Payroll and the Internal Salary Cap

It's time to debunk a myth that has been perpetuated by the Atlanta Braves since Ted Turner stopped owning the team. In his autobiography Built to Win, John Scheurholz stated that one offseason he leaked to the media that he was trying to run the Braves on a budget when negotiating to resign Jeff Blauser, and Ted Turner called him and frankly said, “John, what’s this shit I read about a budget? You wanna sign Jeff Blauser, sign him!”  Oh how I miss Trillionaire Ted.

Today I stumbled across some news that has me quite frankly pissed off.  In discussing salaries and league revenues with a friend across different sports, I quickly went to Forbes' annual franchise valuations expecting to see that the Hawks and the Braves have relatively the same amount of revenues which is why the NBA salary cap is a farce.  What I found shocked me:
According to Forbes the Braves ranked 10th in baseball in total revenues in 2013 and 4th in operating income (which is essentially profit).  The Braves total revenue was approximately $253 million last season.  The total team payroll was somewhere around $105 million.  Of course I recognize that there are numerous other things besides team payroll that the franchise must pay for, such as management, scouting, travel, and maintenance.  Which is why I think the "operating income" figure is much more important.  That figure, again according to Forbes, was $38.3 million.  Let me put that figure into context - after the dumpster fires that were the B.J. Upton and Dan Uggla contracts, the Braves still would have had enough money to turn a $10 million profit AND sign 2012's #1 free agent, Zack Greinke. 

Here's a quote from last week on atlantabraves.com: "Braves need to be thrifty as Deadline approaches." Apparently the Ervin Santana signing pushed the Braves beyond the team's payroll constraints already.  [The article also notes the injuries to Beachy, Medlen, and Floyd, who combine to make $11.25 million this season.  Unfortunately each of these players was likely not insured by the Braves because of the expensive premiums that are generally required by insurance companies for pitchers with preexisting injuries.  I realize that this must be the case since otherwise I presume that articles discussing the Braves payroll would discuss those insurance payments which are between 50-80% for a season ending injury.] 

And of course I finally get to my main point: the Braves should have acquired David Price. Or Jon Lester.  Or at least made a run at them.  There are two camps right now in reacting to the Price-to-Detroit deal.  The first group looked at the deal and immediately thought that 1.5 years of David Price should have returned significantly more than Drew Smyly, Nick Franklin, and Willy Adames.  The other camp says that minimum salaried, league average players should not be undervalued and that Adames could turn out to be the Elvis Andrus of the deal.  I fall somewhere in the middle (Adames could be great, Smyly is decent but cheap, Franklin is blah), but more importantly I think that certainly this deal would have been available to Tampa in December. 

Nonetheless, my initial reaction still holds: the Braves could have easily trumped this offer.  Quite frankly I think that offering Jose Peraza straight up is a better long-term offer, but I recognize there is significantly less risk in Smyly (even though he's a pitcher) than in Peraza.  Of course this means that I think Peraza is highly valuable.  Instead, the cache of minor league arms the Braves have could easily have been tapped in a Price deal with a David Hale sweetener for big league caliber pitching. 

This however is not a post about the trading deadline.  This is to point out that in order to make tens of millions per year the Braves have self-imposed a salary cap, which to quote Ted Turner is complete "shit."