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AL out-spends NL by $10 million per team, AL East out-spends other divisions by wide margin

Apr 4, 2011, 3:15 PM EST

Money Bag

I wrote earlier about the Yankees having MLB’s highest payroll at $202 million, but I decided to crunch a few more numbers using USA Today‘s excellent salary database and break spending down by league and division.

American League teams have an average Opening Day payroll of $97.7 million, compared to $88.6 million for National League teams. And not surprisingly, among divisions the AL East has the highest average payroll:

DIVISION      AVGPAY
AL East       $110.7
NL East        $99.9
AL Wes         $96.0
AL Central     $86.3
NL Central     $84.6
NL West        $82.0

Even if you take the Yankees out the mix the other four AL East teams are spending an average of $87.6 million, which is higher than the AL Central, NL Central, and NL West.

There’s at least one $100 million team in every division and all but the AL West have multiple $100 million teams. Somewhat surprisingly the AL Central is the only division with three $100 million teams in the White Sox, Twins, and Tigers. And the AL Central is also the only division with two sub-$50 million teams in the Indians and Royals.

  1. chrisny3 - Apr 4, 2011 at 3:30 PM

    Aaron, a word of caution … USA Today’s team payroll numbers are notoriously misleading and incomplete. For example, they exclude the $19 million the Mets are paying this year for Castillo and Perez, as well as the $4 million the Yankees are paying this year for Igawa. Cot’s numbers are more accurate. However, this doesn’t change the fact that the AL outspends the NL, due mainly to the Yankees fueling AL spending and probably the DH.

    • Chris Fiorentino - Apr 4, 2011 at 4:00 PM

      To further your point…they have the Mutts at $118 million, while the true salary website, Cot’s contracts, has the Mutts payroll at $142. Truly lame to waste all this time on all this number crunching using lame and factually incorrect numbers.

  2. easports82 - Apr 4, 2011 at 3:30 PM

    That’s not incredibly surprising since AL teams have an extra bat to pay for that the NL doesn’t.

    • Ari Collins - Apr 4, 2011 at 3:36 PM

      DHs generally only make a few million. What’s more, AL teams are losing a bench player in order to carry the DH, so it’s really the salary difference between a low-cost DH and a lower-cost bench player.

      • Kevin S. - Apr 4, 2011 at 3:58 PM

        Jorge Posada – $13.1 million
        David Ortiz – $12.5 million
        Vladimir Guerrero – $8 million ($3 million deferred without interest)
        Juan Rivera – $5.25 million
        Manny Ramirez – $2 million
        AL East average – $8.17 million

        Travis Hafner – $13 million
        Victor Martinez – $12 million
        Adam Dunn – $12 million
        Jason Kubel – $5.25 Million
        Billy Butler – $3 million (jumps to $8 million when extension kicks in)
        AL Central average – $9.05 million

        Michael Young – $16 million
        Milton Bradley – $12 million (not counting $5.5 million Mariners paying Cubs from the trade)
        Bobby Abreu – $9 million
        Hideki Matsui – $4.25 million
        AL West average – $10.3125 million

        AL average – ~$9.1 million. Yeah, I’d say the DH is essentially the difference in payroll between the AL and NL.

      • Chris Fiorentino - Apr 4, 2011 at 4:02 PM

        Gotta agree with Kevin here. Even though the numbers used in this post are essentially meaningless, because, as stated above, they are WRONG, the AL does spend more to have a QUALITY bat in their lineup as opposed to a 25th guy from the minor leagues who may not get more than 50-100 at bats a year and some other late-game work. Of course, this fact also isn’t taken into account in the LAME effort put forth in this posting by the writer.

      • Ari Collins - Apr 4, 2011 at 4:24 PM

        Interesting numbers! I’d be curious to see how much the AL spends on bench+DH versus the NL on the bench. After all, plenty of teams rotate the DH, putting your official DH into the field for a game here and there, or giving the DH the day off and putting a fielder at DH , rotating a bench player into the field… The DH isn’t a static thing, it’s a lot like a bench player.

        And it’s tough to tell what an AL team “would have” spent without the DH. For example, if the Rangers were in the NL, would they still have signed Beltre, moving Young to 1B/DH? If the Rangers were in the NL and had signed Beltre, wouldn’t they have just moved Young or Moreland to the bench?

        All I’m saying is that it’s not cut-and-dried, and I’d love to see someone spend the time to analyze it.

      • Jonny 5 - Apr 4, 2011 at 4:29 PM

        Nice Kevin, It helps to explain the AL / NL ” talent disparity” as some like to call it when looking a wpct interleague. I like the idea of killing the DH myself. Kill it dead.

      • Chris Fiorentino - Apr 4, 2011 at 4:29 PM

        Ari…I think you make a great point. If the Rangers were in the NL, they probably would have traded Young and put a lower-priced bench player on the 25 man roster. They wouldn’t pay him all that money to not play…or hit.

      • Chris Fiorentino - Apr 4, 2011 at 4:31 PM

        To Jonny…that’s why during interleague play, you get the lamest guys hitting as DH for the NL teams when they play in the AL park, while the AL team has professional hitters for the most part. Didn’t the Phillies put Mayberry or somebody like that in as their DH the last couple years??? Does anyone think the Phillies would have Mayberry as their everyday DH if they were in the AL?

      • Jonny 5 - Apr 4, 2011 at 4:41 PM

        Nope, they’d more than likely have to shell out millions of dollars to hang onto a decent DH, shall I say Thome would still be a Phillie?

    • okobojicat - Apr 4, 2011 at 4:41 PM

      Doesn’t the NL have an extra pitcher to pay for then?

      That is a poor reason for that difference in expenses. The bigger reason is larger budgets and thus higher salary totals. I would look to the local populations and the tv market size as to why AL teams spend more money.

      Aaron, I think you should’ve used median vs. average payroll. The Yanks payroll really distorts everything and makes averages a poor substitute.

      You can look at my commentary below, but I’ll recap it here. the AL teams have access to better markets and better revenue streams. When there is a direct comparison of AL/NL teams, usually the AL team does a better job capturing the market whether it be better job marketing and drawing in revenue, or having a superior stadium and location.

      The AL teams in general have access to better resources so they can setup better minor league systems. They can bid over-slot for draft picks and can devote resources to Latin America and Asia to get better young players. So, even if they have the same MLB salary, because they have access to greater revenue streams they can keep that younger, cost-controlled player and also sign a free agent.

      #’s from here: http://www.baseball-almanac.com/articles/baseball_markets.shtml, commentary by me

      21,199,865 New York Mets, New York Yankees
      16,373,645 Los Angeles Angels, Los Angeles Dodgers

      The Yanks obviously have a much better ROI than the Mutts because they do a better job marketing. The Dodgers correspondingly, are better than the Angels at marketing and driving revenues. However, their degree of superiority is not more than Yanks/Mets matchup.

      9,157,540 Chicago Cubs, Chicago White Sox
      7,608,070 Baltimore Orioles, Washington Nationals
      7,039,362 Oakland Athletics, San Francisco Giants
      6,188,463 Philadelphia Phillies
      5,819,100 Boston Red Sox
      5,456,428 Detroit Tigers
      5,221,801 Texas Rangers

      Cubs do better than the White Sox, but not by a lot. Orioles dominate Nats because they control the TV revenue stream, Giants dominate the A’s because….a lot of reasons. Phillies don’t have the national pull of the Red Sox or the income possibilities. Tigers and Rangers rank above comparable NL teams.

      4,682,897 Toronto Blue Jays
      4,669,571 Houston Astros
      4,112,198 Atlanta Braves
      3,878,380 Florida Marlins
      3,554,760 Seattle Mariners
      3,251,876 Arizona Diamondbacks

      Mariners and Braves are comparable because they both market to a much wider audience than their market, and derive a lot of their revenue from that regional recognition. The Blue Jays are the Canada Team so they have access to additional revenue much more so than their existing market. The other teams all have cash flow issues at times and often ramp up and then ramp down their spending.

      2,968,806 Minnesota Twins
      2,945,831 Cleveland Indians
      2,813,833 San Diego Padres
      2,603,607 St Louis Cardinals
      2,581,506 Colorado Rockies
      2,395,997 Tampa Bay Devil Rays
      2,358,695 Pittsburgh Pirates

      The Twins, like the M’s and the Braves, have a large regional pull because their area is not covered with other teams. So they have access to a larger market. In theory, Colorado should have the same ability, but the Mountains are pretty sparsely populated. Their isn’t the same number of people to attract.

      1,979,202 Cincinnati Reds
      1,776,062 Kansas City Royals
      1,689,572 Milwaukee Brewers

      I think this shows that we should be surprised more so that Cincinnati is competing. The fact that Royals don’t have the resources is obvious.

      • Chris Fiorentino - Apr 4, 2011 at 4:47 PM

        No, we are talking about a guy who is used every day as opposed to the 11th or 12th pitcher or 4th or 5th guy on the bench. THAT’s the difference between the AL and NL. For instance, as Jonny and I talked about above, the Phillies would have kept a guy like Thome around for millions more than a guy like Mayberry, because they would have been able to use him every game. Whereas, since there is no DH in the NL, they got rid of Thome and brought up Mayberry…a difference of around $14 million dollars a few years back.

        The DH is a 9th hitter than is used every day…so realistically, the AL has to pay 10 starters a game, whereas the NL only has to pay 9 starters a game. THAT’s where the big difference lies…the “$10 million” difference.

      • Ari Collins - Apr 4, 2011 at 5:19 PM

        But does the DH really replace the 4th or 5th bench guy? Do fewer AL teams carry fifth OFs or third catchers, or is it a better-paid bench player they’re really replacing? You’d really have to do an analysis of benches by league to figure that out.

      • okobojicat - Apr 4, 2011 at 5:36 PM

        @Chris and @Ari

        I think the median # is a lot more accurate than the average. The Yankees salary is such an outlier that it destroys the averages. Which makes me thing that Ari’s point is really good. You must do a team-by-team position analysis.

        For example, Milton Bradley isn’t the M’s DH, Jack Cust is (Bradley is playing LF). Kubel is the Twins 4th OF and will get 30+ starts in the OF. More if someone gets hurt. Juan Rivera will be the Jays 4th OF, Michael Young very well could get more starts at a position than at DH.

        You have to see what each of the above players would be replaced with to make a creditable analysis.

  3. trevorb06 - Apr 4, 2011 at 3:33 PM

    Bold AL Central prediction- Royals finish 3rd, ahead of Detroit, with a winning record.

    • Ari Collins - Apr 4, 2011 at 3:56 PM

      I’m not sure on the Royals, but I *do* think Detroit is an overrated team. Their only additions were a back-end guy in Brad Penny, a good reliever in Benoit, and a catcher who’s not *that* great a hitter when you play him at DH instead. Compare that to the White Sox getting a much better DH in Adam Dunn and a full year of Edwin Jackson. Not to mention that the White Sox started at a higher baseline, winning 7 games more than the Tigers last year.

      I don’t think the Twins had a great offseason, either, but, then again, they won13 more games than the Tigers last year.

  4. bloodysock - Apr 4, 2011 at 3:41 PM

    If you look at the median rather than the average, the results are a bit different.

    For example, the median payroll of an AL team is $85.9 million, lower than the median for an NL team ($86.3 million).

    • Ari Collins - Apr 4, 2011 at 3:50 PM

      So basically, your middle-of-the-road AL team spends about the same as your middle-of-the-road NL team, it’s just that the AL has a higher extreme?

  5. yankeesfanlen - Apr 4, 2011 at 4:13 PM

    Ah, come on guys, let’s do this in business numbers, not small-team, large team discrepancies.
    Does WalMart spend the same as Target? No, much more, but with greater efficiency.As a factor of sales and resources (think players and worth as a franchise) WalMart has astronomical costs, but is much more profitable because of a higher base of sales volume. Target is doing all right because of sales to expense ratio, and Kmart is nowhere because of eroding sales through non-investment.
    WalMart=Yankees
    Target=Phillies
    Kmart=Pirates.
    Spend money to make money. Conclusion=Mark Cuban buys the Metropolitans.

  6. Chris Fiorentino - Apr 4, 2011 at 4:22 PM

    So the salary #’s used were wrong, but even if they were correct, the author failed to take into account the fact that the AL has an extra major league hitter to keep on the roster for the DH, and as shown by Kevin above, this hitter on average, makes $9.2 million. So how lame is it to first, use wrong data, second, not even mention that the Al has the DH, and third, just write an article that is completely 100% lame and wrong.

    EPIC FAIL!!!

  7. indyralph - Apr 4, 2011 at 6:06 PM

    Although the DH data is interesting, it is not the difference. The thing that separates baseball teams from most businesses is competing on two fronts: 1) winning baseball games and 2) making profits. Teams base how much they are going to spend on payroll on a number of factors, but ultimately the idea is to maximize each of those in some particular balance. If a team is willing to spend $100M on payroll because that produces the right balance of winning vs.profits, they will spend $100M (ceteris paribus). The allocation of that money makes no difference as long as it produces the same number of wins. So if the DH suddenly disappears, the AL teams won’t just pocket the money they were paying their DH. They’ve shown a willingness to spend that money to increase the number of wins, and they will continue to do so – just elsewhere.

  8. oilcanjim - Apr 4, 2011 at 6:39 PM

    I think it’s more interesting that the top two divisions are the AL and NL East, respectively. How’s that for explaining East Coast bias? Suck it, California!

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