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Seattle times notes changing face of baseball spending

There was an interesting article in the Seattle Times over the weekend about the changing financial times in major league baseball thanks to a surge in revenue.

The story points out that just a few years ago a $100 million payroll seemed like a big deal. But now the average MLB spending on personnel is $121 million. According to the Associated Press, 17 of 30 teams spent $108 million or better in 2014 which puts the St. Louis Cardinals, formerly in the top quarter of spenders, right in the middle of the pack.

It's easy to spout cliches like "spending doesn't equal wins." But it is an undeniable fact that, sooner or later, talent costs money. You might get lucky, as the Cardinals were in 2013 and 2014, to have several talented but young and inexperienced contributors on the roster at the same time to keep costs low. But those guys are going to earn much more as they gain service time in the league. And, when it comes to free agency, the best players are going to command more.

Sometimes things get out of hand and the cost outstrips the talent level. But there are many free agent success stories such as the contract of St. Louis left fielder Matt Holliday. The naysayers threw a fit when the Redbirds signed Holliday to a seven-year, $120- million contract in 2010. But he's hit .300 with an average of 21 homers and about 90 RBIs since inking that pact, well above the average cost for that kind of production. The Cardinals also benefited greatly from signing free agents Carlos Beltran and Lance Berkman, although a second contract for Berkman didn't work out so well. 

Bad spending, passing out ridiculous contracts to flawed, damaged or over-the-hill players, doesn't equal wins. But a reasonable amount of investment in quality players is an absolute must to remain consistently competitive. 

It's ironic that people in Seattle are griping about spending. First, the Mariners aren't exactly one of baseball's biggest draws. But, second and more obviously, they have been one of the most aggressive free agent shoppers over the past two off-seasons. They inked Nelson Cruz away from the Baltimore Orioles this off-season as well as inking third baseman Kyle Seager to a big extension. Last year they signed the biggest free agent prize, second baseman Robinson Cano. But they're a team that has survived on the cheap -- and suffered for it -- for the past several years. They had a lot of room to grow. The Cardinals youth movement coincided with the new national television contract that other teams used to build up their rosters the last two seasons. The Birds quietly slipped from the top quarter of spenders into the middle of the pack.

The story notes:

"... teams — not just the Mariners — are spending more because of new national TV deals that began in 2013. A few, including Seattle, are also profiting enormously from local TV deals the past five years.

We won’t see results of this winter’s spending until later next year. But it’s taking more to keep pace in a sport where spending really matters because there is no salary cap.

Five of the top-10 spenders made the playoffs last season, as did seven of the top-15. The San Francisco Giants won the World Series with a No. 6 payroll of $165.1 million.

Only three of the bottom 15 made the playoffs and just one — the Kansas City Royals — survived the opening round. It’s trendy to admire the $97.7 million Royals, who had the 19th-highest payroll and lost the World Series to the Giants.

But they remain the exception.

...The goal isn’t the biggest payroll; it’s acquiring sufficient talent — via free agency, trades, or in-house promotions — to fill pressing needs."

"Opening Day Mariners payroll projects around $120 million for 2015. If salary inflation holds at 12 percent, average MLB payroll will be $136 million.

It doesn’t matter whether you think $120 million is still big money. You gauge monetary value based on your market. In MLB, $120 million projects as mid-tier payroll next season and maybe bottom half."

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