The payroll freefall from another perspective | Mets360

The payroll freefall from another perspective

February 8, 2012
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With the offseason coming to a close, the Mets’ 2012 Opening Day payroll looks to be settling somewhere in the neighborhood of $90M. Nominally speaking, that’s an historic dropoff from last year’s Opening Day payroll of roughly $143.2M (per Cot’s, adjusting for Taylor Buchholz‘s roster bonus). There’s just no way to paint a $50M+ decline in payroll as a good thing. But I was skeptical about the actual impact of this massive payroll decrease. Yes, it will hurt, but the effect might not be quite as profound as the visceral reaction to hearing that the team you follow is about to experience one of the largest payroll reductions in MLB history. After all, it seemed to me that there was so much inefficiency, so much rotten luck, and so much payment for past mistakes in that 2011 payroll that there was room to drop the payroll and, at least on paper, not take it on the chin so directly. Some of those payroll issues certainly persists into 2012, but a fair amount of them don’t.

I took a look at the 50 players to whom the Mets cut big league checks in the 2011 season. Since deferred compensation from prior years is not technically considered to be a part of the current year’s payroll, players like Bobby Bonilla were not included. I’ve prorated the players’ salaries so that I’m only counting the portion of their ML salary they actually earned. For instance, Lucas Duda‘s 2011 Major League salary was roughly $415,000. He spent 58 days in the minors, so dividing that number by 182 (the number of days in the ML season), I can conclude that he spent 31.9% of the season in AAA, and thus 68.1% of the season earning a big league paycheck. His adjusted 2011 ML salary works out to about $283,000. Performing this calculation for all 50 players, I reach a Mets 2011 Average Payroll of roughly $136.7M. This number is based purely on salary and roster bonuses, and does not consider performance bonuses.

Biggest Contributors to 2011 Average Payroll:
1. Johan Santana – $22.5M
2. Carlos Beltran – $16.0M (net of money recouped from San Francisco)
3. Jason Bay – $16.0M
4. David Wright – $14.0M
5. Oliver Perez – $12.0M
6. Francisco Rodriguez – $11.5M

My next step was to determine the average payroll of the team that the Mets fielded on a day-to-day basis, or what I will refer to as their Effective Payroll. Again, this is probably best illustrated by example. Tim Byrdak spent the whole season with the big league club and was technically eligible to play every single day. As such, he contributes all $900,000 of his 2011 salary to the team’s Effective Payroll. David Wright, on the other hand, spent 66 days on the DL last year. During that time, he collected his full paycheck, but was unable to contribute to the team. So, Wright adds his full $14M to the team’s Average Payroll, but only about $8.9M to their Effective Payroll, creating a Deficit of about $5.1M. Performing this calculation for all 50 players results in a 2011 Effective Payroll of roughly $72.8M and a Deficit of roughly $63.9M. Put another way, of the $136.7M the Mets spent on players in 2011, $72.8M was given to players who could contribute to the team on a given night, and the other $63.9M went to players who were on the DL, players who were collecting big league checks in the minors, or players who the Mets were still paying, but who were no longer with the ball club.

Biggest Contributors to 2011 Effective Payroll:
1. Jason Bay – $14.0M
2. Carlos Beltran – $12.1M
3. David Wright – $8.9M
4. Jose Reyes – $8.8M
5. Francisco Rodriguez – $6.6M
6. Mike Pelfrey – $3.9M

Biggest Contributors to 2011 Deficit:
1. Johan Santana – $22.5M (recovery from prior injury)
2. Oliver Perez – $12.0M (released)
3. Luis Castillo – $6.0M (released)
4. David Wright – $5.1M (recovery from in-season injury)
5. Francisco Rodriguez – $4.9M (traded with cash)
6. Carlos Beltran – $3.9M (traded with cash)

As hard as it is to believe, with a little luck on the injury front (okay, maybe a little more than a little luck), the Mets could actually wind up putting a more expensive product on the field in 2012 than they did in 2011. It’s a little tough right now to see that translating to a better on-field product next year, and it may well not, but it’s at least something to dampen the effect of the bottom dropping out of the Mets’ war chest. On paper, anyway.

If you’re interested in Major League transactions, rules, and procedures, or if you just want to know which Mets have options left and what picks the Mets will get for Jose Reyes, be sure to check out http://tpgmets.blogspot.com and follow me on Twitter @tpgMets.

20 Responses to The payroll freefall from another perspective

  1. Brian Joura
    February 8, 2012 at 11:02 am

    This is a good way of looking at the situation. I’m curious – what was Jose Reyes’ contribution to the deficit last year?

    • February 8, 2012 at 11:06 am

      Reyes was 7th at around $2.2M, followed by Jason Bay (around $2.0M), Gary Matthews Jr ($1.0M), and Chris Young (around $930K) to round out the top 10.

  2. Metsense
    February 8, 2012 at 10:52 pm

    Great analysis Chris and the concept of effective payroll is unique and good indicator of dollar efficiency. The 50M payroll cut is ludicrous though. The Mets passed on many bargains this winter that could have improved the 2012 roster without compromising the future. Ownership does have a responsibility to field a competitive team. There is talent on this team but very little depth. Adding 20M to the payroll would have improved the team to a point of competitiveness. Now we cross our fingers and hope EVERYTHING goes right

    • February 8, 2012 at 11:13 pm

      Thanks, Metsense. I agree on (almost) all counts. I don’t think they’ll ultimately have the horses to challenge for a playoff spot, but I do think they’ll be more competitive than people think. Another $20M almost certainly would have made this team more competitive, though. And if spent largely on 1-year deals, it would have done so without placing any burden on the future. My big hope, and maybe my head’s in the sand, is that the financial troubles of ownership don’t bleed into the draft or international market, and that next year, the FO has the financial flexibility to chase down some of the late offseason bargains (the Ryan Madsons, Edwin Jacksons, and Roy Oswalts of the 2012-2103 offseason). If the Mets appear hamstrung in the June draft, that’s when I’ll dive headfirst into the panic pool.

      Hope is not a strategy, but right now it’s really all we’ve got.

  3. NateW
    February 10, 2012 at 10:27 am

    Excellent alternative look at things.
    Everyone is very quick to forget the Perez and Castillo portion of the payroll now, oh and there is the 1 mil for Gary Matthews Jr that was on last years books. That’s nearly 20 of the 50 right there. And if Duda can match Beltran like he did last year, thats a 18.5 mil player being replaced by a 0.5 mil one with little impact to the on field contribution.

    I think many fans feel that this years team is about as capable as last years, which just screams out that the payroll number isn’t really an indicator of talent and ability.
    With that 64 mil waste, there is still room for some expected injury losses in 2013, but I expect that number to be greater than 14 mil. Some of the fat has been cut, but not nearly all of it.

    • February 10, 2012 at 12:51 pm

      Yeah, there’s certainly more fat to be cut, particularly if the payroll is going to remain where it is now for the foreseeable future. You can compete at $90M, but you really have to be set up for, and the Mets weren’t. I hope that the Mets can once again have a big payroll someday soon. I just hope that these lean years will teach them how to spend efficiently and build a solid farm so that when the good times come again they can make the most of it & not fall into old habits. Appreciate the comments, Nate. Insightful as always.

  4. Palmer
    February 10, 2012 at 11:15 am

    This is a cool way of looking at payroll. You should run your analysis on the playoff teams from last season (or the whole league) and see what kind of conclusions you could draw from that sample. I think that would be very interesting to see!

    • February 10, 2012 at 12:31 pm

      I might be able to look into a few other teams, or perhaps Mets from the past few years, to see how they compare. I’d love to see what the data looked like for the entire league, but that’d be a pretty massive undertaking. At the very least, though, I plan on revisiting this idea next offseason to see how the 2012 season looks by comparison.

      • NateW
        February 11, 2012 at 10:43 am

        I think that’s a great idea going forward. Not much to be learned going backwards but to see how Sandy transitions away from Omar’s… ‘style of deal.’
        If anything I’d be curious about the 2006 team which seemed to have a few health issues as well, though mostly in the postseason.

  5. Markus124
    February 10, 2012 at 11:21 am

    This is very interesting but neglects the main concern. It is all well and good that dead wood had been dropped from the payroll. The right move for a big market franchise is to plough the savings back into the team and improve it. Instead, the Mets are just saving the money and paying debts. This is what poor franchises do.

    • NateW
      February 10, 2012 at 11:36 am

      actually its what most every sports franchises does save the Yankees, Red Sox, Redskins, and Dallas Mavs, and maybe a few others with owners who are willing to take losses for their own enjoyment. The problem isn’t the way they are run nearly as much as the owners putting themselves in a bad spot and having to pay the piper. Clamor for a new owner, but thinking we are entitled to a Mark Cuban run franchise by the Wilpons is a waste of time.

    • February 10, 2012 at 12:43 pm

      I’d love it if the Mets had reinvested the money coming off the books in some sort of sustainable way. To be clear, my purpose wasn’t to endorse the payroll dropoff, or even rationalize it. I just wanted to better understand what the 2011 Mets really were in terms of payroll and, considering that, what the actual on-field effect the drastic payroll erosion might be. Ultimately, it’s more of an indictment of the notion that the 2011 Mets were a “$140M team” than anything else.

  6. DaveSchneck
    February 10, 2012 at 11:31 am

    Good job with this analysis. There has been much dismay with dropping payroll, but the big disappoint is not with the amount they will spend, or the amount of the drop, but with the holes that have been left. Had they dropped “only” $33 mil to a payroll of $110 mil, a figure Alderson was floating publicly in the 2nd half of 2011, they possibly could have retained Reyes, sign a reliable starter and a solid right-handed hitting catcher. I suspect the fans would have a much different opinion and outlook, even if the could not retain Reyes but spend that money on a bat to replace him.

    • February 10, 2012 at 12:56 pm

      Yeah, either things changed from when Alderson floated that number, or he was being dishonest. I’m inclined to believe the former. I agree that an extra $20M, whether spent on Reyes or on several of the reasonably priced 1-year deals we’ve seen late in the offseason would have made the team better. But I’m hopeful that Alderson’s budget exceeds his payroll right now, and that he has both the flexibility to make a move in-season if an opportunity presents itself AND the ability to participate aggressively in both the draft and international signing period. For a team like the Mets, who may only have a few million bucks left to play with, you’re gonna get way more bang for your buck spending on amateurs than on pros, IMO.

  7. February 10, 2012 at 12:05 pm

    Good analysis. I think what this proves, more than anything, it’s about the players you sign, not how much you spend. No one cares about the overall payroll number if the roster is not filled with AAA players. Spend wisely, Sandy…

    • February 10, 2012 at 1:03 pm

      True, it’s about the players, but I think that even more than the players it’s about the system. Establishing sustainability within the farm is the big key to rebuilding the franchise. It makes it easier to weather the troughs and take full advantage of the crests in your talent cycle. Wherever their payroll ultimately sits, if they’re efficient at the Major League level and relentless in going after amateur talent, then I think they’re going to set themselves up to be successful.

  8. Peg
    February 10, 2012 at 5:45 pm

    Chris:

    If the Mets really wanted to get bang for their buck they would have cut signed Jackson and cut Pelfrey. Mets didn’t spend enough money to upgrade their pitching staff, and what money they spent wasn’t spent that well.

    Just curious, what did DJ Carasco contribute to the deficit?

    • February 10, 2012 at 11:08 pm

      I know I’m in the minority among Mets fans here, but I’m okay with keeping Pelfrey. Frustrating as he is to watch sometimes, I think he’ll worth the $5.7M. I wouldn’t be surprised at all to see him dealt prior to the deadline, either. As for Jackson, I’m not a huge fan, but I do think he would’ve been a welcome addition on a 1-year deal. It’s unfortunate that the Mets didn’t have another $11M kicking around to offer him by the time his price came down. Plus, hindsight’s 20/20. Maybe if they know that they can sign Jackson for 11/1 in February, they handle things differently in December. Generally speaking, though, I’ll reserve judgment on whether the money they spent restocking the pen was well spent until after the games have started.

      As for Carrasco, he contributed around $316,500 to the deficit, just over a quarter of his $1.2M salary. He was the 15th-biggest contributor, behind Ike Davis, but ahead of Scott Hairston.

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