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The progression of the Jhonny Peralta saga is representative of any Orioles foray into free agency. News came out on Friday that the team was interested in the free agent shortstop. MLB Trade Rumors projected he would end up with a contract for three years and $36 million. Hey, you could almost talk yourself into that signing at that price.
Within the span of a weekend, the situation escalated. Peralta was seeking from $56 million to $75 million over either four or five years. He had four years and $52 million in hand from some team. Suddenly, Peralta was not so interesting. Could he really be worth $13 million a year for four years? If the Orioles could only afford one such expenditure, would you want it to be on a player who was just suspended 50 games as a result of the Biogenesis investigation?
In the end, Peralta signed with the Cardinals for four years, $53 million and the Orioles interest amounted to nothing. They will go and look at the next free agent on the list, who will probably want more money than they can or should pay, and the process will repeat.
Does it always have to be this way? The Orioles franchise was recently valued as the seventh-most valuable in the league, with an estimated eye-popping $1.12 billion in value. The Peter Angelos ownership group purchased the team for $173 million in 1993. Must be why they say it takes money to make money.
According to the Bloomberg estimates, the Orioles had revenue of $210 million in 2013. They opened the season with a major league payroll of $92,238,333 and took on a little more money with the acquisitions of Scott Feldman, Bud Norris, and Michael Morse.
The team will be making an additional $25 million just from the new national TV deal for Major League Baseball. Attendance should increase after two straight winning seasons, meaning more from gate receipts and concessions. MASN revenue should also increase with the network coming off of record ratings for Orioles games.
Despite all of this, most stories written about the O's this offseason have revolved around the general idea of having to trade at least one high-dollar player in order to create payroll flexibility. This happens even as Angelos donated $2.5 million for a lung center at Franklin Square Hospital. What gives?
There are more expenses for a team than just major league payroll, of course. Back in February, at the tail end of another quiet offseason, I considered some of those other expenses. As for the Angelos donation, he is an independently wealthy man, rich before he ever purchased the Orioles, though he is a whole lot richer thanks to owning them.
There is always the possibility that the Orioles have more money available than so many stories have indicated. ESPN's Buster Olney wrote about tough choices the O's must make (Insider required). Olney refers to "rival front offices speculating" about whether the Orioles will have to trade or cut Jim Johnson, and later mentions "officials in other organizations doing the Orioles' math."
Many of the offseason's junk stories about any given team probably come from rival front offices. That's not necessarily out of malice, but just not knowing what they're talking about. Teams are capable of operating under levels of secrecy that would be the envy of the clandestine service, as the recent trade of Prince Fielder and Ian Kinsler shows.
Maybe it's what Dan Duquette wants them to think. Maybe it's true. That could be because the team is cash-poor or it could be that they don't think now is the time to spend big. The only superstar out there on the market is Robinson Cano, and the O's probably couldn't afford him even if they did have money to spend on other things.
Jacoby Ellsbury hasn't put together back-to-back good seasons since 2008-09. Shin-Soo Choo's career batting line against left-handed pitchers is .243/.340/.341. The idea of Matt Garza signing with the O's fills me with a vague sense of disquiet, probably because he is what the O's already have in plenty: a guy who will be a little better than league average at best. Late-30s Carlos Beltran, at the cost of a draft pick? The other three players would all cost a draft pick as well.
Perhaps I shouldn't be so harsh on Garza, because it'd be better to have 30 starts from him than 10 from Freddy Garcia, seven from Zach Britton, and five from Jake Arrieta. His floor is higher, but is all of that worth $15 million or more for four or five years?
What about Japanese sensation Masahiro Tanaka? Maybe the O's could pay the contract, but I don't think they can pony up anywhere near the estimated $75 million posting fee.
If the Orioles aren't going to spend money on these guys, who are the top of the free agent class, is it worth spending elsewhere? The team could certainly get more expensive in free agency, but that doesn't mean that it would get better. If one or two ill-advised signings put a damper on retaining someone like Chris Davis, or, in the future, Manny Machado, that would be even more of a negative impact on the team.
Spending carefully is not necessarily the same thing as being cheap. The 2012 O's made hay with a lot of luck and several reclamation signings that paid off. However, the lesson of 2013 is that you can't count on that year in and year out.
You also can't necessarily count on prospects. The spectacular failure of the trio of Arrieta, Britton, and Brian Matusz will not soon be forgotten. Chris Tillman emerged, but one in four mega-hyped prospects succeeding is not going to get the team where they want to be. Until the O's have a player development pipeline to equal a team like the Cardinals, which won its way into the World Series with a lot of home-grown pitching, they may not have the luxury of competing with just a couple of judicious signings - such as, say, Peralta.
It doesn't hurt the Cardinals that they also have $40 million in revenue more than the O's, which gives them more to play with when they do want to sign someone.
Add in a possible forfeited first-round draft pick to sign one of the players who declined a qualifying offer and it becomes even less palatable. The O's might have signed a player like Nick Swisher to play left field in 2013 in hopes that he would have upgraded the team, but it would have cost them a lot more than McLouth for little to no benefit.
Swisher had 12 more points of on-base percentage and 24 more points of slugging percentage than McLouth. He did not steal any bases and had less value defensively. They would have paid $9 million more this year, with $45 million still to come for Swisher's age 33-35 seasons. They would also not have Hunter Harvey in the system. The Orioles would not have been better in the short term. In all likelihood, they would have been worse in the long run as well.
It's frustrating to watch as other teams snap up all the players while the O's sit on the sidelines, but there is always the chance that this is for the best, if not for 2014, then for 2015 and beyond. As fans, all we can do is sit back and hope for the best.