The best money can buy?

Take a step into corporate fantasyland and imagine your boss or shareholders raised your budget by 50%, with absolutely no guarantee of extra returns. If you're David Orton, CEO of 3-D graphics chip maker ATI Technologies Inc., you'd pump that money into R&D. "Quite often, R&D is resource limited, so we make decisions based on pragmatic business needs," says Orton. Armed with a few extra bucks, ATI could work on more longer-term products, ensuring its future success. "Given the angel's windfall, we could build out in anticipation of the business from our bigger R&D investment."

Ah, to dream. Of course, ATI's shareholders aren't giving Orton that kind of money--at least, not yet. But Rogers Communications Inc. (the parent of Canadian Business) did for Toronto Blue Jays general manager J. P. Ricciardi, boosting his payroll by an extra US$25 million to shed the team's perennial also-ran image. Let's face it, general managers, for better or worse, are the new baseball heroes. They don't turn double plays, hit home runs or strike out batters, but a good GM can make a difference in a business where the rich wildly outspend the poor. Now, no one is arguing that knowing a pitcher's ERA is harder than understanding a company's EBITDA, but building a team is a lot like developing a business. You need to address your weaknesses, while capitalizing on your strengths. Of course, a ball team's weaknesses are apparent to everyone. It's no secret the Jays needed pitching help last year-especially a starter and a closer--and a solid bat.

Armed with the extra cash, Ricciardi put 10 names on a board and went after them. He reportedly offered slugger Brian Giles roughly US$30 million over three years, which was rejected. But he did snag starter A. J. Burnett (five years, US$55 million) and closer B. J. Ryan (five years, US$47 million), probably overpaying both to get them to sign. "The bottom line is people are going to go where they are compensated enough that they feel they're not leaving anything on the table or not shortchanging themselves," says Ricciardi. "We tried to be very aggressive, and I think we were."

Indeed, no team spent more money or made more high-profile moves in the off-season than the Blue Jays. Aside from Burnett and Ryan, Ricciardi also signed Gold Glove catcher Bengie Molina, and traded some unneeded players for sluggers Troy Claus and Lyle Overbay. They're big deals by Blue Jays standards, but even with the extra cash, the club--with a payroll of US$72 million--is many tens of millions short of its primary competitors, the Boston Red Sox and New York Yankees. And, so far, the results have been mixed. Claus and Overbay have certainly swatted the ball, but the Jays remain around the .500 level--not nearly good enough to grab a playoff spot if that record doesn't substantially improve come October. And it won't be enough to get more bums in seats to make up for the extra expense on a money-losing team. In 2005, a year when neither the Toronto Maple Leafs nor the Raptors played any meaningful games, attendance rose just 6% to 24,876 per game. Clearly, the Jays have to do much better than break even on the field to have any hope of breaking even on the bottom line.

A .500 record, however, is slightly better than the 0.481 winning percentage of Ricciardi's first four years at the helm, not quite the earth-shaking results expected when he signed up on Nov. 14, 2001. Back then, Ricciardi was known as an expert in developing winning teams with small budgets--a reputation he acquired in Oakland while helping the A's become one of the league's most successful teams on one of the smallest payrolls. The philosophy the A's and their GM, Billy Beane, use has become famously known as "moneyball" which simply argues that position players should be signed using stats, such as their on-base percentage, Willie pitchers should be judged on strikeouts, walks, home runs and ground balls. The strategy worked for the A's, who have won the AL West three times in the past seven years. It didn't work for the Jays. "The reality is that you're not going to win the AL East on a $50-million payroll," says Ricciardi. "The price of doing business in baseball is not cheap. We realize the market is expensive, and to get good players sometimes you have to step up."

Oddsmakers liked what the Jays did, pegging the team's chances of winning its first World Series since 1993 at 30-to-1. But Ricciardi knows baseball is a business where failure is all too common. "You can do everything right and everything can go wrong," he acknowledges. Can the Jays re-establish their image as a well-run ball club that had plans to still be in action come the playoffs? Chances are, no. But have fun watching.

PHOTO (COLOR): A. J. Burnett

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By Andy Holloway

Andy Holloway is a senior writer with Canadian Business.