In 2008, the newly renamed Tampa Bay Rays became baseball's "It" team. The Rays went from 66 wins and last place in 2007 to 97 wins, first place in the brutal AL East, and a World Series appearance. For the next five years, the Rays posted a winning record, winning 90 to 96 games every year except one, in which they won 84. They did this despite uniformly low payrolls -- never higher than 10th in the AL, and that was when the AL had 14 teams -- that resulted from a dilapidated stadium and an indifferent fan base.
The Rays kept winning despite constantly bleeding assets. In 2011, the Rays cut their payroll from $77.5M in 2010 to $45M. In the process, they jettisoned Carl Crawford and Matt Garza, but they slipped only from 96 wins to 91 and still made the playoffs. (Unless otherwise noted, all payroll figures are from Cot's, which gives year-end payrolls and not just season-opening payrolls, like other sources.) After the 2012 season, B.J. (now Melvin) Upton (who was much better in those days), James Shields and Wade Davis were gone, but the Rays still won 92 games. Bullpen turnover was a constant; among other things, the Rays had five different closers during their six winning seasons (not to mention three more in the three years since then).
The winning stopped after the 2013 season. Of all the good players they'd developed or acquired, the only one they'd managed to retain longer than the minimum time was Evan Longoria, who'd signed an extension that set the standard for "team-friendly." At the 2014 trade deadline, they dealt ace David Price. After the season, Ben Zobrist departed. The team's GM and
head physician manager also left for greener pastures. Yet the team still won 80 games and stayed on the edge of the playoff race thanks to a continuing supply of pitchers and under-the-radar pickups like (yes indeed) John Jaso, Logan Forsythe and Brandon Guyer. But inspired management decisions weren't enough to keep them in contention. By the trade deadline in 2016, they were 19 games under .500. Not only did they trade Matt Moore, as they did Price, with a year and two months of control left; they fielded offers for Jake Odorizzi and Chris Archer, each of whom has over three years of control remaining. Although the latter two weren't traded, the Rays are expected to field offers for them during the off-season. The financial impediments have gotten so great that the team has to look several years down the road to see any prospect of contention and, obviously, knows it won't be able to retain anybody who starts to get expensive by then.
The Pirates aren't the Rays. They have PNC Park and a fanbase that's displayed enthusiasm that hasn't been seen in Tampa. The Rays have never reached 1.9M in attendance. The Pirates have topped 2M in every year starting in 2012. They fell just short of 2.5M in 2015 and will probably see just a modest decrease in 2016. Unlike the Rays, they've managed to sign a number of their core players -- Andrew McCutchen, Starling Marte, Gregory Polanco, Francisco Cervelli and Josh Harrison -- to extensions. Their payroll the last couple years has been about $20M more than the largest payroll the Rays have had. So they're not in the same position as the Rays.
Or are they? The Rays' payroll was 20th in MLB in 2010 and 24th in 2012. (Cot's doesn't have rankings for 2016 yet.) The Pirates' payroll hasn't ranked higher than 24th, where it was in 2015, since 2001. The Pirates like to talk about how they've increased payroll every year for a number of years, but so has everybody else. Since 2011, to pick an arbitrary date, the average MLB payroll has increased about $30M, from $100.4M to $130.1M in 2016. (The former is based on full year payrolls and the latter, obviously, isn't. Using opening day payrolls across MLB, though, shouldn't make much of a difference because most in-season payroll changes result from players moving between teams, so the average should remain about the same either way.) The Pirates' payroll has increased from $51.8M in 2011 to $96.4M currently (i.e., post-trade deadline), as estimated by Pirates Prospects. That's an increase of $44.6M, more than $14M above the average. (The Pirates' current payroll, by the way, due to their dumping of Francisco Liriano's salary, exceeds the final 2015 payroll of $95.9 by only $500K, which essentially is no increase at all.)
But is it really that much of an increase? Major league payroll isn't the only variable cost for baseball talent. I'm specifying "variable" to exclude minor league salaries, because all teams pay their minor leaguers basically beans, so there's little team-to-team difference. Bonuses for amateur talent, however, can be highly variable. In 2011, the Pirates spent $17M on draft bonuses, according to Baseball America. In 2016, thanks to MLB's efforts to curb the competitiveness of lower-revenue teams and also to the Pirates' later draft position, the Pirates spent only $6.4M in draft bonuses. (Both figures exclude most bonuses paid to non-above-slot, later-round picks, who seldom receive more than a few thousand dollars.)
On the international front, the Pirates in 2011 spent $2.3M on four players: Harold Ramirez ($1.05M), Elvis Escobar ($570K), Cesar Lopez ($600K), and Leandro Rodriguez ($80K). They signed a number of other foreign players that year, but the bonuses aren't publicly known, so the final figure has to be somewhat higher. In 2016, despite the fact that bonuses in Latin America have skyrocketed in the last few years, we know that the Pirates won't spend more than $2.04M because that's their MLB-assigned bonus pool. The Pirates have never exceeded that pool and aren't expected to this year. They also haven't been associated with a single top international prospect, including none on Baseball America's list of the top 50 international prospects.
So the total increase in the Pirates' variable, talent-related spending is closer to $33M. Meanwhile, the MLB-wide increase is probably a little more than $30M because, while draft spending is almost exactly what it was five years ago, spending on international amateurs is much higher. (I don't have exact figures here, but to take one example: According to Baseball America, prior to 2015 there were 31 international bonuses of $2M or more ever. In 2015 alone, there were 13.) So the Pirates' increase in spending on baseball talent over the past five years probably hasn't exceeded the average increase across MLB by more than a meaningless amount, if at all.
But even that's misleading because in 2011, the Pirates were still in teardown mode. After the current front office took over and traded away most of the team's veterans, the payroll hit bottom in 2010 at $44.1M. It increased by about $7.7M in 2011. At that point it was still artificially low; it didn't indicate the team's spending power and therefore wasn't indicative of the team's potential financial competitiveness. This is obvious from the fact that the 2011 payroll was still more than $10M below the franchise's previous high, set way back in 2003. Of course, the 2003 payroll apparently was more than the team could afford and resulted in the infamous salary dump trade of Aramis Ramirez. It still clearly indicates, though, that the Pirates were spending well below their capability in 2011. For one thing, MLB central revenues increased dramatically in the intervening years, so if the Pirates went a little overboard in 2003, they certainly could have afforded a payroll at or near that level by 2011, yet they were spending over $10M less. The bottom line is that the Pirates' spending on baseball talent in 2016 had, over the previous five years, probably increased by less over what it could have been than the average team's spending actually did increase. Or to put it a little less cryptically, the Pirates have lost ground to the rest of MLB over the last five years.
There's really no way I can pretend to resolve the question whether the Pirates' financial issues are self-imposed or not. It's an impossible question to resolve because adequate data just isn't publicly available. The Bob-Nutting-as-Snidely-Whiplash meme doesn't lend itself to adult discussion, anyway. One simple comparison leaves me with the firm conviction, though, that they could be doing more. While the Pirates' payroll was increasing from $51.8M in 2011 to $96.4M now, the Kansas City Royals' payroll went from $44.6M in 2011 to $131.5M on opening day in 2016. (I don't have a post-deadline figure for the Royals, but I don't believe they changed their payroll much.) That's an increase that almost exactly doubled the amount of the Pirates' increase. Both teams are ostensibly in contention mode right now, so the $35M difference in their payrolls can't be accounted for by the teams being in different places on the success cycle. I can't imagine any argument that would explain why the Pirates can't maintain a payroll that's more than 73% of what the Royals can manage.
In Part 2, I'll address the on-field implications of all this and, specifically, why the Pirates may be the next Rays.