By:  Holly Horning

How slow has this Hot Stove season been? So “hot” that the trending discussions this past week have centered around teams’ payrolls. Teams who are spending too much, teams who are spending too little and teams, well, we’re not quite sure what they’re doing.

What was once kept in the dark is now being brought out in the open. And it appears that these are attempts by some within the industry to “out” certain teams for their bad, even inappropriate financial ways.

The first concern centers around revenue-sharing, a strategy that is supposed to allow smaller-market teams to stay competitive against teams with larger payrolls. These organizations receive millions of dollars which are supposed to be added to their payroll. Only except when they aren’t.

The Oakland A’s are famous for their “moneyball” ways and constant whining about being limited as a small-market team. They receive over $40 million from revenue sharing. The only problem is that investigations have found that they don’t use that $40 million towards signing better players. Their payroll has remained essentially static over the years and ranks them among the lowest in MLB.

The question to ask is exactly where this money is being spent.

But they have now been overshadowed by the Tampa Bay Rays, who receive over $55 million in revenue sharing. The only problem is that their own payroll isn’t much over that amount and hasn’t gone up in years. It’s actually lower than Oakland’s. And you wouldn’t be remiss if you noticed that their payroll matches what they receive in revenue-sharing. Shouldn’t they be spending upwards of $100 million on their payroll?

And it was enough to tick off someone with knowledge of the recent CBA vote to release information that the Rays voted against ratifying the agreement. The reason? The owner, who essentially is getting other teams to foot the entire bill for his payroll, said that revenue sharing didn’t go far enough to help smaller market teams. Yes, he really did say that.

But on the other end of the spectrum are the teams who can’t stop spending. Recently, MLB put 9 teams on notice (including the Tigers) that their free-spending ways had become dangerous to their equity-to-payroll ratio. There is a contract between owners and the Commissioner’s Office about debt which requires owners to comply with maintaining financially-healthy teams.

The Dodgers by far have the highest payroll (and debt) of 30 teams and also the highest future committed payroll (followed by the Tigers). The Commissioner’s Office issued a mandate that they cut payroll this winter and shed some $100 million by 2018.

But what did they do this off-season? They signed 3 new players for a combined $192 million.

What an interesting year 2018 will be for them. Either MLB can take over their finances or potentially there will be a whopper of a fire sale.

And then you’ve got another team. A city with a name that starts with “D” and without a World Series flag in decades. An elderly owner who has signed way too many of Scott Boras’ clients and has some of this sport’s most expensive players on his team. And also warned by the Commissioner that they need to cut payroll.

Only we’re talking about the District of Columbia, not Detroit. Lerner instead of Ilitch. And a team that hasn’t learned from the experiences of several teams, including Detroit, that you can’t buy your way into the World Series. There’s no real fast tracking in this sport.

The parallel between Detroit and the Nationals is uncanny. Some of baseball’s longest and most expensive contracts. A bad bullpen, one of baseball’s best rotations and too many injuries to name just a few.

And they are still going for it. Another star acquired in exchange for a number of promising players, some proven – at a cost of no remaining depth at a number of positions. And no tv contract to help them get out from under the increasing financial mess because another team controls the shared tv arrangements.

So how will our team, the Tigers, fare in finding their financial freedom? That has yet to be determined. It could truly be an effort to recognize that buying a team hasn’t worked. Or it could be the warning given by MLB that inspired the move. Even an attempt to avoid becoming the infamous, aging and expensive Phillies. Or, as written about in these blogs extensively, the introductory salvo as they prepare to be sold.

Or, it could be all of the above. We may not know the answer this winter, but things may become more clear by the end of 2017.


  1. In the case of Tampa, why beef up the payroll if they are stuck in an awful ballpark lease in an awful stadium? Correct me if I’m wrong, Holly, but aren’t the Rays stuck in their lease at The Trop till at least 2027? If that’s the case then keep trading and drafting and hope another 2008-team comes along.


    • Hi, Chuck – Good questions but the point is that teams are supposed to use the proceeds they get from revenue sharing towards getting better rosters. In Tampa’s case, the owner is only using the revenue sharing essentially as his entire payroll and he’s removed his own money He just substituted one pot of money for the other instead of adding to his payroll. Thanks for keeping the conversation going! – Holly


  2. You mentioned that MLB monitors the teams equity-to-payroll ratio. Are you saying that the teams share their Balance Sheets with MLB along with various revenue and expense items? Wow! That is a level of control I never knew existed, if that’s the case.


    • Hi, Sprocket – Yes, they do. It is in baseball’s best interest to ensure that all teams remain healthy. However, none of this info is shared with the outside or with other teams – let alone fans. In this case with the Dodgers, the Commissioner’s Office has the full authority to control them if payroll isn’t cut – from having to OK any and all expenditures, approve any trades or signings and all the way down to taking power away from those who run the team and bring in their own people to run the club. Thanks for keeping the conversation going! – Holly


  3. Yes sprocket in one form or another they do. With only 30 business they can’t afford several team collapses like baseball had in the 70’s with the A ‘s and Twins owners going under while yankee’s, dodgers,angels and others overspent. Some form of equilibrium needs to be maintained.


  4. Holly, Re: Sprocket’s posts. Didn’t MLB actually run the Montreal Expos for a season or part of one? Maybe it was another team, but I thought they had stepped in and taken control at least once.


    • Hi, Herbelicious – It’s a complicated tale. The Expos had a number of problems with only a small one related to payroll which was more of an escalating salary issue and effects of the strike more than anything else. There was an ownership battle and the team was sold to Loria who soon afterwards sold the team to MLB and made a profit which he then used to buy the Marlins. Ain’t capitalism great? Thanks for continuing the dialog! – Holly

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  5. When Garner mng. The tigers they were financed by a Japanese firm that only handled very badly run teams in conjunction with MLB. Part of that the club had to let them and MLB choose mng. ‘advisors’. At the time Dave d. Filled that roll. Some time later he was named full time gm. Officially he was a member/consultant for MLB.

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  6. Firstly, your comment that “You can’t buy your way into a WS” isn’t true. Of course there’s no guarantees but the Tigers got there in ’12 with the help of a fairly large payroll. Also, I’m confused as to what you mean by the statement that the Nationals have no tv contract. A little elaboration might explain.


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