Saturday, February 13, 2010

Padres Payroll and IIATMS

Yesterday Jason over at It’s About The Money, Stupid (IIATMS) brought up some issues in his blog post “Maybe it's time to worry about the Padres” that I wanted to address in more detail than is proper for a comment section.

Let me begin by saying that if you don't read Jasons blog on a daily basis you are mising out on some great commentary on baseball.

I really don't share any of the concerns expressed in his post about the Padres payroll or viability any more than I do for any small market club. The system in baseball as a whole needs to be changed in order for these small market teams to consistently compete.

That is a topic that is worthy of an entire series of blog posts so I am not going to try to cover it in any length here today.

The problem does not lie solely with the Padres.  No small market team today can afford to keep players of Adrian Gonzalez's caliber, players that will earn $20+ million in free agency, and continue to compete with one player taking up such a large of a  percentage of their total payroll.

Why do I say that? Well according to an article by Peter Gammons (and from some lite research of my own), I have found that no team since the advent of Free Agency has won a World Series with one player making more than 16% of total payroll and no team has made it to the World Series (or even the NLCS) with one player making more than 20% of the total payroll.

At a $70-80 million payroll that Moorad and company have told us  they want the Padres payroll to be at in coming seasons, history  tells us that the most the Padres can pay a single player and continue to compete would be under $16 million per season.

Do YOU think Adrian Gonzalez should or would take a contract of  $12-16 million per season to stay in San Diego instead of a  Teixeira-like deal elsewhere? (8 years/$180 million or $21.5 million per season)

As far as the Padres current $38.025 million ML payroll goes there are a couple of points to be made.

The Padres current payroll is more result of conditions that were  court mandated because of the Moores divorce than of market woes or size.

There is ample evidence that the team, the fan base and the market can support a larger payroll as the Padres had a $73+ million  payroll in 2008 and a $69 million payroll in 2006. In fact, before the Moores filed for divorce, every season since the opening of Petco Park the payroll has been higher than it was in any season prior to the park’s opening in 2004.

The Moores divorce has locked the payroll at a size that would preclude any losses that the Moorad group has not volunteered to cover.

In 2008 the Padres organization lost $15 million with a $73 million payroll. The Padres partners (John and Becky Moores and their daughter) had to take money out of their poclets to balance the team budget going into the next season. That is the way a general partnership works. You either borrow money to balance the books or the partner pony it up. This we know from records made public in the divorce.

Until such time as Moorad and his group take majority ownership (2012 season?) and  the Moores divorce is finalized (who knows when) the Padres are in a bind.

They cannot put forth a payroll that would create a cash call for  the partners. In other words they cannot raise the payroll much  above where it is now and are working with their hands tied behind  their backs this season and until Moores divorce is final.

This team will see payroll rise in the coming years and I believe Moorad when he says that he and his investment group are looking to have the Padres major league payroll in the $70-80 million range.

With revenue in the $150-170 million range that is a reasonable amount for the Padres or any team to spend on the players on the field.

What it will not do is allow the Padres to keep a player like Adrian Gonzalez or any other player that rises to his level of performance and worth in the future.

The system is broken. Only about 1/3 of the teams in baseball can afford a player like Gonzalez. Realistically probably only a handful can take on a salary that size and the economy and another headline divorce may have shrunken that number to just 2.

So its not about the Padres ability to raise payroll under normal circumstances or about the Padres market or fanbase to support the team. Its not about a tradition. If you have ever been to a playoff game in San Diego you KNOW we have some rabid and loyal fans here.

Right now its about a divorce. 

Okay I've gotta say it:

It's about the money, stupid!

(There were a few obvious errors in Jason's article. Geoff at Ducksnorts already pointed that Garland was not a Padre in 2009. The Padres payroll was $43,333,700 at the start of the 2009 season and $43,210,258 at the end of the season according to Biz of Baseball and $43,734,200 according to Cots MLB Contracts.)


  1. Good stuff, Web.

    If Adrian took the discount to stay in SD he could reasonably go down as the greatest Padre ever (well, maybe second best). With that distinction he would undoubtedly get a statue at the park in the park and as we all know.... statues last a really long time.

    I hope he takes a discount because he likes the direction the team is going and stays his career here in San Diego.

  2. As a fan I really hope Gonzalez is willing to take a deep San Diego discount and stay.

    The Padres have a a very deep system and with Gonzalez on board they could be very good very soon.

  3. Good article. I am a little skeptical of the "lost $15 million" comment. That most likely includes payments on stadium debt, which increases the value of the franchise by increasing his equity.
    There wasn't enough money from revenues to operate the club and pay off the stadium debts. That is a negative cash flow, but it is not a loss.
    The money that went towards the stadium he got back when he sold the franchise.

  4. A belated thanks for the links and comments...and corrections. The payroll data came from ESPN, what can I say?

    Believe me, I want Gonzalez to remain in SD, as Mauer in Min and Pujols in StL and Jeter in NY.

    I wish there was a way for MLB to assist teams in keeping their homegrown studs, but that's not realistic. (can you imagine the fallout?)

    Anyways, despite my fandom pulling for my hometown 9 in pinstripes, know that SD is my second home and home of the only other team I root for.

    And I'll be back in August, so if anyone wants to play some golf, let me know!

  5. Matthew, In a partnership the books have to be balanced at the end of each year. That meant the Moores had to fork over $15 million out of their pocket at that moment. Whether they get it back is still up in the air. Time will tell. Thanks for the comment and thanks for reading the blog.

  6. Jason,
    I enjoy reading your blog almost every day.

    ESPN is usually better than our local rag for things like salaries, but COTS is my normal source for that kind of thing.

    I don't think your Yanks would enjoy what it would take to help teams like the Padres and other small market teams keep their stars like Gonzalez, but that is an upcoming article on here so I wont ruin the surprise.

    As a baseball fan I hope I never see the day when Jeter is playing in any other uniform than Yankee pinstripes.

    I am a duffer, but I could drive the cart, pour the beer and cheer the real golfers on. When I golf I count how many balls I lose not how many strokes it takes to get the ball in the hole.