MetsBlog Q&A: Cerrone talks to Sandy about spending

Tonight, Sandy Alderson will be a guest on this season’s debut episode of SNY’s Mets Hot Stove Report, which airs every Thursday night at 7 pm ET.

Last week, MetsBlog’s Matthew Cerrone caught up with Alderson for a quick, five-minute talk about the team’s strategy in regards to payroll and spending, which you can read below:

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Matthew Cerrone: Why can’t or won’t the Mets spend on payroll as much as the Phillies, Red Sox, Cubs, Dodgers, etc.? Is it a business strategy? Is it based on revenue? Is it a personal philosophy? What’s the reasoning behind it, as best you can explain?

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Sandy Alderson: Considering where we are now with respect to revenues, in order for us to approach a break-even proposition, we have to keep our payroll at a lower range than it has been in the last few years. Now, as the team performs better and the revenues increase, there will be the opportunity to increase payroll. So, where we are now is at a point of trying to bring our expenses (including most importantly payroll) to be in line with our revenue; and so we’re trying to approach it on a more balanced basis.

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Matthew Cerrone: There are fans who believe you must first spend on new talent, even when the team is losing, so to get the team back on track and winning; at which point people will come to the ballpark and then you will increase revenue. The thing is, when I look at consistent winners around MLB, like the Red Sox and Phillies for instance, I see teams who cut back a bit, developed talent, locked it up, then started winning and then spent on bigger free agents, all while working to keep it consistent. Is this what you’re talking about?

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Sandy Alderson: Yes, I think what most teams would prefer is that you begin to win with a more modest payroll – and you sustain that cycle of winning by increasing your payroll to accommodate the players who are becoming more experienced with your team and so they’re becoming more costly; and at the same time you are participating in the free agent market. Now, what the Mets have done in the past is participate in the free-agent market extensively and so in part we need to rebalance. You can only have so many players on your team making $15 to $20 million. And so the farm system becomes important to the success of any team, including teams in big markets as evidence of the Yankees, Red Sox and Phillies.

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Matthew Cerrone: OK, but the general assumption among some fans and most reporters seems to be that you are not spending because of the legal and financial situation involving your team’s Ownership. However, the way you are outlining it, it seems like what you’re saying is that (while that may or may not be the case) this would be your overall approach regardless of what is happening off field?

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Sandy Alderson: Well, my approach is the typical approach around baseball. And, I think if you go back to the teams that have sustained their success over a period of time – like you mentioned before, even teams with access to big revenues – thats the model they use. We’re in the early stages of winning with that same approach.

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[jbox color="blue"]In addition to talking with Alderson on Mets Hot Stove Report, which airs tonight at 7 pm on SNY, host Kevin Burkhardt will also talk with David Wright about trade rumors, after which he’ll speak with Daily News reporters about the team’s off-season plans.
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Matthew Cerrone (Updated on Nov. 10, 2011, at 10:19 am): I wish I had more time to talk with Sandy, but I only had a few minutes and my goal was to discuss this one specific topic (since it’s such a popular point of contention) so we all can better understand his approach and why. So, please forgive the lack of follow-up questions…

Yesterday, new Angels GM Jerry Dipoto told ESPN.com, “We are a high-revenue team and I’m a big believer in acquiring impact players.” However, I hear media and fans repeatedly frame payroll as Big Market vs. Small Market. To Alderson and Dipoto it seems to be a matter of High-Revenue vs. Low-Revenue; and Alderson is arguing that (despite being a ‘Big-Market team,’ as defined my media market and potential tickets sold) the reality is the Mets right now are a weaker revenue team because of how poorly things have turned out over the last few years (be it due to bad contracts, debt, poor planning, injuries and under-performing talent). And so, because of the lack of revenue, Alderson is saying he is only able to spend what he has available to him (which, based on reports, would be something like $110 million on player salaries, which is on par with the Cardinals, Tigers and Rangers, all of whom made the post season last year).

The thing is, it also sounds like he’d be adopting this initially-spend-less, invest-in-the-farm, develop-talent, expand-payroll-by-re-signing-your-own-successful-guys and work-towards-sustainability model regardless of markets, revenues and legal situations because (to him) that is what works in today’s game. The only variable is working capital, which he is basing on straight revenue.

Next time, if I get the chance to talk with him again, I’d like to ask about that revenue figure and where it comes from and what else it used for (in addition to player salaries, as I assume it goes to paying down debt and organizational costs, including the draft, paying scouts, etc.).