PROBLEMATIC, PERPLEXING, PUZZLING AND PENNY-PINCHING PAYROLLS

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.