Show Me the $! End-of-Year Payrolls

On some level, it’s simple to say that each of the Big-4 sports in Northern America are different. Baseball doesn’t have a clock; the NHL uses a puck; the NBA uses a hoop; the NFL has downs.

Yes, I’m being over simplistic here, but on the salary side, the distance between MLB and its other Big-4 brethren diverge further still.

Baseball has a soft salary cap, but only in the loosest of terms. Baseball is also the only sport where there is a tracking of salary at the beginning on through the end of the season.

In reality, it’s really the former that gets the most attention. Opening Day salaries, be it through the advent of USA Today’s salary database, or the fact that OD salary is latched onto as :”intent of spending” for an upcoming season, end-of-year salary doesn’t get the focus it’s bookended brother gets.

Which, to me, is wrong.

The final salaries in MLB show totals that include the 40 man roster, and shows how clubs ramp up, or shed payroll as the season progresses. It’s the final snapshot of a club’s season, the final salary picture for those “Season Recap” reports.

When coupled with one or more years in the data set, it’s a good trending tool to see how clubs might be making a push for the playoffs when their development window is seen as open, or the shedding of payroll when clubs are reloading. If you watch the Yankees and Red Sox (or rather, the AL East), it can be a sign of widening payroll disparity between the Yankees and Red Sox and the rest of the Division. If you look at the AL West, it’s a whiplashed roller-coaster ride that sees Tom Hicks going after Alex Rodriguez and Bill Bavasi’s <ahem> “handiwork” with the Mariners and Jack Zduriencik trying to correct the former GM’s bad contracts.

There isn’t space here on FanGraphs to display all the data I’ve collected over the last 12 year. You can see it here in a special report. But, here is the end-of-year payrolls for the 2010 season, the 2009 counterpart for each club, and the increase or decrease by percentage from the year prior. I’m going to leave it open for discussion except for a couple comments:

• Total end-of-year salaries totaled $2,911575,488 – nearly $3 billion dollars. MLB has said that gross revenues totaled $7 billion in 2010, meaning player salaries accounted for 43 percent of the total. And remember, that’s just Major League salary. It does not include minor league payroll costs. That said, 2010 player salaries were down, albeit less than 1 percent (-0.88%) from 2009;
• The Phillies ranked third in player payroll last season, and with the signing of Cliff Lee, expect them to hold that position in 2011. Since 2006, the Phillies player payroll has ballooned 56 percent;
• The Red Sox broke the Luxury Tax ceiling for the first time since 2007 (the threshold was $170 million, and the Red Sox’ had a Competitive Balance Tax payroll (see here how it is calculated a bit differently than end-of-year salary) came to $176,609,550. With the off-season flurry of signings that the Red Sox went through, expect them to break the $178 million threshold this coming season. Good thing they’re going to leverage a Luxury Tax loophole (again) with the Adrian Gonzalez extension.

NOTE: Final 2010 payrolls for the 30 major league teams, according to information received by clubs from the commissioner’s office. Figures are for 40-man rosters and include salaries and pro-rated shares of signing bonuses, earned incentive bonuses, non-cash compensation, buyouts of unexercised options and cash transactions. In some cases, parts of salaries that are deferred are discounted to reflect present-day values.

Follow Maury Brown on Twitter @BizballMaury