One Man Show: Why Teams Bank Their Financial Futures on One Player

The Los Angeles Angels grabbed the baseball world’s attention this offseason when they signed superstars Albert Pujols and C.J. Wilson on the same day. Pujols signed for 10 years and $254 million while Wilson’s deal was for five years and $77.5 million. In one day, the organization committed itself to spending $331.5 million on only two players.

Albert Pujols: A $254 million man

The price tags may seem outlandish, but surprisingly enough, the Angels might have made smart investments. In the 48 hours after the signings, the team sold more than 1,000 new season-ticket packages and local sports retailers were unloading merchandise to eager fans. For a franchise that had been losing revenue the past two seasons due to dwindling fan interest, the Pujols and Wilson signings could essentially pay for themselves.

The Angels aren’t the only team to see a spike in revenue after a big signing. The Tigers signed Prince Fielder to a nine-year, $214 million deal this offseason, and consequently ticket sales jumped 352 percent.

Revenue is an interesting part of the puzzle in the Peyton Manning saga with the Indianapolis Colts. Manning signed a new deal with Indy last year, which includes a $28 million bonus on March 8. Manning, however, missed the entire 2011 season with a neck injury, and his long-term future is in question.

The talk this winter has been what the Colts will do with their QB. Do they pay Manning his $28 million even though he might never play again? Or do they cut or trade him so they don’t have to pay?

Undoubtedly the team must consider the repercussions if they were to let the superstar go. Interestingly enough, Colts fans face a March 1 deadline for renewing season tickets. Thus far it appears the uncertainty hasn’t impacted fans, as the team has stated sales are where they normally are. This could be due to the fact the Colts hold the first pick in April’s NFL Draft and will likely take highly touted QB Andrew Luck.

In the modern sports lexicon it has become apparent having big name players on your team is the way to go in order to make money. Keep that in mind the next time you see a huge contract. In sports, big deals are investments.

Photo (cc) by SD Dirk and republished here under a Creative Commons license. Some rights reserved.

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