First Pitch: The Narrative About the Pirates Payroll, and Facts About Small Markets

One of the most popular topics in Pittsburgh surrounding the Pirates is Bob Nutting and how much money he should be spending. It’s not a topic you find on this site often. And that isn’t to say that I take the opposite stance of most Pittsburgh media — that approach being that he should spend more and is cheap and only cares about profits. It’s just that I don’t talk about it at all.

I went on a bit of a rant last week on Twitter about this subject, and I’ll bring up the key point of that rant again: the Nutting/payroll topic brings about the worst discussions among Pirates fans. It’s almost like a political discussion. Everyone has their opinions, and no one changes their opinions, even with new data. If you are neutral, or take a nuanced view of the situation where there aren’t just two clear sides, then you are labeled by one side or the other as having an agenda, just because you don’t fully buy in to a specific side.

When you add in the fact that every single discussion about the Pirates inevitably turns to Nutting and payroll, it makes me want to talk about it less. I prefer talking about actual baseball topics. Last night I discussed the reality of MLB and how small market teams face really difficult decisions keeping franchise players. My favorite articles to write are the ones where I break down the changes a prospect made from the point when he entered pro ball to the point when he reached the majors. I’ll talk about the needs of the 2017 rotation, whether the Pirates can sacrifice offense at second base for Josh Harrison’s defense, or modern bullpen usage.

Every topic is going to have some sort of payroll tie-in, but the point when that discussion pivots to the Nutting/payroll discussion is the point when we stop debating baseball with each other, and start attacking each other. When someone disagrees about Gerrit Cole’s value in the rotation, you never hear that they’re an apologist for Gerrit Cole. The same goes for other baseball discussions. You can pick two sides, discuss each side, and avoid accusing the other side of some ulterior motive. That’s impossible with the Nutting/payroll talk. Those discussions immediately become about attacking the person making the argument, rather than debating both sides. That’s not good baseball talk, and it’s part of why I avoid it.

This weekend at PirateFest, however, Frank Coonelly said he was tired of the narrative that the Pirates are more interested in turning a profit than winning. He went as far as calling it offensive, which I’m sure isn’t going to go over well, but at the same time, I could understand how a group of people would be offended constantly being portrayed like an evil organization led by Scrooge McDuck.

Unfortunately, that narrative will live on, probably until the Pirates win a World Series, and maybe even after that. It’s not going to disappear until the Pirates open their books, and probably won’t disappear even if that did happen (it won’t, and that only makes the Pirates like every other organization). The reason the narrative lives on is because we have very few actual facts to go on.

There are some sites that try and figure out the finances of the game. Forbes posts projections each year, although I have never trusted those numbers. Sites will track payroll, including this one, but that’s only one part of an entire operation. But we’ll never really know how much a team makes, what percentage of that they spend on payroll, what they do with the rest, how much is left over in profit, and what happens with that profit. Even if we knew that for one team, we wouldn’t know how it compares to other teams for perspective.

That’s another big reason I don’t write about this. I prefer to discuss a topic when there are actual facts, rather than two sides playing a guessing game and arguing about what they think is probably accurate.

All of this said, there is one thing that drives me nuts about this entire debate, and that’s the idea that the Pirates being “small market” is an excuse. The Pirates are a small market team in baseball. This is designated by MLB’s Collective Bargaining Agreement. They get an extra draft pick each year, and the most spending money in the international market under the new CBA for this designation. If they sign a player with a qualified offer, the draft pick they lose is lower in the draft than the one the Yankees or Dodgers would lose. The Pirates being a small market team is an undeniable fact, and the moment that gets referred to as an excuse or a lie is the moment when one side has refused to accept any facts in this discussion.

Then there’s the issue of how the Pirates compare to other small market teams. The common argument about payroll is that the Pirates are always in the bottom third, even though that makes sense if they’re in the bottom third in market size. The argument is that they don’t even spend comparably to small market teams. So even though I don’t think these facts will help in the discussion, I wanted to compare payrolls across the league, in order to see what each team could spend.

I looked at the Opening Day payrolls according to Cot’s, and found the highest Opening Day total for each team. I also found the average of the five highest payrolls for each team, just in case there was one extreme outlier (Example: Kansas City’s highest payroll was $131.5 M, but their next four were $112.9 M, $92.2 M, $81.9 M, and $75 M). I used Opening Day payrolls because that’s usually the figure that reflects the budget. Teams save more for in-season moves, but the Opening Day payroll is the best way to view their plan for the season. I will note that almost every team had their highest payroll in the last five years, which makes sense due to the rising costs and the new money coming into the game.

Here is the chart featuring the highest Opening Day payrolls for each team.

Rank Team Payroll
1 LA Dodgers $271.6
2 NY Yankees $228.1
3 Detroit $198.6
4 Boston $197.9
5 Philadelphia $177.7
6 San Francisco $173.2
7 Chicago NL $171.6
8 LA Angels $164.7
9 Washington $162.0
10 Texas $159.0
11 NY Mets $149.4
12 Baltimore $147.7
13 St. Louis $145.6
14 Seattle $142.3
15 Toronto $137.2
16 Kansas City $131.5
17 Chicago AL $127.8
18 Cincinnati $115.4
19 Minnesota $113.2
20 Colorado $112.6
21 Arizona $112.3
22 Atlanta $112.0
23 San Diego $108.4
24 Milwaukee $104.2
25 Houston $103.0
26 Miami $101.6
27 Pittsburgh $99.9
28 Cleveland $96.3
29 Oakland $86.8
30 Tampa Bay $76.9

The figure for the Pirates was heading into the 2016 season. I had the figure at $103 M, although I go into extreme detail that I’m not sure Cot’s could do for all 30 teams. And since all 30 teams would have this disclaimer (and since the difference would only move the Pirates up 2-3 spots), we’ll ignore it.

The Pirates have maxed out so far in the bottom third at one of the final spots. Before adding analysis, let’s also look at the average of the top five payrolls for each team.

Rank Team Average
1 NY Yankees $219.0
2 LA Dodgers $217.5
3 Boston $177.9
4 Philadelphia $164.5
5 Detroit $164.3
6 San Francisco $152.5
7 LA Angels $151.7
8 Chicago NL $141.0
9 NY Mets $138.3
10 Texas $136.1
11 Washington $131.1
12 Toronto $123.4
13 St. Louis $121.5
14 Chicago AL $120.2
15 Seattle $117.7
16 Baltimore $112.1
17 Minnesota $105.0
18 Atlanta $102.9
19 Cincinnati $102.8
20 Kansas City $98.7
21 Arizona $97.6
22 Milwaukee $97.1
23 Houston $94.8
24 Colorado $94.0
25 Cleveland $88.9
26 San Diego $88.4
27 Oakland $79.9
28 Pittsburgh $77.3
29 Miami $72.6
30 Tampa Bay $71.2

One thing I noticed here is that almost every team had their top five payrolls scattered over the 17 year time period I looked at (2000-2016). The Pirates have had their highest payrolls from 2013-2016, which are the years they were contenders. Their fifth highest payroll was in 2001, which was slightly higher than 2012. That’s a side effect of 20 years of losing. If you only look at their last two years, it bumps them up to $95 M, putting them at 23rd. Still the bottom ten.

The reason I wanted to look at these numbers is because I wanted to see what teams in similar markets spend. That’s one of the most exaggerated points right now, with claims that the Indians went well over $100 M to make the World Series (their highest started at $96 M), or that small market teams are now spending $120 M, or other exaggerations.

The first thing I noticed about these numbers is that 13 teams in the league have maxed out at $115 M or less, and half the league has an average of less than $115 M. That’s a huge divide, especially when you have those two teams at the top averaging close to $220 M (the 1% of the baseball world).

The Pirates are low in these, and without having details of their finances, I think they could and should be higher (OMG! Nutting apologist!). I think part of the reason they are lower for their average is because they just recently became contenders. If they continue spending around $100 M, then I think that puts them in a respectable place, ranking near the top of the bottom half in baseball. It’s hard to say that they should be averaging much more than $100 M per year when most teams in similar markets are averaging that or less in their five biggest years.

My takeaway from the numbers is that if the Pirates are trying to contend, and not in a rebuild, then they should be around $100 M in payroll. It’s hard to argue that they can’t afford that much when they’ve spent nearly that much in the two previous years, and are projected to be around that again this year. If they do that consistently, they’ll end up at the top of the bottom third, or the bottom of the middle third, which is respectable when considering their market size.

The bigger takeaway is that the small market designation is very real. It’s hard to look at payroll stats that show teams in Cincinnati, Kansas City, Cleveland, Milwaukee, and Oakland averaging around $100 M or less in their best years, and then expect the Pirates to be spending significantly higher than that amount. Maybe the Pirates could spend a bit more in an individual year ($105 M? $110 M? $115 M?), but they’re still going to end up in the bottom half of the league, and as the numbers from other teams show, they’re probably not going to be able to do this for more than one or two years.

That might be the biggest reason I don’t discuss the Nutting/payroll topic, and why I’m constantly discussing the small market topic. It just seems like payroll is a topic that is blaming the Pirates for being small market, rather than placing the blame on MLB for creating a system that sees such a big divide between the top ten teams and the bottom ten teams. Or even the top five teams ($164 M to $219 M average) and the bottom 15 teams ($112 M or less average). The Pirates are small market, and that’s an MLB problem shared by a lot of other organizations, and it’s much more important than arguing about payroll numbers. The Pirates should be spending comparably to those teams (AKA, they should be expected for at least a $100 M budget in contending years), but expecting them to do more just feels like placing the blame on them for being victims to the system MLB has created.

In summary, I think the Pirates are lower on the above charts because they haven’t been contenders as often as other teams. If they continue contending, they should be able to spend around $100 M, based on what other teams in similar markets have spent. That would put them near the top of the small market teams. But expecting that they should spend more than that on average is blaming the Pirates for an MLB issue, which I think is misguided.

Tomorrow, we go back to the same old actual baseball topics, like how Nick Kingham is following Jameson Taillon’s path returning from Tommy John, and a look at the Triple-A pitching options for the MLB staff.

**Jameson Taillon Ready for the Challenge of Being a Top of the Rotation Starter. Sean McCool talked with Taillon last week about his upcoming role as one of the top starters in the Pirates’ rotation, and his goals for his second full year returning from Tommy John.

**Pirates Hire Gary Varsho and Andrew Lorraine as Pro Scouts. Just so you know the difference, pro scouts are the guys who scout the minor leagues for potential trade additions, or guys who could be good additions in the future, or any other scouting purposes. That’s different from amateur scouts, who look at future draft picks.

  • This is a great article, and one that sadly most fans outside of this site don’t have any interest in reading. I think the benefit of being a Pirates fan that doesn’t live in Pittsburgh is that I don’t have to constantly be bombarded with all the “Nutting is cheap” nonsense.

    I’ve always believed this is an MLB issue like you said. Unfortnately we won’t ever see a salary cap/floor like there is in the NFL, NHL and NBA.

  • Heard KC’s GM on MLBNetwork Radio during the winter meetings. They stretched a lot last year to try and go for another World Series and he said they “lost a lot of money.” He also said their was no room to add payroll this year. Hence, they tried to unload salary (Ian Kennedy) tied to a stud (Davis) to create some flexibility. Kinda shows their $131 should’ve been much closer to $100 in order to maintain future success.

  • I tried once to find where the Pirates rank in available revenue just based on attendance and ticket sales. PNC Park is one of the 5 smallest capacity parks. Even with record attendance in 2015 they were still only middle of the pack. Where I got stuck was trying average ticket prices per team but I have read the Pirates are near the bottom. So the available revenue is among the lowest without factoring the contract with Root. They can’t spend money they don’t have. And MLB owners are like Trump’s cabinet, they are all multimillionaires.

  • I stopped moaning about payroll when I realized it was much more enjoyable being a pirate fan if you accepted and even embrace the constraints they have to work with. I realized when Bonds left that there would be no more lifelong pirate hof types. However the plus was realizing we would have much more young players to watch and that this must be a continual process.

  • At the end of the day it is very true that small market teams have their restrictions and are behind the 8 ball. Knowing this when you have an opportunity to have a real chance at a title what is wrong with spending 10 to 20 million more for one year to go for it. Players and fans don’t say on opening day that their goal is to see the playoffs they say a championship. As a smaller market team we need to take advantage of our rare opportunities.
    The whole baseball is like any other business is false as well. We do not fund companies to build plants or offices (without ownership stake/stock), but we do stadiums with no ownership. As a result, they should have to make their books public, because we have a vested interest. So it would be a problem IMO if they are not competively spending on payroll as they could be when we paid for pnc park!!!!

  • I agree completely that the Pirates will realistically always be in the bottom of the literature but I do think that they should spend between 105 and 110 million if not 115

    • I think it’s the most ridiculous thing I’ve ever read.

    • It seems pretty reductive to argue that small market teams should just spend more money as an outright dismissal to the effect market size has on revenue streams. It also ignores the role of demand, both in volume of sales and the setting of prices.

      A large market team has more people in a denser area around their home ballpark, who, on average, have more money to spend. They can sell more tickets *and* sell them at higher prices. There’s an obvious revenue stream advantage in that. Large market teams also reach more people with their potential television packages, and can demand more money from television stations for the rights to broadcast their games. The internet doesn’t stop either of these things from being realities. For crying out loud, the Yankees have *their own television station.*

      You can very easily make the argument that small market teams should spend more. You can also very fairly make the argument that the Athletics are pretending to be a small market team when they aren’t. But to say that Pittsburgh, for example, should have enough money to spend to remain competitive in the free agent market with New York or Los Angeles, even though Pittsburgh has a much smaller metro area with generally poorer people (especially as you move away from the city, there’s a lot of extreme poverty in western Pennsylvania) is largely absurd.

      Someone provided a number for the Pirates’ profits being $20 million. If that’s true, the most the team could spend without running a deficit (which, why would they?) is about $120 million, 18th in baseball. And that’s spending everything they could.

      The Yankees, meanwhile, have a payroll in excess of $200 million and still turn a massive profit. In order to make this argument, you would have to ignore that reality.

    • To add some quick thoughts:

      1. The idea that “small market” is not real, and just an excuse for those teams to not spend money requires a lot of crazy assumptions. It requires that big market teams will allow those teams to get revenue sharing in the first place. It requires that MLBPA is fine agreeing to designate those teams as “small market” in order to play along with the ploy, not to mention, overlook at lot of money that should be going their way. It paints a picture of a group of greedy owners out for profits, and ignores all of the people who have agreed to this designation, who would be negatively impacted if the big claim was true.

      So either small market teams are super geniuses and MLBPA/big markets are stupid, or small markets are a real thing.

      2. I don’t like Forbes numbers, but the author used Oakland’s $34 M in revenue sharing and $27 M in operating income, suggesting Oakland shouldn’t be receiving the revenue sharing. You take that away, and Oakland loses money each year.

      Meanwhile, he said the Giants are basically the same market. But his preferred site, Forbes, lists the Giants making $58-72 M a year the last three years. Clearly they’re not the same market when SF receives no revenue sharing and makes 2-3 times what Oakland makes after revenue sharing (assuming Forbes numbers are correct, which I don’t assume).

      3. He argues that teams shouldn’t be geographically limited, and should get credit for all fans across the country. The reason they’re geographically limited is because you only make money from the people in your region, either through attendance or TV dollars. The Pirates can have a million fans in California, but they’re not making money from them in their TV deal or in their attendance. They might sell more merchandise, but that is split evenly among all teams, so it doesn’t matter to them if it’s one million Pirates fans or one million Cubs fans.

      I could go on, but every part of that article was ridiculous and I’d be here all night.

      • Tim,
        First of all SF and Oakland ARE the same market – not basically the same market.

        The Giants have a great stadium – have won 3 WS since 2010 and spent a ton to stay competitive with their arch enemies the Dodgers.

        The As have done NOTHING to get a new stadium built – waiting for Oakland taxpayers to present them with a Billion $ gift.

        MLB has enabled this for years – the revenue sharing the get is a direct insult to the players – and fans…

        Tampa Bay is not far behind.

        I proposed a couple of years ago that the best thing that could happen would be for the players and large market owners to join forces and require all 30 teams to spend a minimum on player payroll – or be shut down – contracted.
        I would guess that the Players have modeled what a 28 team league with a $100M floor looks like in terms of player comp versus the current 30 team league – and have decided the current setup is better – or at least not a whole lot worse…

        But I don’t think the leadership of MLB is doing a good job maximizing revenue for the league…

        Their are a lot of options out there for expansion..
        1. The NY market could easily add a team – it had three in the 50’s
        2. Havana is going to happen and will be great – Trump will make it
        part of his new deal with the commies.
        3. Move Tampa to Disney world – this should have happened ten years ago…
        4, Indianapolis, San Antonio, Portland, Montreal, Vancouver, Charlotte are all possibles.

      • The one element I agree with is winning teams make money. And you have to spend to win. Losing becomes a self-fulfilling prophecy. Salary dump leads to more losses which demand lower payroll etc. 2003 the Penguins are last in the league in attendance 2016 they are 8th out of 30 and selling out every game. Winning matters. It makes money.

  • Worth noting:

    Holy balls, Dodgers.

    And that’s really expensive total suckage you’re engaging in, there, Phillies and Angels.

  • Tim, with all due respect, I don’t find Opening Day payroll to be the be-all-and-end-all point for analysis.

    I’m one of the people who claimed that the Indians spent well north of $100 mill last year, using info from Spotrac.

    The main reason I think end of season payroll is just as valid as beginning of the season is, to put it bluntly, as a measure of a team’s commitment to winning should things go awry.

    In the Pirates’ case, I think we’ve all come to the conclusion that NH (or as the case may be, BN) went cheap with Vogey and Niese figuring that Taillon, Glasnow and Kuhl would be ready mid-season. One of those kids was good, one average and one a no-show. However, waiting to find out had already put the Bucs in a hole where they needed all three to step up.

    Of interest, the Indians ended with a 25-man payroll of $61.3 mill vs the Bucs’ $57.3, which doesn’t seem like a big difference. This was partly (mostly) due to Carrasco and Brantley being on the DL at end of the year. The Bucs, meanwhile, had Marte, Cole and others on the DL. Total DL figures were $11.9 for Cleveland, $10.6 for Pittsburgh.

    Cleveland also had $1 mill on the books for Byrd’s suspension and $39.5 million in retained contracts vs the Pirates’ $37.6 mill (Cleveland basically ate $15 million in Bourn and Swisher’s salaries vs a Liriano-ish salary dump). The minor leaguers making MLB minimums was about a wash.

    End of the day, Cleveland spent $114.7 mill to the Bucs’ $105.9 mill. Cleveland added about $6 mill in salary (more than half that to Miller) during the season, plus another half million in minor league promotions. I believe you’d be in agreement over the Bucs final payroll number, so not sure why you’d object to Cleveland’s.

    Point being, having dead money in Carrasco and Brantley (not to mention releasing Bourn and Swisher) didn’t stop them from investing in the right pieces to continue to drive to a pennant. They didn’t spend much in $$$ for mid-season acquisitions, but did use prospects to acquire Miller. Thus, they not only spent more than $100 mill, but they aggressively made improvements despite losing two of the better players.

    If you really put aside any bias, can you legitimately say that the Bucs wouldn’t fold the tent in the same situation instead of going for it? I have little confidence the Bucs would handle things the same way Cleveland did.

    • My name isn’t Tim, but I endorse your post and NO, I don’t think the Pirates would have operated the same way as Cleveland under similar circumstances. I suspect Tim will say we don’t know because they haven’t been in that exact position.

      • The Pirates added about $10 M in payroll on average each year during the season when they were contenders. They were just starting from a lower point in most of those years.

        • I thought it was around 8M but why split hairs. I would not assume they would have added the same amount in 2016 even if they were doing better on the field.

          Keep in mind NH explicity stated the March 2016 Freese signing put them over budget and came out of funds usually set aside for midseason acquisitions.

          They started from a much lower base in 2013, 2014 and 2015 than they did in 2016. I think in 2016 they were basically hitting near their ceiling.

          “Starting for a lower point” is a very key consideration in this discussion.

          They are no longer starting from such a lower point- which is a primary reason I expect payroll growth to me much much lower going forward than it was the past 3-5 years.

    • On the other hand, the Pirates weren’t in a great position to compete in 2016 come the trade deadline, and they weren’t going to compete with the version of Liriano they had pitching every fifth day anyway (because he was bad), so subtracting rather than adding payroll to better set them up for 2017, a year in which they might compete, was probably the best decision they could have made.

      I think the 2015 Bucs team would be a better comparison, when I’m pretty sure they added a decent chunk of salary to try to improve their team.

    • Beginning of the year payroll is more optimistic. End of the year is more realistic.

      The beginning of the year payroll reflects what teams can spend expecting to be contenders. The end of the year reflects what they’ve added on when they find out they are contenders, or what they subtract when they realize they aren’t contenders.

      Teams really shouldn’t be committed to winning that year if things go bad. The Pirates could have had a higher payroll if they kept Melancon. But they’d just have a few million more on the payroll line for 2016, and wouldn’t have Rivero or Hearn for the long-term.

      That’s why beginning of the year works. It shows what teams are willing to spend off the bat, expecting good results. The end of the year payroll is more subjective, giving an advantage to teams that remained contenders.

      Not to mention, teams stick to their budget pre-season, and might be willing to go over budget (or might find the budget higher) mid-season. The goal here was to see where teams finish, to get an idea of their budget.

  • I would also add that I strongly disagree with this statement:

    “If they continue spending around $100 M, then I think that puts them in a respectable place”

    Unless average payrolls fall around MLB spending around 100M will keep them well under 80% of average MLB playrolls and will make it exceedingly difficult to compete as many of our core players get more expensive, Cole, Marte, Polanco etc. It will be extremely difficult to compete at 100M unless they are doing a rebuild.

    A lot of the teams spending less than the Pirates in 2016(Reds, Brewers, Braves) were in rebuild mode and will be spending considerably more soon.

  • Following up my post with the Cot’s data I also want to add this quote is misleading: It’’s hard to look at payroll stats that show teams in Cincinnati, Kansas City, Cleveland, Milwaukee, and Oakland averaging around $100 M or less in their best years, and then expect the Pirates to be spending significantly higher than that amount”

    Very misleading. 100M a few years ago is much, much different than 100M in 2016.

    The Reds spending 106M in 2013 would be like the Pirates spending 130M in 2016

    The Brewers spending 104M in 2014 would be like Pirates spending 118M in 2016

    The list goes on.

    The reality is if a team such as the Pirates will never even be able to spend 80% of what the average payroll is in their best years… it’s going to be hard to compete and years like 2015 will be anomalies.

  • Tim,

    Reran the numbers with Cot’s data as far as Pirates payroll as a percentage of League Average. Did not change much at all from Spotrac(even though average payroll number was different)

    2012 Pirates were at 51.8% of league average (52 vs 100.3M)
    2013 Pirates were at 63.1% of league average (67M vs 106M)
    2014 Pirates were at 63% of league average (72M vs 114M)
    2015 PIrates were at 72% of league average (90M vs 125M)
    2016 Pirates were at 77% of league average(100M vs 129.6M)

    So by this measure they actually slightly worse than Spotrac. Their payroll never represented more than 77% of league average in last 5 years. In addition, NH stated they were overbudget going into last year. I expect payroll to fall modestly this year while league average goes up to a modest degree.

    Other small market teams like the Reds, Brewers have clearly had years where they have been well over 90% of league average.

    • I think the comparison from the other day was 2014-2016.

      The Pirates have increased their payroll 38.9% during that time. The MLB average has increased 13.7% in that same time. And as you show, they are getting closer to the league average.

      I also don’t expect payroll to fall modestly.

      • It was increased from a pitifully low base. And it is STILL 23% below league average.

        So you think opening day payroll will be as higher or higher in 2017 as it was in 2016?

        The important point here is I don’t think the Pirates will even come close to growing their payroll 38% over the next 2 years.

        I would be surprised if they can even grow it 10-12% in aggregate over next 2 years.

        You don’t really think the Pirates will be growing their payroll at the same rate going forward do you?

  • There are multiple elements of this discussion.
    1) Tim is 100% right that MLB has created this problem. And oddly the small market owners seem to have no desire to change. A real salary cap and salary floor is necessary to a competitive league and we don’t have that in MLB like we do in all of the other major American sports.
    2) But I am not going to worry about Bob Nutting or the other ultra rich owners of the Pirates. They are making money, we just don’t know how much. Nutting’s family are billionaires. I’d love the Bucs to have a $200 million dollar payroll, but realistically is average too much to ask? How about $150 million? Imagine how much better we’d be with an Ace starter (making 20 million) and if we’d extended Melancon etc. You make assumptions about that money. But my point is while normal people get bilked out of their money (willingly) for concessions and tickets it appears that Nutting is going cheap and not allowing the moves that might win a championship.

    I’m not asking for altruism or sainthood from the owners but instead a reasonable expectation of fairness. I’m not seeing that.

    • And oddly the small market owners seem to have no desire to change.

      And that is because, despite Frank’s frustration, even the small market owners are making lots of money.

      That is the bottom line. FC, NH and Hurdle want to win. Bob? The jury’s still out on that one. I’m sure he doesn’t MIND winning, but he didn’t lose much sleep I bet after our 2016 season.

      • Small market owners are also likely largely at the mercy of big market owners no matter what they want. The big markets produce the bulk of baseball’s revenue. I would be shocked if they didn’t also carry the majority of the discussion and had just about all the power in negotiations. That’s how money and power work, after all.

      • There isn’t a big time money guy in this country that wants to “lose”… winning is first and foremost. to assume someone has no heart and soul and ok with losing just because they are well off is just ignorant to the fact that they are humans that are ultra- competitive… that’s why they and their families were able to amass wealth.

        There are way better investments that throw off cash than a baseball franchise. Nuttings bought this team out from Mcclatchy at a low, smartly, developed a plan, executed and continues to execute… and they ARE a winning team.

        Give his intentions another look.

  • Multiple sources have put the Pirates profit at around $20m. Don’t ask me who, as my job is not to remember these sources, only that the analysis looked sound. But lets look at this from another angle. Nutting and team are heavily criticized over their spending…..heavily. So if the team was operating at a break even level, you don’t think they would say that to blunt the criticism??? Of course they would. They won’t talk about profits, because there are significant profits. Frankly I think that everyone who goes to the games, or buys a TV package, or spends money on Pirates gear deserves to be treated more like a shareholder. I haven’t even mentioned the fact that they are working in a public financed stadium. Nutting owes the fans a little more forthrightness on the finances, without going into actual specific dollars, as we are the lifeblood of this franchise. If the team is basically setting a player budget at a level that looks to break even on the bottom line, that works. If they are budgeting to make a $20m profit, that doesn’t work for the fans. What are Nutting’s goals?

    • No. If hypothetically the Pirates were operating at a break even level they wouldn’t state this to blunt criticism. Why? Because people who have chosen to believe that they really can afford a 120-150 mil payroll would just continue to believe that they were lying. I don’t think releasing their books would even blunt the criticism because people would just choose to believe they were fake.

      • So Pirate management will not be open and honest because people will think they are lieing? Personally, I think the Russians are behind MLBs problems. 🙂

        • Who’s to say they aren’t already being open and honest. You basically just proved my point. It doesn’t matter if they are 100% honest or 100% deceitful because when it comes to the Pirates payroll people will choose to believe what they want to believe. Because you know, they have “multiple sources”.

          • Open? They have not discussed profit in any way.

            • Maybe they have, maybe they haven’t. I don’t know and I frankly don’t care. My point was that it doesn’t matter. You claim they are striving to make 20 million profit each year. If Nutting was at PirateFest and stated the goal was to break even each year, would you believe him?

    • I agree 100%. We need publicly owned teams. The Pirates benefit from millions of dollars of public money and are very important to the local community and economy. Green Bay seems to be the model. Again, breaking even for Nutting is fine since his family are billionaires! People are acting like he needs the money.

    • A $20 million profit isn’t that big, really, on the scale of the money involved here. And since the goal of a business is to make money, and we’re talking about a profit margin of well under 20% after you consider the various other costs associated with running a baseball team. They’re probably spending close to $115 million annually, all told, to turn that $20 million profit.

      If the number is actually just $20 million, I can’t even be upset by the low payroll. At most, they could reasonably increase it by about $10-15 million without risking running a deficit, and I publicly financed stadium or no (and, full disclosure, I’m completely opposed to publicly funded stadiums on principle), they don’t “owe” it to the fans to run the team on a deficit.

      Now, if the Pirates get a new TV deal which skyrockets their annual income, and the payroll still doesn’t increase, then there’s a clear problem.

    • There are no sources saying they make $20 M.

  • I don’t agree that if they stay around 100 mil in payroll, that they will be at the top of the bottom half. As last year indicated, almost all teams are now paying a minimum of 100 mil. Therefore, as the years go on, the rolling average of the older, lower payrolls will drop off, and replaced with the higher figures. If the pirates stay around 100 mil, they will remain near the bottom.

    • They were 19th last year with a $103 M OD payroll.

      • The Pirates are going to be in big trouble if they think the can contend the next couple years at 100M. Unless your idea of “contending” is what you are seeing from the Rays from 2014-16.

      • I don’t think so. They were 25th at the end of last year according to Spotrac:

        http://www.spotrac.com/mlb/payroll/2016/

        Spotrac updates monthly as trades are made.

        I have never seen any source that indicated that the Pirates have ever ranked higher than 22 since Nutting has been owner.

        • Spotrac isn’t a good source. Their numbers include amateur bonuses. Off the top of my head, I know the Padres and Reds finished higher in the Spotrac rankings, only because they went big on the international market.

  • Balanced discussion Tim, thanks.

  • Aside for attendance $$, huge nat’l tv $$, local tv $$, #Pirates received at least $34M in revenue sharing last yr. $34M! 1/3 of payroll!
    -from a renowned source who may or may not have made regular contributions to this site lol (for all to see on the bleacher report)

  • I applaud your efforts, but come back to the question I asked you the other evening, “How do you know what revenue the franchise makes to establish your premise?”

    Yes, I understand what MLB declares is a “small market” and there are systemic sanctions for spending above those rates, but nothing bars an owner from doing that.

    Also, can you tell me if the Milwaukee Brewers do or have opened their books so their fans can see revenue figures?

    Lastly, faced with with all of the fan anger and skepticism, which you rightly acknowledge, why does BN avoid the fans, who produce that revenue, and send out famous dissemblers like Coonelly and NH??

  • What role does increasing payroll have on producing a contender? I would argue that there is quite a strong relationship. I think that is more the issue that people have. How is a team suppose to get better if they refuse to spend money on the requisite talent to do so? I personally believe the Pirates like their lower tier payroll niche and, it seems like it has become part of the business plan to stay there on an artificial basis. Yes the Pirates are a “small market team” but, I think the Pirates are all too comfortable using that label and have been for quite some time.

    • I think this is a chicken and the egg type discussion, except we have an answer here.

      A lot of people assume you spend, and then you contend. But most teams actually build up to being a contender, then spend to add to that team or keep that team together.

      • But most teams actually build up to being a contender, then spend to add to that team or keep that team together.

        Except for us, of course. 🙂

      • And then you have the 2016 Pirates who coming off a 98 win season decided to trade guys like Morton for Whitehead swap salaries of their 3 WAR 2b for Jon Niese and go into the season with a rotation of Niese, Nicasio, Locke with the remains of Vogelsong waiting in the wings.

        • Yeah, that Morton trade was a killer. He threw 17 valued innings for the Phillies.

          • My man Leo! Where ya been? So you liked the reallocation of the Morton dollars eh? Who am I to argue with the 2016 plan, it worked out well.

  • I live right in the middle of solid Cardinals nation. I agree that they do a fantastic job with organizational efficiency. They draft and develop talent as well as anyone. It’s a model to look at closely.
    Additionally, however, one of their big advantages is that they pack their stadium for virtually every game. Harry Caray helped make them what they are with his broadcasts going back 70 years or more. He created a fan base as far away as Arkansas. I’m convinced Dexter Fowler will play well for them because every player going to the Cardinals gets a shot of adrenaline when he goes out on to the field at Busch and hears 40,000 screaming fans.
    Unfortunately the gross disparity in revenue is something that probably won’t be addressed in my lifetime. I’ll be 70 in April and with baseball now being a $10 billion game there’s not enough momentum among the fat cats out there to make the changes necessary to allow the Pirates and other small market teams to compete more successfully. Thanks for starting this discussion Tim. Regardless, many fans with good intentions will continue to bitch about Nutting.

    • I would also point out that the Cardinals regional success goes back much further than Harry Caray. My Dad was listening to them on the radio wile living here in Pa. when the atmosphere was right !

  • BuccosFanStuckinMD
    December 13, 2016 9:25 am

    I know this site is often the apologist for the Pirates ownership and FO, and this article falls in line with that ongoing strategy. With that being said, I do agree that the Pirates payroll has steadily increased in recent seasons, but so has the rest of MLB. If the bottom line did not trump winning, the Pirates wouldn’t have traded away two of its best prospects in order to get Toronto to take Liriano off their hands – they would have just cut him and eaten the contract or kept him and hoped that he could turn things around. To have to trade away two of their best prospects – and then try to convince the public that they really did want Hutchinson and that this was a baseball trade – just opened them up to ridicule, and deservedly so. If the bottom line did not trump winning, they would be more competitive in the International market and wouldn’t completely ignore the influx of Cuban players in particular. The Neil Walker trade debacle was another move motivated by the bottom line. The latest absurdity was the Pirates actively exploring trading their face of the franchise, and when they were not able to secure proper value for him, try to convince us all that they never REALLY intended to trade Cutch. Damage control mode.

    The Pirates, and other small market teams, cannot compete and win consistently with the current economics of the game, and neither can other small market teams. They may pop up and win here and there (Indians this past season, KC a couple of years ago, etc.) and have a short lived run, but overall MLB is tilted heavily towards bigger market teams. Any appearance of parity is an illusion. Until MLB adopts a hard salary cap, like the NFL, and includes the International players into its draft (like every other major professional sport does), teams like the Pirates will continue to be forced to pinch pennies, largely sit out free agency each year, and look to reclamation projects to be miracle workers. It is not sustaining long term….

    The NFL is great (although they are arrogantly going to destroy their own league with their insistence of going International, while sticking it to their fan base) because its a level playing field – any franchise can win and win consistently if properly managed – Packers, Steelers, Chiefs, Colts, Ravens are all smaller market teams in the NFL, yet compete year after year and have won their share of division titles, conference titles, Super Bowls, etc. It can be done, but MLB and its players union would need to make significant changes….

    • “I know this site is often the apologist for the Pirates ownership and FO, and this article falls in line with that ongoing strategy”

      And there goes the streak of having a smart conversation without having to resort to personal attacks, or speculating about the motivations of people who are presenting facts.

      We made it about nine hours. Be proud of yourselves everyone! I think that’s a record.

      • And BFSMd stays true to form.

      • BuccosFanStuckinMD
        December 13, 2016 9:34 am

        Tim, only someone overly sensitive would consider that statement a personal attack – its based on observations of your site over multiple years. I’m not being critical – I understand your need to keep a good relationship going with the Pirates franchise and their management – I get that. But, don’t turn around and cry foul when someone points out the obvious….I like your site a lot (or I wouldn’t pay for it), for the information you provide about players, the farm system, etc. – its great and I have complimented you for it numerous times over the years. But, I don’t expect to come to this site and get objective journalistic analysis and commentary on the team and its management….

        • “I understand your need to keep a good relationship going with the Pirates franchise and their management – I get that.”

          This isn’t actually true. People who say this have no idea how media works. I get access because of how many people my site reaches, and because we’re the only source that covers the prospects all throughout the system. I don’t have to say anything to maintain access.

          “I don’t expect to come to this site and get objective journalistic analysis and commentary on the team and its management….”

          See, that’s what I find offensive. It’s not being overly sensitive. It’s just being a human being. By calling me an apologist, and saying that we don’t provide objective analysis and commentary, you’re questioning my integrity.

          There are a lot of things I disagree with that you write. I respond by providing facts or opinions to counter the argument. I don’t attack your character or give you my thoughts on what I feel your opinion on baseball says about your character.

          If you disagree with something I say, leave it at that. Same goes for everyone else (“apologist” or whatever the opposite side is called). There’s just no value to the conversation if you start the apologist bullshit. It kills any chance of a smart discussion, because it starts attacking the integrity of the person you disagree with, rather than having a smart debate where two sides discuss their positions and why they came to those opinions.

          I’m just asking that you show me and everyone else respect when you disagree with their opinions. And I’m asking everyone else to do the same to you (specifically addressing comments below). We need to stop this shit of attacking the person, rather than the argument, even if what you’re saying is actually your opinion of the person. It only takes away from the discussion.

          • Tim – I would disagree a bit here. To say that your credentials are 100% based on the people you have registered or reading this site isn’t necessarily true. It may be mostly true but any organization is going to lean in further for media that covers them positively providing the narative of “apologist”. Most beat writers for the Steelers are deemed in the “bag” with management, no different than apologist by the way. Most credentialed White House reporters get and keep their access based on the soft ball questions they ask rather than being critical or pressing difficult questions. There is a reason you don’t see Dem’s on Fox anywhere near as much as you see them on CNN, NBC, ABC and likewise the other way around.

            Attacking one another is never the right path to meaningful conversation but not acknowledging the elephant in the room that is universal across media doesn’t help either. Just fact that you are media and open to more constructive criticism than we are that pay for your fine reporting/coverage.

            Do i read this article to fit the ongoing “Nutting isn’t cheap” narrative that the Bucco brass wants trotted out there… yes i do. Others obviously read it differently. It is nicely written with facts to back up that argument but much isn’t known and their handling of the past year’s transactions have only fed into the inability to stretch a bit to go for a title.

            • These are all assumptions you’re making about the nature of media. They’re all wrong.

              I don’t know if I’ve told this story, but I helped form the rules and guidelines for independent media getting credentials with the Pirates. We requested full credentials in 2012, but they said no originally, since they didn’t accept independent sites and didn’t have a system for it. This was long before DK’s site, or before other blogs gained access.

              I did some research and found a set of rules and guidelines that the Washington Capitals used to credential bloggers. I used that as a guideline, presented it to the Pirates’ media department, and they adopted that as their guide for credentialing independent media. We were the first site they credentialed, and the only independent site for a year or two, until I told Charlie at Bucs Dugout that he should apply as well.

              So as the person who helped form the rules and guidelines for independent media to be credentialed with the Pirates, I can tell you what it requires. It requires a big audience, with X amount of page views per month (it’s a figure that would rival the local newspapers). It requires original content, and daily updates to your site all year. It requires that you produce content from the game you’re covering (i.e. you’re not getting a free ticket).

              I’ve written a lot of critical things about the Pirates. I’ve written more positive things. But that’s because you can’t objectively cover this team and what they’ve done without having more positive than negative.

              • You addressed one part about Eric’s post as far as what it takes to get credentials. But you didn’t address the main theme imo, is that most credentialed outlets that cover teams tend to be viewed as being sympathetic to the team more often than not. I’m not even saying it’s true, I am agreeing with Eric that I hear this same thing about many credentialed media outlets that cover the Steelers.

                • I think it seems sympathetic for a few reasons. The big ones:

                  1. Media covers all sides. We give all sides a voice. I always try to look at moves from the Pirates’ perspective, add my perspective, and let you decide what to think.

                  2. Media isn’t usually as passionate as the fans. The fans want the type of questions you see at PirateFest, where it’s a lot of yelling and blaming and emotions taking over. Those emotions don’t exist when we ask questions, because we’re going in without bias.

                  The media seems sympathetic only because they’re not going in with the emotions of the fans, and they’re just doing a job of trying to report all sides. The fans who think the media is sympathetic are the ones who feel there’s only one side, and there’s no room to try and explore a topic.

                  • I don’t really have any skin in this game. I would add that I’d be careful about your 2nd point. It comes real close to insinuating that people who are are critical are clouded by emotion which interferes with their ability to be rational. This comes quite close to being elitist.

                    Take someone like Wilbur for example. I don’t think his perspective is influenced by emotions taking over. I think even when sharply critical his points are grounded in reason and logic. But I can’t see many people who interact with Pirates brass on a regular basis expressing the same opinions as he does. Maybe some will in the future and some have in the past.

                    DK was/is always critical but that is taking it to an extreme.

                    As a “fan” I always try to see both sides of an issue and don’t fly off the handle. For example something like the liriano trade, I can guarantee you I’ve analyzed it from as many angles as you have dispassionately… and the end result every time is I come away believing it was a shit move. Not because of emotion, but because of objective data.

                    • As someone who talks with Wilbur several times a week, and almost daily, I know he discusses both sides. David Todd is someone who is critical, but he discusses both sides.

                      There’s no problem being critical. I’m critical when it’s warranted (although I’m pretty level headed, good or bad, which is probably why the criticism doesn’t stand out).

                      What I’m saying is that the people who get mad at the media for trying to present both sides are the ones who usually only see one side. They’re the ones who are only critical, and don’t balance it out by giving credit to the good.

                      There definitely is emotion with every fan that you don’t get as much in the media. That’s not saying fans are all irrational. You can have emotion and still see things rationally. You just said that you didn’t like the Liriano trade, but you gave it a fair evaluation and came away thinking it was a bad move. That’s the same approach I took.

                      Those fans I’m talking about who are only critical saw my balanced view of the Liriano trade as me trying to apologize and see it from the Pirates’ side. That was actually said to me. And because I didn’t write a Tweet in all caps on a daily basis, I had to repeatedly remind people that I didn’t think the Liriano trade was a good one.

                      We both took the same approach, came up with the same opinions, felt the trade was bad, yet there are some fans who just aren’t objective and viewed that approach as me being an apologist. I find those are usually the fans who have a problem with the media and think they’re trying to preserve relationships.

              • So….what you’re really saying is Nutting was too cheap to form his own guidelines for independent media so he had you do it for him! Haha.

                • It’s crazy how much things have changed since I started. I couldn’t get credentials with Altoona for almost a year because they just didn’t credential blogs. I got one at the end of the year because they saw me working responsibly in the Richmond press box and saw that all of the players knew me from Lynchburg the year before.

                  It all would have changed eventually, but I was the only one trying for changes at the time with the Pirates (or maybe the only one who was successful in the attempts, thanks in large part to you guys).

                  • Off topic a bit, but the Curve management since 2009 has not been very pro active, or even really fan friendly.That may change with this coming season as the new GM, Derek Martin was always a great guy when employed under the previous management. And that is not to put all the blame the previous GM, Rob Egan,

        • Let’s just say for the sake of argument that Tim Williams is often an apologist for the ownership and front office of the Pittsburgh Pirates.

          I do not care. If you stated the same thing about Tim and the Dave Littlefield administration, that would be highly insulting, and I would care.

          The two of you have opposing points of view. Fine. But you seem to be ascribing motives, at least implying that Tim writes nice things about the Pirates in order to maintain a good relationship with the Pirates.

          How are you privy to Tim’s motives? Do you also know what Tim had for breakfast and his favorite color? You say that you are not being critical. Up to that point, perhaps. But when immediately afterward you seem to be ascribing motives, you lost me completely.

          One more thing, when I defend actions by the PPBC, what are my motives?

        • Overly sensitive? You’re essentially calling him a hack with no integrity. Maybe that’s not your intention, but that’s the implication here when you suggest that he’s not being honest or straightforward in his coverage of the team.

          I don’t always agree with everything Tim writes, but I find his approach on most topics to be incredibly solid and fairly scientific. I think he goes out of his way (sometimes more than necessary, although you can see why) to appear the exact opposite of what you’re accusing him of, because of people like yourself who constantly suggest that he’s some kind of apologist. There are always facts included to support his arguments, he’s not just throwing random junk at the wall to see what sticks.

          There are plenty of places on the web to read the “hot takes” about how we should just spend more money and stop being so cheap. Tim seems to go out of his way to avoid those types of pandering pieces and instead will play the contrarian to see if there is another angle out there that the more simple-minded fans and journalists are missing, and I really appreciate that approach even when I don’t always agree with his conclusions. He is always framing these discussions in a different light than anybody else covering the team, that’s the value here.

          I think if everyone was sitting around praising how wonderful the team is being ran, he’d be out there writing pieces that try to uncover if maybe things aren’t as great as they seem. That’s his M.O., it just so happens that right now it’s much more popular to trash the front office so I think his work tends to try to uncover what people might be getting wrong in their trashing. I can see how that rubs people the wrong way sometimes, but then I’d say that maybe those people are the ones who are being “overly sensitive”.

    • Anyone else find it amusing he sited the Chiefs as a model franchise for small market success in the NFL?

      The Chefs aren’t the Browns by any stretch, but their record over the last 50 years more closely resembles the Browns than the Steelers.

      The NFL salary cap has created 32 teams with mediocre rosters where the teams with the best QB’s win almost always.

    • Having seen both play numerous times in AA, you will neve, convince me McGuire and Ramirez are outstanding MLB prospects. One, while a good defensive catcher, couldn’t hit and the other had problems staying on the field. At best Ramirez looked like Jose Tabata with injury problems.

  • Bottom line on all of this: The Dodgers just signed Kenley Janson and Turner to go with Kershaw and their other high $$$ players.

    We have, nor will we ever have any chance of swimming in those waters. The Dodgers and others of their ilk, can keep their windows open for years with smart management.

    Our windows, like those of T Bay’s, KC, etc, will be short and are usually followed by years of losing until we can (hopefully) get our farm system up to gear. And, if one of these small market teams go “all in” (see Oakland or Milwaukee), they can REALLY screw up their futures if they fall short.

    Teams like us have to sell off stars or very good players as they approach free agency.

    Teams like us can’t even afford middling starters like Ivan Nova any more.

    It is extremely frustrating to be a Pirate fan in this era.

    • I might have to write an article about windows, because I wonder what people mean when they talk about that.

      For example, Oakland has finished 1st or 2nd in their division 12 times in 18 years since 1999. They made the playoffs 8 times in that span. The Dodgers, with a much higher payroll, have made it 11 times in that span, and made the playoffs 8 times.

      When Oakland loses for a few years in a row, like they did from 2007-2009, people proclaim that their “window” is shut. But then they followed that by ending up in 1st/2nd in four of the next five years.

      When the Dodgers finish in third place in four of five years, no one says a thing about windows.

      That’s where I’m coming from when I say that windows don’t exist if you’re smart. I’m looking at the long-term, and recognizing that teams will have some down years, but that’s normal for any team, and not exclusive to small markets. But if you’re smart, you should be able to be competitive in most years over the long-term, even with a few losing years in between.

      Operating like you only have 3-4 years to ever compete (which is what I feel people suggest with the windows argument) is just wrong.

      • BuccosFanStuckinMD
        December 13, 2016 9:29 am

        Tim – and where have all of the A’s best players over those years gone? Almost all were lost to free agency or trades motivated by economics. That would never happen in NY, LA< Boston, or Chicago.

        MLB's current non-salary cap system cannot be defended as an equitable system – it is not. yes, some small market teams have done well for short spurts, when they were able to develop a significant number of good young players in a short span, but they can never keep those teams together long-term.

        • For, I think the first time, I agree with you BFSMd.

          • BuccosFanStuckinMD
            December 13, 2016 9:35 am

            You need to wise up then Foo….I’m not always right, but I occasionally am – even though people are put off by the non-PC approach….:)

        • I agree with you. The A’s have been smart because they’ve somehow remained competitive for the long haul, despite losing some of the game’s best players.

          Although I am concerned about the recent trends where they are losing some of the best players in bad moves (trading Addison Russell to rent Samardzija, and trading Josh Donaldson when he hit arbitration).

      • What about Tampa Bay?

        • That’s a tough comparison. They entered the league in 1998, so it’s expected that they would be bad for some time. It didn’t help that they had horrible management for a long time.

          They started winning in 2008. They finished 1st/2nd in four of the next six years, and made the playoffs four times. They’ve been 4th/5th in each of the last three years.

          So I’d say it’s incomplete right now. Is the window closed? Or are they just in a normal rebuilding period like the A’s went through from time to time?

          • LOL. If you are suggesting the window for the rays is still “open” then yeah, windows don’t exist.

            • What I’m suggesting is that the long-term view is incomplete. And the definition of “windows” can change from person to person.

              If “windows” are small groups of years where a team can compete, followed by a short rebuild, then I’d agree that there are windows. They also don’t really matter, since all teams in all markets have these.

              If “windows” are a case where a team can compete for 4-6 years, then go on a long stretch of losing before another short stretch of winning, then no, I don’t think windows exist if you’re a smart team.

              • Right. And I now understand why you vehemently disagreed when I suggested in the summer that the Pirates window was most likely closing.

                The definition certainly does change from person to person because I’d say it’s closed for the Rays. Maybe just maybe they can get a lot of things right and time it perfectly before that payroll starts approaching 100M and Longoria gets too expensive etc. But yeah, I’d say that window is closed.

                • Yeah, I’d agree with you if we’re saying that windows closing means they could re-open in 3-4 years or less. I just get the feeling that most think a window closing will lead to 20 years of losing. Maybe because so many people have said things like “The window is closing, and now here comes 20 years of losing.”

                  • Well I never said that and was quite specific about what I meant. What I mean is this team is most likely headed in a similar direction as the Rays where they will struggle to do much better than 500 and very well may have some losing seasons. If a lot of things go right they could compete for a 2nd WC spot.

                    No, they aren’t going back to being the worst team in perhaps the history of all professional sports. Call me crazy, but surpassing that bar doesn’t lead me declare the window being open.

                  • Its personal vs professional, Nutting does not care about the fans, he only cares about money. He will not spend enough money on the team. If he wasn’t smart he would sell. If they lose Cutch and lose, the fans will turn on him and his profits will shrink. Cutch is the only player they have to keep, to keep the fans happy. It would be a different story if Nutting said hey we traded Cutch for A-Z. But we extend Cole for 6 years, & signed Nova to the deal he is asking for. I think most fans could live with that. But not the trade talk after a salary dump. There lots of ways to do things, IMO Nutting right now is doing them wrong.

  • I just want to know why Mr Nutting didn’t show his frugal face at Pirate Fest.

    🙂

  • I appreciate your boldness in writing this and opening the floodgates of comments, Tim.

    I think reading moneyball would help give most a refresher of perspective into small market team finances. The necessity of finding a competitive edge to overcome financial restraints is very evident with the Pirates, and they need to keep finding a new edge every year.

  • We can all agree that by MLB definition the Pirates are a small market team.
    We can also probably agree that the ownership can model their business to make a profit, even when ownership enjoys the benefits of a publically funded destination class ballpark.
    The fact is that the overall trend of ticket price revenue for the Pirates since 2012 is up significantly while the percentage of revenue allocated to player salaries is down.
    The “small market Pirates ” can afford to spend more on payroll and STILL be profitable. As others have pointed out a $10-15M increase in payroll should make a difference in the quality of the team.
    Lost in all the discussion so far is the fact that the Nutting family investment in the Pirates has been an enormously successful since they assumed control.
    Estimations of the value of the franchise average $950M. I believe the cost to the Nuttings was in the $90M range. The Nuttings have achieved a spectacular ROI(return on investment) with public assistance by way of the beautiful ballpark. They also enjoy a positive cash flow in a business where future earnings and valuations are certain to rise.
    Count me as one fan convinced the payroll can and should be $10-15M higher.

    • “The fact is that the overall trend of ticket price revenue for the Pirates since 2012 is up significantly while the percentage of revenue allocated to player salaries is down.”

      The ticket prices needed to go up. They were among the lowest in the league (possibly the lowest?) due to the 20 year losing streak.

      As for the percentage of revenues, we don’t know the revenues, so we don’t know if this is true.

      “Lost in all the discussion so far is the fact that the Nutting family investment in the Pirates has been an enormously successful since they assumed control.
      Estimations of the value of the franchise average $950M. I believe the cost to the Nuttings was in the $90M range.”

      I think their cost was more than $90 M, since they bought out other owners along the way at a higher rate. But they have made money on the investment.

      The problem is that this isn’t liquid. They don’t have $800 M in cash lying around. They’d have to take a loan and go in debt each year to add to their payroll through this method. This is a good way to eventually lose your investment and your franchise. It’s also discouraged by MLB.

      On the flip side, MLB discourages owners from removing money from the game, and we’ve yet to hear them complain about the Pirates. Furthermore, the MLBPA will call out a team if they’re not spending a proper amount on payroll, and instead taking larger profits. They called out the Marlins (and the MLBPA has access to the books, so this isn’t guess work). They’ve always said that the Pirates are doing it the right way, and there are no issues.

      So all signs point to the idea that they’re spending the right amount for their market and revenues. When the MLBPA and MLB get mad, that’s when the claims that they’re not spending what they could be spending become a concern.

      • I did not suggest that the Nuttings borrow against their asset to pay increased salaries…..but it cannot be questioned that they have made an enormously successful investment that can be monetized in whole or in part at their choosing.
        All available data supports the argument that the Nuttings are making a conscious choice to spend a lower percentage of revenues on salaries than average.
        Give me a break….the test for whether the Pirates can and should spend more on salaries is not “when the MLBPA and MLB get mad” and call out a team for not spending enough. Using the single extreme example of the Marlins is unconvincing and not comparable.
        I simply disagree with your conclusion “that all signs point to the idea that they’re spending the right amount for their market and revenues.” What signs?
        .
        .

        • The comparison of payroll limits to other markets. The fact that MLB and MLBPA say they’re operating in the correct manner, especially when the latter has every incentive to try and get teams spending more.

  • A better way to look at this instead of averaging 5 year spending is to to look at team spending as a percentage of average spending in MLB per year. For example looking at how much a team spent in 2013 vs 2016 to comprise an average is silly. Average spending since 2013 has gone up 30%(111M to 145M)

    Going back 5 years the here is how Pirates payroll compares to the average MLB spending that year per Spotrac(Tim has a problem with Spotrac, I use it because it makes for easy comparisions)

    2012 58% (61M vs 105M average)
    2013 64% (71M vs 111M average)
    2014 63% (77M vs 121M average)
    2015 78% (105M vs 135M average)
    2016 72% (105M vs 145M average)

    If anything this makes the Pirates payrolls look more competitive than they are because Spotrac gives teams credit for money they are spending on draftees)

    Other small market teams have reached much closer to the average payroll in a given year. For example Cleveland was at 83% of MLB average payroll in 2013 and the Reds were at 94%. Teams like the Brewers have been much higher than 78% in the past as well.

    Even though the Pirates spent as much in absolute terms in 2016 as 2015 they went down relative to the average 78 vs 72%.

    Now this doesn’t tell us how much they are taking in, it does tell us they are very low relative to average spending in MLB and lower than many other small market teams relative to the average.

    This was average not median. Even if you changed it to median the Pirates would still be spending less as a percentage vs other small market teams in many years.

    • My problem with Spotrac is that they don’t use payroll numbers. Their payroll numbers include international bonuses and draft bonuses in addition to team payrolls. If you’re doing a payroll comparison, it’s best to use a source that only focuses on payroll.

      USA Today is a good place for that if you want every payroll on one page. I think I pointed out a week ago that in the last few years the Pirates have seen their payroll increase 39%, while the median MLB payroll has increased 23%. That was using payroll figures only, and not the Spotrac data, which includes other expenses.

      • Spotrac is pretty good. These aren’t distorting things nearly as much as you suggest or envision. It gives a pretty good idea year to year of average spending in MLB and the Pirates spend in terms of a percentage of average.

        • They aren’t good for payroll comparisons, because the comparisons have things other than payroll included.

          For example, the Pirates have $105 M on Spotrac, but $6.5 M of that is for amateur bonuses. The Padres have $133.68 M, but $47.77 M in amateur bonuses. You take out the amateur bonuses, and the Pirates are spending $98.5 M in team payroll versus $85.91 M for the Padres.

      • Please post a link where USA today has the annual total payroll for each team in MLB. I’m only seeing individual players.

      • I’m having a difficult time using USA today for some reason. Does USA today make adjustments beyond opening day? I see a huge disparity between the Pirates and Indians on USA today. They have the Pirates at nearly 30M more than the Indians for 2016(103M vs 74M)

        But the Indians added salary throughout the season and NH was quoted as saying the Freese signing in March put them over budget and they shed salary through out the season.

      • USA Today is a good place to start. So wait… Spotrac is bad but USA Today is good? USA Today shows the Pirates spending 30M more in payroll than the Indians in 2016- you think that is an accurate depiction? I couldn’t account for this but just realized USA Today isn’t accounting for any of the dead money that is still on payroll for guys like Swisher and Michael Bourn, etc.

        So this is the data(USA Today) you are using to come up with conclusion Pirates are increasing their payroll relative to the median in MLB?

        • You can see in the article that I used Cot’s. That was clearly spelled out and linked. That’s probably a better site than USA Today, since they go into bigger detail. But they don’t have a convenient page with all of the payrolls.

          • I’m talking about the comment you made about Pirates increasing payroll 39% vs 23% as Median. Was that taken from Cots or usa today?

            Also does Cots break down the AVERAGE spending each year or do I have to do that math myself?

            I’m interested in comparing Pirates spending per year on Cots as an average as I did with the Spotrac data.

            My suspicion is it will still show them spending less as a percentage than other small market teams.

            • That was taken from the USA Today Opening Day payrolls.

              You have to do the work with Cot’s. For this article, I went to every individual team page, pulled their top five salaries into a spreadsheet, and then got the results above.

              • OK. But I am throwing that 39 vs 23% statement out as meaningless. Opening day payrolls don’t give an accurate depiction of payroll spending especially when they aren’t even accounting for dead money on the books.

                Is there anything else USA today payroll is missing?

                • I’d suggest Cot’s if you want to do some research and want the most data included. That’s what I used for this article.

                  • It would probably be much more constructive to compare Pirates spending using Cots than USA Today then correct? (where you came up with the 39 vs 23% which I have seen repeated elsewhere)

                    • Maybe. I just pulled the data for a tweet. I was mostly looking at the average payrolls (which reduces some of the things you mentioned), and then decided to take a look at the median, since it gave a higher figure for the league.

                      That was supposed to be a ballpark figure though, not a hard figure. I don’t imagine using Cot’s will change the overall message that the Pirates’ payroll has gone up more than the league average or median.

          • Moving on to a more broad definition of spending beyond payroll… would you agree Spotrac more accurately reflects overall team spending in aggregate? Beyond just payroll?

      • See new post I made using Cot’s data. The main point still stands. Many small market teams have come much closer to matching league average payroll over the years than the Pirates.

  • Where to start? It is nice to see numbers but it only points out how little the Pirates spend. I still can’t understand how ppl don’t understand that Nutting is cheap! And that fact that Frank C. said its offensive, well it is offensive to fans who sat through 20 years of losing. To finally see their buccos win again, get good and then not keep any of the FA from those teams. yes they locked up Cutch, Marte, Polanco and Jay Hay to team friendly deals. But overall if you look at that chart, and the links below can someone explain to me how the Pirates can’t operate on a 130-140 mil budget?! Even 120 would mean S Rod, Joyce and Nova would all be under contract right now and there would be no trade rumors about Cutch until maybe next year.

    I had no expectations about them signing Mark M, glad they got something for him I don’t think any reliever is worth that much over 4 years. I will make one comparison for the Bucco brass to follow the hated St. Louis Cardinals. Right around 140 mil every year, which allows you to keep a core group of players for their career. And yes I know they lost Albert P. but that was crazy money and its going to happen. But they kept Monillina, Carpenter, Wano, and others and added on in FA.

    My over all point is, Nutting knows fans are happy w $30 tickets and some prospects and the team will never be real contenders unless they catch lighting in a bottle. Me personally I would rather pay $40-50 even $60 for box seats and have a better product on the field. And not have to worry about players like Cutch being traded, and have hopes of winning or going to the WS. In the end it still comes down to evaluating and developing talent. But it also falls on ownership to keep the talent here.

    http://www.forbes.com/sites/maurybrown/2015/07/17/prime-time-tv-ratings-for-all-29-u-s-mlb-teams-shows-baseball-ruling-summer-programming/#5d9b1b5925a4

    http://www.fangraphs.com/library/business/revenue-sharing/

    http://www.investopedia.com/financial-edge/1012/the-economics-of-postseason-baseball.aspx

    • “It is nice to see numbers but it only points out how little the Pirates spend. I still can’t understand how ppl don’t understand that Nutting is cheap!”

      Is it that the Pirates choose to spend little, or that they are limited by their market in how much to spend? Is Nutting cheap, or does he just own a baseball club in a small market that makes less than other clubs?

      You suggest they can spend $130-140 M a year. Look at the charts above. There are 11 teams in baseball that spend $130 M or more, and eight teams that spend $140 M or more, on average in their best years. The Cardinals average around $120, and they’re pretty much guaranteed 3.5 million in attendance each year, which is a million more than the Pirates in their best years.

      Looking at the charts above, you might be able to argue the Pirates can spend a bit higher than $100 M (although I’d say their TV deal prevents that from happening). But $130-140 M? Or even $120 M? I don’t see how you can reasonably make that argument with the data shown across the league.

      • ESPN has the Pirates ranked 19 in total attendance for 2016. I cannot find good data but I do remember reading their average ticket price is near the bottom of the league. I don’t understand why it is hard to believe they are constrained. We’ve watched the team payroll skyrocket in recent years and I bet it ends higher in 17′ than it was in 16′.

        • I’d imagine that would be the case if they’re competitive. They dumped salary mid-season in 2016, and dropped about $5 M from their Opening Day projection. In other years when they were contending, they added about $8 M on average during the season. If they open with $100 M, and stay competitive, they could end up with $108 M.

      • The TV is up after this year, they built the stadium that only holds 38k. Which is by the way the best stadium in all of baseball! 120 is pennies, fans will show up and pick the park just like they did 2013-15. Maybe 140 is high, but I think everyone agrees 100 is low and ending a year w 77 is a joke. Now they dumped FL and some other big contracts, which was smart. But now how will they spend that saved money. I have said before there is difference between being competitive and competing for the division. Only spending 100 mil limits the team to at best being competitive.

        Just bc you spend 200 mil doesn’t mean you will win the WS. But 100 mil prevents from really being the conversation. It would just be nice for an opening day when there was no trade rumors, we signed a medium FA and had the prospects coming up. Under Nutting and his crew I don’t see that ever happening.

        He could sell the team for huge profit, and do so to a new owner that is willing to spend more money!

    • Yawn……

  • My biggest problem with the management team is when they say they need attendance to increase so they can raise payroll. It is their job to invest in and then market the product so that people buy it. Imagine Chevy saying that they know this version of the Malibu is inferior to the Camry, but if you buy a Malibu today we will make the next model better. People have supported them when they have put a competitive team on the field.

    The other issue that bothers me is the marketing of Jung Ho Kung to Korea. To date, I have only notice one Korean company advertising at PNC Park (Nexen Tire). It seems like they missed an opportunity after the 2015 season, as Kung’s current issues have to be impacting his marketability.

    • See the comment below in my response to David_Orlando.

      Also, here was the actual quote, and not what other media took from it (the “attendance needs to increase so we can raise payroll”). They basically did what you were suggesting.

      The quote:

      Would the Pirates be able to afford a $70M to $80M payroll, in present-day worth, if this current group of players were competitive enough to merit additional outside free agents?

      Coonelly: Today, no but we will be able to support that payroll very soon if our fans believe that we now have a group of players in Pittsburgh and on its way here in the near future that is competitive. We need to take a meaningful step forward in terms of attendance to reach that payroll number while continuing to invest heavily in our future but I am convinced that the attendance will move quickly once we convince our fans that we are on the right track.

    • Even if that was a correct quote, which as Tim has pointed out, it isn’t, you are comparing apples to oranges.

      • Leo, since I wasn’t in attendance at the news conference, I have to depend on what the local media is telling me. This is why I subscribe to this site where I get a reasoned explanation of things.

        Would you like to clarify how I am comparing apples to oranges? They might be different types of businesses (entertainment vs. consumer goods) but at their core all businesses need to invest up front with the hope of product acceptance and thus profits.

  • One of my biggest issues was that a couple years ago, after being asked why he was so cheap, Nutting said, basically, if you put more butts in seats, we will raise payroll. Then, Pirates became contenders, ticket sales went way up. In response, the payroll went up, but so did incoming baseball money and relative to everyone else, we are still in about the same position. Raising ticket sales have not increase placement in payroll. I get that teams like the Pirates NEED to invest huge amounts of money into their infrastructure in order to compete, but to say they are offended that we would ask them to spend more when we spend more is very insulting. I get that the staff outside ownership might be concerned with winning, but that doesn’t mean Nutting is. Thank you for the great article.

    • 2 seasons is not sufficient to increase long term spending. During an off season in 2016, attendance fell. That doesn’t happen elsewhere after 3 playoff years.

    • What you’re referring to was reported on this site. It was actually a Coonelly comment, and wasn’t what you’re describing.

      At the time, teams like the Reds and Brewers were spending $70-80 M a year, tops, when they were contending. We asked Coonelly if the Pirates could afford that level of payroll. His answer, in short, was that when people saw the Pirates were headed in the right direction, they expected attendance would increase, and when that happened, payroll would increase.

      The quote was widely reported with the “when fans see we’re headed in the right direction part” to add the “you show up and we’ll spend” spin to the comment.

      What Coonelly said is basic business. Find a way to generate more revenue under your current means, and then when revenue increases, you can increase the spending. And they did that. We asked about that $70-80 M payroll pre-2011. The Pirates were entering that season with a $42 M payroll. They entered last year at $103 M. I believe $100-110 M is the new $70-80 M after looking at the numbers with the new MLBAM money infused in the game.

      So they’ve lived up to that promise. And they never said anything along the lines of “we’re not spending until fans show up”.

  • A better is way to look at it is estimated percentage of revenue. Now revenue numbers are not public, however an estimates have been done . The last year was 2014. The pirates were at an estimated 38%.which put them 28th in the league. The cubs were only 2 spots ahead in 2014. The cubs invested in players/payroll the last year and that percentage was a lot higher, the pirates did not. Which team went in the better direction. The point is when you build a good nucelous you need to add to take the next step add to payroll not maintain

    • You have to look at the ability to sustain that if you make long term deals and extend your youth.

    • I question how accurate any estimate would be.

      For example, the Pirates have a lot of promotions where they’ll have discount seats, whether it’s the “You Score as the Bucs Score” promotion, or other discount days. It seems the ticket sale portion of revenue projections take the average ticket price, multiplied by attendance. I don’t think they’re getting close to the exact figures across the league.

      Then you’ve got parking and other revenues that are impossible to calculate (Pirates don’t get anything from parking, so that doesn’t really apply to them as much). We don’t know what teams make through corporate sponsorships. I don’t even know if we know the figures that teams get for revenue sharing.

      Percentage of revenue would be a good method, but I don’t think there’s a good public source for revenue that is close to accurate.

    • >>>next step add to payroll not maintain<<<

      You can not spend money you don't have and will never get.
      This is not a government.

  • andrew.oneill88
    December 13, 2016 7:45 am

    Great article Tim! I think another reason people blame the front office for cheap spending is that they look across the North Shore parking lot or across the Allegheny River and see the Steelers and Penguins signing guys for life who have won championships. Its hard to compare the Pirates to those scenarios considering 20 years of losing was only 4 years ago. I think because of the success the other two francises have had recently, it makes it hard for some people to accept that the third francise is a small market team. If you want to follow the Pirates, you have to get to know their farm system, because the young players are so vital for their success and it makes trade talks about franchise players a bit easier to take because you understand the plan should that player be traded. This site helps me to do just that!

    • The bigger difference is that the NFL and NHL have different economic structures. If the Pirates sign McCutchen to a 5 year, $100 M deal, they have guaranteed that $100 M, no matter what.

      Ben Roethlisberger’s deal is on a four year, $87 M deal, but only $34.25 M is guaranteed.

      The NHL has guaranteed salaries, but it seems like the cap keeps those player salaries down. Sidney Crosby is making $104.4 M over 12 years. Part of that salary is also because he took a discount. I’d imagine the Pirates would have no problem extending McCutchen at $8.7 M per year, or even the $9.5 M per year that Malkin is making in his eight year deal.

      Both leagues keep the prices low. The NFL keeps the guarantee low, protecting a team if the deal goes south. The NHL makes the deal guaranteed, but the cap keeps the salaries low. That deal I mentioned for McCutchen could be a bit team friendly if he bounces back, since he’d probably sign for longer, and maybe for more AAV per year. Meanwhile, that same low total amount will buy you 12 years of one of the best players in the NHL.

  • I’d argue the St. Louis Cardinals are the model MLB franchise. They are the most consistently successful franchise in recent times for me.

    Is it because of the money they spend on payroll? Sure, to a certain degree. They are 13th on both lists in the article. But the primary reason isn’t cash or market size, it’s management proficiency. Quite simply, they draft and develop players better than other teams. That is truly their secret sauce.

    • The success of the Cardinals is historical, and that is one of the reasons for their TV Rights deal that goes into effect in 2018. They were already getting $13 mil/yr more than the Pirates and that will jump to over a $30 mil difference in 2018. The Reds were getting $10 mil/yr more than the Pirates in 2016, and their new TV Deal will jump that difference up to between $15-$20 mil/yr in 2017. The Cubs have always had the Revenue and TV Market. And both the Cards and Reds have equity in the contract.

      If I was BN, FC, and NH, I would be trying to find a broadcast partner willing to talk to the Pirates early, so that they can do a better job at projecting future revenue. The Cards got their deal done in 2015, which was 2.5 years before the present TV Contract would expire.

      • There’s no doubt the importance of the upcoming local TV deal can’t be overstated. I expect FC to earn his pay check when this deal is done.

        To compare the Cardinals and Cubs is an interesting study. Chicago has always had the financial upper hand, but it isn’t until they finally hired the right management team that they were able to compete with Cardinals. Yet there are many who will claim it was Cubs ability to outspend the Cardinals for the reason. It’s really quite comical.

        • The Cubs Management Team has been outstanding in every aspect of the game – amateur draft, trades, free agent signings, International draft, development, and LUCK.

          They had early 1st Round draft picks in about 5 straight years. I look up at my autographed Kris Bryant Official Minor League Baseball from when he played AA for the Tennessee Smokies. The Cubs got him only because the Astro’s selected Mark Appel with the first pick in 2013. The Pirates got Meadows as comp for being unable to sign Appel in 2012. Let’s hope transactions involving Appel can be directly related to two All-Star Players.

          • and that Appel continues to be a dud? 🙂

            • And Lucas Goilito was available when we drafted Appel. I was pissed when the Pirates passed on Giolito, then again a bunch of other teams passed on him as well. I never held any ill will towards Appel, he had said all along that he was returning to college, there was no need for the Pirates to draft him.

              • Giolito had TJ surgery before he was out of high school. The majority of orginizations know that there is a 6 0r 7 year window for a pitcher till TJ problems return.

                • No, he had TJ surgery after he was drafted by the Nationals. He was the best prospect in that draft, even with the concern over the injury he had. It was a bad decision not to draft him.

          • We’ll see how smart they look in breaking the bank for Heyward. I have a sinking suspicion his bat speed isn’t going to increase with age.

    • St. Louis is one of those teams that has an outlier at the top. Their top five payrolls were $145.6 M, $122.1, $116.8, $111.9, and $111.3. So in normal years, they’re $110-120, which reflects in the average, although their average is on the high side, due to that big year.

      I agree that they’re a very good franchise. Their ability to draft and develop players over the long haul allows them to sign big free agents, due to the rest of the roster being cheaper. That said, they still have limitations. They couldn’t sign Albert Pujols, although that might have been good for them.

      • I would agree. The Angels are a perfect example of a mismanaged large market team who has tried and failed to buy a WS title. Now they find themselves in the situation of having neither an adequate ML roster or farm system.

        They demonstrate why having good decision makers is more important than having financial flexibility.

    • And the pirates are on their way to modeling the same proficiency.

  • I’m surprised the Pirates are not more vocal about the economic unfairness. No small market owners are. When the Penguins were in a similar position Mario was out in front saying they needed a salary cap and a new arena to compete. I wonder what the difference is between the NHL then and baseball now.

    • It’s a leadership issue. Commissioner Bettman spent many years rallying hockey owners around the concept that a hard cap was best for everyone.

      Meanwhile, MLB had 20 years of Bud Selig. There’s your answer.

    • I don’t know if “no small market owners are vocal” is accurate.

      The NFL is the way it is because the owner of the NY Giants led the charge. He could have gone with a system where he would have been able to dominate like the Yankees. Instead, he proposed sharing revenue so all teams were on equal footing, for the benefit of the entire league.

      The NHL made the change because the league was losing money and needed to do something to make sure the teams in small markets could stay in business.

      MLB is making money across the board, and the big markets aren’t giving up their advantage. Not much that small market teams can do in this situation.

  • Looking at your table, it is clear that the dividing line for teams that continually compete is $120MM. Pirates spend that much and compete into the post season and the revenue will increase with it.

    • Will it? The Royals spent $131.5 M a year after winning the World Series, and now they’re slashing payroll because they went over their budget. And that’s a year after winning it all.

      The idea that you should spend money and then wait for the revenue to come is a pretty bad approach for any business. You can’t guarantee the revenue will be there in the future, even if you get your desired outcome that ideally would have led to more revenue.

      • Cleveland spent more than 9M more in 2016 than the Pirates did in either 2015 or 2016. That is a meaningful distinction.

        I’m using Spotrac which has them a hair under 115M vs the Pirates at 105M both years. You made a comment about Spotrac in the past and how it incorporates minor league salaries. I don’t care, this washes out between teams and if anything makes the Pirates look better as far as payroll commitment as they generally seem to be spending slightly more on minor league commitments than other teams(around 6M)

        • You can’t just say you don’t care and expect that to hide the flaw in the site.

          There are so many sites that include payroll only. Why not use those, rather than using a site that you know doesn’t report payroll only, and then making assumptions about how those added figures really don’t matter, or that they make the Pirates look better?

          Using Spotrac isn’t giving this an objective view, just because it’s knowingly using incorrect data.

          • Huh? “Knowingly using incorrect data?” Please explain. And please don’t just brush aside the comment about added figures before offering an explanation.

            For example- the 105M includes about 6M in draft spending the PIrates spent on Will Craig etc. If you back that out you get to under 99M. Other teams had slightly less than 6M in draft spending. How is that penalizing Pirates in terms of a comparison?

            • You have said multiple times that you know Spotrac uses more than payroll data. So you’re presenting these numbers in a discussion about payroll, while acknowledging that the numbers include more than payroll.

              Also, a lot of teams spent more than $6 M in draft and international spending. See my Padres example above. It’s just best to use a site that compares payroll only. Or, take the time and go through to remove all bonuses from Spotrac and just compare the payrolls.

        • Cleveland is also a significantly larger market than Pittsburgh.

          • That is incorrect mil pit cle cin kc are very similar

            • I checked the MSA’s and the way they define Cleveland you are correct. But I think they undercount fans out of Columbus and Toledo. But your general point that the cities you listed are more similar than different is correct.

      • But they did win and go to World Series two years in a row!!

      • Tim, I have an issue with your second paragraph. Every business literally, has to spend money before revenues come in. That is why some businesses go bankrupt. I worked for a start up at one point in my career. We had to sign a lease, purchase equipment, and hire employees before we sold anything. I was hired in April and we didn’t sell anything until May, an entire $600. The company is still in business and profitable now. Drug companies spend years researching new formulas and only a fraction ever see the market.

        • I started this business with nothing, so I know all about that process. But there are levels of spending.

          I had to spend money to get this site started. But I didn’t just jump to the point we’re at now, with a bunch of writers and photographers and a travel budget to cover every minor league team and the MLB team on the road a few times a year.

          There are cases where you need to spend before revenues come in. But if you spend at a level beyond any reasonable expectations for revenues, then you are going to go bankrupt.

  • How about revenue sharing? I have heard some argue that with revenue sharing the Pirates should be able to spend what the Dodgers and Yankees spend.

    • I think at it’s very best year’s, Revenue Sharing was worth between $25 and $30 mil to the Pirates. That was when they invested heavily into improving the infrastructure of the Franchise. Some physical examples were the Academy in the DR, Pirate City and McKechnie Field Upgrades. The non-physical are harder to see, but it took plenty to install the minor league system of development currently in use, and upgrading the scouting aspect of the game. They also extended ‘Cutch and Marte while dipping into the bargain basement of Free Agency by signing guys like Russell Martin, AJ Burnett, Liriano, etc. And aggressively spending in the Amateur Draft every year.

      As the Pirates have become more successful, I think the amount of RS has diminished. They do get more now from the league in the general MLB TV Rights from 3 users, and there is mention of even sharing the benefits from individual clubs. Like to see how that will work.

    • They would have to share all revenues for that to be the case (local TV, attendance, etc).

  • Everyone knows that there is revenue inequality that is killing the game. That is problem 1 for the Pirates. Problem 2 for the Pirates is that ownership has set a maximum payroll budget to target an approximate $20m profit. That is a problem which might have kept us out of the playoffs last year if it led to the decision not to sign Happ, then snowballed to hurt our future with the giveaway of prospects to dump Liriano. Major league owners should not need yearly profits with the money they are making in franchise appreciation. Plus look at the list….a $100 m salary max is not going to make a team a long term winner.

    • “Problem 2 for the Pirates is that ownership has set a maximum payroll budget to target an approximate $20m profit.”

      What is the source for this statement?

      • Better yet, if that is true, so what, it is a business. Players, actors, singers and many CEO of companies make that a year and then some. When did it become wrong for a business to make money? Isn’t that the point.

        • Some people have a hard time getting their mind around the fact the Pirates aren’t just a MLB team, but an actual business.

      • Pirates Prospects Comments section?

      • I have seen multiple sources over the last year project the Pirates revenue and bottom line profit, and I think one of them was discussed here. I don’t remember the specific sources, as my job is not to track those things, but the assumptions looked solid. If someone wants to do the research, we can pull out all the reliable sources who attempt to track franchise profitable.

    • You have just explained how asset bubbles are created; investments with no annual cash flow and speculatively relying on 100% of profits at reversion (i.e. see recent real estate market crash). How does franchise value appreciate if the franchise consistently breaks even or loses money? That doesn’t sound like a very attractive investment. All risk and no reward. This is Econ 101. The fact that you know what major league owners need from their investments is comical.

    • Crickets…..not going to say your source of the $20MM profit statement?

  • I also am grateful that you refuse to sanction the payroll (Nutting is cheap) debate. However, I would like to see MLB do more to address the huge differences in the ability for teams to acquire and retain talent. I cannot see how such enormous payroll inequity is good for the game, but alas short of the forbidden salary cap (and floor) I don’t ever see a solution. The NFL doesn’t have much of a small market issue, I wonder why?

    • “However, I would like to see MLB do more to address the huge differences in the ability for teams to acquire and retain talent.”

      Me too. Right now, MLB feels like a situation where your house is on fire, and you’re thirsty, so they hand you a glass of water. It’s not enough to put out the fire, and the thirst clearly isn’t the biggest problem you have.

      Breaking down this metaphor, the house on fire problem would be MLB free agency, the thirst would be amateur player budgets, and the glass of water is MLB making small adjustments to give extra draft picks or bigger budgets to small market teams, but not using a fire hose on the free agency problem.

      • What exactly is the free agent problem? I ask because I honestly don’t know.

        • The top players are only available to a few teams, and only a few teams can afford to make mistakes.

          The Dodgers committed $192 M to Rich Hill, Justin Turner, and Kenley Jansen this off-season. Meanwhile, the Pirates are trying to get Ivan Nova and his rumored price has been in the J.A. Happ range of 3/$36 M.

          They can afford that, but it’s also a contract that could really hurt them if it goes bad. Meanwhile, if one of those deals goes bad for the Dodgers, they’ll just sign someone else.

          • That’s not really a free agency problem as much as it is someone deciding that the rules don’t apply to them. If the Dodgers have accepted the punishment ( IE. Luxury tax, diminished production), before the even broke the rules…….well, there is no fix for that.

          • Tim, perfectly said. That’s the chief problem with MLB. Small market teams cannot afford to keep their good teams together for extended periods of time and also cannot compete for FA’s if they so desire. I think it is 2018’s offseason when Harper, Machado et.al are free agents. Even the casual fans knows half the league cannot even consider signing them. IMO, that’s not the way sports were designed to simply throw money at a problem. It is all about being a better judge of talent, being more athletic, better coach, etc., not writing a check to offset your shortcomings in that sport.

          • I certainly agree with you on first part of this post. However, it is an overstatement to say if a high priced player fails, they can just go and purchase a suitable replacement.

            A good example will be Rich Hill. If he gets hurt, the Dodgers pitching will suffer because they have shown an unwillingness to trade their better prospects to upgrade the team in season. The smart large market teams realize they need cheap young talent, too.

      • That is honestly the best metaphor for the situation I’ve ever heard.

    • The budgets are relatively small because the market is relatively small, as Tim has explained. These are facts of life. This is not Lake Woebegone where all the markets are above average. I’m not so sure I agree entirely with Tim’s point that this is the system MLB has created. IMO, television revenues, which historically have been tied to size of market, have largely (again imo) shaped the economic landscape in which baseball operates. Whether, and to what extent, MLB helped determine the current state of affairs or merely went along with the broadcasters for the ride may be a separate topic.

      I strongly agree with your main point, ctalboo. MLB should do more to address the huge differences in the ability of teams to acquire and retain talent. Other than a salary cap and floor — which I do not favor — perhaps a system like that where Japanese teams (and maybe some others) that hold the rights to players receive direct payments when those players become free agents, as opposed to the current system in which all financial benefits flow to the player, would help level the field. Why the smaller market teams aren’t fighting more vigorously to resolve payroll inequities is again, another topic.

    • The NFL shares TV money, MLB generally does not, and the big markets teams are not likely to start doing so (or voting to do so) anytime soon.

  • Bravo Tim. Thanks for contributing facts to this issue. I’m sure there are other ways to skin this cat, but I would have to believe other / similar methodologieswould produce comparable results.

    • I guess that is the entire issue in a nutshell – it is what it is, and MLB is enjoying a run of heightened popularity. Therefore, no reason to make adjustments. Small Market Teams like Pittsburgh, Cleveland, Kansas City and others are still very relevant.

      Saw an article in Forbes addressing MLB Prime Time Television Ratings for 2016. “The data culled from Nielson . . . . . from Apr 3-Sep 25 shows that nine clubs had the No. 1 ranking across all TV networks in prime time (Royals, Tigers, Orioles, Pirates, Indians, Red Sox, Mariners, and Giants).

      The Royals, Pirates, and Indians are all small market, but winning, and having a recognizable product are key factors for all of these nine teams.

  • Thank you for being a voice of reason in this ongoing irrational and emotional debate!

    • meatygettingsaucy
      December 13, 2016 9:24 pm

      I plan to be both irrational and emotional to counter this level headed presentation of facts

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