Nielsen says we’re the smallest market in Major League Baseball, but last week Bob Castellini sent the message that the Cincinnati Reds are no longer a small-market team, signing Joey Votto to a 10-year, $225 million extension that brings his contract to more than $250 million over the next 12 seasons.
Add that to an expected extension for Brandon Phillips and the Reds are looking at going from a nice, middle-class existence to the $100 million-plus tax bracket. While that’s nothing to the Red Sox, Yankees and Angels, it is to the likes of the Pirates, Brewers and Cardinals. Although the Cardinals have been on both sides of that line (and had an Opening Day payroll of just less than $99 million this year), it’s still a barrier that separates baseball’s wheat from the chaff.
What’s driving this is Reds CEO Bob Castellini’s desire to bring a winner to Cincinnati — something you love seeing in your owner. It’s also the result of a decade of hoarding luxury tax gains from the Yankees and spending them on a big-ticket item.
Let’s not forget in all this, the big-ticket item was priced that way for a reason. Votto is one of the best players in the game, and with this offseason’s defections of two of the division’s best players to the American League, he is unquestionably the best player at his position in the National League. Two years ago, in the season he won the MVP, Votto needed a push from the team to win the “last man in” voting for the All-Star Game. This year he should already have a reservation in Kansas City.
The key to this deal is the Reds’ new TV contract. The current contract ends after the 2016 season and will likely be renegotiated before that. That, incidentally, is the same season that Votto’s salary jumps from $14 million to $20 million. The Rangers and Angels have recently signed 20-year TV deals worth roughly $3 billion, while the Padres are close to a deal potentially worth more than $1 billion. The Reds should find a place between the two figures. In today’s DVR world, the worth of sports content has gone through the roof, especially baseball, which provides 162 games a year. That’s 162 three-hour programs that are spoiled if time-shifted.
Another advantage is that the rest of the Reds core is either cheap, or cost-controlled, through 2015. Five of the Reds’ Opening Day starters, including Johnny Cueto, are under team control through 2015, and that doesn’t even include outfielder Chris Heisey or catcher Devin Mesoraco. The team also controls Mat Latos, Mike Leake and Aroldis Chapman through 2015 and Homer Bailey through 2014.
The Reds are banking that when it’s time to shell out more money, they’ll have more money from a new TV contract.
However, there are members of the ownership group that aren’t too happy with Castellini’s move, wondering if the team has committed more money than it has available to run profitably. When I asked Castellini last week if he’d met with other members of ownership before making the move, he didn’t answer the question. And when I followed that up by asking if this would be a repeat of Carl Lindner’s signing of Ken Griffey Jr. and little else through the early 2000s, Castellini was less happy. Later, insiders at the Reds said they had the same questions.
“We have thought long and hard about this — what we’re doing will not be to the financial detriment of the makeup of our team in the future,” Castellini said.
I also asked Walt Jocketty, the man responsible for building that winner around Votto’s contract, if it’s fair for him to hamstring his eventual replacement (the 61-year-old Jocketty is unlikely to stick around another 12 years) to such a large commitment.
“You’re trying to build the team, franchise to the best of your ability and hope it flourishes after you’re gone,” Jocketty said. “That’s what happened in St. Louis. They’re still winning.”
And it was Jocketty who signed Albert Pujols to a long-term deal in St. Louis, but that was for a 24-year-old, not a 28-year-old that will be tied to a team for 12 more years.
The contract could be the best thing that ever happens to the Reds franchise, keeping Votto in town for his entire career, or it could become an albatross that financially straps the team. But this much is sure, Castellini, who promised a winner when he bought the team, can no longer claim frugality or use the small-market excuse. St. Louis isn’t New York and they won two World Series titles during Pujols’ extension. If Cincinnati can do the same, Castellini’s $250 million gamble will be worth it.
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