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July 1, 2011

Contractual Matters

Los Angeles Payroll Limbo

by Jeff Euston

Jamey Carroll of the Dodgers is a nice enough player. A versatile veteran. Not too expensive. Given the right role, he probably could fit in on most major-league rosters.

Now 37 years old, he’s the kind of player who is easy to root for. The Dodgers roster lists him at just 5 feet 9 inches, and last season he posted a 3.3 WARP and won the team’s Roy Campanella Award as the player who best exemplified the Hall of Fame catcher’s spirit and leadership. What’s not to love?

But when Carroll’s named surfaced this week as a creditor in the Dodgers’ bankruptcy filing in Delaware, it was hard not to do a double-take. Could this be some other Jamey Carroll with whom we’re not familiar? A front-office executive, maybe? A quick look at his contract status made it clear. Carroll’s deal, signed in December of 2009, included a signing bonus to be paid out in three installments, $300,000 each at signing and in January of 2011 and $400,000 in December 2011. This wasn’t special advisor Jamey Carroll or spiritual healer Jamey Carroll. This was backup infielder Jamey Carroll, the guy now buried on the LA depth chart behind Dee Gordon and Juan Uribe. But there he was, listed as a $508,791 creditor, right there behind the high-dollar free agents you might expect to find, players like Manny Ramirez.

Deferrals have become fairly common throughout the industry in recent years. They can reduce the financial weight of a high-priced free agent and help a club improve its payroll flexibility. For a player, agreeing to defer money serves as something of a gesture of team-first goodwill and can be a key element in getting a contract extension or additional perks. Scott Rolen, Paul Konerko, Todd Helton, and Ryan Dempster all recently have signed off on deferrals in order to remain with their current clubs or help management bring in more talent.

For anyone who’s not a Dodgers fan, it might be entertaining to scan the team’s list of creditors and see former players like Andruw Jones, whose $36.2 million deal for 2008-09 was an unmitigated disaster. The list of 14 players signed as free agents reads like a catalog of waste: Ramirez ($20,992,086), Jones ($11.075 million), Hiroki Kuroda ($4,483,516), Rafael Furcal ($3,725,275), Ted Lilly ($3,423,077), Kaz Ishii ($3.3 million), Juan Uribe ($3,241,758), Matt Guerrier ($3,090,659), Juan Pierre ($3.05 million), Jon Garland ($1,211,538), Carroll ($508,791), Casey Blake ($332,418), Rod Barajas ($196,429), and Vicente Padilla ($120,879).

But line up your Dodgers roster next to the bankruptcy filing, and another troubling pattern emerges. The 16 highest-paid players on the 2011 Opening Day roster agreed to defer money, in one amount or another, whether they were free-agent signees or young players still under team control or eligible for arbitration.

Ned Colletti, whose job apparently was not hard enough already, was reduced to asking every Dodger earning a salary north of $1 million to defer cash. Admittedly, the team was utilizing deferrals before Frank and Jamie McCourt announced their plans to separate in October 2009, on the eve of the Dodgers’ National League Championship Series with the Phillies. The contracts for Jones, Blake, and Furcal, for example, all included deferrals. Each was signed in the 2008-09 off-season, before the divorce. Those deferrals, like those for Ramirez and Ted Lilly, seem understandable in competitive bidding situations because they allowed Colletti to raise his offer.

What seems to give away the McCourts’ game is the presence of deferred money in contracts for six players who signed not as free agents but as players still under the Dodgers’ control: Andre Ethier ($559,066), Jonathan Broxton ($423,077), Chad Billingsley ($379,258), James Loney ($294,643), Matt Kemp ($216,244), and Hong-Chih Kuo ($164,698). Those deferrals would seem to have no other purpose but limiting what the team was paying out today, at every possible turn, and putting off the bill as far into the future as possible. They’re certainly rare—if not unprecedented—for players who are still only eligible for arbitration.

With payroll obligations of just $46 million in 2012 and $47 million in 2013, the Dodgers should not be hamstrung financially in the country’s second-largest market. The fact that they are is a stark indication of the McCourts’ malpractice and the disservice done to the franchise.

Meanwhile, several important decisions loom for Colletti, whose own long-term contract allows him to escape after the 2012 season. Kuroda, Furcal, and Broxton will be free agents this winter. Five more key players—Ethier, Kemp, Loney, Billingsley and Kuo—hit the open market in 2013. Ace Clayton Kershaw reaches arbitration for the first time in February. Add in the fact that unlike the recent brushes with bankruptcy for the Rangers and Cubs, no one is remotely sure where the Dodgers’ process is headed, and Colletti’s job requires a minor miracle. Constructing a championship-caliber roster is difficult enough in ideal circumstances. Doing it while ownership is robbing Peter to pay Paul borders on the impossible.

Jeff Euston is an author of Baseball Prospectus. 
Click here to see Jeff's other articles. You can contact Jeff by clicking here

Related Content:  Jamey Carroll

8 comments have been left for this article. (Click to hide comments)

BP Comment Quick Links

beerchaser42

McCourt is robbing Paul alright, but Paul's payment has been deferred until 2019.

Jul 01, 2011 06:54 AM
rating: 3
 
beerchaser42

oops meant to put Peter first, but you get the idea.

Jul 01, 2011 06:55 AM
rating: 0
 
NP_14

Robbing Peter to pay Vladmir.

Jul 01, 2011 07:40 AM
rating: 1
 
cfinberg

Robbing Peter and Paul to pay Frank and Jamie and Drew and Travis.

Jul 01, 2011 08:19 AM
rating: 1
 
flirgendorf

Assuming that MLB has learned from their mistakes and won't let someone use leverage to buy the team, the deferred payments should have no affect on the team's ability to be competitive. Potential buyers of the franchise would consider the liabilities when deciding how much to bid, and would have more cash left over to pay the deferrals.

Jul 01, 2011 11:44 AM
rating: 1
 
vtadave

Agreed that Ned's job requires a "minor miracle", but it would require far less of a miracle if he wouldn't do things like give Juan Uribe $21 million among countless examples.

Jul 02, 2011 21:50 PM
rating: 1
 
achaik

Marquis Grissom! $2.7M!

Jul 03, 2011 08:12 AM
rating: 1
 
ScottyB

McCourt also took loans out against almost all sources of revenue (e.g., concessions) just to buy the team. That means the Dodgers get 0 for hot dog sales for many years in return for the up-front cash he used to purchase the club. He also agreed not to build his own regional sports network to appease the Fox Dodger-sellers at the time of purchase. This deal stunk fro the get-go.

Jul 04, 2011 10:28 AM
rating: 0
 
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