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See Also: How the rest of the AL East plans to cope with the Red Sox and Yankees

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By Jerry Crasnick
March 14, 2004

TUCSON--In the early 1600s, three centuries before Holland produced Rik Aalbert Blyleven and his curveball, tulips were the country's hottest commodity.

In a phenomenon that defied rationality, people sold land, jewels and other prized possessions to buy an unusual strain of tulips with colored stripes, with the intention of re-selling the flowers and making a fortune. The more prices rose, the more desirable the tulips became. The speculative craze, which ended with a crash, would eventually be known as the "Tulip Bubble."

In the winter of 2000-01, Major League Baseball was gripped with a similar mania. Teams chased free agents as if there were no tomorrow. The beneficiaries ranged from power-hitting shortstops to injury-prone starters--as well as their valets, investment counselors and the agents who collected big commissions for negotiating these deals.

Then the euphoria wore off, and owners and general managers looked up in dismay at what they had done. And the game would never be the same.

If you have any doubt, consider the five-year, $70 million contract that Vladimir Guerrero signed with the Angels this winter as a 28-year-old five-tool player. Back problems or no back problems, it seems downright reasonable.

Before the stock market crash, the devastation of Sept. 11, a new collective bargaining agreement and a sustained economic downturn, the game had a decidedly different look. Let's put it this way: In the winter of 2000-01, nobody was crying collusion.

From November 2000 to April 2001, baseball owners engaged in a spending spree that was unprecedented in both fervor and scope. Even the Pirates, brimming with optimism because of their new ballpark, joined in the fun.

In November, Pittsburgh made a six-year, $60 million commitment to catcher Jason Kendall, and the Yankees lured Mike Mussina away from Baltimore with a six-year, $88.5 million deal.

At the Winter Meetings in Dallas, the Rockies addressed their need for a marquee starter with an eight-year, $121 million deal for Mike Hampton. Then Rangers owner Tom Hicks gave shortstop Alex Rodriguez a 10-year, $252 million deal, the richest in professional sports history.

Before Opening Day, Manny Ramirez (eight years, $160 million with the Red Sox), Derek Jeter (10 years, $189 million with the Yankees) and Todd Helton (a nine-year, $141.5 million extension with the Rockies) all joined the nine-figure contract club.

Several less prominent players also signed impressive deals, even if the headlines were smaller. A partial list: Darren Dreifort, five years and $55 million with the Dodgers; Kevin Appier, four years and $42 million with the Angels; Bobby Higginson, four years and $35.4 million with the Tigers; Todd Hundley, four years and $23.5 million with the Cubs; David Segui, four years and $28 million with the Orioles; and Denny Neagle, five years and $51 million with the Rockies.

Score them all as E-ownership.

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RANGERS EPITOMIZE PROBLEMS SURPRISE, Ariz.--Two years later, bring up the phrase and you still get a reaction from John Hart. Whether it's a pained smile or an aggravated grimace may forever remain a mystery. But suffice it to say, if you're picking out a video for the Rangers general manager, never ask him if he wants to watch "The Perfect Storm." That's how Hart long has referred to the events of his first year running the Rangers. At the time, it was just one move after another that didn't work out for the Rangers. In retrospect, it was the catalyst that led Texas to trade Alex Rodriguez to the Yankees--and pick up a big chunk of his salary. "We all thought we had a lot of guys already here," says Hart, still wincing. "When I got here, I looked at the talent we had. There was Alex. Rafael Palmeiro. Pudge Rodriguez. The thinking was if you've got them, what do you do with them? You weren't going to have them forever. While they were here, we thought we should make a run for it." So the Rangers took on payroll like George Clooney's little fishing boat took on water during the 2001-02 offseason. They signed Chan Ho Park for the rotation at a cost of $65 million over five years. They added Juan Gonzalez (two years, $24 million) to the lineup. The bolstered the bullpen with Jay Powell (three years, $9 million) and Todd Van Poppel (three years, $7.5 million). Texas took a $3 million risk on John Rocker in a trade. And when it looked like they were done, they added bit pieces like Ismael Valdez ($2.5 million), Dan Miceli ($1 million) and traded for Rich Rodriguez ($600,000) at the end of spring training. When it was all done, they had committed $112.6 million in one winter. Then the storm struck. Sinking Fast Park proved to be nowhere near the same kind of pitcher he was at Dodger Stadium. Gonzalez got hurt. Powell and Van Poppel were flops. Rocker flaked out. Miceli was released a month into 2002 season. The boat sunk. Fast. When the season was done, the Rangers had dropped 90 games. Attendance plunged by almost 500,000 fans. After spending $130.6 million on payroll, owner Tom Hicks announced $30 million in losses. With so many underachievers signed to multiyear deals, the view of the horizon wasn't any better for 2003. Park got hurt. Gonzalez got moody. Van Poppel got released. It resulted 91 more losses, a further decline in attendance and even more red ink. "The big disappointment was 2002," Hicks says. "That was the year we were going to step up and make a move or not and we didn't. We took a financial hit, which we weren't going to continue doing. At that point, we started a course for where we are now going." In other words, Hicks wasn't going to make the same mistake twice. As if to make the saltwater stinging their faces even nastier, the free-agent market took a much bigger drop. But the Rangers, reeling from losses, couldn't fish the deep waters anymore with their sunken ship. They had to watch as other catches were scooped up with lots less net. "Two things happened," Hart says. "First, due to injuries and other things, the guys we signed didn't perform like we expected. Second, there was a big correction to the market. Things changed." Set A New Course . . . Engage Certainly the Rangers' situation did. And with it changed their ability to keep Rodriguez happy. He wanted to win now. That wasn't going to happen in Texas. The Rangers had the best franchise cornerstone in the game and spent an additional $108.6 million and $81.5 million on payroll in 2002 and 2003. Rodriguez held up his end of the bargain and won the 2003 American League MVP award, yet the club's decision-making resulted in consecutive last-place finishes. With diminished revenues, a smaller budget and less flexibility, Texas decided not to fish in this offseason's deep market. The Rangers decided they simply couldn't afford to, not with the past losses haunting them and Rodriguez' big contract limiting them. When they decided to pursue a Rodriguez trade, the Rangers acknowledged their belief that they could rebuild quicker without him than around him. Not because they didn't get their money's worth in performance from him, but because the other contracts provided so little and cost so much, that they had to get rid of one or the other if they wanted to drastically reduce payroll. And interest in assuming the final three years and $42 million on Park's contract was as limited as his effectiveness. "It was almost a chicken-and-egg argument," Hicks says. "Because we weren't winning, we weren't drawing the fans necessary to have the revenue we needed to afford the payroll we had with Alex here." The Rangers plan for a $65 million payroll this year and will grow it slowly, they hope, and in concert with the regeneration of lost revenues. They'll see another $22 million in contracts drop off the books after this year, most notably Rusty Greer's $7.4 million. For now, though, the Rangers must consider their past as much as their future. That's why a week after the A-Rod trade, Hicks was asked if signing Rodriguez was a mistake or if the bigger mistakes were the other deals. "I'd say both," he says. "Alex was a big contract, but it was a 10-year contract that was weighted heavily toward the last four years, and it matched the buildup of our TV contract. But we made some mistakes. We had big doses of bad luck. "I never look back on anything because you can't in business, but if you had to do it all over again, you wouldn't have done it." -- EVAN GRANT

In hindsight, the reckless spenders have reason to wonder how things got so out of whack. But consider the backdrop. The AOL Time Warner union was still flush with promise, and Fox and Disney were making forays into sports ownership as a complement to their main businesses. The NASDAQ soared from 1900 to 5100 in a span of 18 months, and teams still were operating under the assumption that a new ballpark automatically meant big crowds and a shot at postseason play.

"You have to look at the era we were in," says Texas GM John Hart, who was still with Cleveland in 2000. "The stock market hadn't taken a huge hit yet. 9/11 hadn't happened yet. It was a high-flying time. Manny and Alex were a couple of young stars who came out. Colorado was dying for pitching. I think all of those factors combined to drive the market a little bit."

For years, the Rockies had grown accustomed to opening the Coors Field gates and counting the receipts. But the novelty of the park was wearing off, the season-ticket base was slipping, and the Diamondbacks were making some serious noise in the National League West.

The Rockies had just won 82 games in 2000—the second-highest total in the franchise's brief history--and scored a whopping 968 runs. After careful deliberation, they determined they were two starting pitchers away from contending. So they signed Neagle and outbid the Cubs, Cardinals and several other teams for Hampton.

"We thought Hampton would be ideal for us," Rockies GM Dan O'Dowd said. "His fly ball-ground ball ratio was phenomenal, and he was in his prime. Neagle was a winning lefthanded pitcher and a middle-of-the-rotation-guy who could give you innings. The bottom line is, we made a very short-term decision that blew up on us."

Hampton, like Darryl Kile before him, simply wore out at Coors Field. He went 21-26 with ERAs of 5.41 and 6.15 before the Rockies decided to cut their losses--and salvage his career--by sending him to Atlanta in a complex three-way deal that also involved the Marlins in November 2002. Neagle went 19-23 before undergoing Tommy John surgery last summer. He'll probably miss the entire 2004 season, but the Rockies have disability insurance to pay his $9 million salary.

O'Dowd, with the benefit of hindsight, concedes he had buyer remorse shortly after signing Hampton and Neagle. He attributed the decisions to a win-now mentality that overrode common sense.

"We should have never done it to begin with," O'Dowd says. "The only way those contracts would have allowed us to be successful would be if we could have added some more pieces around them. But we weren't one or two players away. After winning 82 games, we were probably a dozen players away from being a championship club."

While Helton's $141.5 million contract seems exorbitant by current standards, he couldn't do any more to earn his money. Helton is a career .337 hitter with at least 30 homers and 100 RBIs every year since 1999. He's a Gold Glove first baseman and a leader in the clubhouse, and plays at least 155 games annually. What more could an employer want?

"There's a difference between players who have large contracts and perform, and players who have large contracts and don't perform," O'Dowd says. "Todd performs."

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Of course, no one performs like Alex Rodriguez. He averaged 52 homers and 132 RBI a year in Texas, appeared in 485 of 486 games and won an MVP award in 2003. But the Rangers finished last in each of their three seasons with him. When Rodriguez went to the Yankees in February in a trade for Alfonso Soriano, the Rangers were relieved to be rid of the financial burden and Hicks was derided as a buffoon by newspaper columnists.

One baseball official, who declined to be identified, says the Rodriguez contract was good for the game because it served as a wakeup call to owners.

"It changed the game, and you want to know why?" the official says. "It was a deal where the player did everything you could have humanly asked, thought or hoped he'd do, and it was still uneconomic."

Then-Texas GM Doug Melvin, who now holds the same position in Milwaukee, isn't so sure.

"I hear people say that contract strangled the franchise, but I never thought so," Melvin says. "You can take two players off any ballclub and they'll total $20-22 million, and you wouldn't trade A-Rod for those two players."

Melvin has a point. After the A-Rod signing, the Rangers added Chan Ho Park, John Rocker, Todd Van Poppel, Jay Powell, Carl Everett, Dave Burba and other veterans who didn't contribute much. Park, who has gone 10-11, 6.06 since signing a five-year, $65 million contract in December 2001, has been a lot bigger drag on the Rangers' pennant hopes than Rodriguez ever was.

Now that Rodriguez is gone, the Rangers have a payroll in the low $60 million range and plan to get back to basics: building through the farm and concentrating on their Latin American operation.

"If you bring in a star player to attract fans and be the missing piece to win, you better make sure that he's the missing piece," Hart says. "Ultimately he's not going to be the one who attracts fans and drives revenue if you're not winning. It's about putting a contending club out there."

Agent Scott Boras, who negotiated Rodriguez's record contract, says events of this winter substantiate that A-Rod would receive a contract similar to his 10-year, $252 million deal if he went on the market again. Boras contends that the game's revenues continue to rise and that profit-taking is a major factor in declining payrolls.

"If Boston and New York were competing for Alex Rodriguez against one another, I think you know what would happen," Boras says. "The cost of losing is worse than the cost of paying the player--as this demonstrates."

But few general managers sign off on that premise. They point to the Angels and Marlins, the last two World Series champions, as an indication that teams can win with mid-level payrolls, long-term plans and no superstars. The last team to pay the richest salary in baseball and make the playoffs (let alone win the World Series) in the same year was the 1986 Mets.

It's also worth noting that even the deep-pocketed Yankees aren't going it alone on A-Rod's salary. Texas will pay $67 million of the $179 million still owed him.

While George Steinbrenner's behavior certainly doesn't reflect it, baseball's new luxury tax and its revenue-sharing provision should make it painful for big spenders to run amuck. For less affluent franchises, debt-to-equity regulations and shrinking credit lines have become a major consideration.

Colorado's O'Dowd says teams are now focused on reality-based decision making. For you and me, that means postponing a vacation to pay the mortgage.

For the average major league club, it might mean nontendering a serviceable player on Dec. 20 rather than commit to salary arbitration. Or it could mean hacking payroll and swearing off $10 million additions for a long, long time. The Rockies certainly have.

"When you go through what we did and realize how painful it is, you create a decision-making process that reflects who you are," O'Dowd says. "And I think you never go back there again."