MLB payroll details, thoughts and analysis.
Payrolls
Frequently Asked Questions
Where do you get your payroll information?
What scale are your salaries listed in?
Why don't all of the players have salary information?
What if I think you are missing some information and/or have listed a contract incorrectly?
Why do some players appear to be 104 years old?
What do the orange numbers mean?
What do the red numbers mean?
How come some numbers are in parentheses?
What does "Cash In/Out" mean?
What are "benefits"?
How come a team's luxury tax payroll isn't equal to its actual payroll?
How do you determine the luxury tax / salary cap value of a contract?
How is the luxury tax threshold calculated?
How is the luxury tax rate calculated?
How many players are counted against a team's luxury tax payroll?
When does Major League Baseball release the actual luxury tax payrolls?
Why don't the payrolls format correctly when I look at them?
When cash is included in a deal, how does it affect the luxury tax payroll?
How come an option year appears to be listed as a guaranteed year?
Why do you list two sets of payrolls for each team?
How do you count signing bonuses?
Why don't you have pre-2004 salary information listed?
Why do you have some non-guaranteed deals listed on a team's payroll?
Why are players who were released still counting agaist a team's payroll?
How is the actual luxury tax amount calculated per team?
How is deferred money in a contract handled?
Where does the luxury tax money that is collected go?
What does it mean when a player has "$ - " listed as his contract?
Where do you get your payroll information?
Most of the background (i.e., pre 2004) contract information was taken from this fantastic MLB contract site.
I've been keeping up on deals since then via all available sources. However, many of the details come from either
Lee Sinins' invaluable ATM reports, or from
official releases on MLB.com. Another great site for staying current with
roster comings and goings is the Transaction Guy's blog.
Lastly, I usually wait to list a contract until I've seen an official confirmation (i.e, on MLB.com). Whenever I
can help it, I won't post rumors or deals from unconfirmed reports on a team's payroll page.
What scale are your salaries listed in?
All salary figures are in millions of dollars.
Why don't all of the players have salary information?
This could be for a variety of reasons. Players who are in their pre-arbitration years usually won't
get an official contract until close to the season begins, so they won't have a contract listed until then (if I
don't hear officially, I'll probably assume minimum contracts for players like this when the season starts).
Players who are arbitration eligible will be without contracts until January/February, unless they sign earlier to
avoid arbitration. Right now, I don't put down estimations or minimums for arbitration eligible players - however, you
can find
information like that on other sites. Lastly, I may just not be able to track down information about
a particular player's contract. If you see a player that you have contract information for, I'd love to
hear from you.
What if I think you are missing some information and/or have listed a contract incorrectly?
One of my biggest hopes in publishing this information on the Internet is that baseball fans all over would
be able to write me when they had more detailed or more accurate
information that I do. I welcome any and all questions, corrections and additions, whether it's information about a
contract breakdown, a note about a player about to reach an incentive bonus, or just a question about how a particular
contract is calculated.
Why do some players appear to be 104 years old?
I use a formula to re-calcuate player ages so that they are always current with the latest posting of a team's
payroll - but if I haven't been able to locate a player's date of birth, the formula defaults to 104 years old.
What do the orange numbers mean?
Orange numbers are used when I'm unsure of the year-by-year breakdown of a contract, but I'm confident about
the total dollar amount. This ususally means that you can trust the salary cap number for the contract in
question, but the actual payroll figures are just estimates. If you have seen the year-by-year schedule
for one of these contracts, please let me know.
What do the red numbers mean?
Red numbers are used when I'm sure a figure is incorrect - for example, if there's an unspecified amount
of cash included in a deal, or if a player has deferred money is his contract, but I haven't been able to
find out when the deferred money is going to be paid out. As always, if you have any information about a
contract like this, I'd appreciate hearing about it.
How come some numbers are in parentheses?
All negative numbers are listed in parentheses
What does "Cash In/Out" mean?
I use cash in/out to track cash that teams include in deals, use to pay for negotiating rights with foreign
players, etc. I include this number in a team's actual payroll, and include it in the luxury tax calculations
when appropriate (as per the Basic Agreement).
What are "benefits"?
As per the Basic Agreement, player benefits
are to be included in the calculation of a team's payroll for luxury tax purposes. This includes
payments made to the MLB Benefit Plan, worker's compensation premiums, social security taxes, spring training and all-star game
allowances, moving and traveling expenses, contributions to the post-season pool, contributions to the college
scholarship plan, and player medical costs. Last year this was calculated at $7,552,271 per team. It can increase
by up to 10% per year, but it can never increase by more than the total combined increase in salaries paid to
players from year to year.
How come a team's luxury tax payroll isn't equal to its actual payroll?
This is for a variety of reasons - but the biggest factor is that when a contract is counted against the
luxury tax, the average annual value of the contract is used, rather than the actual amount paid to the
player each year. Also, a team's payroll takes into account player benefits. There
are many other vagaries in the calculations for luxury tax purposes - if you have any questions about a
particular calculation, or think I've calculated a luxury tax value incorrectly, please
email me.
How do you determine the luxury tax / salary cap value of a contract?
I've based all of the luxury tax calculations on the methodology outlined in the Basic Agreement,
which I found on Doug Pappas' fantastic site.
I'm no accountant or lawyer though, so if you disagree with any calculation I've published, feel free to
let me know. Similarly, if you're curious about any particular
contract or calculation, drop me a line.
How is the luxury tax threshold calculated?
The luxury tax threshold is set in the Basic Agreement at $117m for 2003, $120.5m for 2004, $128m for 2005, and $136.5 in 2006.
How is the luxury tax rate calculated?
The luxury tax rate can range from 17.5% to 40%, depending on which year a team exceeds the threshold and how many times
they have exceeded the threshold in the past. You can see the potential tax rate facing any individual team
by looking at their payroll page - I keep the rates up to date. If you are interested in how any particular
tax rate was calculated, just let me know.
How many players are counted against a team's luxury tax payroll?
According to the Basic Agreement:
Article XXIII, Section C.1.b
defines Actual Club Payroll as "the sum of the yearly Salaries...of all Players under a Uniform Player’s Contract with the Club...
including optionally assigned contracts."
Article XXIII, Section C.2.g
refers to not counting the "pro rata portion of the Salary attributable to that Contract
Year" for time "the Player was off the Major League Club’s 40-man roster".
Both of these sections seem to lean towards counting all players on the 40-man roster, and that's what
I've defaulted to on these pages. If I get a more definitive answer one way or another, you'll see an update
here.
When does Major League Baseball release the actual luxury tax payrolls?
According to the Basic Agreement, MLB
is obligated to provide the team-by-team payrolls to the Players' Association at three points during the
year. Estimates are to be provided 14 days after Opening Day and 14 days after the All-Star game. The
final payrolls are presented on or before December 21st. To whatever extent these estimated and/or actual
payroll figures are made public, I will attempt to reconcile them with the data collected on this site.
Why don't the payrolls format correctly when I look at them?
This is a known issue, that seems to affect Opera, Mozilla, Safari and other non-IE browsers. Right now
I'm using Microsoft Excel's publish to HTML function to allow me to make updates to payrolls rapidly, and it's,
understandably, very IE-centric. As the off-season activity winds down, I'll be turning more attention
to my eventual solution, which will involve moving to more "robust" and browser-independent model
(e.g., PHP over MySQL). In the meantime, I appreciate your patience!
When cash is included in a deal, how does it affect the luxury tax payroll?
Cash considerations are added to the luxury tax payroll of the team paying them in the year in which they are paid.
The receiving team then has the same amount subtracted from its club payroll for the same season.
How come an option year appears to be listed as a guaranteed year?
For luxury tax purposes, the Basic Agreement treats
option years as follows:
Article XXIII, Section E.5.a.ii: A Player Option Year shall be considered a "Guaranteed Year" - unless the option buyout
is greater than 50% of the base salary for the option year.
Article XXIII, Section E.5.a.iii: For a Mutual Option Year, salaries shall be calculated
as if the Mutual Option Year is a Player Option Year.
Why do you list two sets of payrolls for each team?
The first set is the payroll as it is calculated by the league to determine whether or not a team will be paying the
competitive balance (luxury) tax. This is the set labeled as "Cap" payrolls. The second set is the team's actual
payroll - the cash they are responsible for paying out in that particular year.
How do you count signing bonuses?
Unless I can find specific information about a signing bonus being pro-rated over the life of the contract,
I assume it's payable in the first year. However, from a luxury tax perspective, when the signing bonus
gets paid out is irrelevant. The full signing bonus amount (as well as any buyouts for club option years) are
always added into the total guaranteed amount used to calculate the average annual value of a contract for
luxury tax purposes - and I have done this on all of the team cap payrolls.
Why don't you have pre-2004 salary information listed?
I don't show pre-2004 information because a) I do not have complete and accurate data unless it had a
material impact on 2004 payroll, and b) I think it would clutter the team pages even more than they are now.
If you are looking for pre-2004 info, Baseball Reference,
USA Today, and
this salary site all have great
information.
Why do you have some non-guaranteed deals listed on a team's payroll?
I've listed the MLB salaries that will be guaranteed to some players if they make the MLB roster simply as a place
holder until Spring Training ends and the rosters get set. I admit it is a bit misleading; hopefully as I
refine the team payroll pages, I'll be able to more clearly differentiate between guaranteed and non-guaranteed
money.
Why are players who were released still counting agaist a team's payroll?
According to See Article XXIII, Section C.2.E.ii of the Basic Agreement,
players on guaranteed multi-year contracts who are released from their contracts will still continue to count
against a team's payroll for luxury tax purposes according to the original structure of the contract - even if
the team pays out the contract up front. This would not apply if the club was no longer obligated to pay out the
original contract (i.e., when a contract is voided or forfeited).
How is the actual luxury tax amount calculated per team?
The acutal luxury tax amount is calculated as a straight percentage of the payroll in excess of the
luxury tax threshold for that particular year. For example, if Team A has a payroll of $150.5m when the
luxury tax threshold is $120.5m and the luxury tax rate is 30%, Team A's luxury tax bill will come to $30m x 30% or $9m.
How is deferred money in a contract handled?
Deferred money is allocated, on a luxury tax basis, to the season in which the money would have been paid.
If the deferred money was not attached to a particular season, it is spread out evenly over all years of the
contract. The calculations for deferred money make use of the "Imputed Loan Interest Rate" - which is
defined in Article XXIII, Section A.4 of the Basic Agreement
as the "annual Federal mid-term rate defined in Section 1274(d) of the Internal Revenue Code for October".
If the deferred money is paid out at an interest rate within 1.5 percentage points of the imputed loan rate, the deferred
money is included at its face value. Otherwise, the deferred money is included at its present value (calculated by increasing
the money with any interest paid, and then reducing back to present value using the imputed loan rate).
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, as soon as time permits, I will be going back to adjust these deferred money deals.
Where does the luxury tax money that is collected go?
The luxury tax money collected is split out as follows:
- The first $5m is held in reserve, to pay for possible luxury tax refunds. Once it is clear that there are no refunds to be issued, this money is then earmarked for the Industry Growth Fund (IGF).
- 50% of the remaining money is used to fund player benefits.
- 25% is used to fund baseball programs in developing countries with no high-school baseball.
- 25% is put into the Industry Growth Fund (IGF).
The IGF has many different goals - promotion and marketing of MLB, international development, investments in new media technology, community service, and "enhancement in popularity and revenue growth" among teams that receive money from revenue sharing. The money allocated to these teams must be based on "investment criteria". I have not seen any reports of which teams (if any) received any disbursements from the IGF thus far - if anyone has, please let me know.
What does it mean when a player has "$ - " listed as his contract?
When I have "$ - " listed for a player's contract, it means I've heard that he has signed a 1-year deal,
for example, but no details of the contract have been published. This is almost always a team signing up a
pre-arbitration player, and it's usually the local beat writers that manage to dig up the specifics of the deal -
so if you see anything in your local paper, please pass it along.
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