Dollars and Sense

One of the great mysteries of the universe is baseball economics. Everything from the Elias formula, to how the signing bonus is paid and accounted seems to be purposely designed to confuse the average fan. So whenever fans discuss there favorite team there is consequently more confusion than anything else about what a team can or will afford to do in the upcoming off-season.

However, in the last few years the baseball world has been greatly blessed by a number of great on-line resources which help cut through the jungle of obfuscation. Among these is the wonderful Cot's Baseball Contracts.

Every informed fan should have it bookmarked (or, have our humble site bookmarked knowing that there's a link here). It is with the invaluable information found there that I shall attempt to inform you what the Jays budget situation looks to be as we drift ever closer to another winter of wheeling and dealing.

First, some basic assumptions: I assume for the sake of this discussion that the Jays have a $100 million payroll ceiling for next season since we are a negligible distance from that figure in 2008. In my opinion, Rogers will quite possible raise that figure, and they will certainly be willing to discuss a specific increase for a specific player but you have to assume some benchmark in order to make sense so I assume essentially a renewal of the current one. That said, understand it as "approximately" since going (for instance) 225K over or under is irrelevant.

Secondly, I assume that JP was honest when he implied strongly last night that the team would exercise the option on Rod Barajas. So I will speak of him as "under contract" but be advised the technically, they have not yet made that happen.

Finally, as always, one has to estimate the pre-arbitration contracts and the amount the arb eligible guys get, but I think these are pretty close.

So, here's the list. There are 27 guys here because I include McGowan even though he won't start the year on the roster, and another pitcher will make up for that. I chose Wolfe as the familiar name but if you prefer Parrish or Richmond, so be it, the payroll impact is minuscule. A similar thought led to the inclusion of Janssen. Bolded players are under contract, the three with "*" are arbitration eligible, and the rest are pre-arb.

Halladay  14.25
McGowan    0.415
Marcum    0.42
Purcey    0.395
Listch    0.4
Janssen    0.405

Ryan   10
League    0.415
Accardo    0.4
Downs    3.75
Tallett    1.2*
Frasor    1.8*
Carlson    0.398
Wolfe    0.402

Barajas    2.5
Diaz    0.39

Overbay    7
Stairs    1

Hill    2.59
Inglett    0.42

Scutaro    1.1
McDonald   1.9

Rolen   11
Bautista   2.5*

Lind    0.42
Wells     10
Rios    5.9

The totals break down like this:

Under contract: $70.99 million (includes Barajas)
Arb-eligible: $5.5 million (estimated)
Pre-arbitration: $4.88 (estimated)

Total: $81.37 million

Now, that said, Frasor will almost certainly be traded or non-tendered (It would not shock me if he were the player to be named in the acquisition announced today of Jose Bautista). Likewise, I expect Tallet to be traded (easier to do than with Frasor, so no non-tender there) and Baustista may well be non-tendered as well (though given the uncertainty around Rolen he would also be potentially brought back for less money.

I also think that there's some likelihood that the Jays will try to include a contract in any trade they might make (for instance, you trade for Khalil Greene and you try to get them to take Scutaro in the deal).

So, bare minimum, the Jays have $19 million in play this winter. Move the arbitration contracts off the roster and you have $24-25. Again, that assumes no budget increase. And while JP made budget-conscious remarks last night, I don't see a pattern lately which would imply a static payroll budget. So while there is no doubt we can afford a Manny or a similar sort of player in 2009, what we can spend past that is uncertain.

Among the other things JP said last night is that the Jays were unlikely to pursue high-cost pitching to replace AJ (assuming AJ gets away which seems likely) and the team likes its internal options. I actually like that. I've never been in favor of a big long term deal on another SP.

(I do have a smaller idea that intruiges me but I don't want to get too far off topic here.)

One final note:

You can look at other sites which give you a different projected team total and different specific salaries for certain players. the reason this happens is signing bonuses. When I do a total I follow the contracted terms of payment of signing bonuses when Cot's tells me there is a specific schedule, otherwise I pro-rate it. Many other sites pro-rate all bonuses regardless of the contracted schedule.

So, there you have it. Discuss!

~WillRain

Money to Burn!

Time for my second installment of truthiness regarding the good and bad of the potential end of the JP Ricciardi era.

One of the oft mentioned myths about JP is now he's struggling to succeed with "a almost $100 million payroll!!!!" as if that number exists in a vacuum and is arbitrarily a measure of "lots of money" just because it approaches that benchmark. However, the truth is, it is not "lots of money" at all when placed in context.

Let's add a little and see what we find.

This first chart is a look at the Jay's payroll in real numbers as compared to the rest of the league, and to the Yankees (who were the only other team in that span to be ranked #1 except for one year). What you see here is -
Year - Jays' Payroll - MLB rank - Yankees' Payroll - Jays as a % of Yankees

1992   $ 43,663,666       3     $ 35,966,834      121%
1993   $ 45,747,666       1     $ 41,305,000      111%
1994   $ 41,937,668       2     $ 44,785,334       94%
1995   $ 49,791,500       1     $ 46,657,016      107%
1996   $ 28,486,708      16     $ 52,189,370       55%
1997   $ 45,894,833       9     $ 59,148,877       76%
1998   $ 48,415,000      11     $ 63,159,898*      77%
1999   $ 48,165,333      14     $ 88,130,709       55%
2000   $ 46,363,332      21     $ 92,938,260       50%
2001   $ 76,895,999      10     $ 112,287,143      68%
2002   $ 76,864,333      11     $ 125,928,583      61%
2003   $ 51,269,000      21     $ 152,749,814      34%
2004   $ 50,017,000      21     $ 184,193,950      27%
2005   $ 45,719,500      25     $ 208,306,817      22%
2006   $ 71,915,000      16     $ 194,663,079      37%
2007   $ 81,942,800      16     $ 189,639,045      43%
2008   $ 97,793,900      13     $ 209,081,577      47%  

Note that the bolding indicates a different GM

If you notice the raw numbers here, it's obvious from the beginning that the Jays precentage of AYP (Annual Yankees Payroll) is never less than 50% during Ash's tenure and in 4 of the 7 years it was 68% or better. By contrast, during his tenure with the Jays Ricciardi never had a payroll as much as 50% of the Yanks except in his first year when he was under orders to slash payroll. Since then his highest mark is short of Ash's lowest mark.

Now, it's true that the Yanks stretch the ceiling of MLB payrolls, but if you look further you see that this year is the first time the Jays payroll has ranked higher than 16th in the majors, wheras Ash only had a budget lower than that once, and was often in the top half of the league.

But see, that's not the half of it.

I took an inflation calculator and normalized all the jays payrolls to 2007 dollars. That produced this table:

1992   $65,692,294.12
1993   $66,822,996.95
1994   $59,473,577.09
1995   $68,822,054.33
1996   $38,414,113.99
1997   $60,086,253.55
1998   $62,326,152.13
1999   $61,028,295.23
2000   $59,423,851.24
2001   $91,750,709.73
2002   $90,268,628.46
2003   $58,798,584.48
2004   $56,293,140.73
2005   $49,812,574.81
2006   $75,776,835.50
2007   $81,942,800.00

What do we have here? In inflation-adjusted 2007 dollars, JP's available cash (excepting the payroll slashing first year) did not exceed Ash's lowest budget (excepting 1996) until 2006. And even then, if you average Ash's six highest payrolls (out of seven years) you get around $68 million so JP's 2006 budget was up about 10% over Ash's average budget and his 2007 budget was up not quiet 20%.

Why is that important?

Because baseball economics far outpaces inflation.

In 1992 the average MLB salary was $1,084,408
In 2008 the average MLB salary is $2,739,761

Which is to say that the average MLB salary in 2007 was 256% of the average MLB salary in 1995, which is sharply higher than inflation (2007 dollar being 138% of the 1995 dollar).

So, to completely prove how much time I have on my hands, let's adjust those salaries for 2007 Baseball Dollars:

1995   $127,466,240
1996   $66,370,401
1997   $90,880,933
1998   $92,025,096
1999   $76,719,563
2000   $63,894,501
2001   $93,038,500
2002   $88,363,041
2003   $54,966,197
2004   $55,109,035
2005   $50,577,827
2006   $74,569,857
2007   $81,942,800

I'll let you draw your own conclusions about the relationship illustrated here. But clearly it reflects the previously stated reality that this is the third season of any real attempt to be competitive.

Now, the objections to the previous article included the point that a comparison to a GM who lost his job for poor performance is of limited value. That wasn't really valid there because the mantra was that JP's drafts were not as good as Ash's. In this case though, that's a valid point. Say Ash spent (in relative terms) as much or more money and failed is hardly a defense of JP. But it does go to the point that the the current payroll is, in relative terms, not high at all, either in relation to the league, or to inflation, or to baseball inflation. If JP has done an average job, and produced an average team, he's done so with average money.

So, when you make out your list of reasons Ricciardi needs to go, bypass the urge to write in "failed with a big payroll" . . . t'aint really so, McGee.

~WillRain