The O's ARE a small market team -- but so what?

[Frobby]

Notwithstanding John Angelos’ “poor mouth” crying and terrible communication skills, let’s be clear about one thing: the Orioles ARE a small market team.  The question is, what does that say about how the Orioles can and should build their team?

Let’s begin here: MLB awards extra draft picks and international slot allocations to (1) the ten smallest markets as measured by their calculated Revenue Sharing Market Score (“RSMS”), as set forth in the CBA, and (2) the ten teams with the smallest gross revenue.   There is an overlap of these two lists, but they are not identical.   Therefore, in 2023, 14 teams received extra picks and allocations, and this included the Orioles.   The O’s market ranked 23^rd on the RSMS.  The alternate calculation using revenue is not public, but per Forbes, the Orioles also ranked either 22^nd or 23^rd in revenue among the 30 teams.  (I’m not sure which only because the Forbes link that has the Pirates’ data has a glitch.)   So really, by the two measures that MLB itself uses, it’s correct to categorize the Orioles as a “small market” team. 

Of the 14 teams who received comp picks, I am going to eliminate two as outliers.  First, I don’t know why the Mariners are on this list.  They are not one of the 10 smallest markets on the RSMS (they are 16^th), and per Forbes, their revenues were about $70 mm more than any other team that got comp picks.  Second, I am eliminating Oakland, which per Forbes has revenues about $25 mm less than any other team (and $52 mm less than the Orioles).   So that leaves 11 teams that could be seen as small market peers of the Orioles.  I’m going to give a little data on each one, and review the long term contract commitments each team has (the contract figures below include already-past years of those contracts).  I’ll list the teams in order of gross revenue per Forbes (note that the O’s are at $264 mm, right in the middle of this pack).

Milwaukee Brewers, $294 mm in revenue, 30^th in market size per the RSMS.  The Brewers have $296 mm in multi-year contracts, mostly tied up in Christian Yelich ($215 mm).  Their 2023 opening day payroll was $118 mm, per BB-ref.  They lead the NL Central.

Colorado Rockies, $286 mm revenue, 21^st in market size.   The Rockies have $456 mm in long term contracts, headed by Kris Bryant ($182 mm) and Charlie Blackmon ($113 mm).  Their 2023 payroll is $149 mm.   They are in last place in the NL West.

Arizona Diamondbacks, $276 mm revenue, 18^th in market size.  The DBacks have $288 mm in long term contracts, headlined by Corbin Carroll, inked to an $111 mm contract midway through his rookie campaign.  The DBacks have a $116 mm payroll and are currently in 3^rd place in the NL West, 1 game out of the final NL wild card spot.

Cleveland Guardians, $268 mm in revenue, 25^th in market size.  The Guardians have $302 mm in long-term commitments, mostly to Jose Ramirez ($141 mm) and Andres Gimenez ($106 mm).  Their payroll is $87 mm and they are currently 2^nd in the AL Central, but well under .500 and not in the wild card race.

Minnesota Twins, $267 mm in revenue, 17^th in market size.  The Twins have $571 mm in long term contracts, headlined by Carlos Correa at $200 mm and Bryan Buxton at $100 mm.   They have a number of other sizable deals.  Their payroll is $138 mm and they are leading the weak AL Central, despite being only 5 games over .500.

Baltimore Orioles, $264 mm in revenue, 23rd in market size.  The Orioles have $11 mm in multi-year contracts, including John Means (expiring this year) and their share of the James McCann contract.  Their payroll is $72 mm, and they have the best record in the AL, 30 games over .500.

Pittsburgh Pirates, $262 mm in revenue, 27^th in market size.  The Pirates have $176 mm in long terms deals, all relating to Bryan Reynolds ($106 mm) and Ke’Brian Hayes ($70 mm).   The Pirates have a payroll of $72 mm and are in 4^th place in the NL Central, but 14 games under .500. 

Kansas City Royals, $260 mm in revenue, 28^th in market size.   The Royals have $99 mm in long term contracts, mostly comprised of an $82 mm deal with Salvador Perez.   The Royals have a payroll of $91 mm and are the second worst team in MLB this year.

Detroit Tigers, $260 mm in revenue, 20^th in market size.  The Tigers have $458 mm in long term contracts, mostly relating to  Miguel Cabrera ($240 mm) and Javier Baez ($140 mm).  The Tigers have a payroll of $119 mm and sit 3^rd in the AL Central, 10 games under .500.

Cincinnati Reds, $250 mm revenues, 29^th in market size.  The Reds have $278 mm in long term contracts, $225 mm of which is Joey Votto.  The Reds have a payroll of $89 mm and they are 3^rd in the AL Central, 1 game out of the last wild card spot.

Tampa Bay Rays, $248 mm in revenues, 19^th in market size.  The Rays have $370 mm in long terms contracts, almost half of which relates to Wander Franco ($182 mm) – we’ll see what happens with that.   The Rays have a $76 mm payroll and they are 2^nd in the AL East, currently in the top wild card spot.

Miami Marlins, $238 mm in revenues, 22^nd in market size.  The Marlins have $155 mm in long term contracts, nothing larger than the $55 mm deal with Sandy Alcantara.  Their payroll is $98 mm and they are 3^rd in the NL East,  1 game out of the final wild card spot.

Before leaving this list, I should mention that there are two teams in the bottom 10 of the RSMS who did not qualify for draft picks or international pool money, and I did not include them as peer teams.  They are the Cardinals ($358 mm in revenue, 26^th in market size) and the Padres ($324 mm in revenue, 24^th in market size).   I think the revenue disparities are too great to consider them peer teams, and the Padres per Forbes are operating at an enormous operating loss.  

So what are we to make of this?   First of all, we see that most of our peer teams can and do spend more on payroll than the Orioles, with the range being $72 - $149 mm and the median at $98 mm.  Per Forbes, the three teams at the top are showing operating losses, so I’m thinking that $115 - $120 mm is a realistic amount to spend.   Anything more would be dependent on increased revenue, which to be clear, should be coming as attendance increases and playoff revenues come in.

Second, our peer teams can and do enter into long term contracts, though they don’t always work out as planned.  None of these teams has ever forked over more than $240 mm, and only 4 have exceeded $200 mm on a deal (the Cabrera contract was a huge loser, the Yelich deal looks like it will be a significant loser, the Correa deal is off to a bad start, while the Votto deal turned out decently.)  In my view, the O’s can do some long term deals, but they have to be careful with them.   I favor the ones for players who are far from free agency, but of course those require a willingness of the player to sign. 

Honestly, when I look at all this, John Angelos wasn’t completely wrong in what he said.  But, he took it too far and failed to acknowledge that the O’s do have significant room to increase payroll and do some long term deals over the next several years.   They just have more limits than the large market teams do.

Edited August 22, 2023 by Frobby

[Moose Milligan]

Does their poverty index or RMS or whatever take into account that the Orioles and their location dips into the DC market or not?

[baltfan]

6 minutes ago, Frobby said:

Notwithstanding John Angelos’ “poor mouth” crying and terrible communication skills, let’s be clear about one thing: the Orioles ARE a small market team.  The question is, what does that say about how the Orioles can and should build their team?

Let’s begin here: MLB awards extra draft picks and international slot allocations to (1) the ten smallest markets as measured by their calculated Revenue Sharing Market Score (“RSMS”), as set forth in the CBA, and (2) the ten teams with the smallest gross revenue.   There is an overlap of these two lists, but they are not identical.   Therefore, in 2023, 14 teams received extra picks and allocations, and this included the Orioles.   The O’s market ranked 23^rd on the RSMS.  The alternate calculation using revenue is not public, but per Forbes, the Orioles also ranked either 22^nd or 23^rd in revenue among the 30 teams.  (I’m not sure which only because the Forbes link that has the Pirates’ data has a glitch.)   So really, by the two measures that MLB itself uses, it’s correct to categorize the Orioles as a “small market” team. 

Of the 14 teams who received comp picks, I am going to eliminate two as outliers.  First, I don’t know why the Mariners are on this list.  They are not one of the 10 smallest markets on the RSMS (they are 16^th), and per Forbes, their revenues were about $70 mm more than any other team that got comp picks.  Second, I am eliminating Oakland, which per Forbes has revenues about $25 mm less than any other team (and $52 mm less than the Orioles).   So that leaves 11 teams that could be seen as small market peers of the Orioles.  I’m going to give a little data on each one, and review the long term contract commitments each team has (the contract figures below include already-past years of those contracts).  I’ll list the teams in order of gross revenue per Forbes (note that the O’s are at $264 mm, right in the middle of this pack).

Milwaukee Brewers, $294 mm in revenue, 30^th in market size per the RSMS.  The Brewers have $296 mm in multi-year contracts, mostly tied up in Christian Yelich ($215 mm).  Their 2023 opening day payroll was $118 mm, per BB-ref.  They lead the NL Central.

Colorado Rockies, $286 mm revenue, 21^st in market size.   The Rockies have $456 mm in long term contracts, headed by Kris Bryant ($182 mm) and Charlie Blackmon ($113 mm).  Their 2023 payroll is $149 mm.   They are in last place in the NL West.

Arizona Diamondbacks, $276 mm revenue, 18^th in market size.  The DBacks have $288 mm in long term contracts, headlined by Corbin Carroll, inked to an $111 mm contract midway through his rookie campaign.  The DBacks have a $116 mm payroll and are currently in 3^rd place in the NL West, 1 game out of the final NL wild card spot.

Cleveland Guardians, $268 mm in revenue, 25^th in market size.  The Guardians have $302 mm in long-term commitments, mostly to Jose Ramirez ($141 mm) and Andres Gimenez ($106 mm).  Their payroll is $87 mm and they are currently 2^nd in the AL Central, but well under .500 and not in the wild card race.

Minnesota Twins, $267 mm in revenue, 17^th in market size.  The Twins have $571 mm in long term contracts, headlined by Carlos Correa at $200 mm and Bryan Buxton at $100 mm.   They have a number of other sizable deals.  Their payroll is $138 mm and they are leading the weak AL Central, despite being only 5 games over .500.

Kansas City Royals, $260 mm in revenue, 28^th in market size.   The Royals have $99 mm in long term contracts, mostly comprised of an $82 mm deal with Salvador Perez.   The Royals have a payroll of $91 mm and are the second worst team in MLB this year.

Detroit Tigers, $260 mm in revenue, 20^th in market size.  The Tigers have $458 mm in long term contracts, mostly relating to  Miguel Cabrera ($240 mm) and Javier Baez ($140 mm).  The Tigers have a payroll of $119 mm and sit 3^rd in the AL Central, 10 games under .500.

Cincinnati Reds, $250 mm revenues, 29^th in market size.  The Reds have $278 mm in long term contracts, $225 mm of which is Joey Votto.  The Reds have a payroll of $89 mm and they are 3^rd in the AL Central, 1 game out of the last wild card spot.

Tampa Bay Rays, $248 mm in revenues, 19^th in market size.  The Rays have $370 mm in long terms contracts, almost half of which relates to Wander Franco ($182 mm) – we’ll see what happens with that.   The Rays have a $76 mm payroll and they are 2^nd in the AL East, currently in the top wild card spot.

Miami Marlins, $238 mm in revenues, 22^nd in market size.  The Marlins have $155 mm in long term contracts, nothing larger than the $55 mm deal with Sandy Alcantara.  Their payroll is $98 mm and they are 3^rd in the NL East,  1 game out of the final wild card spot.

Pittsburgh Pirates, unknown revenues, 27^th in market size.  The Pirates have $176 mm in long terms deals, all relating to Bryan Reynolds ($106 mm) and Ke’Brian Hayes ($70 mm).   The Pirates have a payroll of $72 mm and are in 4^th place in the NL Central, but 14 games under .500. 

Before leaving this list, I should mention that there are two teams in the bottom 10 of the RSMS who did not qualify for draft picks or international pool money, and I did not include them as peer teams.  They are the Cardinals ($358 mm in revenue, 26^th in market size) and the Padres ($324 mm in revenue, 24^th in market size).   I think the revenue disparities are too great to consider them peer teams, and the Padres per Forbes are operating at an enormous operating loss.  

So what are we to make of this?   First of all, we see that most of our peer teams can and do spend more on payroll than the Orioles, with the range being $72 - $149 mm and the median at $98 mm.  Per Forbes, the three teams at the top are showing operating losses, so I’m thinking that $115 - $120 mm is a realistic amount to spend.   Anything more would be dependent on increased revenue, which to be clear, should be coming as attendance increases and playoff revenues come in.

Second, our peer teams can and do enter into long term contracts, though they don’t always work out as planned.  None of these teams has ever forked over more than $240 mm, and only 4 have exceeded $200 mm on a deal (the Cabrera contract was a huge loser, the Yelich deal looks like it will be a significant loser, the Correa deal is off to a bad start, while the Votto deal turned out decently.)  In my view, the O’s can do some long term deals, but they have to be careful with them.   I favor the ones for players who are far from free agency, but of course those require a willingness of the player to sign. 

Honestly, when I look at all this, John Angelos wasn’t completely wrong in what he said.  But, he took it too far and failed to acknowledge that the O’s do have significant room to increase payroll and do some long term deals over the next several years.   They just have more limits than the large market teams do.

Great post. If Angelos had only said we would love to keep guys but it’s going to be very hard in the present environment, everyone would have just sloughed it off.  Apparently he never took a PR course at Duke.  

[Jim'sKid26]

@Tony-OH would you consider pinning @Frobby post at the top for easy reference? Fantastic info. Thank you!

[Going Underground]

He clarified he didn’t mean that in a financial sense, saying, “I don’t expect payroll to model any particular team.” He noted Milwaukee as a point of comparison because, like Baltimore to Washington, it’s in the shadow of a larger market in Chicago. He didn’t mention another similar pairing: San Diego and Los Angeles. Although the Padres play in the 27th-largest media market in the country, they have the majors’ third-largest projected payroll at almost $250 million. Baltimore is the No. 28 market.

“We’ll see where the payroll goes,” Angelos said. “If you’re asking me if we have the resources, we absolutely have the resources, and we plan to keep moving the payroll up.”

 

So in spring training a different tune. 

[DirtyBird]

It’s not about size, it’s about how you work it.

[Frobby]

49 minutes ago, Moose Milligan said:

Does their poverty index or RMS or whatever take into account that the Orioles and their location dips into the DC market or not?

I have zero idea how it’s calculated.  However, there is only one market score for NY, LA, Chicago and SF/OAK, but Washington and Baltimore are scored separately.  Washington is the 10th largest market per the list.  

[Fan4Life]

I agree with Angelos' sentiments (perhaps reading between the lines) that the O's cannot compete with the open market to sign a long term deal with any Free Agent player, ours included. However, I think his comments were unnecessary, have no purpose,  and perhaps are damaging to the team morale.  If we are going to keep anyone, it will need to be the Tampa model, sign the player years ahead of free agency.  If he is saying we can't do that, he isn't clear in his meaning, then certainly he is a liar.  In the end, as long as they own the team, what we can afford will always be decided by them, not any market comparisons.  Having success with a cheap team will only solidify their position. 

[Too Tall]

Thank you Frobby! I for one appreciate the work you put in and the information that you took time to research and share!

[OsFanSinceThe80s]

18 minutes ago, Fan4Life said:

I agree with Angelos' sentiments (perhaps reading between the lines) that the O's cannot compete with the open market to sign a long term deal with any Free Agent player, ours included. However, I think his comments were unnecessary, have no purpose,  and perhaps are damaging to the team morale.  If we are going to keep anyone, it will need to be the Tampa model, sign the player years ahead of free agency.  If he is saying we can't do that, he isn't clear in his meaning, then certainly he is a liar.  In the end, as long as they own the team, what we can afford will always be decided by them, not any market comparisons.  Having success with a cheap team will only solidify their position. 

It seems pretty transparent that Angelos is trying to get the state of Maryland to give him that $600M for the Camden Crossing project and he's negotiating through the media with this interview.

Angelos attitude is basically what nice prospects you have to watch Orioles fans and it would be a shame to lose them. So give me the $600M and if you're lucky I might mange to sign one of our young stars to a contract extension.

 

[Moose Milligan]

1 hour ago, Frobby said:

I have zero idea how it’s calculated.  However, there is only one market score for NY, LA, Chicago and SF/OAK, but Washington and Baltimore are scored separately.  Washington is the 10th largest market per the list.  

Then I’m not buying that Baltimore is a small market. It is unrealistic to consider the type of market it is if the DC area isn’t part of their calculation. 

I will agree that it’s hard to tell how much of DC plays a part into the Baltimore market, but we all know it does. 
 

IMO it’s a mid market team. 

[yark14]

2 hours ago, DirtyBird said:

It’s not about size, it’s about how you work it.

We need to get more motion in the ocean.

@frobby, that was more detailed and informative than my college thesis was.  Kudos.

[EddeeEddee]

38 minutes ago, Moose Milligan said:

Then I’m not buying that Baltimore is a small market. It is unrealistic to consider the type of market it is if the DC area isn’t part of their calculation. 

I will agree that it’s hard to tell how much of DC plays a part into the Baltimore market, but we all know it does. 
 

IMO it’s a mid market team. 

I agree.  Baltimore is only 40-45 miles from DC, much closer than Milwaukee is to Chicago or San Diego is to LA. 

In fact, Baltimore and DC are frequently considered one metro area, known as a combined statistical area. 

https://en.wikipedia.org/wiki/Washington–Baltimore_combined_statistical_area

Combined it is the 3rd largest metro area in the US, behind only the NY and LA areas and just ahead of Chicago and the Bay Area.  Areas this big can easily support two MLB teams.

On top of that the Orioles were the only MLB team in the area for over 4 decades, drawing fans all the way down into DC, Virginia and North Carolina.  I'm sure the O's still draw tens of thousands -- if not more -- fans from Montgomery and PG Counties on down.  No wonder MASN would serve more or less the same demographic for both teams.  

[baltfan]

2 hours ago, Going Underground said:

He clarified he didn’t mean that in a financial sense, saying, “I don’t expect payroll to model any particular team.” He noted Milwaukee as a point of comparison because, like Baltimore to Washington, it’s in the shadow of a larger market in Chicago. He didn’t mention another similar pairing: San Diego and Los Angeles. Although the Padres play in the 27th-largest media market in the country, they have the majors’ third-largest projected payroll at almost $250 million. Baltimore is the No. 28 market.

“We’ll see where the payroll goes,” Angelos said. “If you’re asking me if we have the resources, we absolutely have the resources, and we plan to keep moving the payroll up.”

 

So in spring training a different tune. 

San Diego doesn’t have a football team. They are the only game in town. 

[Frobby]

51 minutes ago, yark14 said:

@frobby, that was more detailed and informative than my college thesis was.  

Mine too.