The Right Time to Spend

Dejan Kovacevic did an interview with Pittsburgh Pirates’ owner Bob Nutting, which was up on the Post-Gazette site yesterday.  In the interview, Kovacevic asked the following question about payroll, with the following response:

Q: So, your expectation remains that, if this group becomes competitive, you will be able to someday spend at the level of the Brewers and Reds?

A: I think that’s expected. I think it’s rational. I think it’s where Pittsburgh needs to be.

And we’re in that trajectory now. As you see our current core of players — one I have faith in — as they mature, the dollars are going to increase. If that needs to be supplemented, we need to have the flexibility to be able to do that.

I could sit here and debate all day about whether or not Nutting will spend when the time comes.  Charlie at Bucs Dugout did a great analysis on the subject, and I really couldn’t add anything else, except to point out that the loose player at the poker table who gets called on a big bluff never seems to consider that HE may be the one who is the bad poker player at the table (you’d have to read the article to know what I’m talking about).

Rather than discuss whether or not the Pirates will spend at the appropriate time, I decided to focus on exactly when that time would be.  Many felt we should have kept the 2008 team together, spending money to add pitching to the offense we had.  However, that team, even with the good offense, was still 48-55 at the time of the Xavier Nady trade.  So when is a good time to spend?  After a team posts a winning record?  After the attendance takes a spike?  To figure this out, I went back to look at some of the “small market” teams that have had recent success, to determine when they upped their budget to the current $75 M range that Pirates fans hope to see.

First I want to mention that all payrolls are based on the Opening Day 25-man rosters.  I prefer the end of the year 40-man roster payrolls, but I could only find those going back to the 2002 season.  All payroll and attendance figures are in millions.  We’ll start with the Milwaukee Brewers…

The key event for Milwaukee was the move to Miller Park in 2001.  From that point we saw the average attendance go from 1.49 M fans from 1995-2000, up to 2.45 M fans from 2001-2009.  However, the attendance was really helped by a spike from 2005-2009, and that was helped from the success the team had during that time span.  Milwaukee’s success started in the 2002-2003 season.  They drafted Prince Fielder in 2002.  They traded Richie Sexson after the 2003 season.

Milwaukee’s highest payroll from 1995-2005 was in 2002 at $50.29 M.  That saw a spike in the 2006 season, where the payroll jumped to $57.57 M on Opening Day.  It’s probably not a coincidence that this followed an 81-81 season, which saw the attendance at 2.21 M fans.  The record shows that Milwaukee didn’t up the payroll until after their 81-81 season.  With guys like Prince Fielder and Ryan Braun on the way in the next few seasons, it was clear they were close to competing.

Next, the Cincinnati Reds…

The Reds haven’t had a winning season since the year 2000.  They have been close on a few occasions, and I highlighted the 2003 season because that marked their first year in Great American Ballpark.  Cincinnati upped their payroll to the $70 M range after the 2006 season.  They signed Bronson Arroyo and Aaron Harang to big extensions before the 2007 season.  They also had guys like Adam Dunn, Ken Griffey Jr, and Eric Milton in the final years of big money deals.

The Reds, like the Brewers, upped their payroll following a season in which they appeared to be close to competitive.  Unlike Milwaukee, the Reds didn’t have the same success in the 2007-2009 seasons.  The spending may have backfired in that regard, as Cincinnati has been rumored to be trying to unload the big salaries of Arroyo and Harang this off-season.

Next up, the Cleveland Indians…

Cleveland is a great comparison, because it’s the team Neal Huntington came from.  If you’ve read the book “Dealing” by Terry Pluto, you’ll notice that the Indians’ rebuilding plan in 2003 is very similar in many ways to the current rebuilding plan the Pirates are under.  Cleveland benefitted greatly from a consecutive sellout streak in the mid-to-late 90s, which allowed them to spend big money on payroll.  When that ended, they had to take a new approach.

The 2002 season started their rebuilding process, when they traded Bartolo Colon in June to the Montreal Expos in a deal that brought them Grady Sizemore, Cliff Lee, and Brandon Phillips.  Three years later, Cleveland saw a 93 win season.  The next year their payroll jumped to $56 M, and has gone up every year since then.  If you’re putting the Pirates on the same timeline, with their 2008 season being the 2002 season for Cleveland, then you’re looking at 2011 as the goal for the Pirates having a “2005 Indians” breakout year.

Next up, the Tampa Bay Rays…

Tampa tried the big payroll approach in 2000 and 2001, but that quickly went way down after two horrible seasons.  I marked the 2005 season because that was Scott Kazmir’s rookie season.  It was also a breakout season for Carl Crawford.  They added other key pieces in following years, such as calling James Shields up in 2006, drafting Evan Longoria in the 2006 draft, and signing Carlos Pena as a minor league free agent in 2007.

The Rays surprised everyone in 2008, opening the year with a $43.82 M payroll.  In 2009 that opening day payroll jumped to $63.31 M, thanks in part to off-season additions like Pat Burrell for $8 M a year (a move that didn’t turn out to be worth the price).  It will be interesting to see how much longer their payroll stays in the $63 M range, considering they posted back to back winning seasons, and considering that Carl Crawford, Evan Longoria, and James Shields will only get more expensive from here on out.

Next up, the Oakland Athletics…

Oakland is one of the two more successful small market teams over the long term, which means I had to go back to 1998 as my year of significance.  That’s the year Billy Beane was promoted to the role of General Manager.  The A’s posted six winning seasons in a row from 1999 to 2004, before finally seeing their opening day payroll touch the $60 M range.  Their biggest spending year was the 2007 season, in which they opened with a $79.37 M payroll.

For the most part, Oakland has kept their payroll low, even in the 2001-2009 years where they averaged 89 wins a season.  That’s in part due to a low attendance.  It should be noted that Oa

kland has averaged $59.57 M from 2003-2009.  That’s similar to the Brewers, Reds, and Indians over that time frame.  The only difference is that Oakland has been consistently spending in the $50-60 M range, while the other teams saw their averages spike from bigger spending in recent years.

Finally, the Minnesota Twins…

Minnesota joins Oakland as one of the more successful long term small market teams.  I marked the 1999 season because that was Torii Hunter’s rookie season.  Minnesota also had rookies like Cristian Guzman, Jacque Jones, and Corey Koskie, plus young guys like Eric Milton and A.J. Pierzynski, who would help their rebuilding process.

The Twins posted a winning season in 2001, with an Opening Day payroll of $24.13 M.  In 2002 the Opening Day payroll jumped to $40.23 M, and went up to the $50-70 M range from 2003-2009, topping out at $71.44 M in 2007.  Like Oakland, the Twins didn’t see many big jumps in to the $70-80 M range, but kept their payroll in the $50-60 M range consistently from 2003-2009, all while averaging 88 wins a season.

Just for fun, the Pittsburgh Pirates…

I marked the 2001 season for obvious reasons, the first year in PNC Park, but the truth is that this whole time span tells the same story.  The Pirates had horrible records, horrible attendance, and low payrolls.  The attendance was down because of the losing.  The records were down because of poor management, and the payrolls saw a few spikes, but were generally down.

The big factor here is the attendance.  People point to Milwaukee as what the Pirates should do, but Milwaukee drew an average of 3 M fans the last three seasons.  The Pirates have averaged 1.78 M fans in their time in PNC Park.  Even when the park first opened in 2001, the attendance was only 2.44 M.  Granted, the low attendance comes from the losing, but how would a winning team draw?

The 2001 season marks a franchise record for attendance.  The only other two instances in the Pirates’ history where they drew over 2 M fans came in 1990 and 1991, when they were winning 95+ games a year, and even then the attendance was only barely over 2 M fans.  As someone who went to Three Rivers Stadium, I can say that it doesn’t have the same draw appeal that PNC Park does.  That’s like saying hamburger isn’t the same quality of meat as Kobe beef.  However, to get 3 M fans, the Pirates would have to sell out every game of the season.  I just don’t see that happening.  I think a winning season would produce a repeat of the 2001 season, around 2.5 M fans, and that would be the max.  Therefore, I don’t see the Pirates spending $80 M a few seasons in a row like Milwaukee has done recently.

So where does that leave the Pirates?  The best case scenario would be a situation like Oakland and Minnesota.  Both teams have have a long run of success, and haven’t really dropped off significantly from that success.  Oakland has lost three years in a row, but they’ve been rebuilding in those years, and even so they’ve won 75-76 games per year.  Minnesota had one losing season from 2001-2009, and that was a 79-83 season in 2007.  Both teams see their payroll in the $50-60 M payroll range consistently, and both jumped up to the $70-80 M range on one occasion.

A conservative scenario would be a situation like Cleveland or Milwaukee.  These teams have shown success, but at the same time have had to stop for a rebuild after a few seasons.  It’s too early to tell if that’s really the case.  Minnesota and Oakland have certainly rebuilt in their long run of success.  They just managed to avoid falling to a 65-97 type year like we saw in Cleveland in 2009, following the trades of C.C. Sabathia, Casey Blake, Cliff Lee, and more.  You commonly see people criticize this approach as a “short window of time where the team has to compete before rebuilding again”.  If done properly, the “rebuilding again” period can be a year or two, as the foundation of a rebuild, a strong farm system, should already be in place.  That’s why Minnesota and Oakland have avoided 60-70 win seasons the last ten seasons.  It’s too early to say whether that will be the case for Milwaukee, Cleveland, or Tampa Bay.

So the big question is, when is the right time to spend?  Milwaukee spent after an 81-81 season.  Cincinnati upped their payroll after an 80-82 season.  Cleveland saw a spike after a 93 win season.  Oakland and Minnesota have stayed consistently in the 50-60 M range, but have jumped to the $70 M range.  Tampa Bay jumped to $63 M following their 97 win season in 2008.  The simple answer to all of this is that the Pirates need to spend once the team shows they’re competitive.  That doesn’t mean 48-55 with a good offense that will be gone in a year to free agency.  That means a .500 or better record in 2011 with players like Pedro Alvarez, Andrew McCutchen, Jose Tabata, and Brad Lincoln, who will be with the team for at least three or four more years.

At that point, the Pirates need to spend to guarantee guys like Alvarez, McCutchen, Tabata, and Lincoln (or whoever else is leading the team to success) remain with the Pirates up until free agency, and maybe even beyond free agency.  However, first things first, the Pirates need to get to that competitive level.  Wanting the end result from teams like Milwaukee and Cincinnati (the end result being the big payroll) without the work that led to that (the initial signs of being competitive) is kind of like wanting a reward without having to do the work.

So will Nutting spend to keep the team together when that .500 or better season comes along?  Some can speculate that he’s telling the truth in the DK interview.  Others can call him a lying snake and refuse to trust anything he says.  Some may just wait and see what happens.  What we do know is that the Pirates haven’t been in a position like Milwaukee or Cincinnati to justify a payroll increase, and until that point comes, Nutting is basically untested.  This means that no one can conclusively say whether he is lying or telling the truth about spending when that time comes.  We can only hope he’s telling the truth.

Sources: USA Today Salaries Database for Opening Day Payroll Figures, Baseball Almanac for Attendance Figures, Baseball Reference for Won/Loss Record Figures.

Tim Williams

Author: Tim Williams

Tim is the owner and editor in chief of Pirates Prospects. He started the site in January 2009, and turned it into his full time job during the 2011 season. Prior to starting Pirates Prospects, Tim worked with AccuScore.com, providing MLB, NHL, and NFL coverage to various national media outlets, including ESPN Insider, USA Today, Yahoo Sports, and the Wall Street Journal. He also writes the annual Prospect Guide, which is sold through the site. Tim lives in Bradenton, where he provides live coverage all year of Spring Training, mini camp, instructs, the Bradenton Marauders, and the GCL Pirates.

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