As I have written about time and time again, one of the big keys in any business deal is figuring out what types of decisions should be short-term and which should be long-term.  Too often in baseball circles, long-term is thought to be 2-3 years.  That is not long-term.

Yesterday, Tony Regins’s contract was extended, and though details were not forthcoming, no doubt it is more than a three year deal.  The interesting thing about General Manager contracts is that for a very long time they were done in three year increments.  The baseball world is starting to trend away from that, and get into a more practical business model, which is a good thing.

No GM , nearing the end of his contract is worrying about the long-term future of the club, he is worrying about what he has to do to get his next contract. Taking the hard end date of out of the equation, free’s up the the GM to think about all aspects of the job, not just the surface ones.  It creates a conversation about how the GM will be judged, a true evaluation of all elements of his job description.

At this point there are 10 teams who have General Managers with contract with no defined end date.  There are only six teams that have General Mangers hired past 2012.  That’s three seasons away. Nearly half of teams in Major League Baseball at this moment, are going into 2010 with a General Manager who is running the organization with an eye only on the next 2-3 years.  No business can thrive over the true long-term (10+ years) if it is only operating on a 2-3 year plan.  (The exception might be the Yankees, who generate enough income to fix many mistakes that they make in any one year- but that’s the point of a different post.)

I am not suggesting that a GM should be given a completely open ended contract.  I am suggesting that the role of the GM is too important for the long-term health of the organization to treat it like you would the manager on the field.  A board of directors for a large company doesn’t what its CEO to be thinking about the next 2-3 years only.  They want him/her thinking about the next year and the next 20 years.  If you want to break the cycle of the business model, you need to come up with someone in the position to think beyond 3 years.

Now its possible that Regins deal does not extend past three years, since details have not come out.  I also might be lumping teams with short-term thinking in with those that have figured out how to empower their GM for the long-term simply because they do not share that information.   The key though is to allow the man (or woman) to forget about their contract, and let put the health of the organization first.  If there is an organization that I think understands that it is the Angels.

Hopefully, those other 14 teams with no GM past 2012, figure out that committing to a certain number of years isn’t smart business.  There are other ways to build in an exit strategy without putting an end date on the contract.  And those other ways, might just be better for your ball club.

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