ABOUT SALARIES AND THEIR EVOLUTION

By Murray Chass

April 7, 2013

Baseball player salaries occupied much of my time for nearly three decades of my coverage of the game. I thought I had left salaries and payrolls behind when I turned to writing columns in 2004, but like the proverbial bad penny, they keep coming back.

This season provides a good example. The Yankees and the Dodgers have made it imperative to pay attention to payrolls, Yankees Dodgers 225the Dodgers with their humungous spending spree toward the end of last season and the off-season and the Yankees with their declared intention to slash their perennially highest payroll (an all-time high $230 million this year, according to the Associated Press) to a non-tax level $189 million by next season.

In my first several years of covering the Yankees, in the first half of the ‘70s, the only published salaries I saw were in an annual spring training column by Edwin Pope, sports editor and columnist of the Miami Herald.

I quickly learned that Pope’s salaries for what he wrote were the highest-paid players were mainly guesses and estimates. Some club executives might have helped Pope with ball park figures, but it would have been rare for exact figures to be provided.

At that time, no one, not club or league executives or players (there were no agents) or union officials, leaked salary information. That stuff was treated more secretly than classified government reports. Clubs didn’t want their other players to find out what a particular players was making (how could general managers lie to Player X by saying “how can we pay you that much when we’re only paying Player Y this much?” Yes, that’s what they did.)

But players were equally reluctant to have their salaries known. I remember when Phil Niekro signed with the Yankees as a free agent for the 1984 season he became furious and called the Players Association to complain after his $500,000 salary appeared in the Times.

I assume he subsequently learned I was the culprit, but he never said anything to me. By the time I reported Niekro’s salary, free agency and salaries were mushrooming.

Free agency fostered the salary explosion, first with Jim (Catfish) Hunter in 1974 and then with Messersmith-McNally in 1976. I concluded that free agency would be such an integral part of the game that knowing the value of contracts free agents were signing was critical to the coverage of baseball.

Finding people who were willing to share contract information was key to my quest, and proceeding on a trial and error basis, I found the right people. I don’t know if many other reporters tried to obtain the information, even though they all wanted it, but only one other reporter, Marty Noble of Newsday (now with MLB.com) was eventually able to get into the game seriously.

Management people were certain that the union was feeding me the details, but if I had had to depend on the union, I would have starved. Occasionally I would call Gene Orza, the union’s second in command, and tell him the contract details of the latest major free-agent signing when the union had yet to get them.

The way the system worked, still works, is once a club and a player agree on a contract, the club submits the details to the commissioner’s office and the player’s agent provides the details to the union. The designated people in each office then compare the details, and if they are the same, the deal is done.

Besides getting the contract information itself, I was proudest of the fact that no one ever knew who my sources were. I say sources because over time there came to be many.

Al RosenThere was once a moment that was both flattering and annoying. Al Rosen, general manager of the Giants, signed a free agent and at the news conference announcing the signing disclosed the financial details, an unprecedented step for a club executive.

“I might as well announce them,” he said when asked why he did. “Murray Chass is going to get them anyway.”

As flattering as Rosen’s explanation was, he was undermining my job by giving everyone the contract information. It didn’t start a trend, but details became more obtainable after that.

The best time for obtaining details was the late 1980s when the clubs operated an information bank for offers made to free agents. An arbitrator eventually ruled that it was illegal for the clubs to operate the bank, but while it existed, it was a gold mine of information for me.

I’m not sure that any other reporter caught on to the bank’s existence, but all I needed was a friendly general manager or, better yet, an agent, who made withdrawals and was willing to share them with me.

Every time a club made an offer to a free agent it would deposit the information with the Player Relations Committee, the management labor arm. If other clubs were interested in the same player, they could ask the PRC what offers he had received.

The PRC told the arbitrator at a hearing over a union grievance that the bank benefited the players, but neither the arbitrator nor the union bought that argument. Before the bank was banned, the PRC was ordered to turn over all information it had or would receive to the union. That made the information available to agents.

It was the easiest information I ever obtained on free agents, and I was sorry when George Nicolau, the arbitrator, ruled that it was illegal and barred the clubs from continuing to use it. It was a core part of his decision against the clubs on their collusive conspiracy against free agents, the third such ruling in three cases.

The only remnant of the information bank is a letter in the collective bargaining agreement from Rob Manfred, the owners’ chief labor executive, to Michael Weiner, head of the union.

“This is to confirm our understanding,” Manfred writes in what is attachment 13 of the labor agreement, “that during the term of this Agreement the Clubs will not operate an Information Bank with respect to free agents.”

That development came in 1990. More than two decades later I do not feel the need to keep up with every signing. I don’t need the information as immediately as I did previously, my wife periodically reminds me that I am supposed to be retired and there are others who mine the free-agent fields for contract data, though there is actually only one reporter whose information I trust.

That is Ron Blum of the Associated Press, who has been the AP’s reporter on baseball’s business and labor matters for years. I once suggested to a New York Times sports editor that he talk to Blum and consider hiring him, basically to do what I was doing, as I moved on to other matter, but he concluded that Blum’s experience and interests were too narrow.Ron Blum

That was probably 20 years or so ago, and Blum is still with the AP churning out salaries. Perhaps the attraction for him is having such a profound effect on the publication of salaries and their widespread use. When you see a player’s salary in the newspaper or on the Internet, you can safely assume it was reported by Blum. When salary lists appear at the start or end of each season, again it’s Blum’s work.

In recent years, a Web site called Cot’s Baseball Contracts appeared on the Internet, then several years into its existence joined Baseball Prospectus. It lists the contracts of all major league and some minor league players. I don’t know where it gets its information, but I suspect probably like everyone else – from the AP.

I cite as evidence for this belief some of the lowest salaries. They are always the hardest to get, and I found in a spot check that Cot’s didn’t have a few of the lowest-paid Yankees until a couple of days after the AP ran its salaries on its wire. Suddenly, Cot’s had Cesar Cabral ($490,000), Cody Eppley ($510,350) and David Phelps ($512, 425).

But I give Cot’s credit for its idea and its effort to become a repository for contracts. I’m sure a lot of baseball writers appreciate it. Thirty-six years ago, at the advent of free agency, they didn’t have anyone doing their work for them.

I just wish baseball writers and editors would have a better understanding of contracts. For example, ESPN.com reported that the Tigers and their ace pitcher, Justin Verlander, “have reached agreement on a new contract that could exceed $202 million, sources told ESPN’s Buster Olney.”

That statement is wrong on two counts. First, the new contract alone cannot exceed$202 million. At most, it would pay Verlander $162 million. Second, if the pitcher made the salaries for all of the years that statement actually refers, they would total, not exceed, $202 million.

The five-year contract extension calls for salaries of $28 million a year plus an option year with a salary of $22 million. But the option year isn’t guaranteed so it’s fantasy baseball to include it in the earnings. Why not say Verlander could be hit by a bus tomorrow and not have a chance to get the option year.

But even if the option year were included, how would the total get to $202 million? Only by including the $20 million salary Verlander has for each of the last two years of his existing contract. The ESPN.com article made those years part of the new extension, which they’re not. He already had those two years.

Justin Verlander 225The article is wrong when it says Verlander’s deal “is for seven years and worth $180 million.” It is for five years and worth $140 million.

Only new money counts. If you want to say the Tigers now owe Verlander $180 million in guaranteed money for the next seven years, that would be OK. In fact, the Tigers have most likely written or will write a new contract saying precisely that with the terms spelled out. But that’s a new legal document, not the new contract.

What’s the difference, you might ask; the money comes out the same. But it’s all about accuracy and consistency. New money is what it really is about. New contract, new money.

USA Today has a salary database dating to 1988, but I lost trust in the newspaper’s salaries many years ago when I found too many mistakes in its annual salary list. I haven’t checked recently to see how the paper is doing today, but I did discover a refreshing article the other day as I was working on this column.

Tim Dierkes wrote a piece about the Verlander extension and was critical of the reporting of it for the same reason I am here. “Shouldn’t we just be looking at the new, guaranteed money he received, when determining the contract’s value?” he wrote.

Yes, we should, and I applaud Dierkes for raising that question.

Here’s another one, from Newsday, the Long Island newspaper. It’s a note with the list of AP’s (Blum’s) salaries: “The salaries listed are players’ monies to be paid for the 2013 season, regardless of which team is paying all or some of the salary.”

There is a problem with that statement in the case of at least one player. Vernon Wells, whom the Yankees recently acquired from the Angels, has a complex contract that I don’t think even Blum has dealt with accurately.

Under normal circumstances and traditional baseball practice, Wells’ 2013 pay would be a $21 million salary plus $3,642,857 for a pro-rated share (one-seventh) of the $25.5 million signing bonus in the seven-year, $126 million contract he signed with the Blue Jays in December 2006, effective starting with the 2007 season.Vernon Wells Yankees 225

The Blue Jays, however, completed paying the entire signing bonus in three installments by March 1, 2010, before he was even traded to the Angels. Therefore, contrary to the Newsday note, none of the bonus was money paid to Wells for the 2013 season.

Wells’ 2013 pay is complicated even more by his trade to the Yankees. They are paying only $11.5 million of his $21 million salary, the Angels the rest. What about the signing bonus?

In response to my question, Blum said in an e-mail, “He counts $3,187,500 for Blue Jays this year ($25.5 million signing bonus prorated over eight years (because contract was announced before opening day 2007).”

Wading through all of the payment allocation confusion, the Yankees are paying Wells $11.5 million this year, not the $24,642,857 that is listed next to his name with the Yankees.

That larger figure isn’t even the amount attributed to the outfielder. Based on what Blum said about his computation of the pro-rated share of the signing bonus, which I don’t believe should be included at all, the figure should be $24,187,500. It’s close but no cigar for Blum.

If I were dealing with the Wells contract, I would say he gets $21 million this year, with no share of the signing bonus add. I would charge $11.5 million to the Yankees’ payroll and $9.5 million to the Angels’ payroll.

But if you were like most baseball writers, you wouldn’t do anything. You’d wait for someone to do it for you.

Comments? Please send email to comments@murraychass.com.