Monday, February 10, 2014

Deconstructing the Payroll

        With the K-Rod signing the Brewers' roster is essentially complete.  I thought it would be interesting to see how the money is divided among the team's different roles.  There will be some competition for the final two bullpen spots, but it shouldn't impact the payroll as all the in-house options will make approximately league minimum.  It's also possible that the Brewers choose to go with Lyle Overbay instead of Juan Francisco.  I'd be surprised (and a little disappointed) if that happened, so for now I'm going to ignore that possibility.  I ran into a bit of an obstacle at first base and second base because the Brewers are going to, or at least they should, be using platoons at both positions.  I decided to divide the salaries of Gennett, Weeks, Francisco, and Reynolds based on their roles.  The strong sided platoon players would have two-thirds of their salaries go towards the starting position portion of the payroll and one-third toward the bench.  The opposite would be true for the weak-sided platoon players where one-third of their salaries goes towards the starting position portion of the payroll and two-thirds goes towards the bench.

Here is the payroll breakdown:

Starting Position Players: $38,233,333
Bench Players:                $11,116,667
Starting Rotation:             $37,925,000
Bullpen:                           $9,100,000

Starting Roles:                 $76,158,333
Reserve Roles:                 $20,216,667

Position Players:             $49,350,000
Pitchers:                         $47,025,000

Total:                              $96,375,000

Here is the breakdown of the payroll by percentage:

Starting Position Players: 40%
Bench Players:                11.5%
Starting Rotation:             39.5%
Bullpen:                           9%

Starting Roles:                 79%
Reserve Roles:                 21%

Position Players:              51%
Pitchers:                          49%

        Interestingly, the Brewers have pretty evenly distributed their payroll between pitchers and position players.  It's not surprising to see the majority of the Brewers' payroll going to starting players.  I might be surprised by seeing so much money spent on the bench, but I know that's only because the majority of Weeks' salary goes towards it.  The thing that most stands out to me is the percent being spent on the bullpen.  It seems low and to me that's a good thing.  As we should all know by now, relievers are the most fungible asset on any given team.  Bullpens are volatile and usually have a relatively high turnover rate so it's comforting to see so little of the Brewers' money going towards it.  This is also an area where I see the Brewers getting a decent amount of surplus value.  Of the money the Brewers are spending on pitching, 19% of it is going to the bullpen.  Last year the Brewers gave 36% of their total innings pitched to the bullpen.  Back in 2011 when they only used 6 different starting pitchers, they still gave 31% of their innings pitched to the bullpen.
        I wanted to deconstruct the payroll like this simply because I was curious about it.  I'm not sure there is a right or wrong way to divide a team's payroll.  It's a relative situation because a team could have a bunch of position players in starting roles that are making the league minimum.  If that's the case, it would make sense that they'd be spending more on pitchers.  To some extent this is what is going on with the Brewers.  Aramis Ramiez, Ryan Braun, and Carlos Gomez are the only starting position players making over $2 million dollars.  Conversely, they have 3 starting pitchers making over $10 million.  Next year, three of the highest paid (Ramirez, Weeks, Gallardo) players could be cut loose.  Really I only see Weeks departing, but it'll be interesting to see how the payroll is doled out next year.

Friday, February 7, 2014

Brewers sign K-Rod; Updated roster and payroll projections

Today the Brewers announced they signed Francisco Rodriguez to a 1 year contract worth $3.25 million.  The deal includes another $550,000 possible through incentives which would raise the total value to just under $4 million.  Ignoring my personal and moral   reservations, from a purely baseball perspective I think this is a fine deal.  K-Rod was pretty awful in 2012 but that was due to a severe drop in his swinging strike rate from a career average around 12% to 7.9%.  That resulted in a large increase in contact rate, from low to mid-70% the previous three years to 80.9%.  Those numbers regressed towards norms in 2013.  His swinging strike rate was 10.2% and his contact rate was 76.6%.  To me this seems to suggest that while he's no longer an elite reliever, he isn't completely worthless.  I think he's losing his edge a bit, and shouldn't be used in high leverage situations anymore, but outside of those he can probably be a perfectly capable middle reliever.  I've seen plenty of people suggest that nearly $4 million is a big overpay, but I would disagree with that.  In this market of increased salaries, the AAV seems to be in line with what middle relievers are getting.  Then when one takes into account the deal is for only 1 year I think it actually starts to look pretty good.  I suspect this is the last significant transaction of the offseason for the Brewers, so it's not like the money was going to be needed elsewhere.  Oh yeah, in a corresponding move they have designated Donovan Hand for assignment to make room for K-Rod on the 40-man roster.

Here's is my updated roster and payroll projection:

C: Jonathan Lucroy ($2 MM)
BN: Martin Maldonado ($500 k)*
1B: Mark Reynolds ($2.5 MM)
BN: Juan Francisco ($1.35 MM)****
2B: Scooter Gennett ($500 k)*
BN: Rickie Weeks ($11 MM)
3B: Aramis Ramirez ($10 MM)*******
BN: Jeff Bianchi ($500 k)*
SS: Jean Segura ($500 k)*

LF: Khris Davis ($500 k)*

CF: Carlos Gomez ($7 MM)
OF: Logan Schafer ($500 k)*
RF: Ryan Braun ($12.5 MM)

SP: Kyle Lohse ($11 MM)
RP: Jim Henderson ($500 k)*
SP: Yovani Gallardo ($11.5 MM)****
RP: Brandon Kintzler ($500 k)*
SP: Matt Garza ($11.5 MM)*****
RP: Tom Gorzelanny ($2.8 MM)
SP: Wily Peralta ($500 K)*
RP: Tyler Thornburg ($500 k)*
SP: Marco Estrada ($3.425 MM)***
RP: Will Smith ($500 k)*

RP: Francisco Rodriguez ($3.8 MM)******
RP: Rob Wooten (500 k)*

Unless otherwise noted, all figures come from Cots Contracts.
*League minimum is $500,000. Actual salaries could be marginally higher.
** Reynolds' contract is for a $2 million guaranteed base with another $500,000 possible with incentives.
***Estrada's base salary is reportedly $3.325 and includes $100,000 in incentives.
****J. Francisco's contracts reportedly contains performance bonuses that are as yet unkown.
*****Garza's deal is for $12.5MM ea. year but $2 MM is deferred. Can make extra $1M w/incentives.
******K-Rod's base salary is $3.25 million with another $550,000 possible through incentives.
*******Ramirez's total salary for 2014 is actually $16 million, but $6 MM of it is deferred. 

The total payroll comes to $96.375 million with no open roster spots.  That includes all incentives, which equal $2.15 million, so the actual total could be less.