It is Time for the Payroll to Go Up
For the last couple of winters, it’s felt like there’s been a bit of a battle for the souls of Mariner fans. On one hand, a handful of people have loudly proclaimed that the solution to all of the organization’s problems was to spend a lot of money in free agency. Sign Prince Fielder at any cost! Prove you actually want to win! Spend money and everything will fix itself! This one-note plan was always foolish, and has proven to be exactly that after the big spenders of last winter generally fell flat on their faces and have been replaced in the playoffs by the likes of the A’s, Orioles, and Nationals.
On the other hand, you had more rational voices arguing for moves that made sense. Last winter, I wanted the team to trade for guys like Angel Pagan and Marco Estrada or sign free agents like Chris Capuano, Ryan Doumit, and Edwin Jackson*. These guys all had pretty good years in the spots they landed, and could have improved the team without the risks that come with overpaying on the free agent market. Instead of simply relying on one pricey player to upgrade the franchise, I argued for smaller moves that add value to the organization at multiple positions in order to make the overall team better.
*I also suggested that the team trade Michael Saunders for Chris Volstad, so not all of my suggestions were good ones. The point isn’t to toot my own horn, but to provide examples of what the opposite strategy might have looked like.
The problem is that the Mariners decided to do neither. As I wrote in the post about the team’s signing of Kevin Millwood, they ended up missing out on good value buys in the market because they decided to cut payroll:
Like with every other move they’ve made this off-season, Millwood’s a nice role player at a good price. These guys make sense and give the roster needed depth, but I can’t imagine that the team is really going to say that they’re good with all of their transactions representing that kind of move. Even while I’ve advocated for a spread-the-money around plan in lieu of throwing a huge contract at Prince Fielder, I’ve advocated for acquisitions that would offer the hope of bringing in players who could be everyday guys both now and in the future.
Millwood is not that. Sherrill is not that. Iwakuma and Jaso might be, but both come with significant question marks. Montero can be that, but he cost the team a similarly useful piece in order to get him, so that was more of a lateral move than an upgrade. Noesi could be that, except signing Millwood now makes it somewhat less likely that he’ll make the team as a starter on Opening Day.
Jack Z has done a nice job of acquiring players who should help ensure that the team won’t suck as badly as they did last year, but he hasn’t really done anything yet this winter that pushes the organizational talent base forward in a substantial way. Given that the Mariners should still have some money to spend, they shouldn’t be content to call Millwood the final off-season acquisition and just go to camp with the roster they have now. They can and should do better.
I wasn’t advocating for rebuilding through a massive expansion of the budget, as my overall plan called for a team payroll of around $95 million. Instead, their opening day payroll was $82 million, continuing a trend of budget cuts that began after the disastrous 2008 season. Including that year, their opening day payrolls since 2008:
2008: $117 million
2009: $99 million
2010: $98 million
2011: $86 million
2012: $82 million
Sagging attendance has been given as the main reason for payroll cuts, and given that the team set a new low for attendance in Safeco this year, it’s possible that the organization could continue with their plan of cutting expenses in order to ensure that the franchise doesn’t lose money. However, just as it was last year, that would be a mistake. It’s time for the payroll to go back up.
This isn’t about some kind of “prove your worth to the fans!” cry for attention, or some need to have the organization show they’re “serious about winning”. Those arguments are hollow, and simply play on people’s emotions without actually considering the practical implications of spending money just to spend money. Instead, this is simply a realistic response to the current economic state of Major League Baseball.
On Tuesday, MLB announced that they had reached new deals with both Fox and TBS to extend their rights to postseason baseball coverage through 2021. Previously, they’d reached a separate agreement with ESPN to continue their coverage of the sport through the same time period. The figures that have been bandied about publicly suggest that MLB is going to double their revenue figures from national TV contracts under the new deals, totaling $12.4 billion over the life of the deals, or about $1.5 billion per year. Split 30 ways, you’re talking an average of $52 million per team per year. Previous national TV deals put something like $25 million per year in each team’s pockets.
These deals don’t kick in until 2014, so it’s not like the Mariners suddenly have $25 million in cash that they can spend on whoever they want, but they — along with every other team — just got a significant infusion of guaranteed future revenues. There’s simply no way for hundreds of millions of dollars to flow into Major League Baseball and not have it affect player salaries. These TV deals means that team payrolls across the sport are going to go up.
Put simply, if the Mariners decide to keep the payroll at around $80 million next year, they’ll probably find themselves in the bottom third of MLB teams, and this is not a market that should be settling for bottom third budgets. While the fans haven’t been banging on Safeco’s doors, the market is clearly willing to support a winner, and revenue growth is easily within reach if the team puts a better product on the field. With a cash infusion from MLB’s national television deals, the organization has a chance to put a better product on the field, which could lead to future revenue growth from increased attendance and potential playoff appearances. Investing in the on field product is a good idea.
As I wrote on FanGraphs a few weeks ago, my instinct is that we’re about to see some salary inflation that’s driven from the bottom-up rather than the top-down spending pressure we’ve seen in the past. With the luxury tax proving to be a legitimate deterrent for every team besides the Dodgers, top end payrolls are coming closer towards the league average, and the infusion of television money across the board is pushing up revenues for the lower revenue clubs, leading to a smaller disparity between the highest and lowest payrolls within the game.
The Mariners can’t simply spend $80 million again and hope that they can find enough value buys on the market to make it work. Even with attendance dropping, the positive economics of the sport as a whole have put the organization on solid financial ground, and they can afford to expand the payroll back to something closer to $100 million. It doesn’t mean that they should just get stupid and start throwing money around to guys who aren’t likely to produce at a level that justifies the expense, but the team shouldn’t just sit out the free agent market like they did last year, bypassing legitimately useful guys at reasonable prices simply because attendance had kept going down.
If they want to get fans back at Safeco, the way to do that is to win. Spending money doesn’t equal winning, but spending money in an intelligent way certainly doesn’t hurt. The A’s are where they are in part because they saw Coco Crisp as a free agent value last winter, and they gave him $7 million a year even while “rebuilding” because he was undervalued by the market and they knew he could improve their on field product at a reasonable price. The A’s just ended the season with a division title in front of a sellout crowd, and now they’re going to get some playoff revenues from at least one playoff home game, and potentially much more than that.
The Mariners need to put themselves in a position to be next year’s A’s. They’re not going to go into the season as projected contenders no matter what they do, but they can put enough pieces in place to make things interesting and safeguard against too many things going wrong all at once. And they can get some of those pieces by spending some money this winter. Money that they now have more of, thanks to MLB’s overall success even as their own franchise is struggling.
The organization’s issues won’t simply be solved by wading into the free agent market and signing a marquee hitter. Rebuilding through free agency doesn’t work, and the franchise is best served by continuing to build around young, cost-controlled players who can form a core of a contending team for years to come. But they don’t have enough of those pieces to win, and they can supplement those pieces with good additions this winter, especially now that MLB has given them extra revenues with which to play with.
You should still be happy the team skipped out on Prince Fielder and his onerous contract. You should be less happy that the organization skipped out on making other useful upgrades last winter when those opportunities presented themselves. They shouldn’t make that mistake again this winter. There will be smart ways to increase the payroll this winter, and the organization should take advantage of them. They can’t sit on the sidelines and watch other teams upgrade in an intelligent way again. It’s time to take advantage of those opportunities and give the roster a real chance to win in 2013.