MLB’s Payroll Matters Part 2: Just Because Some Low Payroll Teams Have Bucked The Trend – Doesn’t Mean It Will Continue

It seems the only to way to build a team successfully - is to be atrocious for several (talking 6 - 8 seasons), stockpile top 5 Draft Picks, and have them all become your nucleus for a matter of a few seasons. The reason is because of Team Control Salaries.  Teams like the Rays and Pirates have also held players in the Minor Leagues longer than needed - due to salary and Arbitration implications.  I can think of Desmond Jennings, Wil Myers, Chris Archer for the Rays, while Gerrit Cole and Jeff Locke come to mind for the Bucs.

It seems the only to way to build a team successfully – is to be atrocious for several (talking 6 – 8 seasons like the Twins, Nationals, Pirates, Rays in recent years – and now the Astros are following suit), stockpile top 5 Draft Picks, and have them all become your nucleus for a matter of a few seasons. The reason is because of Team Controllable Salaries. Teams like the Rays and Pirates have also held players in the Minor Leagues longer than needed – due to salary and Arbitration implications. I can think of Desmond Jennings, Wil Myers, Chris Archer for the Rays, while Gerrit Cole and Jeff Locke come to mind for the Bucs.  If a player is ready for action in the Majors, he should playing – end of story.

By Chuck Booth (Lead Baseball Analyst/Website Owner):

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Lets just take a look at the teams that have played well above their value.  The Twins are a story much like the Marlins in 1997 and 2003.

The Twins had a good team in the late 80′s, and won 2 World Series Titles in 1987 and 1991.  However the economics of the game hit them hard, and they struggled for an 8 year stretch in the AL Central.

For Part 1 of the MLB’s State Of the Union Part 1:  Click here.

Major League Contraction Talk Again?

Bud Selig almost contracted two teams around the turn of the century (Twins and Expos).  The Minnesota franchise was just turning the corner after several bad years.  They played well enough to warrant a new stadium.  They were a really run team - so they avoided a move,  The Expos sold off all of their assets for decades, played decent enough not to Draft 1st overall, until they moved to Washington in 2005. Selig will not be part of the CBA negotiations for 2016 - as he is stepping down from the Commissioner's post in January of 2015.

Bud Selig almost contracted two teams around the turn of the century (Twins and Expos). The Minnesota franchise was just turning the corner after several bad years. They played well enough to warrant a new stadium. They were a really run team – so they avoided a move, The Expos sold off all of their assets for decades, played decent enough not to Draft 1st overall, until they moved to Washington in 2005. Selig will not be part of the CBA negotiations for 2016 – as he is stepping down from the Commissioner’s post in January of 2015.

Minnesota Twins 2001 – 2010

This team played incredible during the otts decade.  I mean these guys were on MLB ‘Hit List” for contraction before reeling off 6 AL Central Division Titles in 9 years.

In the years before they were good, I am talking about 1993 – 1999, this team placed no better than 4th in the Division, and finished last 5th on 4 occasions.

The reason why this team took off at the crack of the millennium – was because of great drafting in the years they were bad.

The team was able to squeeze out all of their best players until they started to outprice themselves.  Torii Hunter and Johan Santana were with the team when it was at its peak.

Since the Twins management has done okay in trades, they were able to remain competitive.

Now that they have Target Field open, they can’t buy a break, and have 65 wins a year from 2011 – 2013.

But don’t worry Minnesota fans, you should be able to compete, once your young talent can grow a little.

2008 – current Tampa Bay Rays.

The Devil Rays were the worst franchise in the Major Leagues from 1998 – 2007, finishing only one year out of last place in the AL East (2004 – 4th with a then franchise’ best 70 – 91 Record.)

Now the team has played well, earning 4 Playoff Births in the last 6 years, and carrying a collective record of 552 – 421 (.566).

That record is 2nd best in the MLB during that time frame – only the New York Yankees (with 564) have had more.

The team is conducting business in a cycle like the Athletics, where they trade players for 2 or 3 more prospects, and surf the waiver wire style transactions to fill out their roster.

Joe Maddon is also the best field skipper in my view.  This achievement is still incredible when you consider that they play in the same Division as the New York Yankees and Boston Red Sox.

Still, when push comes to shove, the team has to trade its top talent to try again.  Last year they dealt James Shields, and this offseason, David Price will likely be shipped out.

The reason is they can’t afford his potential  $13 MIL salary for 2014, as it will cut the budget to the part where they can’t sign any of their depth players.

I truly wish the Rays would retain Price, pay his salary, and then hope to recover some of the money they would probably lose, by playoff revenue.

But is just a chance the management can’t take.  Whats worse, is that when the New York Yankees reset their Luxury Tax, they could spend their way back to the top.

The Rays will be a great focus for years to come, but how long can they sustain at 30 – 45 % of the payrolls that New York and Boston have?

They should have a salary cap, or at least have a salary floor (This is to make sure we don’t see the teams like Houston and Miami just tank it for several season, stockpile draft picks, and ween themselves of any assets part way through each season).

Houston, we have a problem!

The $25 MIL salary that Houston had this year is a complete JOKE!!!  Where do you have a league in professional sports where one team has 10 times the amount of a salary (as the highest) – compared to the lowest?

It is complete garbage.  The Astros actually had Rick Ankiel as their highest offensive player at one point, (and he had been DFA’D before the ALL – Star Game.)

The club traded everyone who made north of $1.1 MIL by seasons end.  They finished with an MLB worst 51 – 111 record.  For the 4th year in a row, they will pick 1st overall in 2014.

I am not blaming the Astros for taking full advantage of the current CBA.

Just as I am not crushing the LA Dodgers for having a Payroll over $220 MIL.

St. Louis is the best run franchise – and now have the highest payroll in the NL Central

Would you be surprised to find out that St.Louis has had the highest payroll in the NL Central for the last 13 years?

While they may not be in the Yankees, Tigers, Red Sox, Dodgers or the Phillies stratosphere yet, they have been at the top of their own Division for payscale for some time now.

The Cardinals are the model NL Franchise, having gone to 8 out of the last 13 NLCS Matchups.  They also stand to benefit that the highest revenue teams in the MLB like New York, Boston, Los Angles (x2), Detroit, Texas and San Francisco do not reside in their Division.  At a just north of a $115 MIL payroll, they slightly hover over the Reds for highest team salary in the NL Central.  if the Cards continue to do well in player acquisitions, they will keep contending every year in the NL.

The Cardinals are the model NL Franchise, having gone to 8 out of the last 13 NLCS Matchups. They also stand to benefit that the highest revenue teams in the MLB like New York, Boston, Los Angles (x2), Detroit, Texas and San Francisco do not reside in their Division. At a just north of a $115 MIL payroll, they slightly hover over the Reds for highest team salary in the NL Central. if the Cards continue to do well in player acquisitions, they will keep contending every year in the NL.  This test versus the Dodgers in 2013 may become an annual fight with the high payroll Los Angeles franchise.

St. Louis also has the best run franchise, so please don’t flare comments in my direction saying that I said the Cardinals bought their way to the top.  It was a shame they even lost a player like Albert Pujols.

Detroit is becoming AL Central behemoth’s

Look at Detroit.  Since making the decision to spend money in the AL Central in 2011 moving forward, they have appeared in 3 straight ALCS matchups.

The Tigers have armed all of their Superstars with lengthy well paid contracts.  They have also done a great job of Drafting.

That 119 Loss Season is 2003 – now was well worth it when you see they Drafted Justin Verlander with the 1st overall pick in 2004.

The Tigers should continue to dominate for at least the next 2 years in the AL Central.  The club has a payroll over $150 MIL, and most of the teams in the Division are barely in the $100 MIL range.  Detroit has won 3 Straight Division Titles.

The Tigers should continue to dominate for at least the next 2 years in the AL Central. The club has a payroll over $150 MIL, and most of the teams in the Division are barely in the $100 MIL range. Detroit has won 3 Straight Division Titles.  Only a few years ago, they were about $50 – 60 MIL less.  How does this bode for Cleveland, Kansas City and Cleveland?

The San Francisco Giants and St. Louis Cardinals won their collective 4 World Series the right way, and were not so far beyond in their payrolls, compared the New York Yankees (1996, 1998 – 2000, 2009), Philadelphia Phillies and Boston Red Sox (2004 and 2007) that were in the top few payroll clubs.

2001 Arizona Diamondbacks spent a lot of cash to acquire Randy Johnson and Curt Schilling to help their quest of bringing home a World Series  in the 1st 4 years of their existence.

The Los Angeles of Angels of Anaheim once won the World Series in 2002, the right way, and now are trying to but their way back.  What if Josh Hamilton and Albert Pujols had maintained their perennial MVP type of ways?

The 2002 Angels and 2003 Marlins bucked the trend of expensive teams crushing the competition.  This probably set the MLB Payroll structure back 20 years by their success.

Of course Bud Selig would also use the examples of the Oakland and Minnesota franchises.

If the Nats keep their current roster intact with Stephen Strasburg, Bryce Harper, Jayson Werth, Jordan Zimmermann, Ryan Zimmerman all together for several more years, their payroll level will exponentially escalate to the point they will be in the top few teams in the game of baseball.  At least Washington has an owner willing to spend the dough to see that happen.

If the Nats keep their current roster intact with Stephen Strasburg, Bryce Harper, Jayson Werth, Jordan Zimmermann, Ryan Zimmerman all together for several more years, their payroll level will exponentially escalate to the point they will be in the top few teams in the game of baseball. At least Washington has an owner willing to spend the dough to see that happen.

The Preseason favorites in the NL, the Washington Nationals, looked poised for several years of running wild on the NL competition, however, their team salary structure will catapult to a near resemblance of the Phillies in the next few years, if they retain their current nucleus of young guns.

The Nats were built in the style of the Rays, be really bad for nearly a decade, and just amass the highest picks you can every year.

So this brings me back to my study.

Last year, I wrote an article on teams with the best regular season records over the last decade, and wouldn’t you know it:  The Yankees, Red Sox, Dodgers, Angels, Phillies, Cardinals and Giants were all front and center on the leaderboard.

Around the back end of the periphery were the Chicago White Sox, Minnesota Twins and of course, the Oakland A’s.

While it is great to have the ‘little engine that could’ stories every year, it shouldn’t come down to David vs Goliath every year.

The Dodgers went from a $90 MIL payroll halfway through the 2012 season, to over $225 MIL mark this year.  With miniscule penalties accrued for the Luxury Tax Penalty, added with the best revenue sourcing in the National League, what exactly is stopping the club from going hog - wild on even more Payroll?  What if they wanted to spend $300 MIL?  MLB could not stop them until the new 2016 CBA

The Dodgers went from a $90 MIL payroll halfway through the 2012 season, to over $225 MIL mark this year. With miniscule penalties accrued for the Luxury Tax Penalty, added with the best revenue sourcing in the National League, what exactly is stopping the club from going hog – wild on even more Payroll? What if they wanted to spend $300 MIL? MLB could not stop them until the new 2016 CBA

I wrote an article in Sept of 2012  here about how the Dodgers were going to force the MLB into changes for the renewal of the 2016 CBA.

The excerpt from that blog:

Major League Baseball will have no one to blame but themselves – if the Dodgers end up with a big dynasty in the next 4 or 5 years.. 

If I was in Magic shoes I would spend like crazy too.  What is the deterrent?  Based on next year, the Luxury Tax threshold will be 178 Million.  For a first time offender, the penalty is 22.5% of ever dollar spent past $178,000,000. 

So if the Dodgers cake their team salary up to 250 Million Dollars, it is only 16.2 Million.   Magic probably has that in his couch cushions at his lofty California Estate. 

The 2nd Year (in 2014), the threshold goes up to a 189 Million Dollar- and a 2nd time offender is a 30% penalty-or 18.3 Million. 

The Maximum penalty for disobeying the Luxury Tax Threshold appears in year 3 and remains 40 % in subsequent years after.  Even at 40%, that is only 25 Million Dollars a year paid out for Luxury Tax for the team.

I hope to god it comes to fruition. 

Here is a fact.

The Dodgers are the new kings of the hill when it comes to payroll, and what the team can generate.  With their new TV Deal, plus their attendance potential, the LA club could stand to make a profit probably even having a $250 MIL Payroll.

Other than a Luxury Tax Penalty – of which wouldn’t even sting them for 3 – 4 years. 

It is funny how Bud Selig is going to retire prior to the talks of the new 2016 CBA open up.  It is time for that.

There are a myriad of other problems that are a consequence of having such inequities. 

The unbalanced schedule, the Wild Card teams being taken from a collective lead – drawn from the same pool, while there are mitigating circumstances like the Dodgers crushing all NL West teams for payroll spending, or the Astros ineptness of 2013 team spending.

You have to correct this.  Casual fans don’t understand why the league can’t be on a level playing field like the giant NFL does, or the NBA has as well.

The fact the MLB hasn’t been ultimately been burned by its parameters on payroll already is just pure happenstance.  It is coming my friend.

After the 1 year of being beneath the new $189 Luxury Tax Threshold - don't be surprised to see the New York club approach the $225 MIL range again in payroll for the 2015 year and beyond.  You can't have this big of a disparity between the upper salaries and lower salaries.  The Yankees have not had a losing season in over 20 years, and have only missed the playoffs 2 times in that span.  Some of that is attributed to their ability to add more payroll each year.  This is an aspect in which several clubs can't even fathom based on their revenue infrastructure.

After the 1 year of being beneath the new $189 Luxury Tax Threshold – don’t be surprised to see the New York club approach the $225 MIL range again in payroll for the 2015 year and beyond. You can’t have this big of a disparity between the upper salaries and lower salaries. The Yankees have not had a losing season in over 20 years, and have only missed the playoffs 2 times in that span. Some of that is attributed to their ability to add more payroll each year. This is an aspect in which several clubs can’t even fathom based on their current revenue infrastructure.

In 2015, the Yankees will spend $225 MIL on their payroll.  While I am not even sure that the Dodgers will be under that, it will be interesting to see.

The Giants (winners of 2 of the last 3 World Series) will likely be in the $150 MIL range just to keep up.  Do you think Detroit, Texas, Philly, Washington, and the Los Angeles Angels will be under that?….hell no!

What chances do the Cleveland Indians, Pittsburgh Pirates, Oakland Athletics, Tampa Bay Rays, Kansas City Royals, Seattle Mariners, San Diego Padres, Miami Marlins, Arizona Diamondbacks and Colorado Rockies have to been in that realm?

Teams like the Brewers, Cubs, Reds, Orioles, Blue Jays, Twins and Mets can draw if they have a winning team on a yearly basis, but what if they wallow in mediocrity? 

Attendance has fallen off for each of those clubs previously when the clubs have struggled.

The Mets recent bad run of play has been attributed to signing bad contracts like Jason Bay and Johan Santana, and the ownership (Wilpons) not being able to sign players when they hit their own personal financing crisis.  If they are truthful in saying those are behind them, then this club can spend and compete with the Phillies and Nationals for the high payrolls in the NL East.

The Mets recent bad run of play has been attributed to signing bad contracts like Jason Bay and Johan Santana, and the ownership (Wilpons) not being able to sign players when they hit their own personal financing crisis. If they are truthful in saying those are behind them, then this club can spend and compete with the Phillies and Nationals for the high payrolls in the NL East.

So baseball can clean up its payroll act….or it may be time to have a Tier System, with payroll and Geography in mind.  Again, I have broached this subject, and will continue to every year.

If I lived in Kansas City, San Diego, Colorado, Toronto, Cleveland, Miami or Arizona right now, I would be extremely pissed off.  Just because a few teams have exercised their fullest potential to buck the trend in baseball, does not mean the league is in good shape for payrolls.

The Blue Jays won back to back World Series in 1992 and 1993, however once the Yankees jumped their payroll massively, and Boston soon followed, the team has mired in a 20 year playoff drought.  Only in the last year has the franchise spent over $100 MIL on Team Payroll.  Unfortunately their plan to compete this campaign fell of its mark - when injuries plagued the team, and their Veterans played to a lackluster caliber.  This club still has a chance for the 2014 season, when the Yankees reset their spending.  Toronto and Kansas City are the only 2 teams in the MLB not to qualify for the playoffs since 1994.

The Blue Jays won back to back World Series in 1992 and 1993, however once the Yankees jumped their payroll massively, and Boston soon followed, the team has mired in a 20 year playoff drought. Only in the last year has the franchise spent over $100 MIL on Team Payroll. Unfortunately their plan to compete this campaign fell of its mark – when injuries plagued the team, and their Veterans played to a lackluster caliber. This club still has a chance for the 2014 season, when the Yankees reset their spending. Toronto and Kansas City are the only 2 teams in the MLB not to qualify for the playoffs since 1994.

What is next for baseball?  4 more playoff teams?  You can always say: “look at all of the teams that have made the playoffs in the last ump years”.

Guaranteed the the birth of the first Wild Card was partially for the very reason of keeping more teams in contention longer. 

If anymore playoff teams are added from this point forward, then it is truly watering down of  the sport.

I will say that 10 teams out of 30 is just fine the way it is situated.  If they can balance out the scheduling – it would alleviate some of the generic Wild Card Spot questions.

The Astros only had a $19 Million Dollar Payroll this year now after the Trade Deadline.  While the AL East teams battle it out - with 4 teams over .500 - and the Blue Jays just slightly under, the Astros are fattening up the A's and Rangers record.  Since the MLB doesn't have a Salary floor, a more competitive schedule would not tip the scales in a Division's favor, now that there are 2 Wild Card teams that make the playoffs.

The Astros only had a $19 Million Dollar Payroll this year (pro-rated after the Trade Deadline.)While the AL East teams battled it out – with 4 teams over .500 – and the Blue Jays just slightly under, the Astros fattened up the A’s and Rangers record. Since the MLB doesn’t have a Salary floor, a more competitive schedule would not tip the scales in a Division’s favor, now that there are 2 Wild Card teams that make the playoffs.

The AL East played 2/3rds of their games versus teams over .500, when you had the AL Central and AL West teams just ‘cupcake up’ on the White Sox, Twins, Mariners and the Astros. (Especially the 2nd half Houston club, that went 18 – 50 after the ALL – Star Break).

The Indians and Rangers feasted on these clubs.  19 games vs each team for the year is 38/162 (23.4% of a Divisional Teams schedule).  a 251 – 397 combined record is good for a .387 Winning Percentage.

Toronto played 119 Games of its 162 Games Schedule for a percentage of 73.4% of their total games of .500+.  No wonder how they ended the year with a 74 – 88 record.

The NFL is crushing the game of baseball because all of its teams have a chance to win every single year.  I don’t normally compare football with baseball, but for this theme, I must.

Baseball could really learn from how that brand has flourished and captured newer, younger audiences.  Guess what?  The NFL has a hard salary cap – and even non – guaranteed contracts for their players.

I understand that these things need to be collectively bargained in with the Players Association, and that the MLBPA whooped on the owners for countless rounds of negotiations, but it is time to clean house and reset the inequities.

If baseball doesn’t correct this problem, they will not see any growth.

That as a naive kid, I developed a love for the New York Yankees – without any knowledge that they were the “Evil Empire” – and would eventually outspend everyone for 27 years after that. With them as my team, I won’t ever have the problems the aforementioned teams have with payroll.

By the time I was first jaded as a fan (in 1994 – 1995 when the Player Strike and Lockout occurred) – I was 18 years old and had formed my permanent favorite team.

There, I threw my $300 worth in for that blog.

I thank god every morning, that when I was 8 years – that I watched the ‘Don Mattingly led’ Yankees pulverize the Toronto Blue Jays in a series on TV.

I can only hope for Donnie Baseball, that he sees a World Series game this year, it will help both his and my plight in baseball.

For Part 1 of the MLB’s State Of the Union Part 1:  Click here.

Contracts - like the two top ones in MLB history A-Rod has received,are not possible for the lower salaried clubs.  Granted that teams that spend a ton of cash aren't guaranteed success at all, however they are able to pry the top players from other clubs, once the best players are eligible for Free Agency.

Contracts – like the two top ones in MLB history A-Rod has received, are not possible for the lower salaried clubs. Granted that teams that spend a ton of cash aren’t guaranteed success at all, however they are able to pry the top players from other clubs, once the best players are eligible for Free Agency. 20 years ago the difference in Salary between the Top and Bottom teams was not drastic.  In 2013, they higher earning teams are beginning to separate at an alarming rate.  If the MLB doesn’t step in and correct this problem with some form of Cost Control, this will only manifest itself.

*** The views and opinions expressed in this report are those of the author and do not necessarily reflect the views of mlbreports.com or their partners. ***

***Chuck Booth – Lead Baseball Analysr/Website Owner and author of the Fastest 30 Ballgames:

To learn more about my  “The Fastest 30 Ball.games Book” and how to purchase it, click here .

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About chuckbooth3023

I played competitive baseball until 18 years old and had offers to play NCAA Division 1 University Baseball at Liberty University. Post-concussion symptoms from previous football and baseball head injuries forced me to retire by age 19. After two nearly made World Record Attempts in 2008, I set a New World Record by visiting all 30 MLB Parks (from 1st to last pitch) in only 24 Calendar Days in the summer 0f 2009. In April of 2012, I established yet another new GWR by visiting all 30 Parks in only 23 Calendar Days! You can see the full schedule at the page of the www.mlbreports.com/gwr-tracker

Posted on October 12, 2013, in MLB Payroll and Contracts, MLB Teams State Of the Unions, MLB Teams: Articles and Analysis, Playoffs and tagged , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , . Bookmark the permalink. 2 Comments.

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