Vegas?

  2. It may sound crazy for Moreno to suggest or imply that he “needs” subsidies in order to stay in the nation’s second largest media market, but we should never forget that the teams in the nation’s #1 media market both got significant subsides in order to stay there.

    In the case of the Yankees, it’s still the single largest subsidy for any sports stadium in US history isn’t it?

    The Pirates or Reds “needing” taxpayer subsidy so they can compete for players with the Yankees did not prevent the Yankees from requiring taxpayer subsidy so they could compete for players with the Reds or Pirates.

    See the cat? See the cradle?

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