What does $30 million buy anyway?

Depending on who you ask these days, $30 million is either substantial or inconsequential. I’m certainly not going to turn it down if that amount were dropped out of an armored truck onto my doorstep. However, it does mean different things to different people. $30 million (or so) can buy:

To really catch the weight of what Billy said, here’s the entire quote courtesy ESPN’s MLB Network’s Peter Gammons:

“The way the system is right now, there really is no difference between a $75 million and $40 million payroll,” said Oakland GM Billy Beane. “I think a lot of small-market clubs look at that and ask, ‘Why pay $75 million when $40 million will buy me as many wins?’ “

The sad part is that I left out $5 million to keep the analogy going. As discussed earlier in the week, the A’s budgeted $79 million in ’07 only to get 76 wins. Last year they budgeted $47 million and got very nearly the same record.

Remember that we’re talking about a league with no salary cap and no salary floor. Where the biggest team can outspend the smallest by nearly tenfold. Where, unlike other North American pro leagues, certain teams can get away with having their contention windows extend infinitely while less endowed teams may have to count on 1-2 years in a decade as their window. Where my modest plan for a salary cap was ripped to shreds by Billy in the span of a paragraph. Where the Marlins are shamed into working out a deal for an informal salary floor of their own, yet there’s no talk of a formal floor in the next CBA.

I can’t blame Billy for shrugging. $30 million in a single year – via a revenue sharing check perhaps – might get you an ace starter and a dynamic hitter or slugger. Instead you might get Barry Zito and Aaron Rowand. Or Eric Chavez, Matt Holliday, and Mark Ellis. Or most of A-Rod. You get the idea.

Instead, you might put that money towards scouting or high draft pick bonuses. Fair enough. But maybe that gets boring. Maybe you want to mess around with the system a bit, even if you know there’s only so much you can do. The way Mychael Urban is interpreting the A’s interest in Ben Sheets, messing around may be exactly what Billy’s doing.

We know what would likely happen if Sheets donned green and gold. Sheets, who didn’t pitch last year while coming off elbow surgery, finds Oakland a good place to beef up his numbers (as long as he stays healthy), increasing his trade value for a post-ASB pickup by a big money contender. Billy and David Forst get yet another set of nice prospects in a July trade, Sheets gets the stretch run to earn his last serious multiyear deal, everyone’s happy. Same goes for Duke. Meanwhile, B/D figure out who’s desperate for starting pitching now while also potentially keeping an ace arm away from an AL West or wild card rival (if the A’s are actually competitive in 2010). The best part? Since the $30 million is from revenue sharing, it’s quite literally found money.

One way to make the whole charade more, well, fair, is to implement that cap and floor together. I suggested $50 million three years ago, which is far too low in this day and age. The NFL’s team salary floor for the 2009 season was $100 million, which was baked in thanks to the league’s heavy revenue sharing (the 2010 season will neither a cap nor a floor). That’s not realistic in baseball given the nature of both MLB owners (greedy) and union (stubbornly proud). If $75 million is not enough and $100 million is too much, is a realistic figure $85-90 million? There’s no way the have-nots will consent to spending $90 million on payroll unless they got a ton more shared revenue in the process, and the haves won’t consent to subsidizing the whole affair.

Since we’re just playing with funny money at this point, let’s say that all of these historically self-serving parties suddenly become their better angels. There’s still a disparity as the Yankees’ payroll is around $180 million, but he lowest is $90 million while the average payroll is somewhere around $105 million. The free agent market is more lively each offseason as all teams look for various veterans to fill out their rosters instead of just replacement-level players. Would this make MLB more competitive overall? Put yourself in Billy’s shoes. What would you do with the extra scratch?

12 thoughts on “What does $30 million buy anyway?

  1. Some additional numbers:
    The average payroll last year was $88.9 million and payrolls have increased an average of 5.4% over the past 10 years (a bit more than double the inflation rate during the same period).
    Using the 2009 total salary numbers as an example:
    12 teams had salaries under 75 million. The average salary for those 12 teams was $61 million. If the floor was $75 million, the other 18 teams with a 2009 salary of >$75 million in 2009 could average $98 million to equal the total player salaries from 2009. If the floor was instituted and the higher market teams stayed with their original 2009 salaries, the players would receive an extra $167 million in salary. Assuming no roster turnover, thats $222K per player.
    Taking the same example, but raising the floor to $85 milion: 17 teams averaging $67 million. That leaves the other 13 teams with an average of $94 million to spend. If they stick with their original 2009 payrolls, players get an extra $311 million.
    I worry that the floor will force small market teams to neglect their farm system, resulting in even worse disparity. I think this system will have to go hand in hand with hard slotting and an international draft.

  2. I’m not really in favor of a cap, and I think a floor is also arbitrary when considering how many ways organizations spend money off the MLB field. The comparison to the NFL is no way fair. Their structure is much different: no minor league, huge contracts paid immediately (due to avg. 5 yr player shelf life), must have played a certain number of years a college level, only 16 games a year and ticket prices to match. The popularity gap is pretty big as well.

    If teams have to spend $80M a year, i don’t think it improves in on-field team because everyone is required to meet it. Instead, i think, we end up with player salary inflation. If that happens, the A’s still have to do what they’re doing now but with much less. I say, let the market decide what a player’s value is rather than an arbitrary floor. Go Capitalism!

    If I were an owner, I’d only accept the floor if the players union was forced to accept some stiff arbitration ceilings – despite how well Lincecum has done, $13M for a guy who makes me want to vomit, where’s the value in drafting well if you still have to pay out the butt for a guy (out of hundreds you pay for) works out. Watch the lame movie “Mr. Deeds” as Sandler tells the QB that he should be paid less for doing poorly. The QB disagrees and then the point is made that the player shouldn’t get to renegoiate his contract for doing better than expected. I’m all for incentiviesed pay, but the arbitartion is rediculous.

  3. Who had the better decade, the Mets or the Marlins? The A’s or the Dodgers? The Twins or the Cubs? Forget spending on the free agents, let the big market teams have them. Instead spend money on the scouting and player development.

    • I mostly agree with you.

      The only thing I would like to see is the A’s able to gamble on more of their home grown. Chavez was a good bet that went bad… I would have liked to see them be able to make a similar bet on Tim Hudson, or someone (though that would ahve gone bad with the TJ surgery).

      These sort of signings are not just about performance on the field, but at the box office.

      • the new ballpark will allow the A’s to do that, keep a few key fan favorites that make up the identity of the squad and continue to build around them.

  4. Back on the subject of a floor as a bad idea:

    If small clubs are forced to ante-up for their major league rosters it will severely undercut the funding for the minor league system as a whole. with less money, organizations would have to cut prospects, perhaps continue to fail on signing top draft picks who want millions guaranteed and gut the necessary administrative positions to keep it all running.

    I think it’s an instance where you have a players union looking down a very narrow tunnel at the “big” number of the club rather than the overall investments made top to bottom.

    As a long term effect could be that thousands of minor leaguers never get drafted because clubs have to save those millions of dollars for 1 player, rather than picking up 15 potential diamonds-in-the-rough. I think that could lead to unhealthy minors development and a gradual decrease in the quality of player in the MLB.

  5. Unfortunately, it seems like baseball is not the sport for ‘fan favorites’. Who out of the great teams of the early decade would you have wanted around? Zito fell off a cliff. Mulder injured. Chavvy injured. Miggy involved in PED scandal. Huddy had a couple of good years, now he’s a question mark.

    Do you think Red Sox fans stopped following the team after Nomar was traded? No, because they were winning championships.

    I think holding onto ‘fan favorites’ is overrated and, in the sport of baseball, can backfire really quickly.

    More important is acquiring good players, period.

    • For every Nomar, there is a Varitek. Just saying. Roster turn over is inevitable, but holding onto a few guys is not too much to ask.

      How bout Matt Stairs? Marco Scutaro?

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