Friday, July 06, 2012

Feeling you David Ortiz

David Ortiz feels disrespected. The feeling is understandable. For those of you trying to understand how a guy making $14.58 million a season can feel disrespected, let us put things in real world perspective. Say you are an employee working your tail off every day. Your work has added to your company's bottom line for years. But then your company goes out and hires someone who has not put in the work you have historically, nor, has been that anchor to success like you have and yet, still gets a sweeter deal than you. How would you feel?

How about another example? Say you are a Time Warner Cable customer who has no other competition to go to if you want cable television and high speed Internet access. You have TWC's bundle because you are locked in and you have no other choices. You are paying the outrageous sum of $187 a month because TWC is going to take advantage of your lack of choices and they are heartless SOBs. Then you see offers in their commercials to new customers for drastically less than what you have been paying for years. Sucks, does it not?

David Ortiz has added value to the Red Sox for a number of years. He helped bring a long championship drought to an end, not just once, but twice. His big bat busted up the Yankees on several occasions. He has anchored a cranked up offense for years and helped put fans in the seats at Fenway. Despite his age and a couple of down years, he has roared back to again become one of the top five hitters in baseball the last two season. And yet, the team goes out and signs other players for big money for guaranteed years and all Ortiz can get is one year deals.

His feelings are natural and if we put ourselves in more realistically similar situations and forget the astronomical money involved, we can understand. The problem is that life does not work this way. There is inherent unfairness built into the system. Employees who are not yet with the firm or the baseball team are always more attractive than the workers / players you already employ. The known is always taken for granted. The solid, long-paying customer is always less coveted than new customers. Is it right? No. Is it reality? Yes.

Plus, teams have to stick within valuation guidelines. The Red Sox were one of the first to hire analysts to figure out the cost/reward relationship. They also have to weigh future performance against the past and figure in age and regression models. Baseball players are assets now that have to be assigned a value not just for the current season but in the seasons to come.

It is obvious that in the Red Sox' minds, there is no telling how a 36 year old slugger will fare a year from now. David Ortiz's entire value is based on what he does with the bat. He has no value as a fielder and a negative value as a base runner. The bat is how he makes his money. The bat is how his present and future values are established.

The assumption here is that Ortiz will again be worth about $18.8 million this season, matching last season. Add in the $10.4 million he was worth in 2010 and you have a three year average of $16 million. So the Red Sox are underpaying Ortiz by a million and a half this season. But before the season, his last two seasons of $10.4 million plus $18.8 million add up to $29.2 and when divided by two, comes up with $14.6 million. So the deal the Red Sox gave Ortiz was a square deal based on his last two years.

The human element is that Ortiz is worth something more for the intangible element he has brought to the Red Sox over the years. From that aspect, the way David Ortiz feels is perfectly understandable. But the reality is that the world does not work like that. The world is cold and harsh and bases value on what it can measure. The Red Sox hedged their bet and paid Ortiz exactly his worth in pure baseball performance based on a two year average. You could even say that they took a chance that a 36 year old player would continue to perform at that rate.

You can put David Ortiz down if you want. You can turn it into any kind of "whining" comment that appeals to you. But the truth is that Ortiz is feeling exactly the same way we would feel if we were in his situation. All of us buck the reality of the way the world works. Life is not fair and it never will be. What someone has meant to an organization will always be more important to the giver and not the taker.

3 comments:

Left Field said...

I see both sides of this. As you've said, I can understand where Ortiz is coming from, but I also get why fans don't want to hear about it. My solution: Ortiz keep quiet about this issue in the media and restrict his complaining to his family, close friends, and Red Sox management.

Francisco Serrano said...

Way to sentimental, this is sports. You might want to use this poster to ilustrate your point...
http://despair.com/retirement.html

William Tasker - Caribou, ME said...

Agree with both of you to a point. But the main point of the post still stands.