Why The San Francisco Giants Need To See Red In 2012

As is, the San Francisco Giants are going to enter the 2012 season with one of the higher payrolls in baseball – and that’s without any significant additions, including Carlos Beltran.

Depending on who you ask, the Giants’ books were pushing anywhere from $120-125 million this past season, a significant raise from the mid $90 million dollar payroll of the 2010 World Series roster. But despite the annual increase in payroll, the Giants pockets continue to get fatter, year by year. According to Forbes, the Giants operating income and revenue has climbed in a positive direction every year since 2004 (sans 08-09 in revenue):

Operating Income:

• 2004 – 1 million
• 2005 – 7 million
• 2006 – 11 million
• 2007 – 19 million
• 2008 – 20 million
• 2009 – 22 million
• 2010 – 24 million
• 2011 – 30 million

Revenue:

• 2004 – 153 million
• 2005 – 159 million
• 2006 – 171 million
• 2007 – 184 million
• 2008 – 197 million
• 2009 – 196 million
• 2010 – 201 million
• 2011 – 230 million

And if you’re wondering just how profitable that World Series victory was, well, let’s just say the Giants total franchise value jumped a total of eighty million for the 2011 season, from $483 million in 2010 to $563 in 2011.

So what’s my point with all of this you ask? Simple. The Giants need to make bad business decisions for this upcoming season. What, you ask? Hear me out…

The Giants are currently in what many would consider the middle of their Championship window – some may say it’s already starting to shut, others might say it’s just the start – but whatever place you feel it’s in, the Giants have a pitching staff that can, at least right now, compete for a World Series title. Not taking advantage of that because of previously bad financial decisions (see Aaron Rowand, Barry Zito) would and could be detrimental to this franchises long term success.

In no way am I saying the Giants need to raid their vault and hand out asinine contracts like they did with Zito and Rowand, but what I am saying is the Giants have put themselves into a position financially where they can take a loss (or a very small profit) for a season in order to compete at a Championship level. No, it’s not something you want to do year in, year out, but with big contracts like Aaron Rowand and Aubrey Huff coming off the books after the 2012 season and Barry Zito after the ’14 season (buyout) – those hefty deals to players like Carlos Beltran wont appear nearly as catastrophic to the payroll situation as the Giants want to make it sound.

Once this upcoming season ends, the Giants have the following money coming off the books:

• Aaron Rowand – 12 million
• Aubrey Huff – 10 million
• Brian Wilson – 8.5 million
• Freddy Sanchez – 6 million
• Jeremy Affeldt – 5 million (club option)
• Melky Cabrera – Give or take 3 million in arbitration

And of course in 2014, Barry Zito’s devastating contract can finally be bought out.

Again, you need to be smart in what contracts you do hand out, you don’t make mistakes in length of years as those cripple franchises much more than a few extra million per year to outbid another squad. But the Giants simply can’t allow these years of opportunity to pass because they’re trying to cover for past mistakes.

As the old adage says, it takes money to make money – being afraid to invest because of previous mistakes will only set you back further. Andy Baggerly mentioned it yesterday, Tim Lincecum can only take so many 2-1 losses. It’s human nature. The Giants have set themselves up in a good financial situation, both from an on-field perspective (incomes) and from outside investments (real estate, etc) – and this is the time you take advantage of it.