Author Archive

The Stephen Strasburg Financial Fallout

The reality of the injury to Stephen Strasburg is obviously terrible news for the Washington Nationals — and will be felt at multiple levels of the organization.

It’s not often that a single player can be attributed to a surge in revenues for a club, but Strasburg was different; he was a player who had the collective focus of baseball fans before he ever set foot in the big leagues. What’s important here is that he wasn’t playing for the New York Yankees or Boston Red Sox — he was playing for the Nationals, a team that was the Montreal Expos a little more than a half-decade ago.

His first two starts at Nationals Park were sellouts and attendance for his third home start — on June 23 against the Kansas City Royals (31,913) — was 39 percent higher than what the Nats had been drawing on average prior to his arrival. He immediately started paying dividends for a club in dire need of excitement; his debut alone apparently netted the Nationals $1.5 million in additional revenue.

His debut was also a ratings boon for MASN, the regional sports network of the Nationals; they set a viewership record for his debut by earning a 7.1 household rating — more than 165,000 households in the Washington region tuned in.

His economic value this season was also felt beyond the confines of Nationals Park. On the Thursday after Strasburg’s debut, TBS altered its programming for “Sunday MLB on TBS” to air Strasburg’s second start, at Progressive Field during interleague against the Cleveland Indians. As of Saturday June 12, the day before Strasburg’s scheduled second start, the Indians sold an additional 8,000 tickets to what the Indians were calling “Strasburg Sunday.” There was a merchandise stand, in Cleveland, dedicated entirely to a player on the Nats.

The loss of revenues this season will pale in comparison to 2011 — and perhaps even beyond. We can’t project exactly how much Strasburg was worth to baseball in D.C. — but when taking everything (merchandise, concessions, tickets, etc.) into account, it’s likely in the low tens of millions. And in addition to the loss of potential ticket and TV revenue, the Nats will be paying Strasburg $5 million next year (his salary plus a portion of his signing bonus) to rehab.

The feel-good announcement just 10 days ago that the Nats signed Bryce Harper to a $9.9 million, five-year contract will be tempered with the knowledge that the four-year, $15.1 million deal for Strasburg has the capacity to go from boon to bust. After all, who knows whether he will be the Strasburg that showed electric stuff or a watered down version of his former self when he comes back.

The financial implications of Strasburg’s injury are likely to be felt well beyond the reaches of the Nationals. Shortly after the World Series is completed, collective bargaining sessions will begin, as the current CBA is set to expire in mid-December of 2011. A hard slotting system for amateur draft bonuses has been mentioned as something the league would like to see, and the Strasburg contract, and now injury, play into management’s hands. It’s a tough pill to swallow when you give an unproven prospect $15 million and he misses an entire season, which is surely an argument that owners will make. And remember, the 2011 season will count as service time for Strasburg, so even if he returns to form in 2012, the Nationals are losing one of his cost-controlled seasons.

Overall, 1,971 days after the first batter in Nationals history (Brad Wilkerson), it’s a dark day for baseball in Washington — and many more may be coming.