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The New Revenue in MLB Didn’t Lead to a Big Increase in Payrolls

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All off-season there was discussion about the new money that was coming into Major League Baseball. The amounts vary, but most sources had each team getting an additional $20 M in revenues each year, starting in 2014. This led to the idea that teams would be seeing a major increase in payroll starting in 2014. USA Today has released their Opening Day payrolls for the 2014 season, which allows us to compare those payrolls to the 2013 totals. Below is a chart with all of the 2013 and 2014 payrolls, along with the difference for each team, and the average totals per team each year.

TEAM

2014

2013

DIFFERENCE

Angels

$128,046,500

$127,896,250

$150,250

Astros

$44,985,800

$22,568,300

$22,417,500

Athletics

$77,220,900

$69,164,500

$8,056,400

Blue Jays

$129,427,700

$117,527,800

$11,899,900

Braves

$97,855,673

$89,778,192

$8,077,481

Brewers

$102,724,338

$83,466,944

$19,257,394

Cardinals

$108,020,360

$115,222,086

-$7,201,726

Cubs

$74,546,356

$104,304,676

-$29,758,320

Diamondbacks

$111,798,833

$89,100,500

$22,698,333

Dodgers

$241,128,402

$216,597,577

$24,530,825

Giants

$148,239,158

$140,264,334

$7,974,824

Indians

$82,500,800

$78,266,400

$4,234,400

Mariners

$89,539,642

$72,031,143

$17,508,499

Marlins

$41,836,900

$36,341,900

$5,495,000

Mets

$84,281,011

$73,396,649

$10,884,362

Nationals

$134,366,735

$114,056,769

$20,309,966

Orioles

$105,084,121

$90,993,333

$14,090,788

Padres

$89,881,695

$67,143,600

$22,738,095

Phillies

$179,521,056

$165,385,714

$14,135,342

Pirates

$77,845,999

$79,555,000

-$1,709,001

Rangers

$132,491,596

$116,330,100

$16,161,496

Rays

$82,035,490

$57,405,272

$24,630,218

Red Sox

$154,380,395

$150,655,500

$3,724,895

Reds

$112,378,771

$107,491,305

$4,887,466

Rockies

$99,579,071

$71,924,071

$27,655,000

Royals

$90,481,500

$81,491,725

$8,989,775

Tigers

$163,078,526

$148,414,500

$14,664,026

Twins

$84,912,500

$75,802,500

$9,110,000

White Sox

$89,551,982

$119,073,277

-$29,521,295

Yankees

$208,830,659

$228,835,490

-$20,004,831

AVERAGES

$112,219,082.30

$103,682,846.90

$8,536,235.40

On average, teams spent about $8.5 M more this year in payroll on Opening Day. The Pirates are one of the teams below that average when you look at their total team payroll. However, the USA Today figures show the full salaries of players like Wandy Rodriguez and A.J. Burnett, without deducting the money a team is receiving from another team. So the above doesn’t show the out-of-pocket expenses.

The Pirates received $13.5 M from the Yankees and Astros last year for Burnett and Rodriguez. So while their total team payroll was $79.6 M, they were actually spending $66.1 M. By comparison, this year the Pirates are only receiving $5.5 M from the Astros. So while their total payroll is $77.8 M, they are actually paying $72.3 M. In total, the Pirates are spending about $6 M more out-of-pocket on Opening Day in 2014, than they were on Opening Day in 2013. My figures had them at $67 M on Opening Day last year, and $74.7 M this year, although that 2014 number will go down once they trade Vin Mazzaro. After Mazzaro is traded, the total difference would also come to about a $6 M increase in payroll.

You might point out that other teams above could also run into this scenario, where USA Today doesn’t factor in money paid to other teams, or money received from other teams. However, even if USA Today calculated that, the average payroll numbers would be the same.

What this means is that payroll across the league didn’t take a huge spike to the tune of $20 M per team. The actual increase was $8.5 M per team. One other thing to consider is that payroll naturally goes up. From 2012 to 2013, the average payroll in baseball increased by $5.7 M per team. From 2011 to 2012, the average increase was $5.1 M. So the average increase in payroll this year is only about $3 M more than the average increase in payroll from the last two years.

The idea that teams were going to receive $20 M and spend all of that in year one always seemed ridiculous to me. It’s like spending your entire paycheck on Friday, just because you have money to spend. Sure, you’ve got another paycheck coming next week, but this type of “spend it if you’ve got it” approach usually leads to two things:

1. Spending X amount each period, even though some periods don’t warrant X amount to be spent.

2. The inability to save for bigger long-term expenses.

While teams will be receiving a flat rate each year, the more likely scenario is that the spending of this revenue won’t follow a flat line. Most teams will spend varying amounts each year, and over the long run the expenses will continue to trend up. But as we saw with the Opening Day payroll, the increase isn’t going to be massive right away.

Tim Williams
Tim Williams
Tim is the owner, producer, editor, and lead writer of PiratesProspects.com. He has been running Pirates Prospects since 2009, becoming the first new media reporter and outlet covering the Pirates at the MLB level in 2011 and 2012. His work can also be found in Baseball America, where he has been a contributor since 2014 and the Pirates' correspondent since 2019.

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