While a few more moves will certainly occur here and there before the start of the season, team payrolls for the 2016 campaign are taking shape. After adding in the Baltimore Orioles’ signing of Pedro Alvarez, we have a pretty good idea of how the Opening Day payrolls will appear. Much of the offseason has been spent discussing the qualifying offer and “tanking,” but those issues are related to the larger issue of team spending. Revenue and payroll have been growing, but based on the team payrolls, it looks like the growth we saw over the past few years slowed down this offseason.
To determine Opening Day payrolls, I took the raw data from Cot’s contracts and added in minimum salaries to reach the 25-man total needed to field a team. Dead money paid to other teams was included. Over the next month, as players hit the disabled list or veterans with minor-league contracts earn their way onto rosters and get guaranteed deals above the minimum, the team payrolls will likely rise by a small amount, perhaps a few million dollars per team, but will not change the overall outlook by team.
Below is the current Opening Day payroll information for every team. To nobody’s surprise, the Dodgers lead the way.
Update: The Minnesota Twins have not been contracted and are included in the chart.
Also not a surprise: the Tampa Bay Rays bring up the rear. The average payroll right now is $128 million, and the median is right up there at $126 million. However, right after that median, there’s a major dropoff. The Chicago White Sox come in at $125 million, but after them, there is more than a $20 million drop to the Colorado Rockies. The top-four teams have a higher combined payroll than the bottom-ten teams combined, but that tier above $120 million speaks somewhat to the Royals’ success and the second wild card. Teams who might project for 75-80 wins can make a move or two and put themselves in contention for the playoffs, where anything can happen.
There are teams which enter the season with a payroll below $100 million and yet a real chance of succeeding in 2016. The Pittsburgh Pirates, Houston Astros, and Cleveland Indians are all fielding good teams, for example, while the Arizona Diamondbacks, Oakland A’s and Tampa Bay Rays each possess the potential to compete if things break right. Payroll does not lead directly to wins — talent does — and all those clubs have assembled a sufficiently strong collection of talent to remain competitive with teams that feature much larger payrolls. Despite Arizona’s big winter, their payroll still sits among the bottom third.
For those curious if the Dodgers have spent a billion dollars in payroll over the last four seasons: yes, they have. The chart below depicts Opening Day spending over the last four seasons. Including end-of-year numbers and luxury tax, the Dodgers are easily over a billion from 2013 to 2016.
Decreasing the Dodgers’ payroll by one-third would drop them only to fourth place overall. If you took that remaining one-third and made it a team, it would still sit ahead of the A’s, Astros, Rays, and Marlins.
Big-money teams tend to get a lot of attention, but rebuilding teams have gotten some attention as well. And those that received the most are all, predictably, near the bottom of the team-payroll rankings. Atlanta, Cincinnati, Milwaukee, and Philadelphia have all made organizational changes in an attempt to rebuild, and none possess a need for higher-priced players who could add a win here or there. The graph below illustrates the change in payroll from last year.
Much of the Dodgers’ relative “decline” is simply the result of no longer paying Matt Kemp and Dan Haren to play for other teams. The Dodgers will still be paying certain players to play for other teams this season — just not nearly as much as last year. The Phillies started the process of rebuilding over the last year, trading all their expensive assets for prospects. It was only two seasons ago that the Phillies had the third-largest payroll in baseball. It wasn’t a winning payroll, however, and this change was necessary to help them look to the future and make their rebuild as quick as possible. The Braves also appear in a good position to make their rebuilding brief while the Brewers and Reds could face a more difficult task. The Nationals had multiple free agents turn down backloaded deals as they try to work through their television issues with the Orioles, who had the second-largest increase in payroll over the last year.
To compare those figures over a longer-period, here is the 2016 payroll compared to the average payrolls of the last three seasons.
The talk of “tanking” has picked up this offseason as some clubs have curtailed spending, but those teams are less engaged in what one might consider tanking than the two clubs who have changed their spending more than any other team: Chicago Cubs and Houston Astros. The Cubs went out and got Jason Heyward, John Lackey, and Ben Zobrist, supplementing their young core. The Astros’ payroll was a laughable $26 million at the start of the 2013 season. The Astros and Cubs both engaged in long-term rebuilding efforts, working always with the knowledge that they wouldn’t be competitive for some time. Those efforts paid off last year, and with increased spending power, those teams are now in a great position to succeed for a while.
As for the teams that did stop spending this year and the number of free agents like Dexter Fowler and Ian Desmond who were forced to take smaller deals, payroll growth has slowed compared to the last few seasons. This past winter’s free agent class was incredibly good and very well paid compared to prior years, but they didn’t make a huge dent in overall payroll. Total Opening Day payroll increased by close to 8% from 2013 to 2014; and then 9% from 2014 to 2015. The preliminary figures above account for a raise in Opening Day payroll of less than 2%. Even adding $100 million (more than $3 million per team) to the figure for players going on the disabled list and veterans on minor-league deals who make the team, the difference over 2015 is still under 5%.
Spending on the top players increased this offseason, but teams choosing to rebuild when presented with no other options — as opposed to basketball-like tanking — has resulted in more modest growth than the sort observed over the past few years. With the Collective Bargaining Agreement up at the end of this season, this might have been an unusual time for a slowdown of overall spending when revenues have shown no signs of slowing.
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