Dead Money

Every season some teams spend money on players that are going to be on other team’s rosters. For example, according to Cots Contracts, the Red Sox will be paying $9.25M for Julio Lugo to play for the Cardinals. I thought it would be interesting to see which teams had the most “dead money” on the books for 2010. The list, sorted by % of payroll devoted to “dead money” is as follows (all data from Cots)

Team           Dead Money       % of Payroll
Blue Jays      $16M                23%
Dodgers        $16.6M              16%
Angels         $16.1M              14%
Rangers        $6.8M               10%
Brewers        $8.5M               10%

The rest of the list can be found here.

Outside of the Blue Jays, the teams at the top of the list all expect to be in their respective pennant races for a large portion of the season (and the various projection systems expect it too). However, I will also point out that, at least according to those same projections, the Angels, Dodgers, and Brewers appear to be chasing the leaders by a couple of wins in their divisions and this extra money could help close or erase that gap.

The fact that the dead money leaders are going to be in the mix is not entirely surprising as “dead money” is an indictment of past contractual transgressions and does not necessarily reflect on the current management (see Mariners and Yuniesky Betancourt). Also, one years worth of information is hardly enough to draw conclusions from no matter how the teams fell out on the list, but I still found the list interesting.




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Steve's ramblings about baseball can also be found at Beyond the Box Score and Play a Hard Nine or you can follow him on Twitter


28 Responses to “Dead Money”

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  1. redsauce says:

    There looks like a minor discrepancy, at least with the 2010 Red Sox. The chart says 3.35 total is owed in dead money, but the spreadsheet on the 2010 Sox shows something different (.5 for Gonzalez, 9.25 for Lugo, 1M for Wagner, and -7.15 for payments from Milwaukee via Seattle for Bill Hall). This equals 3.6 total, not 3.35. Any idea about the discrepancy or is my math just horribly wrong?
    Thanks

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  2. Dave says:

    I think it would be interesting to see all dead money, deferred payments, payments to players no longer on the roster, payments to players expected to be on the DL all year.

    As for your list, it seems odd to list teams with dead money players from other teams in the negative. The benefit inures directly to the player, and while there is some benefit to the team it wouldnt effect the operational budget.

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    • Steve Sommer says:

      I definitely agree with your first paragraph. I was thinking about doing something similar in the future. I also see your second point, especially from a budget perspective. I was thinking about making a comment that you might not want to be very “negative” either, as that likely means you’re taking other’s castoffs… but wasn’t prepared to really draw any conclusions

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  3. redsauce says:

    Dave,
    I am confused by your phrase ‘the benefit inures directly to the player, and while there is some benefit to the team it wouldn’t effect the operational budget.’
    A team certainly takes into consideration a Bill Hall-type player if it will only cost you ~2M as opposed to the total ~9M of his contract.
    It doesn’t give you 7M of free money to play with, unless you already have that in your budget, but it does give you spending flexibility if you only have ~9M to play with. And isn’t spending flexibility really what matters, not necessarily the number of what your budget is? The negative simply means that you have (possibly) that amount of money to spend on other players, provided your budget allows for it.

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    • redsauce says:

      I’m reading my own comment and am not sure if it will make sense. I think it’s just a different way of looking at it, but basically saying the same thing. Rhode Island is neither a road, nor an island. Discuss.

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    • Dave says:

      The benefit I see to a team has more to due with market value vs. perceived value vs. actual salary. Here, we’re dealing with veteran players, and in many cases they perceive their value high enough to place themselves out of a job – like Smoltz this offseason for instance. In these cases, the teams receiving the player get them at a discount of not only their salary, but also likely a value lower than the player would agree to on the open market.

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  4. Basil Ganglia says:

    In Sesame Street style, one of those obligations is not like the others.

    While the Dodgers are paying Andruw Jones, those payments are a restructuring of his contract. His original contract would be concluded, save for the restructuring.

    Or put differently, the payments the Dodgers are making to Jones are not for his current services. That’s a different situation than for a guy such as Bill Hall, whom Milwaukee had under contract for the 2010 season.

    It seems to me that if you’re going to include situations such as Andruw Jones as dead money, then you should include all deferred compensation payments, including payments to players who are retired.

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  5. Sandy Kazmir says:

    Interesting stuff Steve, another indictment of how awesome Friedmanster and the boys are. I’m curious if this includes option buyouts?

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  6. For the Brewers, it looks like you’re counting Hall’s $7.15 mil, Loopers $1 mil, and David Weathers’ $400K. That’s fine, except the Looper money is a buyout on his contract (and I suspect Weathers’ is too). That’s not exactly money going to other teams. It’s certainly “dead money” in that they get no value for it (besides the cancellation of the negative value he almost certainly would’ve given them), but it doesn’t exactly fit in the definition you gave.

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    • Steve Sommer says:

      You’re right on all counts. Poorly defined in the post, should have stated that I included buyouts and/or stated that it’s paying to guys not on their roster. Thanks

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  7. misc says:

    You missed Eric Byrnes on the Dback’s payroll

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  8. d says:

    yippeee the sox will vault to the top of the list when they trade Mike Lowell

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    • Dean says:

      Even if they were to pay 100% of his contract for him to play for another team, it still wouldn’t get them into the top 5.

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  9. snapper says:

    I think it would be interesting to include players who’s performance has cratered in the definition.

    I mean most of Vernon Wells contract is “dead money”. Same for the $4.5M the Yankees are paying Kei Igawa.

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    • joser says:

      That gets into judgement calls about how “dead” Vernon Wells actually is. If you’re going to do that, you might as well just add up the WAR $ values here at Fangraphs for each of the rosters and then compare that to the actual payroll (including dead money and anything else that might be on the books, like deferred payments to long-gone players). That would tell you which teams are making the most effective use of their current payroll dollars (and which are living with the legacy of past ineffectiveness).

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      • Jason B says:

        As a Jays fan, the answer to the “how dead Vernon is” question, can be framed in multiple choice format:

        (a) very
        (b) as a doornail
        (c) like Johnny Maestro
        (d) all of the above

        I’m so, so proud that our organization is winning *something*. FINALLY!

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  10. Rob G. says:

    I believe the Cubs number is they are receiving $2.5M.

    Giving $1M to A’s for Aaron Miles and receiving $3.5M from Mariners for Carlos Silva.

    The $500K for Luis Vizcaino is a buyout on his 2010 option they were still on the hook for after releasing him.

    Buyouts are generally considered part of the original contract and although I’m not certain of this, believe are payed in a lump sum when exercised near the end of last season and not payed out over the course of the current season. And how they are accounted for by each club probably varies.

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  11. Tim In Missouri says:

    Are you using the Cubs and Mariners paying Silva and Bradley as cancelling each other out? If not, then the Cubs obligation for Bradley should be much higher. And as a Cards fan, I think sometimes you have to get rid of guys…even if you have to eat salary to do so. I would like to see (since I’m not good at math just good at appreciating other’s hard work) how teams do on payroll, division standing change, and draft/Free Agent/Arbitration/etc. spending after that dead money comes off the books. I think the Cardinals freed up around $22MM with the departure/contract expiration of Glaus, K. Greene, and Kennedy.

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  12. Oliver says:

    For the Blue Jays, the dead money is in BJ Ryan’s buyout and who else? Did they eat money for Rolen?

    If the Vernon Well’s contract isn’t considered “dead” money, then what the heck is it? Junk bonds? AIG stock?

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  13. pft says:

    I don’t see how Bill Halls 7 million (transferred by Seattle) off sets the dead money the Red Sox have to pay out to other players. Maybe it makes sense if Hall was expected to provide close to 8.4 million in value (Hall probably would not receive more than 1 million on the open market today).

    The Red Sox have some more dead money coming with Lowell. Excluding Hall, at the end of the day, the Red Sox could have close to 20 million in dead money. Thats 30% or more of 7 teams 2009 payrolls.

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  14. TedWilson says:

    Amazing, but this doesn’t even include Jeff Suppan for the Brewers. His $14 million. BARF

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