Hot Stove Prologue / Sports Business Report

A. In my haste on Friday afternoon, I wasn’t able to properly introduce the recurring feature I will be running on this site, called “Hot Stove Report.” As the name indicates, I will be providing analysis on all of baseball’s winter transactions.

I expect that this off-season will be quite interesting. According to Sports Illustrated’s senior baseball writer Tom Verducci, 24 of 30 teams will be looking to add payroll this winter, with the remaining six to stay put (instead of cutting). Baseball is awash with cash and despite the seeming paucity of quality free agents, this winter will have just as many fireworks as in years past. More teams will get creative and I expect that we may see some interesting trades.

Also, to follow up on my criticism of J.D. Drew’s decision to file for free agency, I was clearly mistaken. In previous years, Drew may have found it difficult to top the guaranteed $33M he had in Los Angeles. But from what I’m hearing, he may get up to $50M from a team like the Red Sox or Mets looking to add a corner outfielder. Baseball must be thriving financially...how else to explain why a team would overpay for a guy like Drew not once, but twice in three seasons?

B. A word on some interesting sports business news. The Mets have signed a 20 year, $400M naming rights sponsorship deal with financial services giant Citigroup for their new stadium, opening in 2009. This deal represents the largest naming rights sponsorship deal in American sports business history and will give the Mets a tremendous new source of revenue.

This deal is significant for three reasons. First, it represents the first named stadium in the New York metropolitan area. Second, it gives the Mets their first-ever advantage over the Yankees. Third, and most important, it will likely set the bar for the future of naming rights sponsorships in the New York market. With the Yankees set to open a new stadium for the 2010 season, it stands to reason that the Yankees will now seek to top this deal. Similarly, the new football stadium being built for the Giants and Jets will likely have a naming partner. And given how the Mets have drawn three million fans only three times in franchise history, one would assume that any sponsorship deals with the Yankees and the Giants/Jets would top Citigroup’s $400M commitment.

On a personal note, as much as it will be sad to see the Yankees playing in a ballpark with a corporate sponsor, there is no way that they will let the Mets earn $20M without trying to top them with their own lucrative deal.