Toronto Blue Jays Payroll Dilemma

Toronto Blue Jays Payroll

 

 

The Toronto Blue Jays recently announced that they will increase their team payroll next season, to an undisclosed amount. The reasoning behind this is based upon the notion that the Blue Jays will need to spend, spend, spend, in order to compete with the Boston Red Sox & New York Yankees of the AL East.
 

 

JP and the organization quote statistics such as an increase in attendance and TV revenue as a sign of success. While this is true, it may not be as rosy as they make it out to be. According to ESPN the Jays have the 16th highest payroll, at approximately $72 million. For their increased payroll the Jays have seen a rise in their attendance, but they still only place 19th in average game attendance. Attendance league wide is up, mostly due to the parity of the 2006 season. The Blue Jays also contend that without the injuries sustained by AJ Burnett, that they would be in the hunt for a playoff spot. The truth of the matter is that AJ has a history of injuries and that this is baseball, every team has injuries to deal with. Nonetheless, the organizations higher ups are sold on JP’s plan and will commit more financial resources to next year’s payroll.

 

One note before I move on. I’m sure most Jay’s fans have heard the rumbling of Vernon Wells wanting out of Toronto. Well, so have I. So, for this example we are going to leave Vernon and his future with the Jays, his likely salary, etc out of this example. Just keep in mind that if the Jays are some how able to keep Vernon on the roster in upcoming years that it will cost them, at minimum $10 million per season.
The Blue Jays currently have four players locked into large, long term contracts. The players are Troy Glaus, Roy Hallady, BJ Ryan, & AJ Burnett. The table below illustrates the “big four’s” combined salaries this, and the next couple of upcoming seasons.

 

 

Year
Big Four
2006
$27,950,000 (Rest of the roster: $43,950,000)
2007
$40,400,000
2008
$44,500,000

 

  

As the table shows, this season the big four are making $27,950,000 this season, while the rest of the roster making $43,950,000. This is due to structure of BJ Ryan and AJ Burnett’s contracts, as Ryan only counts for $4 million against this years team salary, and AJ accounts for only $2.2 million. Starting next year and heading into the future, both players salaries will increase significantly, with both players making over $10 million a season by 2008.

 

 

Even if the other twenty-one players maintain their salary level, the payroll next year will jump to $84 million, but it will be very difficult to maintain the current talent level at this cost. But this will be extremely difficult. It’s safe to say with players such as Vernon Wells ($4.4 million) Reed Johnson ($1.2 Million), Alex Rios ($354,000) and forth coming free agents such as Lyle Overbay ($2.5 Million) that the Jays have been able to field a good amount of talent for a very low cost. The Jays minor league system has very little above replacement major league ready talent available. This is important fact, as a first year player is paid a right around $350,000 per year, which is the maximum salary of a player that has yet to reach arbitration. This does not take into account previous signing bonuses, but these are paid out to players whether they are on the major league roster or not. What this leaves the Jays with is the need to fill in the remaining twenty one roster spots with inexpensive talent, a tough task to say the least when it is not produced from your farm system. In order to compete, the Jays will be forced to re-sign these players at a significant raise (which will raise their salary structure), replace them with mid-tier farm players, trade for similar players (which will be difficult considering the lack of MLB & farm level trading value) or replace them in the free agent pool for a large amount of money (again, raising the salary structure). The only feasible way to combat this is to trade one of the big four, which may be difficult due to their respective salaries. This would also go against the logic of signing them in the first place, which was to win.
 

 

After studying the Jays contract and salary structure for this season, it becomes readily apparent that this team was constructed to win in the 2006 season. This has not happened, but the management seems to be willing to give it another try next season. With the burden of the big four on the payroll, the only way the Jay’s are going to be able to compete and even maintain their current level of success in the AL East is by raising their salary structure to around $90 million. With the Jays currently only 19th in the league in per game attendance, it is hard to fathom how revenue will even come close to expenses. That’s much to ask from a small market team, regardless of who owns the club. Sooner, or later, the business core at Rogers will be unwilling to accept mounting financial losses. Hopefully I’m wrong here, but if the Jays aren’t able to make the playoffs and in turn drastically increase their revenue at the ticket booth in the next couple of seasons, they may be forced by Rogers to cut payroll, and go back to fielding a roster with a payroll around $40 – $50 million.

 

 

Toronto Blue Jays
 

Written By

has written for mopupduty.com since 2006. Follow Matthias on Twitter, Facebook and Google +

  • Early

    I do not beleive Jays were fixing to win this season. If that were the case they would not have given long term contracts to Ryan, Burnett and co. with indexed salaries. The $72mil is the salary at the start of the season right? Jays have cut some dead weight salary for next year in Hinske, Hillebrand, Schoneweis to the tune of +/-$10mil. The Jays claim that they lost the playoff spot with the injury to Burnett, Jays lost the WC or AL East in the field. They are a terrible fielding team and they are luck they haven’t lost more games on account of fielders.

  • When they traded some players, they still ended up being on the hook for some of the salary. I know that the Jays are paying about $2 million of Hinske’s
    contract and are still on the hook for some of Koskie’s salary. While they did go down, with the increase in the big four they can only stay
    around $30 mill if they want to stay at $75 mill for the team. This stars and scrubs method isn’t going to do anything for their chances.

  • First of all, this article makes no mention of large signing bonuses given to Burnett and Ryan. Signing bonuses are calculated differently toward the overall payroll, and are part of the reason the salaries for the ‘big four’ seem so low in 2006. Second, not only has the Blue Jays revenue increased greatly the last few years with the higher attendance and the purchase of the SkyDome, but the Canadian dollar has risen 20% which is pure profit for the jays who pay their salaries in US dollars but generate revenue in Can. dollars. The team has all but announced another increase in payroll and can add some talent. The Jays don’t have a very good farm system but Brandon League, Dustin McGowan, and Adam Lind all have the potential to be stars. While I’m not fond of having all that payroll tied up in four players, the only scary contract to me is Glaus who I don’t think can hold up physically for three more years. My biggest fear is the Can. dollar sinking again. That would cause a decrease in payroll and cause a definite return to sub-mediocrity.

  • 1. When doing this article I only took into account the payroll budget, leaving out signing bonus. This is the same practice as ESPN & I do make mention of this at the start of the article. When the signing bonus’ are taken into account the amount paid is much higher. For example, I count Ryan at $5 million against the 2007 salary structure but outside of this he will also receive $4 million in signing bonus. This actually makes the situation more dire.

    2. When discussing the rise in the Canadian dollar and the rise in attendence the FACT is that the Jays are still in the bottom half in average league attendence at 19th overall. A strong dollar does nothing to alleviate this fact. Granted, they may have a better TV deal to help out revenue but they are still about 3000 tickets a game from the middle of the attendence pack

    3. League and McGowan are borderline middle of the road pitchers at best, at least next season. Lind is being rushed and imo will not be an “impact player” next season. If you look closely I state that these players contribution will be at or near replacement, which is the old VORP statistic.

    Thanks for the input & welcome to Mop Up Duty! Although I don’t agree with it I’m sure there are many who do. Nice site by the way!

  • R-Jay

    JP was right, 70 million dollar payroll isn’t enough to win the AL East. I don’t think the Jays were expecting to win the AL East, they were meant to improve from the previous year. They did that, and are only a game behind the Boston Red Sox for second place. Hopefully the pay roll can be increased to 90-95 million. This will creat some financial flexibility, and may bring in some other big names for next season. Some of the guys this year are very likely to leave the club, this creates some more money to bring in a much needed shortstop with a bat. I agree with the statement of Glaus, he won’t last 3 years, and Vernon’s way too expensive after next year. I think the team next season will have a better shot of winning the title, with the falling og the BoSox and the increased payroll…Go Jays!

  • JJippidy

    Jays are a small market team? By what definition of the word?

    When Selig coined the term he meant it to apply towards payroll, even though it seems more accurate for it to applied to the actual potential market, aka population.

    By any definition of the word Toronto is not a small market. If you wanted to define market by the money spent then a possible $90 million team salary is surely big market.

    Or if you feel like defining it by population you’d have to think that with the GTA having over 5 million people, and the broadcasts of nearly all the games being national Toronto is now a large market team in every sense of the term.

    How can he afford a higher payroll? He owns the stadium, he owns the broadcast companies, you have to figure the dollar amounts presented to us by Rogers accounting are not exactly accurate. I would’nt be surprised if the Jays undersell their broadcast rights to Sportsnet in order to increase Sportsnets profit and making the Jays look less profitable on paper.

    Not to mention the all the extra benefits of owning such a public entity, I wouldn’t be surprised if the Jays generated tens of millions of extra dollars for Mr.Rogers in less direct ways then the ones you may be thinking of. You can’t sit a whole inning without being bombarded by Rogers media advertisments at the “Dome”.

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