Scott Boras, Baseball Econ 001, and Kyle Lohse (etc.)

Christian Petersen

As I'm sure you've already heard, Scott Boras has some high-profile clients who are still, technically speaking, unemployed. That's the bad news. The good news is that blogger Murray Chass recently got Boras on the blower, and Boras has cut through all the statistical and economical claptrap to arrive at an explanation for his clients' inability to secure gainful -- I mean, really gainful -- employment.

Boras, who doesn’t let any baseball financial aspect escape him, has made a study of payrolls and has found, he said, that most teams have lower payrolls five weeks before spring training than their highest opening-day payrolls since the 2000 season.

“Only about five teams have higher payrolls,” the agent said. “Everybody else is below even though revenue is up by 200 percent and the value of franchises is up 300, 400 percent. What we’re seeing is not many teams are spending on payrolls despite the fact that their profits are extraordinary. You’d expect teams to have their highest payrolls but they don’t.”

No, you wouldn't expect that at all. You would expect some teams to have their highest payrolls, and some teams to not have their highest payrolls. In 2009, the Astros spent $102 million on player salaries; does any reasonable observer, Non-Agent Division, really believe the Astros should be spending more than $102 million in 2013? You can always find the number you're looking for, if you try hard enough.

What you would expect, with a significant increase in revenue, is a significant general increase in salaries. And guess what: The players have done pretty well since 2000. That season, teams spent roughly $1.7 billion on their major-league payrolls. In 2012, teams spent roughly $2.9 billion. You know, give or take a few million here or there. Essentially, salaries went up around 76 percent from 2000 to 2012.

Two obvious caveats. One, that 76 percent isn't adjusted for inflation. Inflation's been generally low in the U.S. since 2000, but the rate is still around 33 percent over those years. Players' salaries, as they have since at least the 1970s, have far outstripped the inflation rate. But their buying power hasn't gone up 76 percent. The other caveat is obvious: The players' salaries have almost certainly not kept up with MLB's revenues. So where's all that money going? Straight into the pockets and the swimming pools and the yachts of the owners?

Maybe. But here's Boras's theory:

Now what was Boras’ point in citing the depressed payrolls? Was he subtly saying that clubs have not made substantial offers for Bourn, Lohse and Soriano, and their refusal to spend money was the reason?

I don’t know, but his comments are valid. With Major League Baseball annual revenue soaring to $8.5 billion and lower-revenue clubs getting millions of dollars in revenue sharing, every team should be in good enough economic condition to build their teams.

“What are they doing with all of the profits?” Boras asked. “They’re paying off the debt they acquired to buy the team. The fans need to be aware of it.”

Classic Boras!

The fans need to be aware of it? I'm trying to think of some reason why the fans being aware of franchise debts would lead to higher payrolls. I mean, it would be great for Boras and his clients if every owner with big debts was forced to sell to a billionaire with unlimited funds, but there are only so many Frank & Jamie McCourts to go around.

In the absence of more McCourts, though, I have a hard time faulting owners for, you know, paying back money that they borrowed to purchase baseball teams for huge amounts of money and spend almost $3 billion on their payrolls last season.

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