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Home David Simmons The Perfect Storm and Why We Should Have Seen the Angels Coming

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The Perfect Storm and Why We Should Have Seen the Angels Coming PDF Print E-mail
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David Simmons Article Archive
Written by David Simmons   
Thursday, 08 December 2011 14:47

Pujols

  • 1.14
  • 513,847
  • $150,000,000

Those three figures say all you need to know about how Albert Pujols ended up as an Angel.

I wrote at length on Albert Pujols here on Nov. 3 and mentioned “They could be a team to watch, though, as they are negotiating a new television deal as you read this.”

1.14 represents the Angels TV ratings last season, second-worst in MLB. The Angels have not made the postseason for the past two seasons and have been without a marquee everyday player since Vladimir Guerrero left for Texas a few years back.  With the Dodgers ownership in flux in 2004, the Angels pounced on Guerrero. The Guerrero deal would have tipped the books for incoming owner Frank McCourt. Now in 2011 with Dodgers ownership again about to change, the Angels signed Albert Pujols to a 10-year contract in excess of $250 million per published reports. The recent Dodgers bankruptcy proceedings leaked news of a new television deal on Nov. 14. Ironically, Ed Desser, is on the stand in Wilmington, Del., today on the day that Albert signs with the Angels.

The Angels had 513,847 empty seats last season at an average of $17.13 a seat, making for a minimum of $8.8 million in available ticketing inventory. Throw in approximately 650 diamond club seats, 80 suites, four party suites and eight loge boxes, and they are primed to see a huge ticketing sales increase over the next season. The Angels never had a problem selling seats under the Moreno ownership until last year. Having missed the postseason in 2010, they still had the All-Star Game to sell. This season with no playoffs and no all-star game , sales were down 3% overall in attendance. The team signed many of their ticketing representatives earlier this off-season (in addition to former LA Dodgers Director of Sponsorship Michael Fach) this off-season. If anybody should implement dynamic pricing for the 2012 season it’s the Angels.

$150 million represents the value of the Lakers television deal and the proposed new Angels deal with Fox. This would give the Angels the third-largest television revenue after the Yankees and Red Sox for the time being. The team will bring in over a billion dollars in television revenue over the life of the contract, making Pujols $254 million seem small in the grand scheme of things.

The changes in the CBA were a large factor here as well. International spending and draft budgets are limited. Free agency is now the only way large market teams can flex their muscles. The second wild card team slot would have put the Angels in the playoffs this past season. Now, the Angels project as a postseason contender for at least the next five years with Jerad Weaver, C.J. Wilson, and Pujols locked up until the new television money starts coming in. The luxury tax severely prohibited the Yankees and Red Sox from spending this offseason as “Teams that surpass the luxury tax threshold of $178 million will be taxed 42% in 2012 and 50% in 2013”. The Angels were third in AL revenues coming into this season at $220 million per Forbes data.  For the cherry on top, the team will be playing the Astros 18 times a year starting in 2013 as well thanks to realignment.

The Angels were the best fit for Pujols from Day 1, with only $47 million committed in 2013 and $37 million committed in 2014 before today’s two deals. With Torii Hunter and Bobby Abreu off next year's books, the money was there to spend. From a baseball standpoint, they can use Pujols as a designated hitter in the last few years of his contract.  A quick look at free agency next year also shows why the timing was right. The only marquee bat bound for the market next year is Josh Hamilton, who is rumored to be in extension talks with the Rangers. Today's reports have no timetable for Kendrys Morales return leaving DH or 3B natural homes for incumbent 1B Mark Trumbo. 

Finally, Los Angeles is the largest Hispanic market in country. 6 million Hispanics reside Los Angeles and Orange Country combined. Albert now plays in what is part of the second-largest metropolis in the country.  Arte Moreno, the first Hispanic owner in the history of baseball, now has the best player in the game. Moreno has always wanted the L.A. market. Today is the day he’s been waiting for since he bought the team from Disney. His forward thinking of this newfound television revenue (deal up in 4 years), understanding of the new MLB landscape, and perfect storm helped bring Albert to the Angels. The reasoning behind today’s deal falls in line with the words of Watergate’s Deep Throat:  You should always “Follow the money.”
RELATED CONTENT:
From the 2011 Winter Meetings: Angels Become Darlings with Pujols, Wilson Signings
Now a Free Agent, What's Albert Pujols' Star Value to Other Teams?


David SimmonsDavid Simmons is a graduate of the University of Central Florida who worked in the front office of the Los Angeles Dodgers over 4 seasons and has a decade of ticketing experience.. He serves as CFO for Players For The Planet and currently resides in Baltimore. You can follow David on Twitter @davidesimmons

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