Talking Payroll Structure

Excellent Brewers beat writer Adam McCalvy mentioned this bit of intelligence from inside the Brewers inner sanctum in reference to a question on the possibility of keeping CC Sabathia in the fold:

According to someone familiar with the Brewers' front-office strategy, who spoke on condition of anonymity, a team generally wants its top-salaried player to account for no more than 15 percent of the total payroll, and the top three players to account for no more than 25 percent. Obviously, this is only a guideline; special players could prompt a team to bend the rules. Teams with a disproportionate number of so-called zero-to-three-year players making the league minimum or close to it may also be tempted.

He goes on to break down on the obvious problems this would present for signing Sabathia given what he is likely to command on the market this year and the other commitments they have on top of that.

It may be tempting to call CC Sabathia a "special player" along the lines of what it would take to violate this guideline, because he was so utterly dominant in his time in Milwaukee this year. A look at the rest of his career, however, suggests a very good player but not generally elite. Also, it is important to remember that pitchers are subject to a higher rate of injury than position players, both that keep them out of games and that hurt their effectiveness.

The Brewers a few years ago would have been in the category of teams with a "disproportionate number of so-called-zero-to-three-year-players" because so many of their starting players in 2006 and 2007 were pre-arbitration. Of course, now JJ Hardy, Prince Fielder, Corey Hart, Rickie Weeks are all headed to arbitration and will be in for substantial raises so they can't really use that excuse to justify signing CC. Besides, Sabathia would require at least a 5 year commitment and probably more, so this would be a long term issue that would dominate the payroll for a long time and unless the team plans on completely dumping nearly all of the current "young core" to be replaced by players now in the minor leagues and are as yet undrafted. Remember that they have Braun under contract through 2015 and that within a few years his salary will push him into the top 3 players salary wise on the team.

A team in the Brewers position market wise has limitations to how much it can make in revenue. They can fill the seats every year by having winning teams, but they won't be able to push ticket prices up as high as some markets because they are not drawing on as large a pool of potential buyers as most markets and thus demand will never equal that of the Cubs or Red Sox. More importantly, the TV revenue is always going to be a fraction of the big markets because they have more potential viewers than Milwaukee. Knowing this, the Brewers have to operate under a fairly conservative estimate of potential revenue when planning long term contract spending.

As long as the Brewers farm system is producing talent (and it will have to if they want to be competitive) they are going to have more flexibility than most in terms of pushing those 15% and 25% numbers up a bit. If they have 3 or 4 key players in pre-arby years and another 3 or 4 key players under cost controlled arbitration or signed to below market level "buyout" deals, they will have a sizable portion of the payroll available for the rest of the roster.

Still, what it comes down to from a decision making perspective is does a team want to:

  1. Spend an enormous portion of that leftover money on one player, meaning that many bench, bullpen and back-of-the-rotation players will have to be drawn from whatever the Brewers can scrape up in their back end of their farm system and off the no-cost scrap heap.
  2. Use that money to fill in gaps in the roster on more short term deals. For example, while the team is producing a catcher they have the money to sign a Jason Kendall instead of just rushing up a minor league player who isn't ready.
In the end, one has to think that the Brewers are going to rightly value #2 too much to offer a deal that would leave them totally committed to perpetually having an extremely young team with little true veteran presence. The only way I can see them offering a deal that would truly qualify them in category #1 would be if they were sure it would be turned down.

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