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.