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April 9, 2012

Bizball

Big Money and the Opening Day Payrolls

by Maury Brown

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I’m not saying this in a Chicken Little way. I’m saying it as a reality that some fans may not fully be grasping: MLB is hitting the mother lode, and that’s translating into player contracts that see greater average annual values (AAV), lengths, and total dollar amounts.

Case in point: USA Today recently released their annual Opening Day salary numbers, and the league will see a 5.55 percent increase in total dollars allocated to 25-man rosters from last year—a jump from $2,786,163,302 on Opening Day in 2011 to $2,940,659,204 this year. This represents the largest year-to-year increase since 2007.

According to the annual numbers, there are now 14 players that will earn at least $20 million this season.  Below, I’ve listed the top 25 players in terms of 2012 salary:

RANK

PLAYER

TEAM

SALARY

POSITION

1

Alex Rodriguez

New York Yankees

$30,000,000

Third Baseman

2

Vernon Wells

Los Angeles Angels

$24,187,500

Outfielder

3

Johan Santana

New York Mets

$23,145,011

Pitcher

4

Mark Teixeira

New York Yankees

$23,125,000

First Baseman

5

Prince Fielder

Detroit Tigers

$23,000,000

First Baseman

5

Joe Mauer

Minnesota Twins

$23,000,000

Catcher

5

CC Sabathia

New York Yankees

$23,000,000

Pitcher

8

Adrian Gonzalez

Boston Red Sox

$21,857,142

First Baseman

9

Cliff Lee

Philadelphia Phillies

$21,500,000

Pitcher

10

Miguel Cabrera

Detroit Tigers

$21,000,000

First Baseman

11

Carl Crawford

Boston Red Sox

$20,357,142

Outfielder

12

Justin Verlander

Detroit Tigers

$20,100,000

Pitcher

13

Roy Halladay

Philadelphia Phillies

$20,000,000

Pitcher

13

Ryan Howard

Philadelphia Phillies

$20,000,000

First Baseman

15

Felix Hernandez

Seattle Mariners

$19,700,000

Pitcher

16

Carlos Lee

Houston Astros

$19,000,000

Outfielder

16

Alfonso Soriano

Chicago Cubs

$19,000,000

Outfielder

16

Carlos Zambrano

Miami Marlins

$19,000,000

Pitcher

16

Barry Zito

San Francisco Giants

$19,000,000

Pitcher

20

Torii Hunter

Los Angeles Angels

$18,500,000

Outfielder

21

Tim Lincecum

San Francisco Giants

$18,250,000

Pitcher

22

Jason Bay

New York Mets

$18,125,000

Outfielder

23

Ichiro Suzuki

Seattle Mariners

$18,000,000

Outfielder

24

Josh Beckett

Boston Red Sox

$17,000,000

Pitcher

24

Jake Peavy

Chicago White Sox

$17,000,000

Pitcher

The most staggering increase for a single club comes by way of the Miami Marlins. While USA Today’s numbers do not account for deferred payments, incentive clauses that include money paid/received in trades, or salaries of players who have been released, the number is still mind-boggling. According to the annual numbers collated from MLB and MLBPA that are filed with the league’s central office, the Marlins’ 2012 Opening Day payroll is $118,078,000, ranking them seventh in the league. Even if we subtract $15 million of the Carlos Zambrano trade that the Cubs are picking up, the Marlins would still rank 10th as one of 10 clubs to have an Opening Day payroll over $100 million. To place that number in perspective, when accounting for the salary the Cubs are picking up, the Marlins’ Opening Day payroll has increased by over 81% since last year ($56,944,000). To further put things in perspective, the adjusted number is seven times higher than the Marlins’ 2006 Opening Day payroll of $14,998,500. So where’s it all going? Hanley Ramirez ($15 million), Josh Johnson ($13.75 million), and Jose Reyes ($10 million) account for salaries that are at or above $10 million.

And salary for the Marlins only stands to increase over the next few years. Next season, Ramirez gets a $500,000 bump. Mark Buehrle goes from $7 million this season to $12 million next, Ricky Nolasco jumps from $9 million to $11.5 million, and Heath Bell goes from $6 million to $9 million. Beyond that, Jose Reyes’ back-loaded deal really begins to make an impact; he begins receiving $22 million annually in 2015.

Another interesting study is the Texas Rangers and the wild ride that their payroll has taken over the last decade, especially in regard to the new television deal that the club reached after exiting bankruptcy when the new owners took over three seasons ago. According to USA Today, over the past two seasons salary has increased $65,260,430. In 2010, the year that Tom Hicks had the club in bankruptcy and eventually had to auction them off, the Rangers ranked 27th; they’re sixth this season. Prior to 2012, the last time that the Rangers ranked in the top 10 was in 2003 when they ranked fifth with a payroll of $104,526,470.

Coming back to the league as a whole, within the next three-to-five years expect total player payrolls to increase—and not just a little, but dramatically. Yes, there will be some watering down at the top (this has already started; the Yankees’ $197,962,289 payroll for 2012 marks the first time that the Bronx Bombers have been under $200 million since 2007), but by and large, many will see sizeable growth.  Television deals by the Rangers, Angels, and soon the Dodgers are redefining how fast teams can obtain money for use in free agency, and lesser deals (the Astros and soon the Padres) will have a similar (though muted) impact as well.

Even without local television deals, however, money is flowing into MLB’s coffers. Whether it’s money through MLB Advanced Media, the gate, or (shortly) through the national television deals, clubs are spending. The Reds, for example, don’t have the local television money flowing in but are spending lavishly. In baseball’s second-smallest media market, they signed Joey Votto to the third-highest active contract at 10 years and $225 million. Think about that… Not the Yankees. Not the Red Sox. Not the Dodgers or Angels, but the Cincinnati Reds. It would come as no surprise to see steady increases in the seven-to-eight percent area over the next few seasons. Get ready; a steady flow of “green” is coming. Next season, the total amount spent on Opening Day payrolls will crack $3 billion. For context, here is the past decade’s worth of Opening Day payrolls by USA Today’s accounting:

To close things out, here is a full breakdown of all 30 MLB teams based on the USA Today salary data.

Rank

Team

2012

Pct + or -

Rank (11)

Rank Diff

2011

1

New York Yankees

$197,962,289

-2.33%

1

0

$202,689,028

2

Philadelphia Phillies

$174,538,938

0.90%

3

1

$172,976,379

3

Boston Red Sox

$173,186,617

7.06%

2

-1

$161,762,475

4

Los Angeles Angels

$154,485,166

11.51%

4

0

$138,543,166

5

Detroit Tigers

$132,300,000

25.17%

10

5

$105,700,231

6

Texas Rangers

$120,510,974

30.57%

13

7

$92,299,264

7

Miami Marlins

$118,078,000

107.36%

24

17

$56,944,000

8

San Francisco Giants

$117,620,683

-0.49%

8

0

$118,198,333

9

St. Louis Cardinals

$110,300,862

4.62%

11

2

$105,433,572

10

Milwaukee Brewers

$97,653,944

14.22%

17

7

$85,497,333

11

Chicago White Sox

$96,919,500

-24.16%

5

-6

$127,789,000

12

Los Angeles Dodgers

$95,143,575

-8.68%

12

0

$104,188,999

13

Minnesota Twins

$94,085,000

-16.54%

9

-4

$112,737,000

14

New York Mets

$93,353,983

-21.45%

7

-7

$118,847,309

15

Chicago Cubs

$88,197,033

-29.47%

6

-9

$125,047,329

16

Atlanta Braves

$83,309,942

-4.24%

15

-1

$87,002,692

17

Cincinnati Reds

$82,203,616

8.24%

19

2

$75,947,134

18

Seattle Mariners

$81,978,100

-5.25%

16

-2

$86,524,600

19

Baltimore Orioles

$81,428,999

-4.54%

18

-1

$85,304,038

20

Washington Nationals

$81,336,143

27.37%

22

2

$63,856,928

21

Cleveland Indians

$78,430,300

59.44%

26

5

$49,190,566

22

Colorado Rockies

$78,069,571

-11.43%

14

-8

$88,148,071

23

Toronto Blue Jays

$75,489,200

20.65%

23

0

$62,567,800

24

Arizona Diamondbacks

$74,284,833

38.49%

25

1

$53,639,833

25

Tampa Bay Rays

$64,173,500

56.32%

29

4

$41,053,571

26

Pittsburgh Pirates

$63,431,999

40.81%

28

2

$45,047,000

27

Kansas City Royals

$60,916,225

68.62%

30

3

$36,126,000

28

Houston Astros

$60,651,000

-14.21%

20

-8

$70,694,000

29

Oakland Athletics

$55,372,500

-16.78%

21

-8

$66,536,500

30

San Diego Padres

$55,244,700

20.44%

27

-3

$45,869,140

 

Totals

$2,940,659,204

5.55%

 

 

$2,786,163,302

 

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

Related Content:  Mlb 2012

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

BP Comment Quick Links

WoodyS

Very interesting. Could you explain that "rank diff" column in the last chart? I can't figure out how it was calculated.

Apr 09, 2012 06:25 AM
rating: 2
 
ScottyB

Yes, if it is supposed to be difference in payroll rank from 2011 to 2012, the numbers seem off.

Apr 09, 2012 08:43 AM
rating: 1
 
BP staff member Maury Brown
BP staff

Yeah, I can explain it... I somehow got the formula wrong. I have an update into editors to update the table. As an example, Phillies should see rank diff as 1. Red Sox -1, etc.

Apr 09, 2012 09:21 AM
 
BP staff member Maury Brown
BP staff

The table has been updated. Rank Diff fixed. Apologies on that

Apr 09, 2012 10:26 AM
 
Sharky

Great article, Maury. You continue to set the standard for content on the business side of our national pastime.

I can't decide if this portends good things or bad for the Mets. They have had one of the largest payroll cuts in recent years (supposedly one of the largest cuts in history). And yet, in theory they could spend themselves out of this hole -- if they do it before everyone else realizes the new economics. Any thoughts?

Apr 09, 2012 07:44 AM
rating: 0
 
BP staff member Maury Brown
BP staff

I note this in the article, but USA Today's numbers don't account for deferred compensation, and that's something the Mets have done a bit of.

Biggest thing for the Mets right now is the gate. It's killed them for three seasons running and they need to get that flipped around. It's very early in the season but early returns based on good weather and winning have helped. I don't think that's sustainable, but I'm sure the club will take what they've been getting as opposed to rain and losing.

Apr 09, 2012 08:15 AM
 
fatted

Where and when does the luxury tax come into play?

Apr 09, 2012 08:53 AM
rating: 0
 
BP staff member Maury Brown
BP staff

It's happening (somewhat) now with the Yankees. I allude to this when I said, "Yes, there will be some watering down at the top (this has already started; the Yankees’ $197,962,289 payroll for 2012 marks the first time that the Bronx Bombers have been under $200 million since 2007), but by and large, many will see sizeable growth."

Apr 09, 2012 09:23 AM
 
Karl Barth

lode. mother lode.

Apr 09, 2012 09:21 AM
rating: 0
 
cdmyers

How much do you think this changes they way we should very all the recent big-dollar, big-year contracts that have been handed out? The Votto, Fielder, and Pujols deals don't look so bad from a team perspective if the rate of salary inflation is 5-7% instead of 3-5%. Do you think that teams have looked at the big media deals and valuations, decided that salary inflation is going to be a big factor, and then decided that a 10-year deal might not be so bad after all?

Apr 09, 2012 09:38 AM
rating: 1
 
Peter7899

Is there a ranking of what teams are spending on players regardless of who the players are playing for? I know the Cubs are still paying Zambrano $15M, Pena $5M, but I don't think that is including in the $88M figure.

Apr 09, 2012 10:15 AM
rating: 0
 
amazin_mess

It's official. The Mets are a mid-market team now.

Apr 09, 2012 12:00 PM
rating: 1
 
jhardman

I noticed that Rangers graph looks like a big "W". Either an ex-President could be involved or it's just a mad, mad world...

Apr 09, 2012 14:36 PM
rating: 1
 
tmangell

This article is a reason why I renewed my subscription. Great
job, Maury.

Apr 09, 2012 15:16 PM
rating: 0
 
seabass77

I cannot believe that the Brewers are 10th. Life long Brewers fan. I just typed several sentences and deleted them all because I really don't know what to say.

Apr 09, 2012 16:00 PM
rating: 1
 
Behemoth

Wondering how this will play out with the changes to the luxury tax in the new CBA (both greater penalties, and much slower cap increases). Does this mean more equality in spending with a lot more teams around the luxury cap level once new TV deals are signed and so on?

Apr 11, 2012 05:47 AM
rating: 0
 
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