Wednesday, December 01, 2004

What's the truth about the M's payroll?!

I’ve been reading a lot lately about the M’s current payroll situation, in regards to how much money they have available in budgeting for free agent signings. I thought I'd do some research to see if I could figure out just how much money is available, and how that figure was reached. (I am not trying to prove anything, or even say my research is accurate, I just would like to share what I found.) The latest, from Finnigan, is $15-$16 million:

“It appears that the Mariners are juggling the $15 million to $16 million they are thought to have available to spend on free agents this year. That does not include the $4 million to $5 million they have earmarked for bringing back Wilson and Villone."

So from this we can assume there is between $19 and $21 million available, if Wilson and Villone are not re-signed. (Side point: $4-$5 million for Wilson and Villone is awfully expensive, if you ask me. The M’s had better make a play for another starting pitcher, relegating Villone to the ‘pen, because if Boras thinks Villone will be a starter he’ll use that as a negotiation ploy.)

Wait a second, Munchausen – wasn’t the M’s payroll around $95 million and aren’t a whole bunch of salaries coming off the books? What about Olerud, Edgar, Sasaki and Cirillo’s bloated doles? Isn’t Moyer going to be making less this year? Aurilia’s gone, too…

Well, let’s take a look at how this has progressed.

• The first item I found was some creative Mariners acounting from Finnigan’s column from January 29, 2004:

"Although Sasaki walked away from $8 million guaranteed for 2004, the Mariners figure there is only $7 million available to spend on player acquisitions. The Mariners say they were $1 million over their projected $95 million payroll budget before Sasaki made his decision. Subtract from that $2 million for use on possible in-season acquisitions, it leaves $5 million for immediate additions to the payroll via trade or free-agent signings. Subtract $1 million to $1.5 million for a reliever to replace Sasaki — with left-hander Ron Villone thought to be a likely possibility — and there is $3.5 million to $4 million for offensive help."

So, right off, there’s evidence that the M’s accounting stats are, well, Enron-esque. A concrete, unquestionable $8 million windfall slashed in half within three paragraphs. First, a “projected” payroll of $95 million, (which it was not), subtracted $1 million right off the bat. Next, $2 million for in-season acquisitions – hah! That obviously didn’t get spent, so it rightfully should be added to the 2005 budget. $1-$1.5 million to replace Sasaki – no, they already had Guardado signed to do that. That is a full $4-$4.5 million used up on virtually NOTHING.

Furthermore, One Stop Baseball reports the M’s payroll was $81,515,834 as of April 9, 2004. That is far from the $95 million “projected” payroll quoted in Finnigan’s article.

Even furthermore, from Jim Moore’s column from February 27, 2004:

“Lincoln noted that the team's payroll increases every year and that every dollar of profit goes back into the team, whether in player acquisition, player development, scouting or something else. The idea that this ownership group is somehow getting a dime out of this business is not true," he said, adding that he wants to win a World Series as much as the fans do."

So, that unused $13.5 million ($95 million minus $81.5 million) should be going right back into improving the team, including adding payroll. “Should” is the operative word here…

All of this so far has little effect on the 2005 budget, but does start to show a pattern of misreporting and deception on the part of the Mariners and their flunkies in the press.

• The next item is from John Levesque’s column from August 14, 2004. At that point, the season obviously hadn’t been going the way the front office thought it would go, and the team was “grinding”, (to use Bob Melvin’s favorite word, other than “yes sir”), to get season ticket holders (STH) to renew their seats. Howard Lincoln addressed a couple of groups of STH, and this is what Levesque wrote about it:

“Still, it's worth noting the meetings were deemed important enough to have team president Chuck Armstrong and team chairman Howard Lincoln make brief presentations. The executives assured the ticket holders that this year's startling turn of events is in no way a capitulation, and certainly not the beginning of a long "rebuilding" program.

“Lincoln pledged that he intends to right the team right away. Despite the drop in revenue that assuredly will accompany the drop in ticket sales this year and next, he said he will not reduce the team's payroll from the current low-to-mid-$90 million."

OK. That states, as plain as day, both that the payroll will not be reduced, and that it is in the $9x millions.

From the previous link, we’ve learned that the M’s player payroll was $81.5 million, meaning that at the very minimum, $8.5 million should be available this year to add to the player payroll, and - this is key – that is without even taking into account the drop in payroll due to player departures and possible trades.

• From that, you’d have to figure “hey – since they only have $15-$16 million available now, that must mean that only $7.5 million is coming off the books!” ($16 million minus that $8.5 million). Not so!

John Levesque writes this on October 6, 2004:

“Either way, the Mariners will have more than a few bucks to be a serious player in the offseason. Not counting what they saved when Kazuhiro Sasaki walked away from the U.S.A., they are free of the contracts of Olerud ($7.7 million), Freddy Garcia ($6.875 million), Kevin Jarvis ($4.25 million), Rich Aurilia ($3.15 million), Martinez ($3 million), Quinton McCracken ($1.75 million) and Ben Davis ($1.4 million).

“That's $28 million or so right there, much of it available for use since many of the replacements for those players will be paid next year at or slightly above the major league minimum of $300,000."

Well, by my count, (adding the free $8.5 million to the deleted player salaries), it’s $36.6 million available to pick up new players.

• Sounds good, right? That should be plenty to pick up Beltran, Beltre and a starting pitcher. Wrong. The figure’s already dropping. Just one day after Levesque quoted the already erroneous $28 million, Finnigan brings a new figure to the table - $22 million, no, make it $14-16 million:

“About all that is widely known is that the Mariners will have money to work with — while less than previous speculation, it should be about $20 million to $22 million — and possibly a bit more if they trade Bret Boone."

"Lincoln said earlier this year, and confirmed it in the final week, that the payroll would be at or slightly above last season, when the Mariners had about $87 million to spend on players (plus a contingency fund of around $5 million, for a total payroll budget of approximately $92 million).

“About $65 million of that is spent, with Jamie Moyer's incentives bringing him in at $8 million for 2005 and the club still suffering the Jeff Cirillo/Kevin Jarvis hangover for about $5.5 million, including more than $2 million owed to catcher Wiki Gonzalez — remember him? "

"If one projects that Seattle has $22 million to spend — assuming Lincoln's same-budget promise includes the $8 million that was to be paid Kazu Sasaki before he quit — they may have quite a bit less for outside free agents.

“Figure on about $6 million to $8 million to re-sign Wilson, Villone, Meche and less veteran players on the roster. That leaves $14 million to $16 million to spend.”

• Is that true? What about this quote from today’s (December 1) Finnegan column?

“It appears that the Mariners are juggling the $15 million to $16 million they are thought to have available to spend on free agents this year. That does not include the $4 million to $5 million they have earmarked for bringing back Wilson and Villone."

BUSTED! You can’t subtract $6 million to $8 million to re-sign Wilson, Villone, Meche, etc. from an (already-reduced from $94 million to) $92 million payroll, and then subtract an ADDITIONAL $4 million to $5 million, (apparently to re-sign Wilson and Villone to UNPRECEDENTED SECOND CONTRACTS), that would take the available money down even further! This is so blatant I can’t even believe it’s supposed to be fact! Doesn’t Finnigan know that this stuff is archived for anyone to look up?

• Finnigan contradicts himself again on October 30, 2004, when he states the payroll situation thusly. (Draw your own conclusions as to whether or not these salary figures are accurate – I have serious doubts about the $10 million Villone/Wilson/etc. fund):

“The Mariners have some money to spend, but apparently it is not as much as many outside their front office have guessed. The budget, said to be about the same as last year when the club spent about $87 million, is projected to be $94 million.”

So it’s $94 million again? What about the $92 million from less than a month previous? Anyway, that article goes on to detail the finances:

“Another $6 million is due departed players Jeff Cirillo, Kevin Jarvis and Wiki Gonzalez. The Mariners set aside $2 million for contingencies and $3.5 million for prorated signing bonuses. The following veteran players, including free agents Dan Wilson and Ron Villone, should combine to cost the Mariners about $10 million: SP Gil Meche, RP Ron Villone, C Dan Wilson, C Miguel Olivo, UTIL Jolbert Cabrera.

“From the group listed below, expect six or seven to make the 25-man roster next spring, each making just over the minimum, about $350,000, for a total cost of just more than $2 million: OF Jeremy Reed, SP Bobby Madritsch, SS Jose Lopez, RP J.J. Putz, 1B-DH Bucky Jacobsen, IF Willie Bloomquist, RP Rafael Soriano, RP George Sherrill, RP Julio Mateo, IF Ramon Santiago, RP Matt Thornton, RP Clint Nageotte, RP Scott Atchison, RP Aaron Taylor, SP Travis Blackley, SP Cha Seung Baek, 3B Justin Leone, 3B Greg Dobbs. That brings the total to about $81 million, leaving $13 million to spend on free agents."

Later in the article, the under-contract players’ salaries are laid out in spreadsheet form:

“The Mariners expect to have a payroll budget of $94 million for the 2005 season. They have roughly $57.5 million committed to the following 10 players:
OF Ichiro…………….$12.5 million
2B Bret Boone……….$9.25 million
SP Jamie Moyer……..$8.0 million
RP Eddie Guardado….$6.0 million*
SP Joel Pineiro………$4.7 million
OF Raul Ibanez………$4.415 million
OF Randy Winn……..$3.75 million
RP Shigetoshi Hasegawa.$3.225 million
3B-1B Scott Spiezio…$3.167 million
SP Ryan Franklin……$2.5 million”

* (Munchausen’s note: Keep in mind that Guardado’s salary will be $2 million less than reported, at $4 million, due to smart offseason maneuvering by Bavasi.) Also, keep in mind that only $55.5 million is tied up in ACTUAL payroll, meaning there is, in truth, at least $38.5 million readily available for free agents. Of course, much of that will go towards re-signing the team’s own players, as Finnigan shows above. I’m just disagreeing with how much he claims they will spend for certain players.

(In addition, there’s the little matter of that $13.5 million discrepancy between the $95 projected 2004 payroll and the actual $81.5 million cost, which Lincoln said would be put back into the team, and which unfortunately does not show up anywhere on these figures!)

• Finally, should we be worried about all of this? I mean, with the Mariners’ pathetic record in 2004, will the team attempt to, instead, cut payroll because the front office thinks attendance may be down in 2005? Art Thiel’s October 6 “Interview with the vampire” (Howard Lincoln) column says “NO!”:

The most important thing we can do is maintain a very high major league player payroll, at least in the top 10. If we can do that, that's the most significant contribution the ownership group can make to the Mariners. That's precisely what we intend to do in 2005, even though in doing so we will budget for a loss. We are prepared to accept that loss in order to provide maximum financial flexibility to (general manager) Bill Bavasi and the baseball people, to give them the full opportunity to get things done right.”

“It's hard to say what will happen. Fans don't make decisions in October about what they'll do next year. Our offseason moves will have a lot to do with attendance. We're very appreciative of the tremendous support fans have given us over the years. We don't take it for granted. Nevertheless, it's fair to say we have to anticipate some decline in attendance. We will go into the season projecting an operating loss in the many millions of dollars, without getting specific.”

“We certainly project for not only next year, but following years. Where things stand now is that we don't want to be part of a five-year rebuilding plan that other teams have followed. Our plan is get this turned as quickly as possible. Our group has been told by Bill Bavasi there are a number of holes to fill. We're going to do our best to fill as many holes as quickly as possible. We want to maintain a high payroll, instead of cutting."

"Q: Speaking of perceptions, you've always been a strong advocate of a balanced budget. Why are you willing now to take an operations loss in 2005?

A: There is a perception that we have some kind of static business model that never changes regardless of circumstances. That's not the case. If we're going to achieve the objective, there are times when we have to consider taking a loss. It's not something we look forward to, and we've had seasons where we've made a profit and maintained a high payroll. Every season is different. We don't operate with a model that never changes.”

Well, there you have it. All the information I could dig up on the subject. Now it’s up to the reader to decide what’s going on with the M’s, and what attitude to take into this free agent period. Hopefully we won’t be disappointed.

Go M’s!

Munchausen

(Note: in this post, I link to a number of articles found on the NWSource site, available only by subscription. If you don't want to subscribe, use the username: "blowmeharder", and the password: "library" (without the quotations). (This information courtesy of Bug me not.com.)

5 Comments:

At 12/01/2004 2:28 PM, Blogger PositivePaul said...

Most excellent, Munch!

Nice to see someone tie all this together, and exploit the inconsistency in their comments. I've always been curious about how they can say the profits go back into the team (and not into the owners' collective pockets) and at the same time say that any un-spent budget from a previous season will not be carried over into the next.

The "Accountants at Arthur Anderson" (as Capitol Steps would say, that is) would be proud!

 
At 12/01/2004 8:53 PM, Blogger Trent said...

This comment has been removed by a blog administrator.

 
At 12/01/2004 8:55 PM, Blogger Trent said...

Great analysis. You are doing the exact same head scratching that we all had been.

 
At 12/02/2004 1:57 PM, Blogger check said...

Good analysis, but I feel that overall it may be more accurate just to guess a number. I'm guessing $26 million. I think the ownership may just pony up this year, and I truly believe that Finnigans math is typical of someone who took journalism in college. I won't be surprised to see two bats and on pitcher, likely Delgado, Kostly, I mean Koskie, and Wright. Just my hunch, but at this point, playing a hunch is about as good as the miles of repeated conjecture on the PI blog....

 
At 12/03/2004 11:46 AM, Blogger check said...

Holy cow Munch! I just read your edited version of the M's response to your email, and I must say ROTFLMFAO.

 

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