Two Ways To Count The Mets' Payroll
The Mets are either at their spending limit or more than $20 million below their limit. They know best, but in one way this is all about counting.
The Mets are done spending, most likely, so maybe this is all moot. Maybe they didn't even begin spending. But last week, Adam Rubin pointed out that, according to the way the team accounts for deferred obligations, the payroll is already at $94.9 million. It was $94.5 million last year.
But if you count differently, the payroll is much lower. Like almost $20 million dollars lower.
Here are the 2013 obligations for the current roster. This is counting only money the team will have to pay in 2013.
(See the web page for the list
That doesn't look like $95 million. In fact, the total obligations for the Mets this year only tally $71.25 million. That's counting Wright's salary as $8m, since he deferred $3m of it into the future. That's counting Santana's salary as $20.5m and worrying about the $5.5m buyout next year and the $5m deferred seven years from now. That's counting only the $6m of the $21.125m still owed Jason Bay, as $6m is what the team will have to pay in 2013.
It's an eye-opening thing to say that the Mets could also be seen as $20 million short of the same salary they paid out last year. And it's tempting to use that to decry the lack of free agency signings seen from the front office. A few minor league free agents, a couple trades, stop $20m short and call it quits doesn't seem like enough for a fan base used to a team that costs $100m most seasons.
But I asked around with some team officials from other teams, and Rubin is correct. There has to be some accounting for future obligations that have a link to 2013. In that way, you can take Bonilla off the list... but you have to add the other guys back in.
There is a wrinkle. Next year's money is worth less than this year's money. And so, what you really want to do is add in future 2013-related obligations in today's dollars. That probably made the deferments to Bonilla seem a lot more reasonable, but let's do it here too. Even if we have to guesstimate a little.
Inflation is down some -- we even had some deflation recently -- but the most common number, year-in and year-out, is three percent. Using 3% inflation, Santana's $5.5m buyout is worth $5.335m in today's money. And Santana also has five million deferred annually for seven years, but at 1.25% interest. That means the current value of his $5m deferred is $4.5m. By the best information we have, Jason Bay will be paid $6m this year and $15m over the next two years. Let's call it $7.5m in each year after this year. That means that Bay's buyout is actually worth another $14.56m over the next two years. Wright's deal is fairly complicated, but the $3m that was deferred without interest will begin entering his bank account in 2021. That makes the extra $3m worth only $2.35m this year.
The team saved about almost two million dollars in present value by deferring those deals. That might be enough to go get Chris Young one more time, but it's not enough for the guys the fan base wants.
What's the new tally? Add up all the future obligations related to the 2013 roster in 2013 dollars, subtract Beltran and Bonilla, and you get another $22.3m. Add that to our $71.25m in today's obligations in today's dollars, and you get $93.6m.
That's the whammy sound you hear.
Perhaps the deferments could open the door for a conversation about Michael Bourn, but it doesn't seem likely. And if a high-priced outfielder is coming in a trade, there might need to be money leaving the payroll to make it work. Which makes that sort of deal less likely.
It might be a painful year. But it makes sense to consider future obligations that are tied to the current roster. If you don't, you could end up owing half your payroll to players that no longer play for you, and that's even more painful.