Waste Some, Want Not

As free agency crawls into its annual hope fest, it's worth reminding Cubs fans not to expect too much. Historically, barring the Mike Morgan, Danny Jackson and George Bell years, the Cubs have been cheap when it comes to free agents. And this weekend's back tracking on Rafael Furcal is just a reminder that winning takes a back seat to profit at Tribune Corporation (note: were I a stockholder of Trib, I would agree unless I felt that a World Series Title would jump the stock more than 3 cents of earnings).

Ah, but we're told that the Trib isn't cheap, just that they don't spend the money wisely. That statement is humorous on so many levels. Does it occur to anyone that the Cubs don't spend money wisely BECAUSE they are cheap?

Let's look at the 2004 season. Going into that year, the Cubs had a gaping hole at short stop. Sure, they still owed Alex Gonzalez $5 million, but what were they going to get for that investment? Mediocre defense, no offense, and a vacancy at the end of the year, that's what A Gonz was gonna give you in 2004.

So what should the Cubs have done? Well, Miguel Tejada was an option. You can't do that, someone will scream. You can't let $5 million worth of Alex Gonzalez rot on the bench while you pay Tejada $12 million!

Yeah, you can.

In the world of finance, the value of assets and the return from those assets is constantly monitored. There comes a point when the value and the return from an asset diminishes so far that you just erase the asset from your books and take a loss. This is known as a "write-off." The Cubs refusal (read: cheapness) to write off Alex Gonzalez meant they didn't waste $5 million. Instead, they lost A Gonz to injury and had to scramble for a short stop until Nomar Garciaparra became available. They missed the playoffs in 2004 and saw Nomar fail to contribute again in 2005.

So, the Cubs spent $3 million on A Gonz and $3 million on Nomar in 2004, then $8.25 million on Nomar in 2005. They missed the playoffs both times. Now, they have no short stop and may have to top $10 million per year to keep Atlanta from re-signing Furcal (only the entire 2006 season is bet on this move).

And Furcal isn't as good as Tejada.

If they had, instead, decided to live with A Gonz on the bench, effectively writing off his salary) and signed Tejada, you would have made the playoffs in 2004 as the offense would have been better and your backups would not have been Ramon Martinez and Rey Ordonez. The 2005 season would not have seen the soft-tissue injury prone Nomar riding the DL.

By not signing Tejada, what did the Cubs really save? They lost two potential post-seasons. How much extra money could the team have made by spending an extra $10 million on shortstop in 2004 and an extra $4 million in 2005? How many tickets to playoff games could have been sold? How many TEJADA jerseys? How would TV and Radio ratings have been in the fall? How many extra Tribunes would have sold? Ever hear the phrase, "penny wise and pound foolish"? They also lost two years of Mark Prior and Carlos Zambrano's careers. They lost an amount of fan goodwill built up from the fluke of 2003.

Ironically, the real cost to the Cubs for not signing Tejada may exceed the actual cost of his contract.

The hope Cubs fans have is, that with the cutting and eating of $16 million of Sammy Sosa salary in 2005, the Cubs have learned their lesson, that they now understand the value of write-offs. The one thing Jim Hendry has done is not saddled this team with a lot of bad contracts (only Kerry Wood's and Michael Barrett's are bad). Time to start signing some new good ones.