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If the payroll is $100M max, the Orioles are a small-market team.


skanar

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The current rumor is that the Orioles have a hard budget of $100M. I wanted to see how such a budget stacks up in today's baseball financial world. To start, here are the opening day 2013 payrolls:

	Team		OD 20131	Yankees 	$ 228,835,490 	2	Dodgers 	$ 216,597,577 3	Phillies 	$ 165,385,714 	4	Red Sox 	$ 150,655,500 	5	Tigers 		$ 148,414,500 	6	Giants 		$ 140,264,334 	7	Angels 		$ 127,896,250 	8	White Sox 	$ 119,073,277 	9	Blue Jays 	$ 117,527,800 	10	Nationals 	$ 116,056,769 	11	Cardinals 	$ 115,222,086 	12	Rangers 	$ 114,090,100 	13	Reds 		$ 107,491,305 	14	Cubs 		$ 104,304,676 	[b]15	Orioles 	$ 90,993,333 	[/b]16	Braves 		$ 89,778,192 	17	Diamondbacks$ 89,100,500 18	Brewers 	$ 82,976,944 	19	Royals 		$ 81,491,725 	20	Pirates 	$ 79,555,000 21	Indians 	$ 77,772,800 	22	Twins 		$ 75,802,500 	23	Mets 		$ 73,396,649 	24	Mariners 	$ 72,031,143 	25	Rockies 	$ 71,924,071 26	Padres 		$ 67,143,600 	27	Athletics 	$ 60,664,500 	28	Rays 		$ 57,895,272 	29	Marlins 	$ 36,341,900 	30	Astros 		$ 22,062,600 

The Orioles are right in the middle of the pack. Now, let's assume that every club will take the $25M in free national TV money and devote it to increasing payroll. We'll put the Orioles' number at $100M since that seems to be their limit. The new ranking looks like this:

1	Yankees 	$ 255 M 	2	Dodgers 	$ 242 M 3	Phillies 	$ 190 M 	4	Red Sox 	$ 175 M 	5	Tigers 		$ 173 M 	6	Giants 		$ 165 M 	7	Angels 		$ 152 M 	8	White Sox 	$ 144 M 	9	Blue Jays 	$ 142 M 	10	Nationals 	$ 141 M 	11	Cardinals 	$ 140 M 	12	Rangers 	$ 139 M 	13	Reds 		$ 132 M 	14	Cubs 		$ 129 M 		15	Braves 		$ 115 M 	16	Diamondbacks$ 114 M 17	Brewers 	$ 107 M 	18	Royals 		$ 106 M 	19	Pirates 	$ 104 M 20	Indians 	$ 102 M 	21	Twins 		$ 101 M[b]22	Orioles 	$ 100 M 	[/b]23	Mets 		$ 98 M 	24	Mariners 	$ 97 M 	25	Rockies 	$ 96 M 26	Padres 		$ 92 M 	27	Athletics 	$ 85 M 	28	Rays 		$ 82 M 	29	Marlins 	$ 61 M 	30	Astros 		$ 47 M

The Orioles drop well back, to #22. Even worse, several of the teams behind them are teams with the ability to spend who were rebuilding in 2013: the Mariners (think their payroll will be over $100M next season?), the Mets, and the Astros. Even the Twins have spend a significant amount of money this year.

In short, ignoring ownership issues, the Orioles' front office is in a situation pretty close to that of the smallest market clubs: Tampa, Oakland, San Diego, and Miami (which isn't a small market but has the same sort of ownership issues). I would be unsurprised if by 2016 the Orioles had the #26 payroll in the league - perhaps even #27 if Oakland sorts out their stadium/relocation situation.

With this payroll cap, the Orioles cannot expect to ever bid for any serious free agent or even retain their homegrown players. The only realistic option is the Rays model, consistently trading players with expensive arbitration years for as many good prospects as possible.

Conclusion: IF the Orioles payroll is hard-capped at $100M, they are essentially Tampa. Any player who can be traded for prospects MUST be traded for prospects when their value is at a peak. This offseason, that means Chris Davis (two years of control), Wei-Yin Chen (one year), Matt Wieters (two years), and JJ Hardy (one year) should be out the door over the winter or perhaps at the trade deadline.

Even worse than this conclusion, I can't imagine Angelos approving such a strategy. So we'll be stuck in limbo with a 80-win team, a below-average farm, and both in decay rather than improving.

There are some assumptions here that may be wrong: teams may not add all $25 M to payroll (though given FA salaries this offseason it seems at least possible) and the $100M rumor may be wrong. Still, I'm very, very concerned. Dumping Jim Johnson's salary as an overpay is defensible, even though I think it's wrong. And the offseason isn't over yet. But not signing Nate McLouth for an extremely reasonable contract because Francisco Peguero is the apparent plan? Very bad.

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The current rumor is that the Orioles have a hard budget of $100M. I wanted to see how such a budget stacks up in today's baseball financial world. To start, here are the opening day 2013 payrolls:
	Team		OD 20131	Yankees 	$ 228,835,490 	2	Dodgers 	$ 216,597,577 3	Phillies 	$ 165,385,714 	4	Red Sox 	$ 150,655,500 	5	Tigers 		$ 148,414,500 	6	Giants 		$ 140,264,334 	7	Angels 		$ 127,896,250 	8	White Sox 	$ 119,073,277 	9	Blue Jays 	$ 117,527,800 	10	Nationals 	$ 116,056,769 	11	Cardinals 	$ 115,222,086 	12	Rangers 	$ 114,090,100 	13	Reds 		$ 107,491,305 	14	Cubs 		$ 104,304,676 	[b]15	Orioles 	$ 90,993,333 	[/b]16	Braves 		$ 89,778,192 	17	Diamondbacks$ 89,100,500 18	Brewers 	$ 82,976,944 	19	Royals 		$ 81,491,725 	20	Pirates 	$ 79,555,000 21	Indians 	$ 77,772,800 	22	Twins 		$ 75,802,500 	23	Mets 		$ 73,396,649 	24	Mariners 	$ 72,031,143 	25	Rockies 	$ 71,924,071 26	Padres 		$ 67,143,600 	27	Athletics 	$ 60,664,500 	28	Rays 		$ 57,895,272 	29	Marlins 	$ 36,341,900 	30	Astros 		$ 22,062,600 

The Orioles are right in the middle of the pack. Now, let's assume that every club will take the $25M in free national TV money and devote it to increasing payroll. We'll put the Orioles' number at $100M since that seems to be their limit. The new ranking looks like this:

1	Yankees 	$ 255 M 	2	Dodgers 	$ 242 M 3	Phillies 	$ 190 M 	4	Red Sox 	$ 175 M 	5	Tigers 		$ 173 M 	6	Giants 		$ 165 M 	7	Angels 		$ 152 M 	8	White Sox 	$ 144 M 	9	Blue Jays 	$ 142 M 	10	Nationals 	$ 141 M 	11	Cardinals 	$ 140 M 	12	Rangers 	$ 139 M 	13	Reds 		$ 132 M 	14	Cubs 		$ 129 M 		15	Braves 		$ 115 M 	16	Diamondbacks$ 114 M 17	Brewers 	$ 107 M 	18	Royals 		$ 106 M 	19	Pirates 	$ 104 M 20	Indians 	$ 102 M 	21	Twins 		$ 101 M[b]22	Orioles 	$ 100 M 	[/b]23	Mets 		$ 98 M 	24	Mariners 	$ 97 M 	25	Rockies 	$ 96 M 26	Padres 		$ 92 M 	27	Athletics 	$ 85 M 	28	Rays 		$ 82 M 	29	Marlins 	$ 61 M 	30	Astros 		$ 47 M

The Orioles drop well back, to #22. Even worse, several of the teams behind them are teams with the ability to spend who were rebuilding in 2013: the Mariners (think their payroll will be over $100M next season?), the Mets, and the Astros. Even the Twins have spend a significant amount of money this year.

In short, ignoring ownership issues, the Orioles' front office is in a situation pretty close to that of the smallest market clubs: Tampa, Oakland, San Diego, and Miami (which isn't a small market but has the same sort of ownership issues). I would be unsurprised if by 2016 the Orioles had the #26 payroll in the league - perhaps even #27 if Oakland sorts out their stadium/relocation situation.

With this payroll cap, the Orioles cannot expect to ever bid for any serious free agent or even retain their homegrown players. The only realistic option is the Rays model, consistently trading players with expensive arbitration years for as many good prospects as possible.

Conclusion: IF the Orioles payroll is hard-capped at $100M, they are essentially Tampa. Any player who can be traded for prospects MUST be traded for prospects when their value is at a peak. This offseason, that means Chris Davis (two years of control), Wei-Yin Chen (one year), Matt Wieters (two years), and JJ Hardy (one year) should be out the door over the winter or perhaps at the trade deadline.

Even worse than this conclusion, I can't imagine Angelos approving such a strategy. So we'll be stuck in limbo with a 80-win team, a below-average farm, and both in decay rather than improving.

There are some assumptions here that may be wrong: teams may not add all $25 M to payroll (though given FA salaries this offseason it seems at least possible) and the $100M rumor may be wrong. Still, I'm very, very concerned. Dumping Jim Johnson's salary as an overpay is defensible, even though I think it's wrong. And the offseason isn't over yet. But not signing Nate McLouth for an extremely reasonable contract because Francisco Peguero is the apparent plan? Very bad.

Would agree with this assessment. If we had access to the 25 M, we could add the two pieces, SP and LF, we need to be a WS contender.
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Well said, great post skanar.

Would agree with this assessment. If we had access to the 25 M, we could add the two pieces, SP and LF, we need to be a WS contender.

I agree. There's no reason for this team to not be spending money right now. Whether it's:

- signing FA's

- trading for a top player already under contract

- eating another teams bad contract in order to get a really good prospect back

- spending money on international players

- increased spending/presence in Latin America

- spending to overhaul our MiL system (which is clearly a problem)

This money should be going SOMEWHERE towards the team ... but it's not. Instead, we're hearing comments like "resource allocation". Instead, we're watching teams w/ less income and in smaller cities outspend us.

No, the offseason isn't over and I'm sure this thread is going to get bogged down with the proverbial, "wait and see" posts, but if the past is any indicator, this team won't be doing anything (significant).

Sure hope I'm wrong though.

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Do you really think every MLB owner (save PA) is going to plow the entire $25M into this team and keep nothing for himself? I don't.

FWIW, perhaps this is counterintuitive, if every owner (save for the Os) did put the entire $25M into their teams this year, it would probably considerably help the Os competitive position starting in 2015.

Also, I think the Os have more than $100M to spend in 2014 - so by the time you add $5M to the Os and take $5M from everyone else, the Os are right back around 17/18.

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Do you really think every MLB owner (save PA) is going to plow the entire $25M into this team and keep nothing for himself? I don't.

Well, probably not. But I think a good chunk of it will be, and the $25M is not the only reason payrolls are rising fast - it's just a convenient round number that we know about. Prices for FAs this offseason have certainly been high, despite a weak-ish FA class.

FWIW, perhaps this is counterintuitive, if every owner (save for the Os) did put the entire $25M into their teams this year, it would probably considerably help the Os competitive position starting in 2015.

Obviously not all of the money will be spent this season. The point is to look at the O's relative competitive position in terms of payroll going forward.

Also, I think the Os have more than $100M to spend in 2014 - so by the time you add $5M to the Os and take $5M from everyone else, the Os are right back around 17/18.

They certainly have the money, but the rumor/conspiracy theory is that Duquette was given a strict cap of $100M by Peter Angelos. I can't know if that's true, but it might be: hence the big "If" in the title of the post and in the conclusion.

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The current rumor is that the Orioles have a hard budget of $100M. I wanted to see how such a budget stacks up in today's baseball financial world. To start, here are the opening day 2013 payrolls:
	Team		OD 20131	Yankees 	$ 228,835,490 	2	Dodgers 	$ 216,597,577 3	Phillies 	$ 165,385,714 	4	Red Sox 	$ 150,655,500 	5	Tigers 		$ 148,414,500 	6	Giants 		$ 140,264,334 	7	Angels 		$ 127,896,250 	8	White Sox 	$ 119,073,277 	9	Blue Jays 	$ 117,527,800 	10	Nationals 	$ 116,056,769 	11	Cardinals 	$ 115,222,086 	12	Rangers 	$ 114,090,100 	13	Reds 		$ 107,491,305 	14	Cubs 		$ 104,304,676 	[b]15	Orioles 	$ 90,993,333 	[/b]16	Braves 		$ 89,778,192 	17	Diamondbacks$ 89,100,500 18	Brewers 	$ 82,976,944 	19	Royals 		$ 81,491,725 	20	Pirates 	$ 79,555,000 21	Indians 	$ 77,772,800 	22	Twins 		$ 75,802,500 	23	Mets 		$ 73,396,649 	24	Mariners 	$ 72,031,143 	25	Rockies 	$ 71,924,071 26	Padres 		$ 67,143,600 	27	Athletics 	$ 60,664,500 	28	Rays 		$ 57,895,272 	29	Marlins 	$ 36,341,900 	30	Astros 		$ 22,062,600 

The Orioles are right in the middle of the pack. Now, let's assume that every club will take the $25M in free national TV money and devote it to increasing payroll. We'll put the Orioles' number at $100M since that seems to be their limit. The new ranking looks like this:

1	Yankees 	$ 255 M 	2	Dodgers 	$ 242 M 3	Phillies 	$ 190 M 	4	Red Sox 	$ 175 M 	5	Tigers 		$ 173 M 	6	Giants 		$ 165 M 	7	Angels 		$ 152 M 	8	White Sox 	$ 144 M 	9	Blue Jays 	$ 142 M 	10	Nationals 	$ 141 M 	11	Cardinals 	$ 140 M 	12	Rangers 	$ 139 M 	13	Reds 		$ 132 M 	14	Cubs 		$ 129 M 		15	Braves 		$ 115 M 	16	Diamondbacks$ 114 M 17	Brewers 	$ 107 M 	18	Royals 		$ 106 M 	19	Pirates 	$ 104 M 20	Indians 	$ 102 M 	21	Twins 		$ 101 M[b]22	Orioles 	$ 100 M 	[/b]23	Mets 		$ 98 M 	24	Mariners 	$ 97 M 	25	Rockies 	$ 96 M 26	Padres 		$ 92 M 	27	Athletics 	$ 85 M 	28	Rays 		$ 82 M 	29	Marlins 	$ 61 M 	30	Astros 		$ 47 M

The Orioles drop well back, to #22. Even worse, several of the teams behind them are teams with the ability to spend who were rebuilding in 2013: the Mariners (think their payroll will be over $100M next season?), the Mets, and the Astros. Even the Twins have spend a significant amount of money this year.

In short, ignoring ownership issues, the Orioles' front office is in a situation pretty close to that of the smallest market clubs: Tampa, Oakland, San Diego, and Miami (which isn't a small market but has the same sort of ownership issues). I would be unsurprised if by 2016 the Orioles had the #26 payroll in the league - perhaps even #27 if Oakland sorts out their stadium/relocation situation.

With this payroll cap, the Orioles cannot expect to ever bid for any serious free agent or even retain their homegrown players. The only realistic option is the Rays model, consistently trading players with expensive arbitration years for as many good prospects as possible.

Conclusion: IF the Orioles payroll is hard-capped at $100M, they are essentially Tampa. Any player who can be traded for prospects MUST be traded for prospects when their value is at a peak. This offseason, that means Chris Davis (two years of control), Wei-Yin Chen (one year), Matt Wieters (two years), and JJ Hardy (one year) should be out the door over the winter or perhaps at the trade deadline.

Even worse than this conclusion, I can't imagine Angelos approving such a strategy. So we'll be stuck in limbo with a 80-win team, a below-average farm, and both in decay rather than improving.

There are some assumptions here that may be wrong: teams may not add all $25 M to payroll (though given FA salaries this offseason it seems at least possible) and the $100M rumor may be wrong. Still, I'm very, very concerned. Dumping Jim Johnson's salary as an overpay is defensible, even though I think it's wrong. And the offseason isn't over yet. But not signing Nate McLouth for an extremely reasonable contract because Francisco Peguero is the apparent plan? Very bad.

Chen does not become a free agent. And I think the hard cap is not accurate.

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Chen does not become a free agent. And I think the hard cap is not accurate.

I didn't realize he had an option; you're right.

I hope there isn't a cap. But I'm struggling to understand this offseason so far. Staying out of the FA market because the vast majority are overpriced and don't perform well is one thing, but dumping Johnson and making no effort to resign McLouth is another.

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I didn't realize he had an option; you're right.

I hope there isn't a cap. But I'm struggling to understand this offseason so far. Staying out of the FA market because the vast majority are overpriced and don't perform well is one thing, but dumping Johnson and making no effort to resign McLouth is another.

We then control his rights through 2018 if I am not mistaken. He is just like Bryce Harper in that regard.

I did not want Jim Johnson back. I did not want Nate McClouth back. I think flexibility at those two positions will serve us well. Money aside. Because if it were up to me, I would have Mr. Angelos spend every last penny on my personal enjoyment of the team. And life in general.

I believe that we will be a better team not tethered to Jim Johnson this season. And I believe we will do better in left field than Nate McClouth does for the Nationals.

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We then control his rights through 2018 if I am not mistaken. He is just like Bryce Harper in that regard.

I'm pretty sure this isn't the case, BB-ref notwithstanding. Chen signed as an international (pro) free agent, right? I believe those players become FAs when their contract is up - like Cespedes or Puig. Cespedes signed a 4-year deal, so I think he's a FA after 4 years, despite his <6 years of service time. I could be wrong about this but I'm like 80% sure....

I believe that we will be a better team not tethered to Jim Johnson this season. And I believe we will do better in left field than Nate McClouth does for the Nationals.

By tethered, you mean bound to use Johnson in the 9th? I think the bullpen overall will be better than last year just due to annual variation, but I think the loss of Johnson will hurt. As for McLouth, hmm... it's possible. Nate could easily be due to hit an age wall. And someone like Urrutia could step up and perform well. But I don't think I'd bet it that way.

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I doubt its fixable.

If you put in a hard cap, and then you have parity like the NFL.

the owners should shut down . These contracts are unsustainable. The union has far too much power. There should be a cap and a floor . Who wants to watch a sport where there can be a $150-200M differential between teams ? It is absurd.
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I still do not understand why a team like SEA... with dwindling attendance and a tv deal... can have a bigger budget than Baltimore... Does this team not have money with MASN as well? Hasn't attendance been on the up? Maybe I am not too knowledgeable on how the funds system works with baseball... but it seems like this team should have more money ready than reported. There should be no reason, if we really want to be contenders, that we can't go out and get these guys early (Choo, Balfour, Garza) like other teams are doing...

Can someone with better knowledge please explain?

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I still do not understand why a team like SEA... with dwindling attendance and a tv deal... can have a bigger budget than Baltimore... Does this team not have money with MASN as well? Hasn't attendance been on the up? Maybe I am not too knowledgeable on how the funds system works with baseball... but it seems like this team should have more money ready than reported. There should be no reason, if we really want to be contenders, that we can't go out and get these guys early (Choo, Balfour, Garza) like other teams are doing...

Can someone with better knowledge please explain?

To add to this... Baltimore, to me, has never seemed like a "small market" team. The fan base is huge and aside from the straight, losing years... has always been a great sports town.

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