Rocks and a hard place.

• Author: Schley, Stewart
• Position: Sportsbiz - Column

STOCK-MARKET PROS HAVE A WORD for the sort of nest-egg-devouring swoons that send everyday investors heading for the Maalox. They're called "corrections."

Market corrections hurt, but they're presumed to be beneficial because they pave the way for improvements down the road. Let's hope they work that way in sports, too.

Because, on the local scene, there's a whopper of a correction playing itself out. Bloodthirsty voyeurs who want an early peek into it can book a flight this month to Tucson, where the Colorado Rockies Baseball Club resumes the business of professional baseball in a perilous state of financial affairs.

Behind the hoopla (and aside from that federal antitrust exemption) big-league baseball is an enterprise that abides by the universal laws of business. Keep your costs low and your revenues high and you'll do fine. Get topsyturvy on that equation and you'd better have plenty of cash to cushion the fall.

For the Rockies, that's exactly the problem.

The NASDAQ gave us Webvan and pets.com. The Rockies gave us Mike Hampton and Denny Neagle. All four are emblematic of serious misjudgment in valuation, and some unfortunate timing. But who knew?

Stock-market day traders who watched the Internet crash suck down their kids' college funds were simply following the advice of Wall Street savants like Morgan Stanley's Mary Meeker and Merrill Lynch's Henry Blodgett, both of whom would be about as welcome today at a weekly investment club meeting as a commemorative swatch of Ken Lay's boxer shorts. For its part, the Rockies management was merely knocking off a proven formula advanced by rivals like the Arizona Diamondbacks, who had recruited two hard-working employees named Johnson and Schilling.

The Rockies committed to pay $175 million for their southpaw duo. But by fall of 2001, Hampton's sinker had faded as badly as the NASDAQ, and so had the Rockies' chances of playing in the postseason. The team posted an unremarkable 73-89 record, and a year later repeated that unremarkable feat. The good-times vibe that once filled Coors Field with 40,000-plus had soured, and with it, so had the Rockies' balance sheet.

Nobody knew it at the time, but the expensive Hampton and Neagle deals were among the last big free-agent contracts signed before baseball's pay scales underwent some downward correction of their...