Commentary

BP Daily: Astros flunk Payroll 101

Who does the best and worst with what they have?

Originally Published: March 10, 2009
By Steven Goldman | Baseball Prospectus

As in all businesses, getting more for less is the name of the game, but baseball has an added dimension of difficulty for teams: They need to maintain flexibility while dealing with long-term guaranteed contracts. Some clubs are very good at managing their payrolls to meet these imperatives, while others stumble.

Maintaining payroll flexibility is much like the venerable Magic 15 puzzle, in which one tries to order numbered tiles while moving them around a constricted space. Once clubs have defined that space in terms of what they consider an affordable payroll, they have to weigh the value of each piece of added salary very carefully. For a team with an $80 million payroll -- and 16 teams spent less than that in 2008 -- adding a $15 million or $20 million superstar carries very high risks. That player is going to take up a fifth to a quarter of the overall payroll, leaving very little breathing room for other star-level players, and despite players legendarily "carrying" teams, no team has won a pennant with only as much quality as a single 10-win player can provide. Last year, the defending NL pennant-winning Rockies spent $68.7 million on salaries, nearly one quarter of which went to Todd Helton. Helton got hurt and contributed less than one win above replacement, and the rest of the club, starved in large part due to his massive salary, lacked the ability to compensate.