Wednesday, June 04, 2008

The Old Terence Moore Returns

I had been concerned in recent months that I was losing my mind because I was agreeing with Terence Moore over and over again. Fortunately, Terence has put me back on terra firma with a couple of classic examples of ineptly argued columns. All is right with the world again. The first was this gem stating the case for Chipper Jones over Mickey Mantle as the greatest switch-hitter in baseball history. (Mantle's career OPS+ [OPS adjusted against the league average] is 172. Chipper's career OPS+ is 145 and that's before his numbers presumably go down a little in the decline phase of his career.) This morning, Moore follows his gem on Chipper with
this effort at explaining why Matt Ryan isn't overpaid. Matt Ryan, the quarterback who got more money as the #3 pick in the Draft than Jamarcus Russell got one year ago as the #1 pick in the Draft. Matt Ryan, the quarterback who got a deal worth 20% more than 2007 #3 pick Joe Thomas. Matt Ryan, the quarterback whose only leverage was to hold out and thus to cut off his own nose to spite his face.

Let's see how Terence justifies this one...

Matt Ryan was the wrong choice. If you have the opportunity to draft the next Warren Sapp in Glenn Dorsey with the No. 3 pick overall in the NFL draft, you do it. Instead, the Falcons did the historically risky by taking a quarterback that high in the first round.

We're doing so well...

That said, nobody is overpaid. In fact, most folks are underpaid. Others are within several pennies of what they should be making, including shortstops, point guards, defensemen and even quarterbacks making something like $72 million.

I was an economics major in college, so trust me when I say Ryan isn’t overpaid, OK? Neither is any professional athlete, and there are many reasons why.

Somewhere, the head of an economics department is screaming at his faculty, wondering "how the f*** did we give a degree to this guy!?!"

Here are just five of them.

We’re talking about supply and demand, free-market system, survival of the fittest, rugged individualism. All the American things that have generated cringing through the decades from Lenin to Mao to whoever invented the salary cap.

Does the AJC not have editors? What does this sentence mean? Terence, your job yesterday was to create an 800-word column. With all day to work, you couldn't come up with a better construction than this?

In this country, whatever somebody is willing to pay you, then that’s what you’re worth — and likely more. The economic structure in professional sports is just a microcosm of this process, where attendance records and ticket prices have kept rising this century in the NFL, the NBA and baseball.

OK, so whatever the Falcons paid Ryan is what he's worth. If they paid him $100M per game, that would be fine. If they paid him $10 per game, that too would be fine. If that's the case, then how is that consistent with saying "most folks are underpaid" four paragraphs ago? How can anyone be underpaid if their value is always correct in a free market?

The major point that Moore is missing is that the NFL does not operate as a pure free market. There's this thing called a salary cap. Maybe a guy who writes about sports for a living has heard of it. This salary cap limits the amount that NFL teams can spend on their players. When the Falcons bid against themselves (like Tom Hicks with A-Rod) to shower money on an unproven quarterback because the owner has taken a shine to this little rapscallion, they diminish the pool of money with which they can acquire other players. This is why Matt Ryan is overpaid. He is going to make it harder for the Falcons to build a team around him. Unless he plays like Peyton Manning, the Falcons are not going to get production commensurate with their investment.

That’s why, with the Falcons playing before a stuffed Georgia Dome for the past six years, Michael Vick ($130 million) was Matt Ryan before Matt Ryan.

Ah, so maybe some players are worth more because they fill seats with people who buy $20 parking spots and $8 beers. Maybe some people are indeed worth more than others. So what does that imply for Matt Ryan, who is disliked by half of the fan base as a great white hype and the other half of the fan base as a great yankee hype?

No soup kitchen here
The next owner of a professional sports franchise to go bankrupt after paying a bunch of money to one of his players will be the first. Owners give all of that money to certain players, because owners have all of that money to give.

Arthur Blank, you have lots of money. I need some work done on your front yard. Please give me $20K for this project. You have that money to give. Terence Moore says so. As William Munny said, deserve's got nothing to do with it.

Such is especially true in the NFL, where Forbes magazine estimated this year that five franchises are worth more than $1 billion. According to Forbes, the Falcons are ahead of only Minnesota in total value in the league, but the Falcons still are worth around $796 million.

Not only that, Arthur Blank, the co-founder of Home Depot whose worth is placed at $1.3 billion by Forbes, bought the Falcons in 2002 for $545 million.

You do the math.

Terence, you are going to argue below (quite correctly) that rising salaries have nothing to do with ticket prices. The reason that statement is true is the fact that other factors determine ticket prices, namely the demand of consumers to purchase tickets and the supply of tickets available in a given arena. Similarly, with rising franchise values, there are a variety of factors that cause franchise values to rise that have nothing to do with Matt Ryan's ability to read a defense, namely the overall demand in the economy for the NFL's product. If players aren't to blame for rising ticket prices, then why should they get credit for rising franchise values?

It doesn’t work that way
Essentially, this is how the average fan thinks when — oh, say — a quarterback who hasn’t played a second in an NFL game gets something like $72 million.

How can they pay that guy all of that money when you have school teachers barely making it? The same goes for nurses, law-enforcement officers and others around the minimum wage with oil prices soaring by the millisecond.

Sorry to deliver the truth, but if that quarterback we just mentioned didn’t get $72 million, it wouldn’t translate into higher salaries for school teachers, nurses or police officers and relief at the gas pump for the weary. It would translate into more money in the pocket of that owner.

That's all true, but it doesn't answer the criticism that the Falcons paid too much for an unproven quarterback. In concept, athletes deserve what they are paid because they generate a product that people are willing to pay to see. Falcons fans are verklempt about the Matt Ryan pick because they don't think that he's one of those athletes and because they fear that the Falcons took him because of his steely, Matty Ice stare that caused Arthur Blank to melt like a 13-year old girl.

A bleacher seat or the mortgage
Here’s Part II to our previous point: The average fan also thinks that, if an owner doesn’t give something like $72 million to a quarterback who hasn’t played a second in an NFL game, such a scenario would lead to friendlier ticket prices.


There have been a slew of studies through the years to show there is no correlation between the rise of players salaries and the rise of ticket prices.

Owners traditionally will raise ticket prices no matter what. And get this: Despite Ryan’s supposedly outrageous contract, the Falcons even lowered ticket prices for next season in the upper parts of the Georgia Dome.

Like a blind squirrel with a nut, Terence is on to something here. He's absolutely right that ticket prices reflect the general demand for tickets and not the salaries that a team is paying out. This is especially true in the NFL where the salary cap sets outlays on players at a relatively fixed level. So let's examine why the Falcons have dropped ticket prices. Could it be that the fan base is not excited to buy those tickets because they don't like the product that is going to be on the field next fall? And isn't Matt Ryan part of that product? So maybe spending a fortune on a guy who has done nothing to energize the fan base wasn't such a good idea after all.

Just wait
These things work themselves out. We’re back to the free-market system. For instance: Blank just put a $72 million bull’s-eye on the back and front of Ryan’s jersey. That means before the Falcons’ season reaches Halloween, Ryan has to start, and he has to play well.

If Ryan becomes a pumpkin, that means he wasn’t worth all of that money, but only to Blank. It’s nobody else’s business, because it’s nobody else’s money.

I was as negative about the Ryan pick as anyone and I'm not even staking the claim that Ryan has to be producing by midseason for the pick to be worthwhile. Normally, I would peg year three as the drop dead date for Ryan to be a good quarterback, but with the money the Falcons spent on him, I'm pushing that up a year. That said, who the hell is Terence Moore to say (or at least imply) that I shouldn't be mad at Ryan being overpaid if he doesn't produce? I would like the local professional football collective to do well. If said collective is making dumb decisions with their money and spending a huge chunk of change on a quarterback whose signature game in college involved being shutout for the first 55 minutes, I have a right to be angry. Arthur Blank will be losing money, while I'll be losing out on the emotional payoff that comes with a winning team. I'll admit that the latter isn't as big a deal as the former, but I'm entitled to my bitterness.


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Sports Dawg said...

I try to never waste my time reading the AJC's Mr. Moore, although I do occasionally have a weak moment and read his column. He's a joke 95% of the time. Great job on the post, as well as your entire site. If you have a minute, please check out:

Thanks. Sports Dawg

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