The Ledger Domain: Why... (12/04)
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December 19, 2006 The Ledger DomainFully Backloaded
Since the glory days of Cito Gaston, John Olerud, Joe Carter and those great teams of the Blue Jays in the early '90s, the last remaining club in Canada has, for the most part, been a whipping boy for the AL East revenue juggernauts Yankees and Red Sox. Since the Jays' last World Series championship in 1993, they have finished third eight times, fifth three times, and fourth once in the AL East. That was until last season when they came in second, finishing with a record of 87-75. This would have been good enough to win the NL Central in 2006, but it was 10 games behind the Yankees' 97-win campaign. Regardless of whether that second-place finish was a byproduct of the Red Sox collapsing, or the Blue Jays being that much better, owner Ted Rogers has opened up the pocketbook. General Manager J.P. Ricciardi and President Paul Godfrey have raised eyebrows by increasing player payroll; not by small increments, but by leaps and bounds in the hope that they're "this close" to getting into the postseason for the first time since 1993. Take last season's player payroll. Toronto's Opening Day payroll was $71,915,000, a mind-boggling increase of 57.3% over the year prior when it was $45,719,500. The increase in 2006 moved them to 16th out of the 30 clubs in total player payroll. The increases were tied to doling out contracts that at the time seemed like extreme overspending, but in light of this year's free-agent market may look like money well spent. Ricciardi jumped out of the gate in November of '05 by inking B.J. Ryan to a five-year, $47-million deal that, at the time, was the largest contract ever doled out to a reliever. The deal included a $10 million signing bonus split between '06 and '07 ($6 million and $4 million), and pays Ryan as follows: 2006: $2 million; 2007: $5 million; 2008-2010: $10 million annually. Not content with just Ryan, Ricciardi signed Florida Marlins righty A.J. Burnett to a five-year, $55-million contract in December '06. The contract paid Burnett $7 million last season before jumping to $12 million annually over the rest of the contract. Add in Roy Halladay's extension in March of last year, which sees him being paid $10 million in '07, $14.25 million in '08 and $15.75 million for '09. Tasting second place convinced the Blue Jays' front office to keep spending. Ricciardi plucked Frank Thomas before the market was set, and really came off with one of the better deals. The two-year, $18.12 million deal with a $10 million vesting option for 2009 is chock full of incentives, plus a $9.12 million signing bonus. When compared to the deal Ricciardi and his staff finalized on Monday, it's a borderline steal. The structure of the extension Vernon Wells signed shows that now is the time for the Jays. The trend through these contracts outlined has been one of backloading, and the Wells deal is the mother of all backloaded deals for the Jays. Starting in 2008, Wells is paid a skinny $500,000, which then moves to $1.9 million in 2009. From there, the figures jump dramatically. The rest of the contract breaks out as follows: $12.5 million for 2010, $23 million for 2011 and then $21 million annually for the remainder of the contract (2012-2014). Thus, the Blue Jays offer up Wells the sixth-largest contract in the history of MLB following Alex Rodriguez ($252 million), Derek Jeter ($189 million), Manny Ramirez ($160 million), Todd Helton ($141.5 million) and Alfonso Soriano ($136 million). It's clear that the Blue Jays are banking on winning big in the AL East, which will then parlay into increased revenues. Call it the Colangelo Factor--as in how Jerry Colangelo opened up the purse strings and spent $81,206,513 on player payroll in 2001 for the likes of Randy Johnson and Curt Schilling. The gamble paid off for Colangelo when the Diamondbacks won the World Series against Yankees that year, but it's also a cautionary tale: the Diamondbacks are still hamstrung by the backloading of those contracts. The Blue Jays aren't the Yankees or Red Sox, or for that matter, the Cubs. Now the only MLB club in all of Canada, the Blue Jays still don't have nearly the revenue streams of either AL East juggernaut. There is no RSN monies the likes of which YES or NESN pulls in. There is no superstation reach, as with the Cubs and WGN. The Blue Jays' gate revenues, while increasing, aren't even in the same galaxy of what the Yankees, Red Sox and Cubs are pulling in. It's one hell of a gamble by Rogers and the rest of the Blue Jays staff. It's either commendable or stupid, depending on your point of view. There is that feel-good thought that maybe a club can break the stranglehold that the Red Sox and Yankees have had at the top of the AL East since the Orioles won the division in 1997. Certainly, there are those that remember fondly those back-to-back World Series championships by the Blue Jays in 1992 and 1993. Something to bear in mind when recalling those teams from the early '90s: it wasn't a case of pure parity that allowed the Blue Jays to pull it off. Here's why, and it's something that has been forgotten. The Blue Jays had the highest player payroll in all of MLB for those two seasons. In 1992, they had a total team payroll of $42,663,666, just slightly ahead of the Red Sox at $42,203,584, and considerably higher than the Yankees at $34,462,834. In 1993 it was much the same. The Blue Jays had the highest player payroll in all of MLB at $45,747,666, followed by the Reds at $42,851,167 and then the Yankees at $40,405,000. They slipped to third behind the Yankees and Tigers in 1994, just as they did in the AL East standings that season. The Blue Jays are robbing Paul to pay Peter; spending now in the hopes of pulling off a World Series and the revenues that come along with a flag that flies forever. Given how Theo Epstein and Co. have lavished dollars on anything with a pulse this offseason, it would be interesting to see the Blue Jays spend as freely in 2008 if they still feel like they're close. After all, it's not like Brian Cashman's driving a Prius quite yet either. Such is the AL East.
Maury Brown is an author of Baseball Prospectus.
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