Seattle Sports Insider

Payroll Thread

Cooking the books, Dept.

Posted by

11/2/12

=== Contingency Fund ===

Uncle Al sez,

Geoff Baker ... says the M's spent $85M in 2012 is correct but he takes this dollar figure and uses it to base his 2013 payroll on. He doesn't tell you that the $85M amount consisted of a Budget for 2012 that was $80M in payroll for the 25 man roster and another $5M for the Contingency Fund which eventually gets turned into additional salaries during the year. He then says we basically stand at $62M as of now but we are closer to $68M by throwing in the Contingency Fund. You have to add in the Contingency Fund when you talk about the Budget and that is why everybody thinks we have more money to spend than we actually have. The Budget and Payroll within the Budget are two different things at the start of the year.

The contingency fund point has traction, though this line item also is partially discretionary. There are two primary expenses that go under this $5M line item:

Player performance bonuses
Mid-season salary adds

The mid-season salary adds contingency can ... contingently ... be spent in March. :- ) In the abstract, if they spend a couple extra mill in March, they can say "all right, no July payroll adds now."

...............

I would like to know, however, how many performance incentives they have for 2013. You probably have those Al? Per this chart, I see only four players on the 40-man who aren't club-controls players (and who even could theoretically have performance incentives).

Felix, Guti, Figgins, and Ackley seem to be the only players under contract. Vargas is an arb player. What would these four guys' performance clauses be? Comparing this chart, it looks like a total of $1.5M would be the max performance bonuses earned, but even there I can't figure out where Cots sees a possible $1.2M in bonuses for Felix?

The Mariners are so young that they seem to be skimming over the issue of player performance bonuses. Cots has the Mariners at $47M after the Iwakuma deal and at that $47M figure, I can't find any player performance bonuses pending.

If that be the case, then the "Contingency Fund" line item becomes a real-world F-500 nonissue. A Josh Hamilton and a Dan Haren come calling, the Mariners have no problem deploying that line item to make the numbers work, and then saying "Don't plan on any July salary adds."

Baker gives these numbers:

[$48M allocated, after Mr. WBC-san, with a $20.7M figure for Felix]
$12M for arb players, approx.
$8M for min-wage players

The contingency fund is a malleable line item unless there are bonuses we're missing.

=== Lonnie of MC ===

Follows on with

I ran the numbers and prior to the Iwakuma signing the payroll stood at ~$58M. Figuring that they will approximate the payroll that they had in 2012 (everyone seems to think that this is so), that will give them about $27M to play with. Iwakuma just took a $6.5M bite out of that pie, so now they are down to ~$21M.

If you are wondering, my number is already loaded with a hefty raise for Vargas, Kelley, and Jaso.

Um ... this would come out of the $12M bullet point given by Baker above. If Lonnie's arb numbers don't contradict Baker's, then Baker has them at $60M including arb players and Lonnie at (?) $65M or so.

=== Tacoma Rain ===

Then sez,

Per Greg Johns inbox edition from 11/1/12, the Mariners budget for last year was $91 Million. Further, Johns writes that the Mariners plan to increase payroll this year.
Lastly, lest we forget, that EVERY team was basically given $20 Million this year due to the new TV deal, so if the Mariners ONLY spend $100 Million... the Mariners will have broken even with last year's final budget of roughly $83 Million - a figure also supplied by Johns in the article.

As to Rain's last paragraph: Zduriencik's comment to Baker was simply that the Mariners will have at least last year's payroll to work with. "At least" in this case means something between "same amount" and "$20 million more" or something else entirely.

Baker's Exec Sum: "the Mariners are in for a spending spree this winter." As we've noted before, they've got precious few positions at which to deploy this money. Stars & Scrubs bab-eh.

Comments

Discretionary spending

The Contingency Fund is for everything and it's not just a number thrown into the Budget. It includes every additional expenditure that the team thinks it could possibly incur during the year. I am now showing that $73.8M is gone from whatever this years Budget is going to be after using the Arbitration numbers that Larry Stone is using. I don't get involved with the detail of the Performance Incentives because they are included in the Contingency Fund which is usually around 6% of total payroll. I only keep track of the contingency Fund so I can get a better feel for what they actually have to spend.

TV Deal

That TV deal is going to disrupt the market something fierce. We are going to be looking at some really inflated contracts, especially on those mid-range guys. This might be the off-season to strike early.

I am logged in

I write the subject. I write the comment. Hit the "Enable rich-text" and then hit save.

Top of the page

Then at the top of the page I get "Your comment has been queued for review by site administrators and will be published after approval.

I'll get in touch with the admins Al

Sorry bout dat. Will be fixed shortly.

We have to break down that line item

For the reasons specified in the original article.
You are 100% right Uncle Al -- it's not just a number thrown into the budget; it's for (in this context) performance bonuses and to allow spending at a date later than the one at which you present the charts in steering committee. (Chairing steering committees in F-500 companies is a role in my background, Uncle Al.)
A vague sense of "we can't spend that money" isn't a specific enough reply. Of course the line item is there for a reason, not thrown in to mislead the auditors; on that we absolutely agree. When Chuck Armstrong calls for a $6M line item "Contingency" he's not doing it to mislead anybody.
You've been fighting that battle for a long time, I think, trying to educate people that the Contingency line isn't merely Chuck Armstrong's way to present an inflated budget. You've been 100% right about that. However, THIS winter there may be a new development you need to consider: the fact that the M's have shed their liabilities within that line item.
That Contingency line is spent when and where the shot-callers (senior management with budget responsibility) deem fit, and it can be spent the day after steering committee review, unless there are expenses that can come in later beyond the committee's control. Can't imagine what those would be, other than player salaries or bonuses. We are talking about a payroll budget, right? Money that goes to players?

"This might be the offseason to strike early"

That strategy assumes that the 30 MLB teams haven't calculated inflation the way that a team of roto owners would have done.
I think that assumption may be sound. That's been my impression of previous winters that had inflation, that early on there were bargains to be had. No doubt it's hard to nail down --- > the % of the extra dinero that other clubs are going to pocket, and what % of it they're going to plow back into salaries.

Post missing

My last post is also missing.

Oliver Perez re-signs

Good value on the contract, but not entirely sure the purpose of the move unless one of our cheap lefties is key to a major trade and we want a measure of predictability from the left side of the 'pen.
Not exactly a move you make if you plan on casting about at .500 this coming season. Seems like a hedge against losses incurred by future aggressiveness to me.

Perez guarantees there will be trades

They didn't need to sign Perez for $1.5M. They did it because trades are necessary this year. With Perez signed, they 40 man roster is at 36 and they need to get down to 30 so they can add Catricala, Jones, LaFromboise, Maurer, Moran, Carraway, and Gillheeney plus a starting corner outfielder, back-up catcher, and a 5th outfielder. I have 8 choices to get 6 more positions to get the 40 man roster to where it needs to be. The 8 are Figgins, Medina, Robles, Ruffin, Carp, Peguero, Robinson, and Thames. Figgins must go unless they are going to use him as the Utility Infielder and outfielder. That leaves you with 3 RP's and basically 4 OF's. Zduriencik has excess inventory and has got to trade some of it away or just lose it.

Money for players.

The Contingency Fund is for money for Payroll for players but I don't think they can ever get rid of it because it pays for anyone who is brought up from the minors during the year and also for all the September call ups so there are a lot of things the Fund is used for. I find it interesting that Geoff Baker says that $85M was spent on payroll in 2012. That is the same figure I finished with but I still show the full $5M contingency Fund plus the $80M in detailed Payroll and I have no idea how they spent the $5M and have no interest to ever know. I really like what Zduriencik has done so far and The Perez signing is another CYA move just like Ryan two years ago and Jaso last year. I just had a real good laugh as I went over to USS Mariner where some guy wasn't impressed with the signing of Perez and Cameron just ripped him a new one. Zduriencik definitely has a plan this year and he isn't waiting around to get things done.

Maybe

It might signal pending trades from the bullpen depth. It would also mean that Jack is prepared to go north with some young SP and will need a deep bullpen to avoid over exposing them and to keep their inning count down. Or just that he's keeping his options open. Time will tell.

Maybe you missed my point

They may also want to add Poythress to the 40 man roster and all eight names I mentioned would need to come off the 40 man roster to be able to add the new ones. They'd all risk being claimed going through the waiver process. I'd bet that all 3 RP's would be lost if they go through waivers. They won't be around to help Jack out with his over exposed BP. He is going to make some trades with his BP depth, keep his options open, and we'll see what happens. He also needs catching at the AAA level and he will want catchers that don't need to be added to the 40 man roster.

Still having site problems

Still getting the "Your comment has been queued for review by site administrators and will be published after approval." I might add that the 40 man roster must be set in a couple of weeks and there are going to be possible waiver pick ups for the M's as well plus they want to add a Rule V pick and add it to their 40 man roster. There are better farm systems than ours out there so we could have a shot at a good prospect as they are forced to send one of their better players through waivers. There is only room for 15 MiL players on the 40 man roster.