Looking At the Payroll

In 2006, the Red Sox’s payroll was about $127.79 million dollars, while the Yankees are at $199.01 million dollars. While I am going to be advocating the signing of Roger Clemens for $21 million dollars until it doesn’t happen for sure, I still don’t want our payroll going any higher.
Certainly, Manny Ramirez, Curt Schilling, Keith Foulke, Matt Clement, and Jason Varitek all combine for about $65 million dollars, which accounts for most of the gnashing of the teeth, so the payroll should continue trending downwards. John Henry has said that they plan on having a consistent payroll of $120 million and that they will keep bringing in players to help the team compete.
However, by going with young players – Dustin Pedroia, Jacoby Ellsbury, Clay Buccholz, Jon Lester, Jonathan Papelbon, and so on and so forth, the payroll will have to decline on its own. I know that we won’t make moves just for the sake of keeping up appearances of a $120 million payroll.
If Roger Clemens signs for $21 million, this means we are going to start getting into obscene payroll territory, only previously held by the New York Yankees. Once this happens – once the payroll crosses the $150 million barrier, I don’t think any Red Sox fan alive can complain about the Yankees’ fiscal insanity – we’ll be insane ourselves.
Here’s how the Red Sox payroll so far looks for 2007, and why:
We are currently slated for a $82.52 million payroll. This does not include some players of note, such as:
Alex Cora
Alex Gonzalez
Mark Loretta
Jon Lester
Gabe Kapler
Lenny Dinardo
Doug Mirabelli
Trot Nixon
Jonathan Papelbon
Wily Mo Pena
Mike Timlin
David Riske
JT Snow
Tim Wakefield
David Wells
Kevin Youkilis
This means that after we resign our automatic resign players and settle Wakefield’s option year, we’ll be around $92 million. Factoring in Wily Mo Pena’s arbitration resigning and a backup catcher (if it’s Mirabelli, he’s due a pay cut), we’re going to be around $94-$95 million.
This means that we need a starting shortstop, backup/starting rightfielder (it’s all up to Theo if Pena becomes our starting right fielder), starting pitcher, two bullpen arms (or even more) … I think that’s roughly about it.
This means we have $20 million to play with if we just want to match our payroll from last year.
It also doesn’t count Roger Clemens. We will probably end up around our $120 million payroll again (and if I get my way and sign Julio Lugo, it’s a definite) … with Roger Clemens, we’re looking at around $145-$150 million.
It almost makes me not want to sign Clemens. Almost, but not quite. I just feel that our winning ways are somehow cheapened by our payroll.
Of course, we’re in the same division as the Yankees, so we play on a much different financial scale as the other teams. Toronto is getting aggressive with $85.92 million in 2006, and a likely spike to over $90 million next year, and Baltimore is at $83.29 million and a VERY upset fan base – so that payroll should rise. The AL East is a very competitive division, and when you put the payrolls all in scope with one another, it makes sense.
However, I don’t think we should constantly be raising our payroll and rather should be decreasing it incrementally, while ensuring we still put a talented team on the field. The Twins, Athletics, and many other teams can do the same. We should start speaking out in favor of a hard salary cap, or much more stringent luxury tax ramifications. Even though we are in a very competitive financial division, we are still laughably far ahead of the rest of baseball, and the Yankees are laughably far ahead the rest of the AL East.
Once all of our players listed above are gone, the payroll is going to spiral downward. At the same time, our current players will be entering arbitration/free agency, but I doubt you will see a $20 million dollar man again, unless he signs with New York.
Here’s the future of the Red Sox, factoring in only guaranteed contracts:
2007: $74.97 (This is the Average Annual Value payroll total, NOT the “AAV Total w/ Benefits” which is used to calculate the luxury tax – the AAV Total w/ Benefits for 2007 so far is at $82.52 million.)
2008: $39.17
2009: $28.17
2010: $0
As you can see, we are going to be gaining massive payroll flexibility in the coming years. Don’t be surprised to see Boston operating on a $90 million payroll in 2009 and 2010 – especially if (a) all of our stud prospects – or at least most of them – develop and (b) we do not pick up Manny’s options (or trade him).
In summary, we’re pretty well set up the next several years, especially as our prospects start bearing fruit, and we can keep them very cost-effective for the next six years. The true test will be how Theo manages the resources, and how high our payroll goes. I’d rather sign the right player that makes our payroll $95 million and suffer PR backlash for “not spending enough” rather then overpay for the wrong person.