37 replies to this topic

[flymrfreakjar]

For the first time since 2003, the Red Sox will not start the season with the second-highest payroll in the majors.

Figures obtained by the Associated Press indicated that the Red Sox opened the season with a payroll of $133,440,037 (click here for a player-by-player breakdown), which is down $10 million from their Opening Day payroll last season and ranks as the fourth-highest in the majors. Not surprisingly, the Yankees lead the way with just over $209 million.

In every season since 2004, the Red Sox had placed second behind the Yankees in total payroll. This year, they're behind the Yankees, Tigers, and Mets. The Sox spent $143 million last season, and averaged about $123 million per year from 2004-06. Courtesy of USA Today's salaries database, here's a list of total Sox payroll from 1988 ($15 million!) to 2007.

With a roster of mostly the same players from the 2007 season, you might be wondering why the 2008 Sox payroll is less than last year's. In 2007, the team paid more than $15 million combined for Matt Clement (who never threw a pitch last season) and backup Eric Hinske, neither of whom are on this year's roster.

Figures were obtained by The Associated Press from management and player sources and include salaries and pro-rated shares of signing bonuses. In some cases, parts of salaries deferred without interest are discounted to reflect present-day values.

Extra Innings

Here are the top 10:

N.Y. Yankees -- $209,081,579
Detroit -- 138,685,197
New York Mets -- 138,293,378
Boston -- 133,440,037
Chicago White Sox -- 121,152,667
Los Angeles Angels -- 119,216,333
Chicago Cubs -- 118,595,833
Los Angeles Dodgers -- 118,536,038
Seattle -- 117,993,982
Atlanta -- 102,424,018

[BroodsSexton]

Extra Innings

Here are the top 10:

Where can one find payroll information for, say, the last ten years. It would be interesting to chart the teams over that period of time (maybe adding in a few others, as well...)

[Fratboy]

Granted, the Sox were paying $5-6 million for Hinske, but weren't the Blue Jays covering half of it?

And I have to imagine the $120M the White Sox are spending will be a record for a team that doesn't make the playoffs, let alone a losing record.

[Harry Hooper]

Sounds like the salary totals were compiled based on a very simple summation of who was on the roster. Toronto paid half of Hinske's 2007 salary. On the flip side, the Sox are paying some of Renteria's salary for 2006-2008. The reported totals are questionable, might be a wash but maybe not.

Edited by Harry Hooper, 01 April 2008 - 05:37 PM.

[JimBoSox9]

Where can one find payroll information for, say, the last ten years. It would be interesting to chart the teams over that period of time (maybe adding in a few others, as well...)

http://content.usato...es/default.aspx

Just don't choose a year and it will give you the last 10 for a team.

Edit: Actually it will give you more than 10, I just happened to choose the DBacks when I searched.

Edited by JimBoSox9, 01 April 2008 - 05:38 PM.

[flymrfreakjar]

Where can one find payroll information for, say, the last ten years. It would be interesting to chart the teams over that period of time (maybe adding in a few others, as well...)

Here's the data for the Red Sox from '88 to '07.

You can substitute the other teams in to get their data as well. Maybe someone more computer-savvy than I can assemble it in a legible manner.

[Purpose Pitch]

Granted, the Sox were paying $5-6 million for Hinske, but weren't the Blue Jays covering half of it?

They also failed to mention the $$$ saved from Gagne and Schilling's pay cut.

[jp]

Boy, the White Sox sure are paying a lot to finish last this year!

[BroodsSexton]

Here's the data for the Red Sox from '88 to '07.

You can substitute the other teams in to get their data as well. Maybe someone more computer-savvy than I can assemble it in a legible manner.

Does anyone have a link to annual average payroll data? I could create it manually from this site, but it would be easier if it were already compiled somewhere.

[Bowlerman9]

They also failed to mention the $$$ saved from Gagne and Schilling's pay cut.

Gagne wasnt on our opening day roster. When they throw out payroll numbers like this, its always the opening day roster. Occasionally someone will report the total payroll spent at the end of a season, but its usually opening day.

[Lucen]

Granted, the Sox were paying $5-6 million for Hinske, but weren't the Blue Jays covering half of it?

And I have to imagine the $120M the White Sox are spending will be a record for a team that doesn't make the playoffs, let alone a losing record.

The Red Sox were at 120,099,824 in 2006 according to Cot's. They have the White Sox at just over 121 million. So I wouldn't laugh too hard. Granted, the Sox at least ended up with a winning record.

Edited by Lucen, 02 April 2008 - 12:01 AM.

[Punchado]

Anyone (read: yankee fans) who talk about how the Red Sox and Mets spend money just like the Yanks simply needs to be made to understand that the difference between the number two team and the yankees is about twice the difference between the number two team and the number nine team. As many have said many times, there's the yankees and then there's everyone else.

[Paul M]

That's pretty impressive to think the Sox are spending less in today's dollars for a much better roster than they had in 2001. Moreover, that team I believe had the highest payroll in the league when all was said and done. I hear people say NY will be shedding a lot of payroll next year, which could be true, but even without Giambi, Pettitte, and Abreu they would STILL have the highest payroll all else being equal. And have an extra $15 million on top of the next team. And we know they won't be standing pat next year. Besides this NY problem, the payroll picture looks a lot better.

[yecul]

Besides this NY problem, the payroll picture looks a lot better.

Meaning? Haven't revenues been increasing? Others can speak to that better than me.

[Philip Jeff Frye]

Amazing to see the Tigers that high given that only a few years ago, some pundits were identifying Detroit as a city that could no longer support a team - dead local economy, no one showing up even at a new ballpark, weirdo owner, etc...

The Tigers attendence as recently as 2003 was not even 1.4 million (13th in the AL), last year they were over 3 million (behind only the Yanks and Angels, and ahead of the Sox!).

Edited by Kevin Mortons Ghost, 02 April 2008 - 10:50 AM.

[TheYellowDart5]

The Tigers attendence as recently as 2003 was not even 1.4 million (13th in the AL), last year they were over 3 million (behind only the Yanks and Angels, and ahead of the Sox!).

Well, to be fair:

Detroit home attendance, total: 3,047,124
Boston home attendance, total: 2,970,755

Comerica Park capacity: 41,070
Fenway Park capacity: 38,805

I'd imagine that if both parks were of equal capacity, the Sox would have broken the 3 million mark as well, and probably passed Detroit.

[Philip Jeff Frye]

Well, to be fair:

Detroit home attendance, total: 3,047,124
Boston home attendance, total: 2,970,755

Comerica Park capacity: 41,070
Fenway Park capacity: 38,805

I'd imagine that if both parks were of equal capacity, the Sox would have broken the 3 million mark as well, and probably passed Detroit.

True, but a few years ago, some people were talking about Detroit as a potential contraction candidate. They were rumored to be having trouble meeting payroll or unable to meet their mortgage payments on the new park. A few years later, they're right up there with us in payroll. Its a remarkable turnaround.

[philly sox fan]

Meaning? Haven't revenues been increasing? Others can speak to that better than me.

Last year the Sox ended up paying about 159M in player costs. That's a 153M final payroll and a 6M luxury tax bill.

My numbers are a little higher than the AP ones for whatever reason, but it would take some significant mid-season financial bump to get them over 140M in costs and they shouldn't pay the tax in any circumstances.

So the Sox should be able to realize a net savings of 15-20M in major league player costs this year in comparison to last and I don't think anybody thinks the Sox were dipping into their rainy day fund to spend that 159M last year. Toss on another post-WS revenue bump and the Sox really should be awash in cash.

And I think that's way the biggest off-season story for me, was the idea that the Sox have hit the point where they have more money than there is high quality available talent. Now as long as the team projects as a 95 win team I don't think fans can complain much whether the payroll is 160 or 140 or 120, but it does suggest to me that they ought to be willing to "lose" some prospect value in a package for a genuine and expensive stud player. It seems like the Sox think they did that in the package they offered for Santana. Without knowing the real offers and counters, it's impossible to know, but it may be that what the Twins wanted was reasonable given the "wasted" payroll space the Sox seem to have.

[Purpose Pitch]

True, but a few years ago, some people were talking about Detroit as a potential contraction candidate. They were rumored to be having trouble meeting payroll or unable to meet their mortgage payments on the new park. A few years later, they're right up there with us in payroll. Its a remarkable turnaround.

I wish the Phillies would take some notes. Philadelphia is the largest single team market in the nation, and there is a beautiful new ballpark. In 1993, in a shit-hole, the team drew over 3 million fans. When the team is winning, fans come out in droves.

Attendance has gone up since the team has become competitive again. But many die-hard fans are frustrated when each year it seems like they are 1-2 pitchers away from being a more serious contender, but they never go the extra mile to make the move. The fans have shown that spending the money on a contender is a good investment.

[yecul]

And I think that's way the biggest off-season story for me, was the idea that the Sox have hit the point where they have more money than there is high quality available talent... it does suggest to me that they ought to be willing to "lose" some prospect value in a package for a genuine and expensive stud player.

That was the sense I had, but I hadn't been able to put it together. Well said. I agree.

The positive spin is that they didn't spend money for the sake of it.

[OCD SS]

The positive spin is that they didn't spend money for the sake of it.

The FA market also looks very good for next year (Teixeira, Sabathia) in areas that the Sox could use help. Of course they're also areas that will lead to direct competition with NY, so it could be pretty expensive if it comes down to a bidding war.

[yep]

I'm actually a little embarassed at how happy this development makes me.

I would much rather win with a huge payroll than lose with a modest one, but better still is to win with a modest one.

Why? Because a smaller payroll says that the team won at least in part through smarts and not just money. And that indicates that a team stands a good shot at winning more, because it means the team has the ability to stockpile value in a more sustainable way than simply buying available talent at market price. It theoretically means greater flexibility to make the right deals (both cash AND trade) when they come along, because it not only implies spare cash but more importantly talent held at below-market prices.

Getting "Younger and cheaper" is of very real value, not merely as a point of pride, but as a part of building a long-term machine that can remain competitive and stay ahead of the player-decline curve. The Red Sox seem to be demonstrating that it is possible to make "younger and cheaper" part of a systemic approach that is not at odds with also getting better at winning.

It also gives me meanspirited pleasure to rub Yankee fans' noses in the discrepancy between their payroll and record in recent years, and not being the closest runner-up robs them of an obvious comeback

Cheers.

[Carmine Hose]

My thoughts are that they extended Lowell when they probably didn't expect they'd be doing so. They have almost the same team as last year's champions for a better price. This off-season's FA market was horrible (A-Rod wasn't leaving the Bronx). So, they're likely going to jump back in next year (and that includes exercising Manny's 2009 option and making a decision on Tek). They even have some room to further extend Beckett if he duplicates 2007.

I can see them eyeing Sabathia or Ben Sheets moreso than Texeira, given they've got Youk under arbitration for 2 more years.

[JKelley34]

Also, a lot of credit needs to be given to the farm system and the Sox's ability to integrate cheap pre-arb/arb players onto the roster. Right now the team has 7 pre-arb players (Aardsma, Buchholz, Delcarmen, Lester, Pedroia, Papelbon, Ellsbury), who significantly drive down costs as compared to comparable players signed in free agency. Thats also not counting arb players (Youk, Snyder) and other cheap players (Okajima, Lopez, Corey, Cash, Wakefield, Cora). The team's ability to generate quality from their farm system has really freed up their payroll, especially in starting pitching where comparable stats to Lester and Buchholz would go for $20MM+ combined per year.

The bigger question for the Red Sox management will be, at what point do they realize how successful they've been in the draft and start throwing their financial weight around. I mean, just in the past few years the team has lost out on Pedro Alavarez (top 10 2008 projected), Laporta (2007 #7) and Scott Green (2008 proj. 1st round) for what would amount to the cost of a couple of relief pitchers. I just have to think at some point the realization that going with Bryan Corey instead of Timlin and investing the $3MM spent on Timlin into 2-4 great prospects would yield far more value than the upgrade from Corey to Timlin (if there is one).

[smastroyin]

The bigger question for the Red Sox management will be, at what point do they realize how successful they've been in the draft and start throwing their financial weight around. I mean, just in the past few years the team has lost out on Pedro Alavarez (top 10 2008 projected), Laporta (2007 #7) and Scott Green (2008 proj. 1st round) for what would amount to the cost of a couple of relief pitchers. I just have to think at some point the realization that going with Bryan Corey instead of Timlin and investing the $3MM spent on Timlin into 2-4 great prospects would yield far more value than the upgrade from Corey to Timlin (if there is one).

So what you're asking is at what point do they just sign everyone no matter what?

They have signed plenty of these guys. The difference between Pedro Alvarez and Lars Anderson on draft day is small, so applying hindsight to the guys they missed out on isn't always the best idea.

[philly sox fan]

So what you're asking is at what point do they just sign everyone no matter what?

They have signed plenty of these guys. The difference between Pedro Alvarez and Lars Anderson on draft day is small, so applying hindsight to the guys they missed out on isn't always the best idea.

True, but I'd also say the difference between an 800k offer that represents good value to the Sox and doesn't close the deal and an even 1M that the kid wants to sign is also pretty damn small in terms of the Sox overall finances.

Here's a Bill James answer to this question from the Freakonomics thread:

Q: It seems like investing an additional $5 million or so in the draft each year is a wiser investment than spending it in the F.A. market most of the time. Why do so few teams do this?

A: Well, I remember once having this conversation with my father:

“Dad, do you know what your problem is?”
“No, son, what is my problem?”
“You’re just too poor to get rich.”

Some baseball teams are just operating too close to the margin to have the freedom to make long-term investments. They are, in a sense, too poor to get rich.

Are the Sox operating too close to the margin to have the freedom?

Last year the Sox spent ~159M on major league players and just to take one example, didn't sign Scott Green for a reported difference of 200k. I think there's an argument to be made that an extra 200k in that situation is generally worth it, but you can't question the Sox overall commitment to spending money on talent last year. And you know the whole winning the WS thing works for them too.

But if this year their major league spend is in the 140-145M range, then I'm not so sure I want to hear Epstein or McLeod talk about holding the line on the Sox internal valuations.

The Sox are going to head into the next draft an extra ~15M from the margin. Giving a a couple more kids what they want in order to close deals seems an eminently reasonable and efficient way to invest the money that they couldn't spend at the MLB level.

[JKelley34]

So what you're asking is at what point do they just sign everyone no matter what?

They have signed plenty of these guys. The difference between Pedro Alvarez and Lars Anderson on draft day is small, so applying hindsight to the guys they missed out on isn't always the best idea.

Why not? I'm not trying to apply hindsight, but rather ask the question of why choose? I can imagine that the Sox had set a price on everyone of their draft picks and felt confident to use top 15ish round picks on these guys. They had set prices and were engaged in signing these players but eventually backed off when the players request became higher than the price the team had set for the player. But sum up those three players, throw in Grandal and a couple more guys and do you think the differences were more than the $4MM the team wasted on Joel Pinero in 2007? I'm just saying, the team has done an awesome job of spotting talent, developing talent and now reaping the benefits of the talent. The teams pre-arb players are providing 50+ million in marginal benefit given their skillset and the critical roles they fill on the team.

If they are spending $10-12MM on their draft and reaping equivalent benefits far in excess of the money spent on the draft, why wouldn't they throw another $3-5MM into the draft and make sure not to miss any talent.

Look at the Yankees. As much as we want to make fun of Hank, he is not an idiot and one day he will realize that spending an extra $5-10MM on the draft will likely yield far more benefit than $5MM on a middle reliever. I don't want them to beat the Sox to the punch.

Edited by JKelley34, 02 April 2008 - 03:46 PM.

[smastroyin]

True, but I'd also say the difference between an 800k offer that represents good value to the Sox and doesn't close the deal and an even 1M that the kid wants to sign is also pretty damn small in terms of the Sox overall finances.

This is all true, but how do you make the decision? Just say that you will draft every over slot player on the board and sign them until Bud takes away the binky? Tell kids that want to go to college that they aren't allowed to because the Red Sox drafted them? Look at a case of Alvarez. They offered him $900K and he didn't even blink, even if people tried to drag out the story. So what would it take to sign a kid who really bought into going to school? How many of them should that kind of money be spent on?

I don't know the answer, maybe as certain scouts/cross-checkers/etc. find more guys that are worth spending the $$$ on, then they will invest in a larger percentage of them. Certainly you can argue with some of the choices, right? The marginal money given to Mike Rozier would have given the Sox every guy on their board for the last two years (compared to what they actually spent).

I am a huge sign them all kind of guy, but I think it's a much deeper issue than just whether they are being cheap with their offers or not.

[Rudy Pemberton]

I think you have to take the good with the bad, though. For every Pedro Alvarez, there's a Jason Neighborgall and even DH3 has stopped talking about him. It's also impossible to debate, but who knows where Alvarez would be at if he was signed by the Sox and didn't go to college.

I just have to think at some point the realization that going with Bryan Corey instead of Timlin and investing the $3MM spent on Timlin into 2-4 great prospects would yield far more value than the upgrade from Corey to Timlin (if there is one).

I'm not sure I agree with this, although one can make their point with whatever example they want. Should the Sox have bothered signing Ortiz in '04, or put that money into the draft? Certainly they should have passed on Giambi, right? Just saying that it's not really clear. Putting money into prospects instead of big leaguers doesn't help that year's big club, though, and that has to be most important, although the future is important to.

I also think that if you start giving every prospect what he wants, they all want more and it can blow the whole structure.

[yep]

When you are a big enough player to affect the market single-handedly (as the Red Sox are), inflation and its ill effects are a very real risk if you show a willingness to overpay, even in small amounts.

There may be people who are "too poor to get rich," but there is almost nobody who is too rich to get poor. Sticking to your valuations, conserving what wealth you have, and refusing to overpay is part of how people and teams become rich and stay rich. Baseball contract negotiations are extremely public, in their results always, and usually in their day-to-day details as well. When a team caves a little and overpays a few percent for a player they want, the next player to talk to them knows it, and so do all of the players who have contracts up for re-negotiation, and a little bit of leverage is lost semi-permanently, and the inflation created snowballs, since each subsequent player who is overpaid drives the market price a little higher, and signals to the next player that they can expect to get a little more by holding out.

When a team holds the line and demonstrates that they are willing to let top prospects and superstar players walk away, even when the team could afford them, it also sends a message loud and clear, and creates, for the team, a virtuous cycle whereby players know coming into negotiations that the team has set a value on their services and will go no higher, whatever else may happen. Especially if the team is a winning club that players want to be on, this foreknowledge defuses any potential resentment over "disrespectful" offers and sets an expectation that the team is not going to be manipulated into a bidding war. In addition to creating a safety valve that lets off inflationary pressure, this kind of reputation opens the possibility for "hometown discounts" from players who genuinely have a preference to stay with the team.

The reason the Yankees never get the hometown discount is not because players don't want to play for the Yankees, but because players know the Yankees will pay. Because the Yankees are rich, and are big spenders, and are known to be both, there is an inbuilt expectation that they should pay *at least* market value for anyone. Even players who love the Yankees and want to play for the Yankees still expect the giant payday when they sign with the Yankees. If the Yankees offer their guy 2/3 the years and money as some other team, it's an insult and an offense. It's like Warren Buffet haggling over his share of the bar tab. Now, if you know in advance that Warren Buffet is very anal about making sure that the tab gets split evenly, then it becomes part of the routine, maybe even part of the charm of having drinks with Warren Buffet.

Note that sticking to rigorous valuations is not the same thing as cheaping out and refusing to pay for top-flight talent.

Cheers.

Edited by yep, 02 April 2008 - 04:29 PM.

[BroodsSexton]

Note that sticking to rigorous valuations is not the same thing as cheaping out and refusing to pay for top-flight talent.

Great post. Pigs get fat; hogs get slaughtered. Of course, the classic ways of controlling inflation are to slow down the growth of the money supply and reduce demand. So yeah, let's hope Hank decides to start throwing money at prospects and trying to sign everyone he can get his hands on. Like adding gas to his exploding payroll. Of course, Yankeedom is pretty much already Zimbabwe at this point, with Hank and Cash as these guys:



(photoshoppers, the gauntlet is cast).

[philly sox fan]

There may be people who are "too poor to get rich," but there is almost nobody who is too rich to get poor. Sticking to your valuations, conserving what wealth you have, and refusing to overpay is part of how people and teams become rich and stay rich.

Your post is much more relevant for the free agent market than the draft market imo and there are crucial differences between the two in terms of the importance of proper valuation of players. In the free agent market teams can and will make 100M mistakes on players who can be somewhat reasonably projected going forward and who are in a known inefficient market. In the amateur market we're mostly talking about low six figure differences on players who are very difficult to project who are forced into a market with a single bidder for the chance to be wildly underpayed if they ever make it.

I would argue that it is, in fact, impossible to be “too rich to get poor” in a rigged monopolistic market.

What bothers me about the stories of the Sox offering someone 800k who wants 1M and eventually losing the player is that I don't believe for one second that the Sox scouts - as good as they've been - can accurately tell the difference between an 800k amateur and a 1M amateur. If their best analysis says that a kid is worth 800k, then imo a 1M signed deal is well within the margin of error around that 800k valuation. The difference is just too small for the team to get burned and the rigged potential payout just too big.

People may not like when a team allows a Pedro Martinez or Johnny Damon to walk when the players go beyond the team’s valuation, but I think most people realize that those players have much more downside than upside and the cost of being wrong is in the millions, if not tens of millions, of dollars.

I don’t really have a problem with how the Sox have spent money in the draft, they’ve spent plenty, but the tie in with the James quote was too good to pass up.

[Joshv02]

What bothers me about the stories of the Sox offering someone 800k who wants 1M and eventually losing the player is that I don't believe for one second that the Sox scouts - as good as they've been - can accurately tell the difference between an 800k amateur and a 1M amateur. If their best analysis says that a kid is worth 800k, then imo a 1M signed deal is well within the margin of error around that 800k valuation. The difference is just too small for the team to get burned and the rigged potential payout just too big.

I should preface this by stating that I completely agree.

I just caution that I don't think we ever really know enough to make too strong a judgment here. To take your example, what if the Red Sox value the player at 600k - but are willing to negotiate up to $800k b/c they recognize the uncertainty in their own evaluations. All we see at the end is that they weren't willing to go to $1mm and so we think there is a small difference - but there isn't, the difference is $400k, or +66% of their valuation. I have, of course, no idea that this is true - but since we only see the end result, and because this is a rational way to quantify the risk in their own valuations, we just don't really know the end result.

Of course, I'd like Pedro Alvarez, too. Of course, until yesterday, the Vols did too.

[Cuzittt]

What bothers me about the stories of the Sox offering someone 800k who wants 1M and eventually losing the player is that I don't believe for one second that the Sox scouts - as good as they've been - can accurately tell the difference between an 800k amateur and a 1M amateur. If their best analysis says that a kid is worth 800k, then imo a 1M signed deal is well within the margin of error around that 800k valuation. The difference is just too small for the team to get burned and the rigged potential payout just too big.

Not that I disagree with your general premise... but it seems to me that the assumption here is that 800K is not only as high as they will go, but it is where the initial evaluation is. It would seem to me that if the Sox stopped at 800K, they probably value the player at less than that. How much less, I don't know, but it seems likely that 800k is not where they started.

So, If the Sox actual evaluation is that the player is a 600K player (+/- 200K), while the player thinks he is worth 1M and won't go lower, the Sox should cut bait. If the player starts at 1M and then is willing to negotiate, there seems to be a middle ground at 800K.

In any case, I guess what I am saying is that the Sox aren't seeing it as a difference between a 800K amateur and a 1M amateur. They are seeing it as a difference between a 600K amateur and a 1M amateur. And, at a certain margin of error point, the difference is not too small.

[yep]

Your post is much more relevant for the free agent market than the draft market imo ... In the amateur market we're mostly talking about low six figure differences on players who are very difficult to project who are forced into a market with a single bidder for the chance to be wildly underpayed if they ever make it.

It is certainly true that mistakes are cheaper and easier to absorb in the draft market, but they are also a lot easier to make. A college/high school/amateur player who is worth paying a signing bonus to or whatever may still have a very high likelihood of never being good enough to make it to the majors. Penny stocks are not necessarily any less risky or more lucrative to invest in than blue-chips just by virtue of being cheaper. In theory, the market has priced them according to their likelihood of potential returns.

If there is some particualar reason to believe, for instance, that the draft market is undervalued or that the risks of signing young prospects are exaggerated in the marketplace, then it may be true that the price premium for the certainty of established players is as a whole inflated compared with the true level of talent and probable performance at the draft/amateur level. In that case we could say generally that the market for baseball players has not priced risk accurately and those imbalances could be exploited by a team that spotted them.

However, without having any particular reason to think that the market is undervaluing the amateur/draft market as a whole, there is no reason to think that players who are cheaper from a dollar amount point of view are necessarily proportionately less risky. And risk is the name of the game when it comes to player evaluation at any level. We value them according to their probable and potential contribution towards the big-league club, primarily. Players who have proven their ability to win in the big leagues are extremely valuable, and players who have a small chance of contributing are worth very much less, or nothing.

So, as a grossly oversimplified thought experiment, let's hypothesize that for instance the Red Sox were able to secure a generic class of "better" draftees by offering $1m signing bonuses to 20 players who otherwise would have signed earlier. Ignoring luxury tax, roster spots, etc: would the difference between those 20 draftees and the 20 the Red Sox *would have* signed without bonuses ultimately contribute more value to the club than signing a single established player to a $20m contract?

If the generic answer to that question is yes, then it would be correct to say that the draft is a better place to spend money than the FA market. If the answer is no, then the draft is actually a riskier place to spend money, even though the increments seem trivial. If the answer to that question is that either move would generate about the same on-field production, then the market has priced risk appropriately (there are actually a lot of peripheral considerations such as present vs future costs and so on but whatever).

I don't really know whether the draft/amateur markets are undervalued (they may be), but the simple fact that the players are cheaper per-unit does not in and of itself make them less risky, counter-intuitive as that may sound.

I would argue that it is, in fact, impossible to be "too rich to get poor" in a rigged monopolistic market.

...Uh, I think I agree (?)


Cheers.

[ToeKneeArmAss]

Anyone (read: yankee fans) who talk about how the Red Sox and Mets spend money just like the Yanks simply needs to be made to understand that the difference between the number two team and the yankees is about twice the difference between the number two team and the number nine team. As many have said many times, there's the yankees and then there's everyone else.

To your point:

[philly sox fan]

One other thing to note looking at that cluster of teams in the 130s. The luxury tax level is at 155M this year. If the benefits cost is still ~10M, then teams have to stay below ~148M to stay below the tux level. Even allowing for picking up salary within the season and incentives which don't payout until the end of the season, it's pretty unlikely that any team will pay much in taxes aside from the Yankees as has been the case most years.

It's an amazing coincidence, I'm sure, how the luxury tax level has worked as a de facto soft cap for everybody but NYY.

[Rough Carrigan]

To your point:

Actually, the difference between the yankees and the #2 payroll ($71.3 million) there is about the same as the difference between the #2 payroll and the #22 payroll.

Edited by Rough Carrigan, 02 April 2008 - 11:01 PM.