Tuesday, August 5, 2008

Money don't grow on trees

At the dawn of each new season, franchise budgets are the first thing decided upon by general managers. If calculated incorrectly, budget decisions can have a major affect on a franchise -- whether that means having the cap space to add an extra piece through trade or free agency, having the means and proper scouting to draft the right players or sign internationals, keep the team healthy or hire the right coaches depends on the team and the circumstances around it. Every season, one of the most important decisions a GM will make is the very first one -- budget numbers.

I stumbled upon some free time and began comparing budget numbers from season 2 to season 3 and found a few interesting things.

Last season saw 17 franchises (slightly more than half the league) transfer money from one portion of their budget to another. Certainly not every team was forced to make the transfers due to bad budgeting. Some were able to unload salary and thus transferred the freed-up cash to the prospect or coaching pool. Whatever the reason, teams were losing half of whatever they transferred. So if 17 teams all made some sort of payroll transfer last season, exactly how much money was thrown away and who were the teams that wasted the most dough?

Roughly $76 million. That's how much teams lost in budget transfers in season 2. The biggest money waster in that pool? The Atlanta Bandits, who transferred about $34 million from payroll to prospect, costing them $17 million in the process. The Bandits weren't the only double-digit money wasters in season 2 as New York and Vancouver threw away $14 million and $12 million in transfers respectively. Chicago wasted $9 million in transfers and Ottawa flushed $5 million down the drain to round out the top five.

Now certainly some teams plan to spend more than the $20 million they're allowed to budget for in the prospect pool, so that's one reason for the enormous transfer amounts. But there were also plenty of teams transferring money into their player payroll due to miscalculations.

Another interesting find when comparing budget numbers from last season to this season is that of the 32 teams in The Bigs, 20 budgeted for payrolls of at least $80 million last season. This season? Only 15 teams have budgeted for $80 million payrolls or higher. A sign of GM's getting better at setting their budgets? Well unless we know the direction of each franchise and the intentions of every GM, we can't be sure.

We do know that only six teams have budgeted to spend $90 million or more on player payroll this season, with the highest being Nashville at $107. Last season, only four teams budgeted for that kind of player payroll, though Salem would eventually jump into the $90 million-plus pool via transfers. We've also already seen six teams transfer funds in season 3 and we haven't even begun spring training yet.

So what does all of this mean? Well, I don't know. I was just bored and found it interesting. Do with this information what you will.

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