Tuesday, April 24, 2012

Payroll Value Index 2012

Team Payroll Value Index - 2012

It's that time of year.  Baseball's are flying around ballparks, ... not as many out of them, but, it's early.  Contracts have been given, rosters are opening day set, and extensions are being sought, and paid, some at levels that were surprising, but perhaps shouldn't be given the increase in cable rights fees.  But let's not get too far into the baseball payroll weeds. Let's get into value.  Which teams are doing a good job of getting value for their money spent.  Oh, I know that seems an oximoron, with values that high, but here goes, the baseballevaluation.com Team Payroll Value Index for 2012.

The Team Payroll Value Index from baseballevaluation.com compares the actual money spent with the Salary Projection model estimates (SPRO), in order to come up with an index that takes stock of the salaries handed out, ranking them in the order of their effectiveness.  This does not represent who is the best team.  Low payroll or high payroll, you can spend your money well.  Good team or bad team, you can do the same.

Top Five
1. Tampa Bay Rays - In most years it's a bad team with a low payroll that gets this honor, but not so with the Tampa Bay Rays.  This young team, predominantly built through the draft with young players emerging onto the scene, without veterans they just let fly to other clubs.  Think Carl Crawford to Boston with that overpaid contract.  The Rays are a good club, one that should fight for a playoff spot, and might even win it all.  And they're doing this with a payroll that ranks #25 at $64,173,500, more than $100 million less than three clubs.

How are they getting this done?  Who are their best bargains?  Well, we've touched on how.  They are building through the draft.  They are young.  They don't overpay their veteran players once reaching free agency and let them go to other teams if they want too much.  A couple examples of who is a bargain.  Just start at the top of their payroll schedule.  James Shields gets paid $8 million; he's worth $12,031,000.  Carlos Pena was brought back at $7,225,000; he's worth $9,226,000, and has started off the year playing well.  And the best of them all, Evan Longoria.  Signed early in his tenure, Longoria is getting paid $4,500,000 in his first arbitration year, but he's worth $11,114,000.  Now that's bang for your Tampa Bay buck.

2.  Arizona Diamondbacks - In many ways, it's the same story, although they do have the tendency to raid the Oakland A's for pitchers once they reach an arbitration number the A's don't want to pay.  Just a couple examples of what's working out really well for them, beyond paying appropriate salaries to their young players as they move up the ladder, are two veterans they've acquired on the cheap.  J.J. Putz was one of the best relievers in baseball last year, they're paying him $4.5 million.  Lyle Overbay may not be the best first baseman in baseball, but he's pretty good in a pinch, and being paid $1 million.

3.  St. Louis Cardinals - When a Cub fan of some repute, Michael Wilbon of  Pardon the Interruption fame states that he wasn't worried about the Cardinals losing Albert Pujols, because somehow they'd figure out how to put together a good team without him, he was right.  The Cards know how to gather talent and spend wisely.  At over $110 million in actual salary, this is not a cheap team.  They just spend prudently.  And sometimes they put out contracts that seem too high.  We still don't get the $15 million per year extension for Yadier Molina, the great defenese catcher with one good offensive year, but so far this year he's proving us wrong, and is a bargain this year at $7 million.  But the biggest bargain of all is Chris Carpenter, signed at $8.5 million, but just about as good, when healthy, as the $20 million pitchers other teams are paying. 

4.  Toronto Blue Jays - An emerging team that once saw itself near the bottom of this list, they have let go players such as Vernon Wells and now get bargains with players such as Jose Bautista, now the surprising slugger who once was more average, but has done the good deed for several years in a row.  He's paid $14,000,000, but worth $20,000,000.

5.  Los Angeles Dodgers - We wish we could say that the prudence of the last couple years, done mostly due to outside financial woes of its owners, and not really the baseball club, had anything to do with a $2.1 billion offer the new owners are going to pay for the team.  In a down economy.  But we still can't get our heads around that number.  From the baseball perspective, the contract have just been well paid.  With star player Matt Kemp, Andre Ethier, and Clayton Kershaw being paid below their value due to good to great seasons last year.  They'll certainly test the payroll boundaries going forward, and we'll see how that billions dollar pricetag for the team impacts payroll.  My guess is it's going to go up and get less value fromt he money spent.

Bottom Five
26.  Baltimore Orioles - The Orioles are doing some good things on the offensive side of the equation, but the contract of Brian Roberts is costing them in value.  Add to that the numbers given to Kevin Gregg and Matt Lindstrom and you get to the #26 spot in the Value for Money Index.

27.  Boston Red Sox - It's not Bobby Valentine's fault.  The Red Sox are overpaying players who are not producing enough for them.  Who? John Lackey, Dausuke Matsuyama, Josh Beckett, and the poster child Carl Crawford.  When you're willing to pay $20 milion per year to a player who'se former team is doing just fine without him and perhaps knew that his value was about half the number given, you know there's trouble in beantown.

28.  Chicago Cubs - Let's give the new regime time to make changes and get their financial house in order.  Until Alfonso Soriano is not being paid the initial Carl Crawford contract, they Cubs won't be at the top of this list.

29.  New York Mets - Been doing and making poor contract decisions for awhile and are in the Cubs boat that it will take time to recover.  They really couldn't have foreseen the Johan Santana situation, he was a good pitcher, but it does point out the problem with paying many year $20 million contract to pitchers.  That doesn't seem to be stopping others from doing it though.

30.  Houston Astros - Off to a better start than most thought, despite this ranking and due mostly to young players.  The former contracts of Carlos Lee and Brett Myers are driving this last place bus.  Lee paid $19m, but worth $7.4m.  Myers paid $12m, but worth $7.7m.

For salary projections and player ratings for every player in Major League history, in current player or history version, get Stat Geek Baseball PRO12.

And to answer a quick question we first posed in the last post.  Just where do salaries seem to be headed.  Well, looking at the bottom of the scale, the new minimum salary is $480,000 versus last year's minimum of $414,000.  That's an increase of 15.9%.  And when looking through the salaries above that mark, particularly with an emphasis on the new extensions given, we're seeing, at first note, an increase somewhere in the range of 18.75%.  It will take time to see how accurate that number is, as those extensions and new free agent contract of the offseason get tested and others signed, but it does seem that we're seeing an increase in the 15-20% range.  Hope that doesn't jump into ticket prices, but ... it probably will.

Thursday, April 12, 2012

Contract Escalation, How High Has It Gone?

All you have to do is read the headlines in the baseball pages of your favorite online website to know that despite an economy in the tank for many people, that's certainly not true of the baseball community.  With exceptions of Oakland, stands are filled, cable tv ratings up, and more importantly, rights fees are going through the roof.  And how has this impacted the salary structure of baseball?  Well, just look at the recent contracts of Matt Cain (5 years $112.5m) and Joey Votto (12 years $251.5m or 10 years $225m for the most recent extension), not to mention Ian Kinsler (5 years $75m).  We're thinking, and working on the actual number as we update the baseballevaluation.com projection system, that it's climbing near 20% from a year or two ago.  Now, some of the contact are out of line, just as they always were.  But we're not here to debate whether the overall structure is correct, ... if industry revenue increases, it should filter down to the talent.  But the dynamic has changed.  Just wait to see what Cole Hamels will get.  The thought of Jered Weaver money has now been changed to Matt Cain money plus.  Now we think Hamels is a very good pitcher, in the Matt Cain territory of contracts, but it will be interesting to see just where that contract lands.  As Philly fans, we're just hoping it lands in Philadelphia.

Tuesday, April 10, 2012

New Chapter to Stat Geek Baseball 2012

It may have taken us awhile to get to this, and we're not sure whether everybody's been hankering for it or not, but yes, this year, Stat Geek Baseball, the Best Ever Book 2012, includes it's new chapter on the Best Hitting, Pitching, and Overall Teams in baseball history, all powered by the PEVA rating system from baseballevaluation.com.

And while we won't get into all of the lists here in a blog post, we're going to talk about one specific item, one team that showed up very high on one of those lists.  The pitching staff of the Philadelphia Phillies, which came in at #8 all-time.

A lot of talk got bandied about during the preseason of 2011 and the season of 2011, too, that what fans of baseball and the Phillies were witnessing was one of the best staffs in baseball history.  Some of that luster got taken off in the postseason when talk of not winning a round predominated, but that doesn't change the fact that it was true.

Now they weren't the best of the best.  But when you're comparing staffs over the course of 1871-2011, that's a whole lot of mound presence to beat.  The starting staff of Roy Halladay, Cliff Lee, Cole Hamels, Roy Oswalt, and Vance Worley (who subbed for the intended and injured Joe Blanton) through most of the year,

And who beat them out.  Well, we won't give away too much of the drama, but will say that the Atlanta Braves fans of the 1990's will be pleased (although they aren't at the top), as well as a couple really old staffs, including one of the Cubs.

But where's the staff of the last 60's and early 70's Orioles.  It's in the Top 50 somewhere, as well as a variety of teams from all generations.

Check out Stat Geek Baseball, the Best Ever Book 2012, for updated lists of not only the best teams, but the best seasons, careers, postseasons, etc. of All-Time, plus every team in history.  It's now for sale at all major online bookstores in paperback, and you can buy the ebook (pdf) from baseballevaluation.com for only $5.95.