Regardless of the size of the budget, each team allocates their payroll to the different positions based on many factors. I thought it may be instructive to look at how payroll is allocated on a percentage basis by team.
Note, I used Cot’s Baseball Contracts as the main source and I pulled the data for each team into a spreadsheet and then made some educated guesses as to which bucket each player’s salary belonged to. There can certainly be some variations in how others would assign the buckets, but I believe that most of the questionable calls were for lower-salary players, so I was comfortable on a percentage basis.
The following is the average payroll percentage that each team spent in 2016:
At first glance, these numbers match well with what I would have guessed, with perhaps the Reliever/Other Pitchers and Dead Money categories feeling a little high and the Bench category feeling low.
Digging into team-by-team, I then noticed that the starting player categories were generally consistent among teams, while the non-starting categories had much more variability among teams. Here is a distribution of the categories among teams (ranked most wins to least wins):
So, what makes the best teams win and the worst teams lose?
- It appears that “Bullpen Spend” is inversely proportional to winning. The top teams typically spend 15% or less of payroll on bullpen (interestingly, the Nats spent the highest percentage on relievers of the Top 10 teams). A top bullpen needs to have a significant percentage of homegrown pieces.
- A team needs to have “Cheap Stars” performing in order to win. I looked at the number of “Cheap Stars” (defined by sub $3MM payroll and a major contributor to the team – and yes, I could have been biased who I chose). Here is the breakdown of cheap stars per team:
The Orioles were the only team in the Top 10 who had no Cheap Stars (ha!) and I’d argue they overperformed and are ripe for regression next year. The Cubs (Bryant, Russell, Hendricks, and Baez) had 4 and could have had more (Schwarber, Contreras and Soler didn’t make my cut, which offsets my questionable Baez call). Texas overperformed as their two Cheap Stars were questionable (Odor and Mazara). The Nats had 3 with Roark, Rendon and Turner. Miami had 4 Cheap Stars, but a few I picked were questionable (Conley and Ozuna to go with Fernandez and Yelich).
- Good teams are willing to cut bad players and deal with Dead Money. This is related to #2 as Cheap Stars would likely make a team feel more comfortable about cutting a high-payroll player.
However, I was surprised to see that the best teams were more likely to have Dead Money than the worst teams. The Top 6 teams each had at least $10MM in dead money. One could argue that only Big Market clubs can afford to write off dead money, but the Indians managed with nearly $30MM of dead money (Swisher, Bourn, Chris Johnson, and Michael Brantley) because they had Cheap Stars ready to take their places (Bauer, Salazar, Lindor) and made some smart trades as well. Cleveland actually underinvested in each category compared to their AL Central competitors because of the Dead Money.
The teams with the highest paid benches – Philly (Ryan Howard, Blanco, Burriss) and the Mets (Loney, deAza, Johnson, Lagares) – both underperformed. I would argue that those teams should have dropped their high-priced bench guys and tried to develop young players on the bench who could potentially have become Cheap Stars. As a result, Philly underinvested in their starting position players while the Mets were lucky as they had a young talented starting rotation.
So, what is the ideal way to spend payroll and what should the Nats do for 2017?
The Nats had a distribution very comparable to league average in 2016:
- The Nats should aim to maintain 2016 percentages in 2017. The Starting Pitching category will go up with big raises for Strasburg and Roark, and I advise offsetting that by trading Gonzalez. Starting OF will go up with a raise to Harper, and that should be offset by non-tendering Revere. Catcher payroll is a variable that is likely to increase and can be offset by trading Espinosa and bringing down Starting Infield payroll. If the Nats go with cheap catchers, then they can afford to sign another big bat. With Werth coming off the payroll in 2018, perhaps the Nats can justify adding payroll in 2017 to get a big OF bat regardless of the catcher situation.
- The Nats must continue to promote prospects and hope for them to achieve “Cheap Star” status. The team should strive to have 4 cheap stars, with Turner and Roark taking two of the spots. Joe Ross is hopefully the third. I’d argue that Giolito and Lopez should compete for the 5th spot in the rotation as they are most likely to achieve Cheap Star status. Severino is a dark horse for that status in 2017.
- The Nats can afford to sign a high-priced closer (Melancon?), but then need to use most of the rest of the spots for low-salary guys like Treinen, Solis, Glover, Cole and Gott. Kelley and Perez are already on the payroll, but perhaps one of those guys can be traded.
- Under-invest in the bench. The Nats spent an appropriate amount on their bench in 2016 after making a mistake and over-investing in bench guy Nate McLouth who alone in 2015 made more than the Nats’ entire bench in 2016. While Stephen Drew was a strong contributor in 2016, I would be hesitant to bring him back in 2017 unless he stays a bargain or if he can take on more starts (perhaps platooning with Difo at SS). The Nats have potential bench players such as Goodwin, Difo, and Skole at minimum salary and who should be given strong consideration to win bench spots for Opening Day. The Cubs spent $5.7mm on their bench, and $3.7MM was spent on Jorge Soler, who is really more highly-regarded than a bench player.
- Play the best players, regardless of payroll. In 2017, the Nats start the year with minimal dead money (a few million in buyouts for Petit, Papelbon, and perhaps another I’m missing). The team can afford to eat a large contract if a player underperforms. The Nats should keep some payroll in reserve to make a deadline trade in case Zimm, Werth, or someone else (Lopez/Giolito) cannot perform. The Indians did a great job plugging holes in 2016 to compensate for their significant Dead Money.
Note: You can see my source work at https://drive.google.com/file/d/0Bx3rIcR7Tac2eDJwOGVfOEdkeGs/view?usp=sharing and please feel free to share comments. Most of this analysis was done late night, so there could easily be some errors.