Wednesday, June 26, 2013

Does payroll size matter?

With the Los Angeles Angels in town this week taking on the Detroit Tigers we see two
teams with large payrolls performing at not exactly what the fans expected from two teams spending over 140 million dollars each on payroll. The two rosters showcase how MLB teams spend money and what kind of return one can expect from that money. It also highlights the fact that often times MLB players are paid a large salary based on what they have done not what they are currently doing.

The Detroit Tigers have three players making north of 20 million dollars a year. In past years it has been hard to argue that Justin Verlander did not deserve that kind of loot, but he has not been the dominating force he has been over the previous two campaigns. Prince Fielder and Miguel Cabrera also make north of 20 million dollars and it is hard to argue that each of them have not lived up to the fans expectations of their enormous contracts, especially Cabrera who is probably the best hitter of this generation. 

The Angels on the other hand have a struggling Josh Hamilton, well struggling till he got to Comerica Park, who they just signed to a five year 123 million dollar five year deal and who came into Detroit hitting just .207 with 10 home runs. He has heated up a little bit here in the D, but that is no where near enough production out of a guy making 15 million dollars this year. The Angels are also paying Albert Pujols 16 million dollars a year in the second year of a massive 10 year 240 million dollar deal. Pujols is hitting .258 with 13 home runs and 47 RBI. 

The Angels are right around 140 million dollars in payroll and have a 34-43 record and re a full 10 games out of first place. Clearly their investment in payroll has not brought success to the team so far in 2013. 

The Tigers are also big spenders. Beyond the big three who eat up 60 million dollars in payroll by themselves they signed Anibal Sanchez to a five year 80 million dollar deal and are paying him 8 million dollars for 2013. Add that to Max Scherzer's 6.7 million dollar one year deal and the Tigers are getting an extremely good bargain for 14 or so million dollars of 2013 payroll that has produced 17 wins, a near no hitter, a K/9 rate of over 10 for both hurlers, a likely All Star Game Starter, and a legit Cy Young bid. 

The point here is this. It is not how much money you spend, but how you spend it. Dave Dombrowski of the Detroit Tigers has done a masterful job of structuring contracts in a way that keeps the deep pockets of owner Mike Illitch semi protected. The Tigers do have a big payroll but for their fans playing meaningful ball games deep in October is pay off enough. For the Angels that may not be the case. 

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