Archive for the ‘Ozzie Giullen’ Category

Joe Torre and Performance-Based Baseball

Friday, October 19th, 2007

Joe Torre should have taken the deal!

After 12 years as manager of the New York Yankees, and twelve post season appearances and four World Series titles to his credit, Joe Torre yesterday turned down a one-year contract to continue. The reason as reported in the Washington Post was because of a pay cut from $7.5 million to $5 million, which as the Post reports is still the highest in Major League Baseball.

Well, in my view it wasn’t a pay cut. Rather, Yankees’ ownership took a page out of the pay policies that the smartest companies are adopting – pay for performance. The contract included incentive bonuses of $1 million if the Yankees reached the playoffs, another $1 million if they made it to the American League Championship Series, and a further $1 million if they reach the World Series. Add it all up and it’s $8 million, an actual increase. What’s wrong with that? Let’s compare Torre’s pay with that of other manager who have won titles recently. The baseball fan site The Red Sox Times lists the pay of all MLB managers for the ‘07 season. Turns out that with an ’07 salary of $7.5 million, Torre is already getting paid more than three times as much as Boston Red Sox manager Terry Francona ($1.65 million), Chicago White Sox manager Ozzie Guillen ($1.1 million), and Los Angeles Angels manager Mike Scioscia ($2 million).

As the highest paid manager in baseball – and perhaps in the history of the game – and with the highest payroll in Major League history, why not agree to incentives vs. guarantees, as do most of the corporate world and many in sports? In my view Yankees ownership acted responsibly, and I wish this great manager had agreed to return. The world of sports and baseball has lost (hopefully for only a short time) a legend.

On a related note, contrast the Yankees with the Washington Nationals, who operated with one of the lowest payrolls in baseball and a rookie manager, Manny Acta. When I led the group partnered with the city to bring baseball to Washington, it was my dream to see a team developed from the ground up along the lines of the Cleveland Indians and Colorado Rockies. That’s what Manny Acta and Jim Bowden are doing under the able leadership of team President Stan Kasten – and at a fraction of the cost in management and players. I like what I see there and look forward to the day they enter post season competition.