MLB payroll details, thoughts and analysis.
Along those lines, you will notice that many of the more "minor" roster moves (DL stints, DFAs, callups, etc.) have not been updated on the site. I had originally planned to keep up with them on a daily basis, but it just has not proved feasible. I still plan on catching up later in the year, but for now, just keep in mind that the rosters are somewhat dated. The impact on actual payroll should be small, however.
Without further ado, the updates:
Many thanks go out to Chris Kahrl, of Baseball Prospectus; without her fabulous Transaction Analysis columns, I would not have been able to catch up as easily as I did on the comings and goings of the first half.
In addition, for any player on a 25-man roster who wasn't in the AP Wire story, I've assumed a MLB minimum salary of $300,000. For any player on a 40-man roster without an MLB contract, I've assumed the minor league minimum of $50,000.
This also means that the Payroll Leaderboard is up to date for the start of the 2004 season:
- Two teams (Yankees and Red Sox) are projected to pay the luxury tax this year.
- Top 5 in actual 2004 payroll: 1. Yankees ($184m) 2. Red Sox ($131m) 3. Angels ($118m) 4. Three way tie at $93m between the Cubs, Phillies, and Dodgers.
- Last in 2004 payroll? The Devil Rays, at $27m, eke out the Brewers ($29m).
- Total paid to MLB players in 2004? $2.1 billion
- The average team payroll checks in at $70m, but only 11 teams are above that level. The median payroll is $63m.
- The Yankees payroll is 2.6 times the league average payroll. The Devil Rays payroll is 2.6 times less than the league average payroll.
- Scott Lucas, who has a great site for Texas Ranger information, passed on a bunch of great information, including the details of Mark Teixeira's contract, and the details of Michael Young's deal.
- Mike Hunssinger caught a mistake from last year - I had missed the deferred money included in the deal Ivan Rodriguez signed with the Marlins last year - I've adjusted their payroll accordingly.
- Joe Dimino passed along a great link with all of the details of IRod's signing with the Tigers.
- Matthew Rhodes, Brian Durack and Greg Padgett all checked in with the the details of Eric Chavez's signing with the A's.
- And lastly, Mike of East Coast Agony dropped by with the details on the Roger Cedeno trade (from ESPN.com): "St. Louis will pay Cedeno $1 million over the next two years. As part of the trade, $8 million of the money owed Cedeno was converted to a bonus, which will be deferred for two years with no interest and then at 5 percent interest annually. The Mets will pay the Cardinals an additional $1 million". As a result, the Cardinals don't get hit with any money against the luxury tax, and only have to pay Cedeno $1m for two years of service.
- The Angels inked Garrett Anderson to a four year extension - if anyone has seen a breakdown of the contract, please email me.
- The Expos agreed to a three year extension with Livan Hernandez.
- The Yankees signed Mariano Rivera to a 2 year extension, with an option for 2007.
- The Tigers signed Ugueth Urbina to a $3.5m dollar deal.
- The Mets exercised their 2005 option on Steve Trachsel and added an option for 2006.
Catching up on a few of the signings that I've missed over the past week or so.....first up, the Yankees brought back an old friend, inking Orlando "El Duque" Hernandez to a one year deal. Next up, the Diamondbacks locked up Brandon Webb for 3 years, while the Brewers were also busy, signing Keith Ginter to a 3 year deal and Geoff Jenkins to a 3 year extension. In addition, the White Sox came to terms with reliever Damaso Marte on a 3 year deal. Lastly, the Twins signed Joe Nathan to an incentive laden 2 year deal. They also announced the signings of the rest of their 40-man roster (as many teams have been working towards over the past week or so). I'm trying to gather as much information as possible on these signings, but by the end of Spring Training I'll assume minimum salaries ($300k for major leagues, $50k for minors) for any players I haven't located details on. As always, if you've got any particulars, email them along.
- Raul Mondesi was inked to a one year deal with an option by the Pirates - check out the option for 2005 - $8m for a 33 year old Raul Mondesi?
- Two big signings for the Cubbies - Kerry Wood and Derrek Lee. Both deals void the one-year contracts that had been originally signed to avoid arbitration. The Cub Reporter checked in with some additional details about how the signing bonuses are to be paid out on both contracts.
- The Yankees came to terms with Travis Lee on a one year deal with an option for 2005.
Brian Pogar also checked in with some corrections on Andy Pettitte and Brad Ausmus' deals with the Angels.
And last but certainly not least, Jeff wrote in to clear up a whole bunch of the orange numbers I had on my payrolls - thanks to Jeff, I've cleared up contracts on the Marlins, Mariners, Giants, Brewers, Athletics, Devil Rays, Braves, Angels, Indians, White Sox, and Twins payrolls.
I've gotten quite a number of questions recently concerning the calculation of deferred money against the luxury tax payrolls - I've added a detailed section to the FAQ which address this. At a high level (and as many readers have noted), the majority of deferred money is indeed reduced back on a present-value basis for inclusion in the luxury tax payroll. In many cases, the present-value calculation only results in a difference of a few hundred thousand dollars, so I have opted to ignore the present-value calculation for the time being. However, I will be going back around shortly to adjust these deferred money deals - especially for cases like Manny Ramirez and Alex Rodriguez, where such a large quantity of money is deferred (and the teams are over the tax threshold).
One more FAQ entry that I was remiss in not addressing sooner comes courtesy of an inquiry by Gannan745, who asked, "Where does the luxury tax money go?". In fact, the money collected as luxury tax is split out to a number of different areas. The first $5m is held in reserve, in case any adjustments need to be made to refund tax money collected (e.g., in the case of a contract buyout that isn't exercised). However, once it is determined that no refunds are due, that $5m earmarked for the Industry Growth Fund (more on this later). Of the remaining money, 50% is used to fund player benefits, 25% is used to fund baseball programs in developing countries with no high-school baseball, and 25% is put into the Industry Growth Fund (IGF).
The IGF has many different goals - promotion and marketing of MLB, international development, investments in new media technology, community service, and "enhancement in popularity and revenue growth" among teams that receive money from revenue sharing. The money allocated to these teams must be based on "investment criteria". I have not seen any reports of which teams (if any) received any disbursements from the IGF thus far - if anyone has, please let me know.
- John VonBokel checked in with a link to the detailed breakdown of Albert Pujols' new deal - the Cardinals page has been updated with the new information.
- Michael Laureano advised me of a more accurate account of Gabe White's new contract with the Yankees - thanks Michael! I've also been going back and forth with Michael searching for the details of the deferred money in Gary Sheffield's contract - if anyone has seen anything specific, please email me.
- Seth of Seth Speaks got back to me with better details on Shannon Stewart's deal signed a while back with the Twins - thanks Seth!
- DaddyRainmain dropped me a note with the particulars of Kirk Rueter's deal with the Giants.
- Jeff Euston sent me some great details on both the Royals and Cardinals payrolls - special thanks for the finer points of Edgar Renteria and Jason Isringhausen's deals - they had been hard to come by.
- Thanks to Helen Simmins-McMillin, Thomas Gorman and Christian Ruzich (of the fabulous Cub Reporter and Transaction Guy blogs) who all checked in with the structure of Greg Maddux's option year with the Cubs.
- John VonBokel pointed me towards this absolutely fantastic payroll thread on birdsonthebat.com. The majority of the detailed information on the thread came from a poster named John Bristor - many thanks to John for his wonderful research. Thanks to his work, I've been able to update the Cardinals payroll with more accurate information on a number of contracts, most notably Jim Edmonds, Scott Rolen, and Woody Williams.
- Eitan Altman sent along his extremly detailed analysis of the Padres payroll - he pointed out a few inaccuracies that I had, and sent me the specifics of a few other deals - all of the information has been updated on their payroll page. Thanks for the great work, Eitan!
- Ron Doub passed along a link to Orioles Hangout, where I was able to find some additional information on Orioles contracts - most notably the details of Javy Lopez's deal.
The Yankees also avoided arbitration with Gabe White, signing a $2.15m / 1 year deal.