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View Full Version : HUGE MLB team payroll range


Ron Karkovice
08-15-2009, 09:32 PM
This is probably bringing up an old popular topic, but I just noticed the very large range of MLB team payrolls:

http://baseball.about.com/od/newsrumors/a/09teamsalaries.htm

2009
Yankees: $200M
White Sox: $96M
Twins: $65M
Marlins: $36M

Is baseball the only sport with this huge variation of LARGE and small payrolls? I never realized how "unfair" it seems. I know the larger teams have to pay a luxury tax to the rest of the teams, but does this really make up for it?

soxfanreggie
08-15-2009, 10:01 PM
I think that Marlins payroll is like double what they had in a recent year. I think they were at $14 million in '06 and a little over $20 million in '08.

gobears1987
08-15-2009, 10:45 PM
I think that Marlins payroll is like double what they had in a recent year. I think they were at $14 million in '06 and a little over $20 million in '08.
I was just going to point that out too. Loria is finally spending some real money.:redneck

Fenway
08-16-2009, 01:46 AM
Isn't this special as it appears the Pirates are making a huge profit without selling one ticket and now the Indians will do the same

http://www.nydailynews.com/sports/baseball/2009/08/15/2009-08-15_crying_poverty_some_mlb_owners.html

Ron Karkovice
08-16-2009, 07:27 AM
Isn't this special as it appears the Pirates are making a huge profit without selling one ticket and now the Indians will do the same

http://www.nydailynews.com/sports/baseball/2009/08/15/2009-08-15_crying_poverty_some_mlb_owners.html

Thanks Fenway. This was a very interesting read.

eastchicagosoxfan
08-16-2009, 08:32 AM
Isn't this special as it appears the Pirates are making a huge profit without selling one ticket and now the Indians will do the same

http://www.nydailynews.com/sports/baseball/2009/08/15/2009-08-15_crying_poverty_some_mlb_owners.html
Max Bialystok would be proud!!

Noneck
08-16-2009, 08:33 AM
Isn't this special as it appears the Pirates are making a huge profit without selling one ticket and now the Indians will do the same

http://www.nydailynews.com/sports/baseball/2009/08/15/2009-08-15_crying_poverty_some_mlb_owners.html






Great read.

Every team makes at least 35m before they put the key in the door. Very interesting and hope all the " can't spend a buck if you only have 50 cents people here" realize now that teams don't lose money. Some just make less than others.

The Immigrant
08-16-2009, 08:48 AM
Is baseball the only sport with this huge variation of LARGE and small payrolls? I never realized how "unfair" it seems. I know the larger teams have to pay a luxury tax to the rest of the teams, but does this really make up for it?

The disparity is much greater in European soccer leagues, and there is no luxury tax to benefit the smaller clubs.

hawkjt
08-16-2009, 08:51 AM
Great read.

Every team makes at least 35m before they put the key in the door. Very interesting and hope all the " can't spend a buck if you only have 50 cents people here" realize now that teams don't lose money. Some just make less than others.


Madden basically says the Indians owner is lying about losing 16 million...because of their revenue sharing money? Now, maybe doyle is lying but I assume that when they do their income statement, all revenue is included... so it is not improbable that the Indians will lose 16 million.

The payroll of the players is not the only expenses. They have a whole administrative organization to pay, minor league organizations,scouts, ect.ect...

At 96 million it appears the sox are in the top 10 in payroll...that is not being cheap.
As the Cubs show, it is not what you spend, but how you spend it:D:

As for Sox revenues, I suspect they get zero revenue sharing and might even be paying a small luxury tax so they live on their own revenue sources only.

As far as the system goes, baseball is the least socialist, for myriad of reasons,but mainly due to the TV packages that the Yanks command vs Oakland. The NBA is most like MLB and the salary cap seems to keep small market teams alive (if you have Lebron) better in the NBA. I hope the mlb players union gives a bit and allows a cap and a floor ...the Marlins have to spend at least 50-60 million in payroll..and the yanks cannot go to 210 million.. make is a soft cap like a range of 60- 150 million.

The Immigrant
08-16-2009, 08:54 AM
As for Sox revenues, I suspect they get zero revenue sharing and might even be paying a small luxury tax so they live on their own revenue sources only.

The White Sox are far below the luxury tax threshold.

Daver
08-16-2009, 09:13 AM
Is baseball the only sport with this huge variation of LARGE and small payrolls? I never realized how "unfair" it seems. I know the larger teams have to pay a luxury tax to the rest of the teams, but does this really make up for it?

The luxury tax gets paid to MLB, and is doled out to the teams at the whim of the commisioner after MLB takes its cut.

Noneck
08-16-2009, 09:15 AM
The payroll of the players is not the only expenses. They have a whole administrative organization to pay, minor league organizations,scouts, ect.ect...

At 96 million it appears the sox are in the top 10 in payroll...that is not being cheap.
As the Cubs show, it is not what you spend, but how you spend it:D:

As for Sox revenues, I suspect they get zero revenue sharing and might even be paying a small luxury tax so they live on their own revenue sources only.



If you are correct {and I think the article meant all teams below the luxury tax threshold received 35m), Do you think the Sox would take a chance of losing money, when they would have a sure thing like the Indians or Marlins? I don't. They may be trying to maximize profits but having a profit is a foregone conclusion.

TommyGavinFloyd
08-16-2009, 10:20 AM
As was mentioned earlier, European soccer leagues are the end all for disparity between team payroll. Teams such as Manchester United and Real Madrid routinely drop tens of millions of dollars to buy players (and this doesn't even count towards a player's actual salary). The teams in the lower end of the division spend no where near this much. And add in the fact that every year, new teams from lower divisions come up to the top, and the disparity between the top and bottom grows. And since there are regular cups and tournaments pitting top teams against teams from leagues several divisions lower, you get the equivalent of the Yankees vs the Birmingham Barons, payroll wise.

PatK
08-16-2009, 10:34 AM
Great article.

I do business with some people in the Pitt area and they are season ticket holders and are absolutely disgusted with the way the team is ran.

I like the dig on the Cubs in that article as well. Around this town, the media paints it as though the Sox have given way too much for Peavy and Rios, while completely ignoring what the North Siders have done.

Ron Karkovice
08-16-2009, 12:09 PM
Great article.

I do business with some people in the Pitt area and they are season ticket holders and are absolutely disgusted with the way the team is ran.

I like the dig on the Cubs in that article as well. Around this town, the media paints it as though the Sox have given way too much for Peavy and Rios, while completely ignoring what the North Siders have done.


I dont know how Pirates fans have been stomaching this deficit for years and years. Can you imagine the White Sox going through something THIS bad?

jabrch
08-16-2009, 02:05 PM
As for Sox revenues, I suspect they get zero revenue sharing and might even be paying a small luxury tax so they live on their own revenue sources only.


You are correct they get zero in revenue sharing. They do not, however, pay anything either.

Fenway
08-16-2009, 03:03 PM
Every team gets a check for 35M from MLB.

The ownership of the Expos before Loria were the first to figure it out and had the firesale that killed the franchise.

The system is broke.

Big D
08-16-2009, 04:31 PM
Maybe instead of a salary cap, there ought to be a salary floor. The low revenue teams are making plenty of profits from the revenue sharing. Are they really investing that in their clubs? I know that in theory, rebuilding teams like the Pirates might be better off putting that money into scouting than the big league payroll, but I have my doubts about whether they're actually doing that.

It is funny how the team with the lowest payroll has a better record than the teams with the 2nd (Mets) and 3rd (Cubs) biggest payrolls. Keep that in mind the next time you hear a pathetic franchise like the Pirates complain that they can't possibly contend with such a low payroll.

Daver
08-16-2009, 08:00 PM
The system is broke.

How, exactly?

UChicagoHP
08-16-2009, 08:36 PM
How, exactly?

Broke is a stretch, as European Soccer is much worse, but it 'aint exactly fair. It all depends on an individuals opinion regarding how "fair" they want things to be...

The NBA's league setup is about as "fair" as one can realistically hope for, but many don't like the fact that a team can only have two or three star players/contracts(unless the owner is Bill Gates, but even then, the lux tax keeps them in line). I think MLB will take some steps in the future to keep the Yankees and RedSox in line(but then again, they play in the same division, so that helps a bit, but don't tell that to Rays fans over the next five years), but it will be a long fight with the MLBPA for simple baby steps towards more "fairness".

Daver
08-16-2009, 08:41 PM
Broke is a stretch, as European Soccer is much worse, but it 'aint exactly fair. It all depends on an individuals opinion regarding how "fair" they want things to be...

The NBA's league setup is about as "fair" as one can realistically hope for, but many don't like the fact that a team can only have two or three star players/contracts(unless the owner is Bill Gates, but even then, the lux tax keeps them in line). I think MLB will take some steps in the future to keep the Yankees and RedSox in line(but then again, they play in the same division, so that helps a bit, but don't tell that to Rays fans over the next five years), but it will be a long fight with the MLBPA for simple baby steps towards more "fairness".

Fair to whom?

Big D
08-16-2009, 08:41 PM
Broke is a stretch, as European Soccer is much worse, but it 'aint exactly fair. It all depends on an individuals opinion regarding how "fair" they want things to be...

The NBA's league setup is about as "fair" as one can realistically hope for, but many don't like the fact that a team can only have two or three star players/contracts(unless the owner is Bill Gates, but even then, the lux tax keeps them in line). I think MLB will take some steps in the future to keep the Yankees and RedSox in line(but then again, they play in the same division, so that helps a bit, but don't tell that to Rays fans over the next five years), but it will be a long fight with the MLBPA for simple baby steps towards more "fairness".

Considering many NBA teams are losing tens of millions of dollars a year, why would baseball want to copy their system? The NBA is headed for a lockout in 2011 because so many teams are losing money that they'll actually be better off by not playing. Even in a recession, baseball is awash in money, and there's been more competitive balance in this decade than there's ever been. Hell, look at the NL East standings, where the team with the smallest payroll in the game is ahead of the team with the 2nd largest payroll. I don't get why people constantly think the sky is falling in on MLB. Other than the NFL, the other pro sports leagues would trade places with them in a minute.

Noneck
08-16-2009, 08:44 PM
Every team gets a check for 35M from MLB.



Even the yanks?

Daver
08-16-2009, 08:47 PM
Even the yanks?

Shared revenue in MLB is dispersed at the whim of the commisioner, and is not subject to public scrutiny, this includes ALL shared revenue.

Noneck
08-16-2009, 09:00 PM
Shared revenue in MLB is dispersed at the whim of the commisioner, and is not subject to public scrutiny, this includes ALL shared revenue.

Thank you, That was not really explained in the article.

At 35m each, it is just a matter of how much profit a team makes , not if.

whitem0nkey
08-16-2009, 09:16 PM
Soccer has been brought up, is it true that in european leagues the minor league team can move up to the majors and major league teams can get demoted to the minors?

Lip Man 1
08-16-2009, 09:24 PM
This and that:

Some already know this but for those who do not.

I've spoken with two people who know members of the White Sox board of directors, one in fact works for the individual in a particular capacity. When I asked about the Sox financial status both told me in no uncertain terms that the Sox are doing very well. One specifically said, "the Sox haven't lost money in a long time..."

Regarding the revenue sharing situation, the winter before the Reds Great American Ballpark opened, their owner, Carl Linder (and to his credit he didn't try to hide it) told both Cincinnati newspapers that he ordered then G.M. Jim Bowden to cut payroll specifically because the new ballpark would draw so many fans that the Reds revenue sharing amount would be reduced.

:rolleyes:

So in essence Linder had to cut team payroll so his profit margin would be as big as in previous seasons.

Given the examination of MLB's books by an independent Stanford accountant during the 1994 labor impasse and the way he found owners transfering funds from one dummy corporation to another to show a "loss" I have zero belief that ANY MLB team is in fact losing "real" money.

These owners / corporations aren't stupid, they are brilliant people...they wouldn't hold on to a produce that was bleeding them dry.

Remember twice this past off season even WITH the economic situation Proud To Be Your Bud was crowing about how baseball was now "a six billion dollar industry" (direct quote). That friends if you haven't realized it, is NFL territory.

Baseball is doing very, very well...especially when garbage teams like Pittsburgh, Cleveland, Kansas City and so forth can get revenue sharing money as a reward for their organizational stupidity.

Lip

Noneck
08-16-2009, 09:32 PM
Lip,

And some of the people here constantly talk about the Sox not being able to get a player here and a player there because of budgetary constraints. They should really say it will lessen their enormous profits.

TommyGavinFloyd
08-16-2009, 09:33 PM
Soccer has been brought up, is it true that in european leagues the minor league team can move up to the majors and major league teams can get demoted to the minors?

Oh, it's absolutely true. And it happens every season automatically. I posted this link in another thread:

http://en.wikipedia.org/wiki/English_football_league_system

All the details are there. Scroll down towards the bottom and just look at that pyramid of leagues. There are over 7000 teams! And this is just England. The lowest ones are groups of firefighters and bricklayers, complete amateurs. But if somehow, someway, they kept winning, they could work their way up the ladder. I've thought about how cool it would be if American sports worked this way but the owners would never go for it. Imagine if eventually the Cubs were 3 leagues down and the Railcats were in the NL Central!

Daver
08-16-2009, 09:37 PM
Lip,

And some of the people here constantly talk about the Sox not being able to get a player here and a player there because of budgetary constraints. They should really say it will lessen their enormous profits.

You don't know that, you are making a speculation based on someone else's speculation, MLB books are not subject to public scrutiny because they have an exemption from anti trust laws.

Lip Man 1
08-16-2009, 09:43 PM
Daver:

Since you follow this closely, has MLB's books been examined by anyone since the economist did it as part of the negotiations in 1994?

Lip

Noneck
08-16-2009, 09:45 PM
You don't know that, you are making a speculation based on someone else's speculation, MLB books are not subject to public scrutiny because they have an exemption from anti trust laws.

Yes, I am but what Lip has always said how the Sox haven't lost money in a very long time, being exempt from public scrutiny and common sense tells one, this is a bonanza. No team is in a Coldwell Banker listing for years.

Lip Man 1
08-16-2009, 09:50 PM
Noneck:

To be perfectly accurate I've never said that 'the Sox haven't lost money in years.' I have passed along what I have been told by individuals (one a former Sox player) who know members of the Board of Directors.

It's my personal opinion though that I don't think they have lost money since the years right after the White Flag Trade and are in very, very good shape financially... making a profit every season since then when you add in ticket sales, concessions, parking (owned by a Reinsdorf corporation), a great stadium lease, advertising deals and the value of the radio and TV contracts.

Lip

Daver
08-16-2009, 09:52 PM
Daver:

Since you follow this closely, has MLB's books been examined by anyone since the economist did it as part of the negotiations in 1994?

Lip

The MLBPA does it as part of every CBA negotiation, though the access they have is limited and subject to strict non-disclosure rules, it is part of the settlement that MLB had to agree to after being nailed for collusion.

Ron Karkovice
08-16-2009, 09:54 PM
Noneck:

To be perfectly accurate I've never said that 'the Sox haven't lost money in years.' I have passed along what I have been told by individuals (one a former Sox player) who know members of the Board of Directors.

It's my personal opinion though that I don't think they have lost money since the years right after the White Flag Trade and are in very, very good shape financially... making a profit every season since then when you add in ticket sales, concessions, parking (owned by a Reinsdorf corporation), a great stadium lease, advertising deals and the value of the radio and TV contracts.

Lip

This thread now makes me want to read about Reinsdorf's "rise to power." This man must be worth so much money.

Noneck
08-16-2009, 10:02 PM
Noneck:

To be perfectly accurate I've never said that 'the Sox haven't lost money in years.' I have passed along what I have been told by individuals (one a former Sox player) who know members of the Board of Directors.




Lip,

Sorry again, I have to word my posts more clearly about the information you are able to pass on.

Lip Man 1
08-16-2009, 10:39 PM
Ron:

This is from a long biography and history of JR that I worked on a few years ago. It ran about 75 pages but this will give you the crux of how he became very successful and very wealthy:

"Jerry Reinsdorf was born on February 25, 1936 in Brooklyn, New York. He’ll be 73 years old this season. He was the son of lower middle class parents with his dad spending a number of years as a sewing machine repairman / salesman.

He went to Erasmus High School. That school has had a number of famous alumni like Eli Wallach, Barbra Streisand, Bernard Malamud, Betty Comden and Bobby Fischer. He was nothing special in high school and the story is told of him walking home with his mother after graduation. During the ceremony the school had handed out literally hundreds of awards for everything from athletic participation to being a hall monitor. After a period of silence his mother looked at him and said ‘couldn’t you at least have won something?’

He grew up a passionate sports fan and had a fanatical devotion to the Brooklyn Dodgers. To this day in his office in Comiskey Park you can find reminders of that devotion, including a pair of original seats from Ebbetts Field (painted Dodger blue...).

Upon graduating from high school he went to George Washington University in Washington D.C. where he earned his undergraduate degree. From there he moved to Chicago in 1957 where he went to Northwestern University and got his law degree.

One of his first jobs was as an attorney for the Internal Revenue Service and ironically one of the first individuals he compiled a case against was then Sox owner Bill Veeck for tax issues.

Also early in his career he was a lawyer at a Chicago firm representing doctors. He kept telling these doctors the real estate deals they were looking at were bad, however the doctors kept ignoring his advice. Finally one doctor challenged him to put something together if he was so smart. He did... and it led to the start of his real estate empire and the formation of his own company, Balcor in the early 70's. When he was asked one time by a baseball executive what his business was Reinsdorf replied ‘OPM’ Pardon? ‘other people’s money.’ Wound up selling Balcor to American Express for 53 million dollars (although others have claimed it was for much more.) After the sale, rumors surfaced of American Express being upset at some of the things they had supposedly found in the company books, however these ‘charges’ were never followed up or proven and must be considered a myth.

In the fall of 1980 and the early part of 1981, Reinsdorf headed up the limited partnership that purchased the White Sox after American League owners refused to allow former owner Bill Veeck to sell the team to his first choice, Edward DeBartolo Sr. Reinsdorf originally agreed to purchase a small part of the New York Mets. The syndicate of which he was a part, however, did not land the team and consequently he turned his baseball attention to other opportunities. As chairman of the board he is responsible for the day to day operations of the team and has the authority to do as he sees fit, stated in his contract, without approval or having to notify, the other owners of the White Sox with the exception of large financial expenditures.

In 1984, Reinsdorf was having dinner with George Steinbrenner, when he mentioned he’d love to run the Bulls. Steinbrenner, at that time a limited partner in the Bulls, mentioned that conversation to Lester Crown (a part owner of the Bulls) who spoke with Reinsdorf in September 1984. Reinsdorf then bought the team with the deal approved by NBA owners in February 1985.

According to Chicago Tribune sportswriter Sam Smith, in his book“The Jordan Rules,” Reinsdorf bought the Bulls so he could remain in sports if he lost ownership of White Sox because they were a ‘financial drain’. Like with the White Sox, Reinsdorf has day to day control of the Bulls and also like with the White Sox, can not be outvoted or overruled on his decisions by the other owners.

He has been one of the most powerful and influential owners in major league baseball having been a member of the Executive Council as well as the Player Relations Committee, he was the chairman of the Ownership Committee and is Co-Chairman of major league baseball’s committee for the advancement of minorities

Reinsdorf has been very active in numerous charitable and philanthropic organizations in Chicago including the Chicago White Sox charities, and the Chicago Bulls CharitaBulls. He is responsible for introducing a new reading program to the Chicago Public School system and has started the White Sox / Bulls Training Academy which promotes sports to the youth of the area.

Reinsdorf has received numerous awards from divergent organizations including the Interfaith Organizing Project, the American Academy Of Achievement, the Cystic Fibrosis Foundation, the Trail Lawyers Club Of Chicago, the Chicago Jewish Sporting Hall Of Fame, the Chicago Sports Hall Of Fame, the Chicago Park District, Operation PUSH, the National Italian-American Organization, Northwestern University, the United States Air Force, the Ellis Island Foundation, and the Chicago Baseball Cancer Charities

Professionally he is an attorney, a certified public accountant, a specialist in real estate securities, a registered mortgage underwriter and a certified review appraiser.

In addition to his current duties with the White Sox and Bulls he is a partner in Bojer Financial Ltd., is a trustee of Northwestern University, is the director of the LaSalle National Bank, and is on the board of Equity Office Properties.

Reinsdorf and his wife Martyl, have four children and seven grandchildren. He spends a large amount of time now in Arizona where he has a home in the Phoenix area in addition to his Highland Park residence."

Lip

gobears1987
08-16-2009, 10:56 PM
And I feel a need to ask, but what certain organization was Jerry Reinsdorf a proud brother of at GW?:D:

Last year when we had our national convention in Chicago, he was the keynote speaker and we all got to attend a White Sox-Red Sox game (Buehrle dominated them). I'm pretty sure my fraternity's executive director now hates me after that game as he's a Red Sox fan from Bahston and an accent to prove it. Reinsdorf has also donated a very good amount of money to our national and there is a plaque in the lobby of the office.

Ron Karkovice
08-16-2009, 11:18 PM
And I feel a need to ask, but what certain organization was Jerry Reinsdorf a proud brother of at GW?:D:

Last year when we had our national convention in Chicago, he was the keynote speaker and we all got to attend a White Sox-Red Sox game (Buehrle dominated them). I'm pretty sure my fraternity's executive director now hates me after that game as he's a Red Sox fan from Bahston and an accent to prove it. Reinsdorf has also donated a very good amount of money to our national and there is a plaque in the lobby of the office.

Was he a ZBT?

And Lip:

Thanks so much for the overview of reinsdorf. I liked the end where it summarized that he is "Professionally he is an attorney, a certified public accountant, a specialist in real estate securities, a registered mortgage underwriter and a certified review appraiser."

That is amazing. I am sitting for my CPA exams starting this spring... Have you had the opportunity to interview him or just have a conversation?

gobears1987
08-16-2009, 11:23 PM
Was he a ZBT?





ZBT? Why would he subject himself to that?:tongue: (ZBT is still a step up from Sammys) He was AEPi. As was Steve Stone I might add.

Reinsdorf actually met a lot of his future business partners through AEPi. I wasn't kidding when I had my AEPi signature a few years ago that claimed "our brothers own the Sox."

voodoochile
08-16-2009, 11:26 PM
This thread now makes me want to read about Reinsdorf's "rise to power." This man must be worth so much money.

The Wirtz's dwarf him.

Lip Man 1
08-17-2009, 12:26 AM
Ron:

I have never met the man. As you know he very rarely does interviews and those are only with mainstream media members under tightly controlled circumstances.

This biography was put together by researching things that have been said and written about him over the years as well as speaking with people who know him or work for him or have worked for him.

He is a very interesting study in the human dynamic, a guy who is a self made millionare but who has the capacity to get down and dirty like he was still in Brooklyn. A guy who is very, very savvy but can still make some statements that are PR disasters and a guy very generous with his money and loyalty but who can carry grudges and blame other for events that he was at least partially responsible for.

In some ways he reminds me of Richard Nixon.

Voodoo:

True but he can still probably buy and sell every registered member of WSI! He, his family and their family and their family will never have to worry about making a car payment or figuring out when the next meal is going to come.

The big question with Jerry and no one that I've talked to knows the answer,is what happens to the franchise after he has left the scene.

Lip