FanPost

New ownership and how it affects payroll

I recently became interested, and subsequently conducted research, on what happens in Major League Baseball when an ownership change occurs. In particular, I measured what happens to the team's payroll in the first two seasons under new ownership, as payroll is a more direct representation of the desires of ownership than any other (that isn't subject to a lot of statistical noise) and it is applicable to the Padres in the immediate future.

The main finding:

As seen in the tables above, our methodology shows that, since 2000, an ownership change has been met with a 2% relative payroll increase in the first two seasons of ownership compared to the three years prior, on top of the standard 11.6% increase that is seen league-wide.

I go ahead and project the Padres 2013 and 2014 payroll in a number of ways, accommodating our specific circumstances -- in particular, the steady rise in payroll we're already seeing. A brief conclusion would be:

A $64.6 million figure can serve as an optimistic, but reasonable projection for the average payroll in the 2013 and 2014 seasons, if we accept that the result of our fifteen point dataset is meaningful (which is not necessarily the case).

There's a lot more written about how and why I arrive at this figure, which can be seen in its (lengthy) entirety here: http://gwynntelligence.blogspot.com/2012/07/new-owners-and-how-it-affects-payroll.html

I hope this can serve to hedge against both the overly pessimistic and overly optimistic expectations of what the new ownership will do.

This FanPost was written by a member of the Gaslamp Ball community and does not necessarily reflect the views of the Gaslamp Ball managers or SB Nation.

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