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A Closer Look at the Orioles 2015 Payroll

The Orioles payroll increased again in 2015. Are they getting good value for their money?

Tommy Gilligan-USA TODAY Sports

There was a lot of talk going into the season about how the Orioles had a quiet offseason. Unlike the lead up to 2014, when they signed Nelson Cruz and Ubaldo Jimenez, the Orioles didn't sign any high profile free agents this past offseason. This led a lot of people to think they didn't spend any money, but that's not exactly true. One reason for the perceived inactivity is certainly they thought they would be getting a lot of production to cover the losses or Nick Markakis and Nelson Cruz from returning players like Matt Wieters and Manny Machado, as well as expecting a rebound season from Chris Davis. An equally important factor though had to do with having to re-signing players they already did have, a lot of whom received raises from arbitration or entered the arbitration process for the first time which can result in a substantial increase in pay from the league minimum, which is around a half million dollars.

Steve Pearce got a raise of almost $2.9M, which is probably a bargain still after the 2014 season he had. J.J. Hardy was re-signed to an extension and got a raise of more than $4M. Bud Norris got a raise in arbitration of about $3.5M. Alejandro De Aza hit arbitration and got a raise of more than $4M. And of course most free agents aren't going to sign for the one year "show me" deal Nelson Cruz did, meaning it's just not this year's payroll the team would need to consider. The team has a number of players who are due to hit arbitration in the coming years they're almost certain to keep, like Manny Machado and Kevin Gausman. And of course, there's the eleven impending free agents after this season the team is going to need to deal with.

The last thing to keep in mind is the still unresolved MASN deal. There's the potential for MASN to make the team a lot of money, but there's also the potential MASN could owe a lot of money to the Nationals. With so much uncertainty in how much money the team could expect to see from its Regional Sports Network in the coming years (which is how a lot of MLB clubs account for revenue nowadays) it makes sense for them to restrain spending until its resolved. There's no way to tell for sure of course that's what is happening, but my bet is the answer is yes. And when the dispute is resolved (whether in favor of the Orioles or not) my guess is there will be more money to spend. Jonah Keri of Grantland wrote a great article on this prior to last season, and even though its now more than a year old, I think it's still well worth the read if you haven't yet (or wanted a refresher on some things like I did).

But leaving all that aside, the team has set itself up with a certain team and payroll for this season. I wondered if they were getting a good deal. I probably don't even need to run the numbers on last season...they won 96 games and their first division title in 17 years, not to mention a sweep in the ALDS. They could have spent as much as the Yankees, the fans would probably still consider it a good deal. For the record though, they spent just shy of $110M. That may seem like a lot, but it really isn't these days. The Dodgers, who didn't win any playoff series, spent a little more than $244M. They were by far and away the biggest spenders, but still...the Orioles advanced in the playoffs and the Dodgers didn't, so it was a good deal by at least one measure.

For this year, I thought I'd look just within the division. For each team's payroll, I calculated a value for a win, using the ZiPS projections on Fangraphs for how many wins the teams are expected to get by the end of the season:


2015 Salary ($M)

ZiPS proj. wins

$M/win

Orioles

$119.7

79

1.51

Blue Jays

$127.7

82

1.56

Yankees

$216.44

85

2.55

Rays

$76.61

83

0.92

Red Sox

$173.09

87

1.99

The Orioles aren't doing too bad, they're not nearly as efficient as the Rays, but they're also expected to win the fewest games - so what does it matter, right? Well, it matters to me. I'm a 13-game season ticket holder, which is something I can only afford because the team is able to keep ticket prices so low. If they charged as much as the Yankees or Red Sox, there's no way I could afford to get that package and I'm guessing a lot of fans in Baltimore wouldn't either. Maybe it still wouldn't be worth it if they only won 79 games, but buying wins is hard. An article on Fangraphs last year estimated the cost of a win at $5-$7 million. If the Orioles were going to bridge the gap between themselves in the Red Sox, they may have had to spend anywhere between 40 and 56 million in the offseason on free agents. Coincidentally, that would have put their payroll very close to what the Red Sox are currently paying.

Besides, that's just one projection. What if we estimated each team's 2015 win total based on their current Pythagorean winning percentage?


2015 Salary ($M)

Pyth. proj. wins

$M/win

Orioles

$119.7

85

1.41

Blue Jays

$127.7

85

1.50

Yankees

$216.44

102

2.12

Rays

$76.61

85

0.90

Red Sox

$173.09

77

2.25

You can tell this probably doesn't mean much, because I'm sure hopeful the Yankees aren't going to win 102 games, but by this metric the Orioles are already showing to be a better value.

I mentioned above that about a year ago, Fangraphs estimated the cost of a win at $5-$7 million. This is based on what players sign for in free agency and what their projected WAR is going to be, but within the article there's a lot of links to other research into the area of trying to put a value into a win, and you'll see it all seems to match up. Individual player data may not be perfect, but all of the data seems to average out. But that was a year ago, so let's go with the high end of the estimate (considering 2015 dollars may be slightly more expensive) and say a win is worth $7M. Rather than use a player's individual ZiPS projection, I looked at some of the more important pieces of the 2015 Orioles and figured out how many wins above replacement they would need to be worth to earn their salary.

Player

2015 Salary ($M)

2015 "expected" WAR

Adam Jones

13.33

1.9

Chris Davis

12

1.7

Chris Tillman

4.3

0.6

Steve Pearce

3.7

0.5

Manny Machado

0.55

0.08

For the record, Adam Jones has already been worth 1.5 WAR this season. In less than a month, he's earned almost his entire year's salary. Chris Davis has already accumulated 0.4 WAR, meaning he's on track to beat his projection by more than a full win. I'm willing to bet the other players on this list exceed those expected WAR totals as well by the season's end.

This analysis isn't perfect. The cost of a win on the open market is certainly going to be more than what a team pays it's arbitration eligible players, and when free agents sign large contracts it's based on the fact that players with low amounts of service time make almost nothing compared to what they're worth. But just like the team chose to try and replace Markakis and Cruz with people in house, they chose to "buy" wins the same way.

Nothing's guaranteed in baseball and maybe by the end of the season the team will regret not signing back Cruz, or going out and getting a guy like Max Scherzer. But from where I stand, the front office made the smart decision to invest in their homegrown talent, re-sign key players like J.J. Hardy, and assemble a team that has a good chance of repeating last year's success without breaking the bank and ruining the chances the team has to compete for the next several years.