M’s Payroll
Art Thiel has a piece in the P-I this morning about the Mariners 2005 Payroll. Apparently, the team was pretty pissed off by the numbers released last week by the AP that calculated “Final Payroll” as of August 31st. And, really, they have a right to be upset, because that’s a pretty terrible way to calculate real payroll.
So, in an effort to show everyone that they really did spend money last year, the M’s gave Thiel their numbers, or what they are claiming their actual 2005 payroll was. It’s a rare moment of transparency from an organization that has attempted to mislead the public on payroll information every chance they get. You can read Thiel’s articles for the specific numbers, but the club claims they paid $99.042 million on players during the 2005 season, and for once, the math works. There are no noticable gaping flaws in this calculation, as there always are in the annual Bob Finnigan “we have no money left to spend” spin pieces.
Interesting to note, the Mariners claimed all of Spiezio’s ’06 salary and the buyout on his ’07 option against the ’05 payroll. However, they didn’t claim the buyout of the ’06 options for Pokey Reese, Wiki Gonzalez, or Shigetoshi Hasegawa, which apparently will count against next years payroll. So, apparently, if they release you during the season, everything they owe you in the future counts on current payroll, but if they release you after the season, it goes towards next years payroll.
What does this mean to us? Well, for once, the club is being truthful with its fans, which is good news. And they have a few million more to spend this year than we originally thought, since we had assumed the Spiezio contract would remain on the books this year.
But, mostly, it just reinforces how much money was summarily wasted last year. The club spent $16.46 million on Scott Spiezio, Ryan Franklin, Shigeotshi Hasegawa, Gil Meche, Wiki Gonzalez, Dan Wilson, and Aaron Sele. The average VORP for that group was 2.22. It’s basically a group of replacement level players who provided similar performance to what a league minimum minor leaguer could have done. That’s a $14 million dollar hole right there.
You’d hope that the M’s could look at that and see that what killed them was consistently overpaying by a little bit for what they considered to be mid-level talent. The signings of Jarrod Washburn and Carl Everett do little to reassure me that they learned any lessons from last years debacle.
So, apparently, if they release you during the season, everything they owe you in the future counts on current payroll, but if they release you after the season, it goes towards next years payroll.
This actually seems pretty reasonable to me. Reese has a contact that says (actual numbers not important) 1.5 in 2005, .4 or 1.8 in 2006. They chose .4M in 2006 which has the caveat that he doesn’t play for the team. They always might trade Reese (OK, not specifically him) and be on the hook for $0.
With Spiezio being released, the money is gone. The can’t trade his contract and at the moment of releasing him they’ve agreed to a fixed expense of his 2006 contract and 2007 option. (I can’t believe he has an option for a 4th year. He should give that money away.) OK, it’s a bit funny, but I get it.
I don’t think teams in general understand the concept of replacement level or freely available talent. There are always a number of $2-$4M contracts to replacement level free agents every year. Heck, what did Burnitz just get; that may be the worst signing of the off-season (in context). I start to sound like a broken record, but when it comes to the M’s understanding or lack thereof of replacement, Everett and Lawton and their contracts on the same team is really funny.
Dave, I wonder why you did not include Boone and his 9 Million in your list of wasted money.
Because at the time Boone signed the contract that paid him $9 million in 2005, it wasn’t an obvious waste of money. It was part of a long term contract that, in the end, was not that bad of a deal. Same thing with Beltre and Moyer.
The contracts to guys like Spiezio, Hasegawa, and Franklin were obvious losers at the time they were signed.
I usually agree with your thoughts, Dave, but to write that the M’s wasted $14M on a handful of players that were essentially replacement level or worse, while truthful, is misleading. The M’s sign contracts before the season or seasons are played; performance under those contracts is ex post facto. Surely the M’s would not have signed Spiezio, Reese, et al if they had known what they were going to get… but they didn’t know (though one could easily argue before the fact that some of those players’ contracts were likely duds).
Anyhow, there’s not a team in the league that probably could not call out a handful of their players’ performance as barely equal to replacement level and say that therefore those players were overpaid and the money wasted. So the trick is to do some risk analysis prior to a signing and trust that those players underperforming salary are offset by those that turn into bargains. (It’s great to have young and cost-controlled players in this regard. Hello, Felix.)
It’s like buying a car (good luck with your new purchase). You pay up front and it’s likely either to be a lemon or a good car, i.e., either it will under or over perform vs. expectations. It’s pretty unlikely that you will get exactly the value that you expect.
Your point that mid-level talent can be the payroll killer is a great one. These are the guys to avoid with savings used to acquire (fewer) legitimate star players; it’s the stars that have the lowest beta in performance from year-to-year, but even a star can fall off a cliff. I’s why you think twice about trading a Reed for an Arroyo — cost-controll for Arroyo about to be eliminated and he is one of those mid-tier talents. To extend the car analogy: buy a couple of new Lexus cars (what’s the plural of Lexus?) and a handful of Honda Civics, but avoid a fleet of mid-market used Fords and Chevys. Your Lexus might break down, but you try to play the odds. (Not that I am picking on domestic model cars; it’s all I could think of (sic)).
And as for Reed for Arroyo: hey, I’m a Red Sox fan and I think the M’s should ask for more.
Anyhow, there’s not a team in the league that probably could not call out a handful of their players’ performance as barely equal to replacement level and say that therefore those players were overpaid and the money wasted.
Sure, we could do that for every team. The A’s have Jason Kendall, for instance. But the point wasn’t to call out the M’s for having bad contracts on the roster. The point was to highlight the quantity of similar bad contracts they have.
Through the past several years, they have repeatedly paid several million dollars for players clearly in decline or coming off obvious fluke performances. We outlined in detail why the contracts for Franklin, Hasegawa, and Spieizo were abysmal deals before the club signed them. It was plain to see that the M’s weren’t going to get what they were paying for.
I don’t have a problem with the contracts for Beltre, Moyer, Winn, or Reese, and it’s why I didn’t list them in the post. They didn’t return a performance in line with their salaries, but there were reasons to believe that they would at the time the deal was signed.
My issue with the M’s has been, and continues to be, paying a premium for mediocre players based on things like hustle, character, fight, and leadership. Jarrod Washburn and Carl Everett fit nicely into the Scott Spiezio and Ryan Franklin line of thinking.
Dave, once again we agree. I was just playing the devil’s advocate.
My issue with the M’s has been, and continues to be, paying a premium for mediocre players based on things like hustle, character, fight, and leadership.
Thank God, Millar will finally get a job at good pay!
70 million? That’s chump change-I lose more than that a month in my sofa cushions. 99 million….now that’s more like it…..
Maybe it’s partly the Boone Effect: Having once scored with a mid-tier guy, the M’s have tried to repeat the feat with signings that resemble Boone’s. Spiezio is the primary case in point. But that doesn’t explain the pitchers, who were expensive and horrendous. To me, the Everett and Washburn signings are in different categories. Everett is Boone Effect; Washburn is justifiable desperation over the starting rotation (just, strangely, insufficient desperation: we needed either 1) genuine TOR or 2) a basketful of pitching prospects to restock the system).
The M’s are in a weird place. They’d be better off using young players, even if they fail. But they fear their fan base will call them cheap for not getting bona fide major leaguers (Spiezio!) to fill the roster. Maybe they didn’t articulate the Sexson-Beltre signings very well last year, which I had hoped signaled exactly what you are suggesting — pay what it takes for premium talent, save on the rest of the roster.
The Ms FO is falling into a very commmon trap for a business with good income, revenue and bookings (ticket sales). They don’t need to budget carefully as they have enough flexibility to continue to make mistakes.
They don’t recognize the patterns of poor player selection, they ignore data that would help them avoid some mistakes and they seemingly chock it up to poor luck rather then seeing that they chose these poor players. Until they recognize that the entire Ms FO/Player development group is complicit in the poor selections, they’ll continue to throw money at it rather then use their collective smarts and consult outside influences. They appear to be so internally focused that they are unable or unaware of other places to research and consult player selection. It would seem that the same group of people only talk to one another and never go outside their circle of influence. They are so internally focused that they’ve become inbred with the expected results. Thirdly, they are clinging to a previous team’s player dynamics and personalities that no longer exist. The heyday of of the Mariners, circa 1995-2001 is gone. They continue to make decisions based on a team that doesn’t exist. I think they listen to the KOMO listener who is emotionally attached to a uniform. They fail to realize that the same listener who is PO’d that Boone got cut will welcome with open arms any player who comes in and plays successful ball. Here is a team with nearly unlimited resources and no success. They are a Greek tragedy in the making. Billy Beane is likely smirking so hard at the Ms choices that his face hurts.
Like any person or business, the more resources you have, the more likely one is to spend foolishly. Ask a person with limited resources to stay on budget and they will, because they have no alternative or slush fund to bail them out of continued bad choices. Find any retird person and you’ll find someone who is careful, makes considered choices and enjoys a level of life that is possibly beyond what they enjoyed while working. Why? They have to. The Ms don’t have to and act like it.
I loved this:
Okay, first, those numbers were based on payroll at the end of August. It’s the way the Commissioner’s office does it. That the AP reported it isn’t some kind of deceptive act.
And as for the M’s credibility, well… that statement has not been supported by their words or actions in the past.
Also, seriously, how many times is Cirillo’s contract going to get counted? Wasn’t the whole point of dumping him for Wiki & Co. to get out from under it? Even then, why do we hear every year that they’re paying Cirillo for more than just that year?
And this…
Wow. Where to start with that one? Art, come on, man.
The Spiezio and Everett contracts are nothing like Boone’s. Boone got himself a big-time contract based on star-caliber performance (.331, 37 HR, 141 RBI from a 2B). Problem is, it was out of context with the rest of his career and it shouldn’t be surprising that he couldn’t sustain that level of performance for the entire length of the contract. Spiezio and Everett got sizable contracts based on mediocre performance, then at least in Spiezio’s case, couldn’t even manage that. If Boone’s contract resembles anybody, it’s Beltre.
I’ve got a massive, nearly finished post in the queue about the strengths and weaknesses of Mariner management, Russ. I have a feeling you’ll enjoy it.
The accounting of a released player’s future salary in either the current year’s or next year’s payroll probably depends on when the team actually pays the money to the player. Much like lottery winners, a released player such as Spiezio has two payment options: (1) a lump sum payment of the amounts owed, discounted for present value; or (2) regular paychecks over the remaining contract period. My understanding is that players generally choose the lump sum option, although it depends on their indiviudual tax situation.
Where did you learn that?
Isn’t it also true that the M’s pay only the net difference between a released player’s contract and whatever his present team pays him, e.g., if Cirrillo’s contract with the M’s says $4 million for 2006 and the Brewers pay him $1 million, the M’s only pay $3 million (hypothetical, of course)?
DMZ, a professional who has worked on those type of deals.
Dave:
I agree with your conclusion that any discussion of the M’s payroll leads to hand-wringing over how much money they needlessly waste on replacement-level talent, but I don’t really agree that the AP numbers are a poor window into real spending. As Derek said when he first posted the AP numbers, they are at least consistent from year-to-year and from team-to-team, and provide at least a rough way of measuring payroll spending across the league.
The Mariners are defensive about this because they have been misleading over the years, and I don’t see this in any way as an attempt to be “honest” with the fans. Bottom line: the Mariners will use any accounting method in any year that suits their PR purposes. They may all be “generally accepted” accounting methods, and even produce a SNAPSHOT of truth, but the bigger picture is still a jumbled mess of contradictions.
Either way, you are right to bemoan the fact that they can’t seem to see what’s really hurting them is wasting big money on aging, mediocre (or more often, worse) veterans.
Picking salary as of 8/31 every year doesn’t make it a good measure of salary just because its a consistent method. It’s the Wilson Valdez of salary evaluations; consistently terrible.
The M’s are defensive about the numbers released last week because, in the M’s case, they are wildly wrong. There’s no way to come up with any kind of real payroll analysis that concludes that the M’s spent $70 million on the team last year.
The Mariners will gain credibility when controversial newcomer Carl Everett hits .280 with 28 homers next year while causing no disruptions.
DMZ, sometimes tone and sarcasm are hard to read online, but I think you missed what he’s saying. (Maybe I missed what you’re saying.) I think the point is only when Everett is great THEN the Mariners will gain credibility. Until then they (the front office) lack it. I don’t think it’s a prediction, just a statement that the M’s eggs are in that basket.
Okay, the Commissioner’s numbers stink in part because they exaggerate the high and low ends, since teams that stink will dump salary and teams competing (which, generally, will be high-payroll teams) will take it on.
But in that sense, it’s really no better than any other point-in-time method like Opening Day payroll, which is much more widely used and accepted. They’re all pretty bad.
On the Everett thing: if that was the intent of what Thiel was trying to say, then he’d have been better off writing “The Mariners (might/could) gain credibility if…”
As written, it’s just not clear that that’s the intended meaning.
Related to Payroll Wastage, from today’s Mariners Propaganda Email:
—————————————
DID YOU KNOW?
Mi Casa Es Su Casa…
Mariners starter Jarrod Washburn has a career 47-24 (.662) road
record and a 3.34 ERA. He also is 5-4 lifetime at Safeco Field
with a 3.54 ERA.
—————————————
Yeah, that sentence by Thiel made me blanch as well (first thought:”Suuuuuure, Everett’s going to do something at age 35 at Safeco that he’s done exactly twice in his career, in better ballparks (Fenway one year, Arlington and New Comiskey the other). I’ll be sure to watch for the airborne pigs going past my window as well”).
Oh, and the correct comparison for Everett is 2002’s answer to “OMG WE NEED A BAT BUT CAN’T ACTUALLY SPEND BIG MONEY”: Ruben Sierra.
Like Everett, the only time Sierra posted any kind of pseudo-interesting numbers was when he spent some time in Texas. Both are switch-hitting DH’s of comparable ages when the M’s signed them (Everett’s a year younger). Both had long injury histories.
Sierra’s numbers in 2002 (.270/.319/.418, 13 HR, 60 RBI, 122 G) are probably not unreasonable numbers for Everett to post in 2005- maybe a bit high on the OBP and games played side, but not out of whack. They also are pretty garbage numbers from a DH (a Branyan/Morse platoon could arguably beat that).
#5, Dave:
Actually, I would put Reese in the other category. At the signing time, it was obvious that he was a .240 hitting good fielding shortstop with no power or other attributes.
Basically, even if he had been healthy, he was replacement level or only a tiny bit better. In fact, the M’s found a player off the bone pile during spring training that was Pokey-light (low .200’s hitter with a good glove). Which I think demonstrates how bad the Pokey signing really was.
Google the site for our numerous articles on Pokey. His defense made him a good player, and one of the best signings of last offseason. Obviously, the injuries erased any value he could have offered, but that doesn’t take away from the fact that it was a good signing.
The fact that a Pokey injury was a near certainty made it a bad signing IMO….but the fact that had we not signed him the money wouldn’t have been spent anyway makes it sort of a moot point.
The problem wasn’t signing Pokey. The problem was not having a backup plan, knowing his injury history.
Dave wrote:
I agree with you, but for the sake of comparing where the Mariners are relative to other teams, it is better than the hodge-podge of financial crap we typically get from the Mariners. I’m with Derek on this one; the Opening Day payroll figures might be slightly better than the Commissioner’s Office figures, and they all have their faults, but I’ll take any of them over just about anything the Mariners produce, which is all self-serving drivel.
My first reaction was YIKES! I thought we wasted a lot of money in 2004! I thought that was supposed to get better in 2005. (Maybe that IS better. ‘sigh’)
The other is that after watching several of our Tacoma call-ups, I don’t know that we have many (or enough)minimum salary minor leaguers who can play at the replacement level major league level. ‘heavy sigh’