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Projecting Payrolls: Houston Astros

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Though Spring Training is underway, let’s move on to our 15th team payroll projection. Below find the links to the earlier posts in this series.

Philadelphia Phillies
Los Angeles Dodgers
Los Angeles Angels
Atlanta Braves
New York Yankees
Chicago White Sox
Boston Red Sox
Minnesota Twins
Milwaukee Brewers
San Francisco Giants
St. Louis Cardinals
Chicago Cubs
New York Mets
San Diego Padres

If you have questions about financial information made available to the public and the assumptions used in this series, please refer to the Phillies piece linked above.

Today, we look into a club whose rebuild earned a World Series win, yet who finds itself with a rotation in flux: the Houston Astros.

Team Leadership

The Astros franchise got off to a bit of a rough start, beginning play in 1962 as the Colt .45s, but the team was obtained by GE Credit and Ford Motor Credit just over a decade later in 1975 as a result of crippling debt related to the building of the Astrodome. Thankfully for the future of baseball in Houston, former Yankees minority owner John McMullen purchased the club in 1979 and oversaw a period of relative stability before selling to Drayton McLane in 1993. McLane’s period of ownership was filled was success, from the Killer Bs to the 2005 National League pennant winners, Astros fans became accustomed to winning. Fans could have been understandably concerned when McLane sold the club at the end of 2011 to Houston businessman Jim Crane. While Crane’s ownership tenure got off to a rocky start, losing 218 games over his first two seasons, the results have been stellar over the past four seasons, particularly the team’s 2017 championship.

This year’s team has been assembled by general manager Jeff Luhnow, who took the reins in Houston in December 2011, shortly after Crane’s purchase was finalized, after nearly a decade running the Cardinals’ scouting department. Luhnow utilized his drafting prowess over his first few drafts to add stars like Carlos Correa, Lance McCullers Jr., and Alex Bregman, with others such as Forrest Whitley and Kyle Tucker close to contributing. Infamously, Luhnow also whiffed on a pair of number one overall picks in right-hander Mark Appel and left-hander Brady Aiken, though Luhnow salvaged his losses by flipping Appel to Philadelphia as a minor piece in the Ken Giles trade and recouping a compensation pick for Aiken going unsigned that became Bregman.

On the whole, it’s difficult to argue with the results that Crane and Luhnow have compiled: they tanked their way to a miserable 176-310 (36.2 percent winning percentage) over their first three years followed by a stellar 374-274 (57.7 percent winning percentage) mark over the last four years.

Historical Payrolls

Before hitting the numbers, please recall that we use data from Cot’s Baseball Contracts, we’ll use average annual value (“AAV”) on historical deals but actual cash for 2019 and beyond, and deferrals will be reflected where appropriate. And, of course, the value of examining historical payrolls is twofold: they show us either what type of payroll a team’s market can support or how significantly a given ownership group is willing to spend. In the most useful cases, they show us both. We’ll focus on a 15-year span for the Astros, covering 2005-18 for historical data as a means to understanding year 15: 2019. This period covers the transition from McLane to Crane ownership and includes a tank for the ages with winning teams on either side, so this provides an excellent window into what to expect from the club as they rev up to contend again. We’ll also use Opening Day payrolls as those better approximate expected spending by ownership.

The Astros were in the top half of leaguewide spenders each year from 2005 through 2010 before their 2011 dip. Then Crane tore the whole operation down to the studs, reaching a comical low in 2013. The 2013 Astros began the year with just five players earning north of $1 million — Bud Norris, Carlos Pena, Jose Veras, Erik Bedard, and Wesley Wright — yet Norris, Pena, and Veras were jettisoned in July while Wright was shipped out in mid-August.

The Astros understandably came under fire for their extremely low payroll at the time, but the low spending was justified by the fact that Crane incurred $275 million in debt to purchase the team and by Crane’s own promise that “once our minor league system is filled in, we’ll move up into the top five or 10 in payroll.” It took a few years for the payroll to reach such lofty heights, but by 2018, Houston found themselves with the seventh-highest end-of-season payroll.

Like most teams, the Astros haven’t been that close to the luxury tax threshold, but that changed in 2018 and figures to be a relevant consideration in 2019 as well. While the Astros never blew past their international amateur bonus pools to the extent that some other teams did, they did incur the top penalties and restrictions in 2016, showing a willingness to spend internationally. Nevertheless, their Major League payrolls present a good picture of baseball operations spending.

Future Liabilities

Get ready for Jose Altuve and a whole bunch of soon-to-be free agents.

We’ll start with Altuve, the 2017 American League Most Valuable Player and heart and soul of the franchise. His contract features one more discounted year before leaving $130 million on the books from 2020-24. As long as Altuve continues to produce like an MVP, I suspect that Houston won’t complain.

Moving to the top of the list, Houston has just one more year with Justin Verlander under contract. The team’s marquee trade acquisition in August 2017 after a period of struggles with the Tigers, Verlander was reinvigorated and returned to Cy Young caliber form. Owed a net of $20 million thanks to a contribution from Detroit, Verlander represents a good bargain in 2019 in advance of his first-ever walk year. He did originally have a vesting option for the 2020 season, but Verlander waived the option to facilitate the trade.

Next we find a trio of outfielders with two remaining years of control. 2018 provided a great, and timely, reminder of Michael Brantley’s offensive prowess when healthy, and he figures to set the table near the top of the lineup for the next two seasons. Joining him will be Josh Reddick, whose average power and above-average on-base ability had been a given for years before his BABIP against right-handed pitching surprisingly cratered in 2018. He’s no star, but he’s a good bet to rebound to be an average starter in 2019. Finally, George Springer slipped in the power department in 2019, but his ability to get on base and play a solid defensive outfield kept him valuable. If the power returns, he’ll be a star once again as he nears free agency.

Yuli Gurriel has underwhelmed somewhat since arriving from Cuba, and at 34, there’s not much reason to think he’ll improve dramatically going forward. He’s solid as a regular, though Tyler White’s offensive prowess could render Gurriel susceptible to losing some playing time.

The majority of the remaining guaranteed contracts are one-year commitments. Smith unfortunately ruptured his Achilles in December 2018, so he won’t be expected back until late summer, if at all. At this point, it’s fair to wonder if he’ll be able to contribute to the 2019 team. Chirinos, Miley, and Rondon should each play a role on the 2019 squadChirinos may get a crack to take the everyday job, but Houston would probably prefer it if Max Stassi’s 2018 breakout — he posted the second highest framing runs added per Baseball Prospectus despite playing a part-time gig — was a harbinger of things to come. Miley could find himself in the rotation’s fifth spot if Verlander and Gerrit Cole stay healthy while Collin McHugh and Josh James make successful returns to starting. And Rondon remains best-suited for a setup role rather than closing, a job he should stick with provided that Roberto Osuna remains entrenched.

The final contract offers some forward-looking control. New Astro Aledmys Diaz will head to arbitration should the team elect to keep him, although he’ll need to prove his health after spending time on the disabled list in each of his first three Major League seasons.

Houston has done well in avoiding dead money with only the final buyout payment for Singleton allocated to this year’s payroll.

Lest you find yourself wondering why the Astros are such a powerful ball club, let’s take a look at one of the most robust arbitration tables in the game:

There’s some serious star power here.

We’ll start with the starting pitchers. Much like Verlander before him, Cole appears to have been invigorated by his move to Houston. He pitched like an ace in Pittsburgh in 2015, then pitched well but not nearly as well in 2016-17. With the Astros in 2018, Cole was an ace once again. McHugh lost most of his 2017 to injury, then found his rotation job claimed by Cole last year. With Charlie Morton (surely) and Dallas Keuchel (presumably) out the door, McHugh figures to have first dibs on a starting job after excelling in relief last season. Unfortunately, McCullers won’t help his case in 2019 as he’ll spend the year recovering from November 2018 Tommy John surgery.

The majority of the Houston bullpen is listed in the table above. It all starts with Osuna, who starred after arriving via trade from Toronto at the end of his 75-game suspension for violating Major League Baseball’s policy on domestic violence. His baseball abilities are indisputable. His off-the-field activities present the club with significant risk, both with regards to public relations and roster construction. Even in his mid-30s, Harris represents superb value, especially given his ability to stifle batters of both handedness. He is likely in line for a big contract next offseason. Peacock and Pressly both figure to pitch a lot, with Houston hoping to get a lot of innings out of Peacock and high-leverage innings from Pressly. Finally, Devenski starred in long role in 2016, excelled in 2017 — though to a lesser degree than the prior year — then floundered in 2018. He still has some time to kill before free agency.

We close the arbitration table with the two position players. Correa, the 2015 American League Rookie of the Year, produced three nearly identical excellent seasons from 2015-17 before an injury-marred 2018. Just 24, Correa likely has years of stardom ahead of him. Marisnick, on the other hand, seems destined for a part-time gig that accents his defensive and baserunning skills. Outside of 2017, he hasn’t shown enough with his bat to warrant a more significant share of time, especially against same-sided pitching.

What Does Team Leadership Have to Say?

To Crane’s credit, when he stripped the club down to next to nothing, he promised that he’d spend when it made sense…and then he did. But what about pushing payroll even higher? Crane has shown a willingness here, too, commenting in December that, “I’d say if the right situation came long — certainly we’re not going over [the luxury-tax threshold] — but we could move closer to that. We were pretty high up in the food chain last year. A lot of teams realize the penalty is pretty severe if you go over. We’ll stay within the strike zone.” Luhnow hasn’t been as open about the team’s spending plans, but Crane provided plenty of guidance.

After living through a miserable rebuild, Crane seems keenly aware of the value of contending seasons and willing to spend to supplement his winning teams.

Are the Astros a Player for Bryce Harper?

I think that the Astros could be lurking in the shadows for Harper.

The team is smack in the middle of their window of contention, but having just lost Morton and (presumably) Keuchel from their rotation, they could use a boost. They currently have Brantley and Reddick manning the corner outfield spots, but Reddick is eminently tradeable. And that’s why Harper could fit so easily. If Houston offloaded Reddick and a portion of his $13 million annual salary for 2019 and 2020, the cost of Harper would be mitigated. With Harper likely obtaining a contract with opt-out clauses starting in the early 2020s, signing him allows the team to maximize their current window without seriously jeopardizing their ability to keep Altuve, Correa, and Bregman together for a decade or more.

The luxury tax is a serious consideration, but it should be avoidable. I currently have the team’s luxury tax payroll at $181.2 million. If the Astros followed the blueprint above, jettisoning Reddick and signing Harper for, say, $30 million per year, they still might be able to stay south of the tax line.

The Astros have looming rotation questions with the free agencies of Verlander and Cole coming, but building around an offensive core of Altuve, Correa, Bregman, Brantley, Springer, White, and Harper…whew.

What Will the 2019 Payroll Be?

How high is Crane willing to go?

As of now, I have the Astros at $164.9 million with the aforementioned $181.2 tax number. After sporting a $160.4 million payroll in 2018 and mentioning that the books have room to expand, there’s surely room for more.

Projecting just how high that number goes is tricky. The 2018 payroll was achieved by the age-old formula of 2013 payroll times five plus $4 million. What does that tell us for 2019?

All kidding aside, Houston is primed to take another step. Harper represents approximately three additional wins over what Houston figures to get out of right field in 2019, and if Reddick could be unloaded, it makes tons of sense. However, Houston has made such a move yet, so it stands to reason that perhaps Crane isn’t interest in pushing payroll quite this high.

So let’s split the difference here between what it would take to add Harper and where payroll currently stands. This represents a 9.2 percent increase of 2018 spending, a sensible amount for a team in the midst of their best-ever window of contention.

Projected 2019 Payroll: $175 million

Projected 2019 Payroll Space: $10.1 million

Projecting Payrolls: San Diego Padres

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As we still continue to wait for the new homes of Bryce Harper and Manny Machado, let’s move on to the 14th team payroll projection. Below find the links to the earlier posts in this series.

Philadelphia Phillies
Los Angeles Dodgers
Los Angeles Angels
Atlanta Braves
New York Yankees
Chicago White Sox
Boston Red Sox
Minnesota Twins
Milwaukee Brewers
San Francisco Giants
St. Louis Cardinals
Chicago Cubs
New York Mets

If you have questions about financial information made available to the public and the assumptions used in this series, please refer to the Phillies piece linked above.

Today, we look into a club whose rebuild has yielded one of baseball’s top farm systems: the San Diego Padres.

Team Leadership

In the realm of sports franchise ownership, the Padres got off to a rough start. C. Arnholdt Smith founded the team in 1969, but when software executive John Moores bought the team in 1994, he became the fourth distinct owner in just a 25-year span, an unseemly rate of turnover for the club. Moores held the club as majority owner for a significant period of time, but it wasn’t without its own upheaval: in 2009, a group led by agent Jeff Moorad purchased a significant minority stake in the Padres with the intention of completing the remaining purchase of the team in the coming years. Instead, after years of trying by Moorad, the team was sold in 2012 to an ownership group led by Ron Fowler (who now serves as chairman) and Peter Seidler (presently titled the organization’s general partner).

Since August 2014, the baseball operations department has been headed by executive vice president and general manager A.J. Preller. Preller inherited a team that had won 75 games per year from 2011-14 and in the first four years under his leadership, the team went on to win just 70 per year. Nevertheless, Preller received an extension in October 2017 due in large part to his efforts building a successful farm system.

The team is yet to make a postseason run under Preller (or Fowler/Seidler, for that matter), but to be fair, they won just one playoff game in the 14 years prior to the 2012 sale.

Historical Payrolls

Before hitting the numbers, please recall that we use data from Cot’s Baseball Contracts, we’ll use average annual value (“AAV”) on historical deals but actual cash for 2019 and beyond, and deferrals will be reflected where appropriate. And, of course, the value of examining historical payrolls is twofold: they show us either what type of payroll a team’s market can support or how significantly a given ownership group is willing to spend. In the most useful cases, they show us both. We’ll focus on a 15-year span for the Padres, covering 2005-18 for historical data as a means to understanding year 15: 2019. This period covers the transition from Moores to Fowler and Seidler’s ownership and includes Preller’s first attempt to buy a winner, so this provides an excellent window into what to expect from the club as they rev up to contend again. We’ll also use Opening Day payrolls as those better approximate expected spending by ownership.

Although the Padres have never been a top spender among Major League clubs, payroll underwent a meteoric rise during the first few years under new ownership, nearly tripling from 2010 to 2015 before tumbling again when Preller’s first attempt at constructing a winner backfired.

The Padres have never come remotely close to incurring a luxury tax bill, oftentimes ending with a payroll $100 million under the tax line. However, the team became a major spender on international amateur talent prior to the new system clamping down on substantial expenditures in that space, giving out the following bonuses in the 2016 class alone: $11 million to Cuban lefty Adrian Morejon, $4 million to Dominican shortstop Luis Almanzar, $3 million to Cuban righty Michel Baez, and at least five other bonuses between $1 million and $2 million each. Despite the paltry annual Major League payrolls and the smaller media market when compared to the behemoths of baseball, the Padres under Preller approached the international amateur space like the Yankees, Red Sox, Dodgers, and Cubs until a new Collective Bargaining Agreement closed that door. A major chunk of franchise spending was embedded here.

Future Liabilities

The Padres sheet is really interesting. Let’s take a look and then examine the numbers.

Let’s look at this one backward, from the bottom to the top.

The Padres have a significant chunk of their 2019 spending tied up in players who won’t be wearing Padres uniforms this year. Hughes appears to be the biggest number at first glance, but thanks to the contribution from the Twins, San Diego owes him just $7.25 million. More importantly, the purpose of that deal wasn’t Hughes: it was San Diego’s ability to draft and sign Texas Tech oufielder Grant Little with the 74th pick in the 2018 draft, acquired from the Twins alongside Hughes.

The largest commitment belongs to Hector Olivera at $16 million over the next two years. Signed by the Dodgers, Olivera was traded to the Braves, suspended for domestic violence, and then the Padres acquired his contract when offloading Matt Kemp’s remaining deal to Atlanta.

Makita failed as a bullpen import last year, while Wood failed as a trade import in 2017, leaving 2018 dead money and the buyout of his 2019 option that was split with Kansas City. Neither amount is significant.

Finally, Gyorko, Shields, and Richard also won’t play for the Padres in 2019. For Gyorko and Shields, this year represents the final year of multi-year payouts of bad decisions. For Richard, San Diego caught a break when Toronto claimed him off of waivers and agreed to take on half of his $3 million guarantee for 2019.

Add it all up and the net dead money on the San Diego books is $25.9 million in 2019, $8.5 million in 2020, and nothing beyond. Keep this in mind.

Small, short-term commitments to Kinsler and Stammen don’t move the needle much, though both figure to get a chance to play meaningful roles for the team in 2019.

Richards, on the other hand, gets yet another chance to show that he can get and stay healthy over the course of a southern California season, this time with the Padres instead of the Angels. That chance, of course, will come in 2020 after Richards underwent Tommy John surgery in July 2018.

Finally, we hit the two big numbers: Myers and Hosmer. Myers showed tremendous promise early in his career with the Rays and he excelled with San Diego in 2016, totaling 28 homers and steals while getting on base well. Unfortunately, nagging wrist injuries an an inexplicable experiment at third base have hampered his overall value in recent years. Just 28, Myers still has time to re-emerge even if the early returns on his extension have been poor. Add it all up and he has $72.5 million remaining over the next four guaranteed years, including his 2023 buyout. Not good. But not crippling.

Hosmer, similarly, provided terrible early returns on his big deal. He comically has an average WAR in even-numbered years of -0.4 compared to 2.9 in odd-numbered years, including 3.6 over his non-rookie odd-numbered years. I’m not here to stump for the even-year/odd-year split, but Hosmer has shown a trend. The Padres will surely hope to see a massive rebound from their marquee investment in 2019. Like Myers, Hosmer is still in his 20s (29). Hosmer is due $80 million over the next four years before he decides whether to hit free agency in advance of his age-33 season or keep his three-year, $39 million golden parachute.

The Padres arbitration table is arguably the leanest one we’ve seen thus far in the series:

Despite being 5’10” and nearly 32 years old, Yates figures to occupy a key role in 2019 coming off of a stellar 2018 that saw peak production and a repeat of his 2017 velocity jump. Yates figures to play an important role for the team, either as the closer or as this year’s Brad Hand, fetching a sizable return in July.

Hedges is an excellent defensive catcher and provided offense around the league average for his position last year.

Erlin excelled in a swing role in 2018 returning from Tommy John surgery, coming in under one walk per nine innings while setting career highs in velocity on every pitch. He’s worth keeping an eye on in 2019.

The remaining names — Jankowski, Mitchell, and Garcia — simply don’t move the needle much (unless the needle is moved by pure speed, in which case Jankowski moves it a ton).

What Does Team Leadership Have to Say?

At a time when most franchises are talking about payroll efficiency and ducking the luxury tax, Preller’s end-of-season comments were a breath of fresh air. In looking to 2019, Preller stated that “I feel like we’re going to have some financial flexibility, because a lot of the players are younger players. And we’re at that point from a plan standpoint where we’re going to have to supplement from the outside — be it the free agent or trade route. We’ll look to do that in the next few months.”

Fowler and Seidler, on the other hand, made waves this offseason by opening the team’s books to the San Diego Union-Tribune and revealing that they are (i) primarily focused on reducing the team’s debt load, and (ii) still hung up on the inefficient use of cash from 2015. Fowler mentioned that 2015’s $40 million payroll bump yielded just $15 million in additional ticket/concession/merchandise revenue, continuing that “It really convicted me…We had a blip in terms of revenue…(and) we dug a big hole for ourselves.”

That does not sound like an ownership group interested in spending big dollars anytime soon.

Are the Padres a Player for Bryce Harper or Manny Machado?

Yes. Definitely. Or at least they definitely should be.

The Padres don’t immediately make oodles of sense as a player at the top of the market, but they check off every other box for being a team that pursues one of these elite talents.

First and foremost, ownership has shown the penchant to spend on a winner as Preller’s 2015 experiment showed.

Second, ownership has shown a penchant to spend on “the right player” as last year’s massive deal for Hosmer showed.

Third, the Padres have a window of contention that will blow open in the next year or two.

Fourth, thanks to shrewd trades and superb drafting and development, that contender will be fueled almost entirely by players making the league minimum. The Padres have assembled one of the truly great collections of farm talent in the modern history of the game. I could go into great detail here, but instead, I’ll let the introduction to the club’s top prospect list over at Baseball Prospectus do the talking: “their full-slot, top-ten first-round pick from this year’s draft is ranked 12th overall.” If you have any interest in prospect accumulation, take a look at the Padres system and how it was built.

Fifth, they have southern California geography on their side with both a pleasing climate and proximity to Harper’s home in Las Vegas.

Sixth, they have a desperate need for an impact bat (or two) and the two spots that make the most sense for housing this bat are (i) outfield, and (ii) shortstop or third base (wherever stud infielder Fernando Tatis Jr. isn’t playing).

Seventh, outside of Hosmer and Myers, the Padres don’t have any major salaries on the books and their current Major League players heading into arbitration in the next few years won’t receive substantial awards. There simply isn’t much in the way of earmarked money going forward, be it currently guaranteed or coming through arbitration.

Eighth, the immediate payoff could be significant as the Rockies stood pat this winter aside from Daniel Murphy, the Diamondbacks kicked off a rebuild, and the Giants have thus far made modest additions.

Considering the above factors and the glacial pace of the Harper/Machado market to date, it should come as no surprise that the Padres began openly poking around the market for the superstars last week.

What Will the 2019 Payroll Be?

At this stage in the offseason, payroll is quite low at $87.6 million. This would represent a 6.8 percent drop in payroll from 2018’s Opening Day payroll. As a reminder, 2018’s Opening Day payroll was 5.3 percent below 2016’s opening day payroll. And 2016’s Opening Day payroll was 8.4 percent below 2015’s. Add it all up and this year’s Opening Day payroll would be 19.2 percent below 2015’s high water mark. In the estimate of Forbes, the franchise’s value has increased over 29.9 percent during that time.

So is this it? Is this the new normal for the Padres, same as the old normal?

Something doesn’t add up to me. The Padres sported a payroll north of $100 million in 2015 and spent nearly $100 million in 2016 while spending about $25 million on international amateurs, all while saddled with a much more notable debt burden.

There’s a scenario in play where the organization truly doesn’t want to spend, thus keeping payroll at its current level below $90 million and saving cash for…well, I’m not sure exactly. But that doesn’t line up with recent practice. The club lacks major commitments going forward and needs a big boost with a front office and ownership group that has shown a willingness to make a splash. I bet Fowler and Seidler authorize another big swing.

Keep in mind that the numbers projected below would still be below 2015 and 2016 aggregate spending levels…and that the team sees more than $20 million in dead money drop off of its books next year.

Projected 2019 Payroll: $115 million

Projected 2019 Payroll Space: $27.4 million

Projecting Payrolls: New York Mets

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As we continue to wait for the new homes of Bryce Harper and Manny Machado, let’s move on to the 13th team payroll projection. Below find the links to the earlier posts in this series.

Philadelphia Phillies
Los Angeles Dodgers
Los Angeles Angels
Atlanta Braves
New York Yankees
Chicago White Sox
Boston Red Sox
Minnesota Twins
Milwaukee Brewers
San Francisco Giants
St. Louis Cardinals
Chicago Cubs

If you have questions about financial information made available to the public and the assumptions used in this series, please refer to the Phillies piece linked above.

Today, we look into a club that has surprised the baseball world move after move this winter: the New York Mets.

Team Leadership

Despite having been around for 57 seasons, the Mets have really had only three owners. They were founded as an expansion franchise in 1962 by Joan Payson with her widower running the show for five years after her death before he sold the club to publisher Nelson Doubleday’s company in 1980. Doubleday individually grabbed the club along with Fred Wilpon in 1986 and Wilpon, along with his business partners, bought out Doubleday in August 2002 with the Wilpon ownership group assuming full control. To say that Wilpon ownership got off to a bad start is quite an understatement as the team made just one trip to the playoffs from 2003-14, memorably falling to St. Louis in a seven-game NLCS in 2006 before a pair of heartbreakingly close playoff misses in 2007 and 2008. The club was rejuvenated, fueled by elite young pitching, in 2015, reaching the World Series and following that up with another playoff trip in 2016, albeit just a Wild Card Game loss.

Following an eight-year run during which Sandy Alderson rebuilt the club into a true contender, Wilpon went outside the box — way outside the box — and hired former Creative Artists Agency player agent Brodie Van Wagenen to be the new general manager in October 2018. Although his hiring was initially met with some skepticism and questions about possible conflicts of interest, Van Wagenen has set the baseball world on fire with a series of marquee moves, as we’ll discuss below.

Historical Payrolls

Before hitting the numbers, please recall that we use data from Cot’s Baseball Contracts, we’ll use average annual value (“AAV”) on historical deals but actual cash for 2019 and beyond, and deferrals will be reflected where appropriate. And, of course, the value of examining historical payrolls is twofold: they show us either what type of payroll a team’s market can support or how significantly a given ownership group is willing to spend. In the most useful cases, they show us both. We’ll focus on a 15-year span for the Mets, covering 2005-18 for historical data as a means to understanding year 15: 2019. This period covers nearly the entirety of Wilpon’s sole ownership, so this provides an excellent window into what to expect from the club. We’ll also use Opening Day payrolls as those better approximate expected spending by ownership.

Wilpon kept spending largely consistent during the early days of his sole ownership, but payroll jumped in a big way to fuel the successful teams of the late 2000s. As that roster aged and faded, the payroll dipped substantially, including a massive one-year drop of nearly $50 million before the 2012 season. Payroll largely stagnated until a return to significant spending in the 2016 season as the Mets attempted to return to the World Series, followed by another jump before the 2017 year.

The Mets paid a $1.1 million luxury tax bill for the 1999 season under the previous tax regime, but that was the only year in club history during which they’ve incurred the tax. They came in narrowly under the threshold in 2003 by less than $1 million, but they haven’t come particularly close to the tax line over the past 15 seasons. The club has regularly played in the international amateur space, though they’re not known for the type of boundary-pushing spending that teams like the Yankees, Red Sox, Dodgers, and Cubs have employed.

Future Liabilities

Mets spending in 2019 is set to take a new leap, setting a new franchise high by a solid margin. Unsurprisingly, a bevy of guaranteed deals lead the way.

Despite some huge numbers for Cespedes and Cano, the club is far from hamstrung by its current deals as there is very little money committed beyond the 2020 season.

Speaking of Cespedes, he provides unquestioned offensive firepower…when he’s on the field. Since being acquired by the Mets at the 2015 trade deadline, signing a new deal with the club before the 2016 season, opting out, and securing a long-term deal covering the 2017-20 years, Cespedes has blasted his way to a powerful .282/.346/.543 batting line. However, Cespedes has seen his games played dwindle each year, tumbling from 159 in 2015 to 132 in 2016, 81 in 2017, and finally just 38 last season. The front office has given repeated indications that any contribution from Cespedes in 2019 will be gravy given his lengthy recovery timeline following heel surgery.

While Cespedes has struggled to stay on the field, new Met Cano has been a picture of consistency, playing at least 156 games each year from 2007-16 before dipping all the way to 150 games in 2017. However, Cano was slapped with an 80-game suspension last year after a test revealed the presence of a diuretic in his system before undergoing arthroscopic knee surgery in December. It’s likely Van Wagenen’s tenure will be defined in large part by how Cano performs in his new (old) city. Regardless, from a purely financial standpoint, Cano represents a fairly safe risk: whenever he plays, he has been remarkably productive and if he fails another drug test, Cano will be suspended for an entire season without pay. It’s also worth noting that the Mariners are subsidizing Cano’s deal both by sending cash to the Mets annually and by absorbing the remaining amounts due to Jay Bruce and Anthony Swarzak.  It should be noted that the most sought-after player in the Cano deal was reliever Edwin Diaz, who fell 13 days short of Super Two status for 2019 and will therefore earn just $570,800 in his first year with the Mets.

Among the guaranteed deals for current players, longtime Met Juan Lagares is the sole remaining holdover who spent a significant chunk of time under the Alderson regime. Lagares plays a mean center field and runs well, but his bat never developed, so it figures that the Mets will pay his 2020 salary and wish him well nine months from now.

The remaining players are all middle class veterans on short-term deals. Frazier and Vargas both enter their walk years while Van Wagenen filled out the remainder of his roster by throwing modest sums of cash at solid, unspectacular veterans. Lowrie enters off of a stellar year but turns 35 shortly after Opening Day. Ramos, Familia, and Wilson each enjoyed success in 2018 and prior years, though each comes with a recent red flag: a knee injury for Ramos, a domestic violence suspension for Familia, and a nightmarish loss of command in recent years for Wilson.

Finally, we get to the payments to ex-players, and holy smokes, what a walk down memory lane this is. Wright has two years remaining on his eight-year contract, though insurance figures to pay about 75 percent of his guaranteed money, after which the team owes him $3.1 million annually through 2025. Santana’s deferred money carries just two years into the future.

But Strawberry, Bonilla, and Saberhagen? They basically define the risk of long-term deferrals. The team will spend over $3 million on that trio through the 2020s while owing nearly $2.8 million to the Strawberry-Bonilla duo for additional years. It’s true that those dollar figures aren’t astronomical when considering team budgets, but $3 million represents an annual flier on someone like Shelby Miller or a modest bullpen upgrade like Shawn Kelley. Instead, the Mets will continue to spend that cash on players through their 60s. Yikes.

Turning to the arbitration ranks, the Mets feature their best talent:

deGrom and Syndergaard are arguably the team’s two best players. Wheeler finally recovered from a slew of injuries to realize his promise as a strong rotation cog, and Matz still carries plenty of promise to do the same. Conforto played at an All-Star level in 2017 before slipping to be a merely plus regular in 2018; he just turned 25. Only d’Arnaud figures to play a less than prominent role as his sterling 2015 becomes a thing of distant past more so than a predictor of future stardom. Nevertheless, the arbitration table carries much of the intrigue for the Mets in 2019 and beyond.

What Does Team Leadership Have to Say?

Wilpon didn’t offer much insight as to what team spending would look like early on in the offseason, stating only that “Brodie knows what the parameters of what the payroll is and what we’re planning to do.”

Accordingly, this pushes us toward Van Wagenen for insight on the team’s expected spending…which also yields no useful information. Back in November, the general manager stated that the club was “open for sure to moving money off the roster” but “willing to add money as well” before deferring more specific questions to ownership.

It seems that franchise leadership has no interest in making their spending plans public knowledge. For competitive advantage purposes, I can’t say I blame them.

Are the Mets a Player for Bryce Harper or Manny Machado?

Probably not. They haven’t been mentioned as one of the clubs seeking a sit-down opportunity with either mid-20s star and that speaks volumes, especially now that we’ve reached February.

Furthermore, following his expensive forays into the marketplace to acquire Cano and Familia, sources indicated that Van Wagenen would be focusing his efforts on an outfield bat, rotation depth, or a lefty reliever, not exactly an indication that Harper or Machado would be meeting with Mets brain trust in the near future.

Still, it can’t be ignored that Mets play in a major metropolitan area and feature a fan base that supported attendance totals regularly in excess of three million annually, even eclipsing four million fans in 2008. They exceeded 2.6 million fans only twice since then. If ownership and the business operations folks believe that a contending Mets team can draw at least 3.1 million fans like they did each year from 2006-09, that extra revenue could surely support another marquee addition, though doing so would push the team into taxpayer status depending on how Wright’s insurance coverage is factored. They currently have a tax payroll of approximately $186.5 million, meaning they can only afford a $20 million addition before exceeding the tax line.

For now, assume that the Mets are out on both players while holding a tiny glimmer of possibility in the back of your mind. While you hold onto that thought, consider this idle, baseless speculation: in addition to Wright’s, Cespedes’ contract is insured as well, though the Mets were hazy on the specifics. If they truly think that he’ll be unable to play at all in 2019 and the policy covers roughly 75 percent of his salary after a disability period is reached, the club may recover something north of $10 million on the policy. The prospect of another big expenditure starts to look eminently more reasonable.

What Will the 2019 Payroll Be?

Well, it’ll be a new team record, that’s for sure. But just how high will it go?

Currently, team payroll comes in at $159.5 million including the substantial payments of deferred money. The luxury tax won’t be a factor unless the team adds $20 million or more to current payroll, so this number is a good approximation.

How much room is there for additional expenditures? It seems reasonable to assume that Van Wagenen took the job with the understanding that payroll would increase by some amount, even if that amount is more in the five-to-ten percent neighborhood than something more substantial. A ten percent increase fits the bill as the club seeks to contend in their final years of depressed-cost control over deGrom and Syndergaard. But don’t be stunned if the percentage increase is more like fifteen or twenty in the end. For now, we’ll estimate at the low number.

Projected 2019 Payroll: $165 million

Projected 2019 Payroll Space: $5.5 million

Projecting Payrolls: Chicago Cubs

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Although substantial time has passed since the last installment in this series, only the reliever market has moved in a significant way. As such, we move on to the 12th piece while the biggest fish remain unhooked. Below find the links to the earlier posts in this series.

Philadelphia Phillies
Los Angeles Dodgers
Los Angeles Angels
Atlanta Braves
New York Yankees
Chicago White Sox
Boston Red Sox
Minnesota Twins
Milwaukee Brewers
San Francisco Giants
St. Louis Cardinals

If you have questions about financial information made available to the public and the assumptions used in this series, please refer to the Phillies piece linked above.

Today, we look into a club coming off of its best four-year stretch in franchise history and flush with cash, yet one who also appears to be fully intent to sit out free agency this winter: the Chicago Cubs.

Team Leadership

Concluding 65 years of ownership by the Wrigley family, the Tribune Company purchased the Cubs in 1981. The franchise had, incredibly, missed the playoffs for 35 straight seasons prior to the transaction. The team went on to make the postseason six times under Tribune ownership, including three times from 2003-08. The final two years of Tribune ownership were executed under the direction of Sam Zell, a real estate mogul who purchased the Tribune in late 2007. Then, in October 2009, the Ricketts family famously acquired the Cubs for $845 million. Ownership of the franchise is managed by team chairman Tom Ricketts, who authorized an aggressive tank followed by the most successful time period in Cubs history.

While the Ricketts family initially kept general manager Jim Hendry in place running the baseball operations department, they made the splashiest of splashy moves in 2011, relieving Hendry of his duties and replacing him with new President of Baseball Operations and renowned curse breaker Theo Epstein. Epstein got his band back together, bringing in former proteges Jed Hoyer and Jason McLeod to be his general manager and vice president of scouting and player development, respectively, both after two years in San Diego. The results have been undeniable: the club averaged a putrid 67 wins per year during the first three years of the Epstein regime and flipped the switch in 2015, averaging 97 per year over the next four years.

Historical Payrolls

Before hitting the numbers, please recall that we use data from Cot’s Baseball Contracts, we’ll use average annual value (“AAV”) on historical deals but actual cash for 2019 and beyond, and deferrals will be reflected where appropriate. And, of course, the value of examining historical payrolls is twofold: they show us either what type of payroll a team’s market can support or how significantly a given ownership group is willing to spend. In the most useful cases, they show us both. We’ll focus on a 15-year span for the Cubs, covering 2005-18 for historical data as a means to understanding year 15: 2019. This period covers two competitive windows and two ownership groups for the Cubs, and it’s not terribly difficult to see where the Ricketts-authorized tank began. We’ll also use Opening Day payrolls as those better approximate expected spending by ownership.

Payroll spiked from 2008-10 as the Cubs paid to keep their 2007-08 winners together. Publicly available reported revenue increases climbed to fuel the spending, growing from $179 million in 2005 all the way to $239 million in 2008. Of course, take all publicly available revenue figures with a significant grain of salt as only ownership and the front office truly know the finances. However, revenue largely stagnated in the following half decade, reaching only $266 million in 2013 during the tank.

What followed is difficult to describe as I’ve never seen anything like it. Revenue climbed to $302 million in 2014, $340 million in 2015, $434 million in 2016 (!), and $457 million in 2017. While 2018 revenue hasn’t yet been reported, it is entirely possible that revenue has increased more than $200 million over just five years. Striking. Seen in that light, the 2016-18 payrolls are hardly surprising.

Ricketts ownership and the Epstein-led front office have been keen to stay under the luxury tax threshold during their time in charge, exceeding the threshold only in 2016, incurring a tax of just under $3 million before staying under the threshold in each of the next two years. The Cubs have simultaneously been major players in the international market, throwing a $30 million guarantee at outfielder Jorge Soler in 2012 and following with a boisterous international class in 2013 that included young stars Gleyber Torres and Eloy Jimenez and a massive 2015 class that yielded just under $19 million in signing bonuses. Major League spending captures a significant portion of Cubs spending, but international amateur spending has been a key facet of Cubs expenditures in recent years.

Future Liabilities

Cubs spending in 2019 will surely hit a new franchise high.

That is a lot of guaranteed money.

The 2019 Cubs are spending $88 million guaranteed on starting pitching, led by $20 million-plus salaries for Lester, Hamels, and Darvish. To say that these commitments are risky is a massive understatement.

  • Lester has been a paragon of stability, but he has seen his FIP rise each year as a Cub, from 2.92 in 2015 to 4.39 in 2018. He’ll enter 2019 with 2,520 combined regular season and playoff innings on his odometer. He just turned 35.
  • Hamels pitched a year and a half to the tune of a 4.87 FIP prior to joining the Cubs at the trade deadline in 2018. He was rejuvenated with the Cubs, but he’ll enter 2019 with 2,653 combined regular season and playoff innings on his own odometer, also having just turned 35.
  • Darvish largely enjoyed success since arriving from Japan before a disastrous debut season with the Cubs that ended in May due to an elbow injury.
  • Tyler Chatwood bombed in his first year as a Cub, losing his rotation job and throwing fewer than 10 innings for the club after the trade deadline.
  • Jose Quintana posted a career-worst FIP of 4.43, fueled in large part by a career-worst home run rate.

Projection systems expect the Cubs rotation to be wildly successful in 2019, especially when the arbitration-eligible Kyle Hendricks is added to the fold. Still, Cubs fans are at least a bit anxious after the across-the-board struggles from 2018.

A trio of lefty hitters figure prominently on the balance sheet, two of whom will be around for years to come. Rizzo and Heyward have been lineup mainstays for years, though Rizzo has obviously been substantially more productive on the field. Unlike Rizzo and Heyward, Zobrist finds himself in a walk year in a season in which he turns 38.

The remaining notable deals are all for relief pitchers, at least four of which find themselves staring down free agency come November. In a highly competitive 2019 National League Central division, the team will need strong production from multiple arms in the group of Morrow, Cishek, Strop, Kintzler, and Duensing.

Finally, Heyward’s signing bonus stands out as the only deferred money for the franchise. But it’s a big number: $20 million payable after his contract expires. Presumably franchise revenue will be so astronomical in the mid-2020s so as to see this amount as largely rounding error, but $5 million is still $5 million.

As a result of stellar drafting in the early part of this decade and a trio of impact trades, the Cubs feature significant talent in the arbitration ranks, including multiple Most Valuable Player candidates and Cy Young contender.

All seven players listed above figure to play key roles for the team in 2019, though Russell finds himself mired in a mess of his own making. As the arbitration chart shows, each player is controllable for at least one year beyond 2019 as well with offensive stars Bryant, Baez, and Schwarber each controllable through 2021.

What Does Team Leadership Have to Say?

So, so, so much.

While ownership, the front office, and manager Joe Maddon have spoken at great length about the budget this offseason, comments from Tom Ricketts in recent days likely shed the most light on the spending plans. In response to questions about expected payroll, Ricketts suggested that “when you make any free-agent signing — not to pick on Darvish, but any of them — you know that you can’t spend that dollar twice and you have to budget that into the future, so that’s going to limit what you can do in the following year. And one of the things this year that we knew going into the offseason was that we weren’t going to have as much flexibility as years past.” When Ricketts moved on to discussing the team’s local tax burden, it seemed that the budget has very little, if any, room.

As we will detail below, it’s close to inevitable that the Cubs will incur a luxury tax in 2019. However, Ricketts more or less stated that the budget is tapped out, jiving with what the front office has said for months now.

In the face of big moves by the rival Cardinals and Brewers, the Cubs appear content to have their offseason largely dictated by their budget.

Are the Cubs a Player for Bryce Harper or Manny Machado?

Ummmm…honestly, I don’t know. Almost certainly not. But crazier things have happened.

The Cubs haven’t been connected to Machado at all this offseason, and given their impressive collection of infield talent, this doesn’t come as a huge surprise.

But Harper? The Cubs have been connected to Harper for years. This article humorously chronicles some of the 2017 nuggets that suggested Harper would — or wouldn’t — join the Cubs. These rumors have become par for the course. Many of the rumors have centered around the close relationship between Bryant and Harper, both Las Vegas natives.

After the Cubs surprisingly bowed out of the playoffs in quick fashion, Epstein lamented that “the offense broke,” leading to significant speculation that the Cubs would seek to add a significant bat.

Nevertheless, budgetary constraints combined with Maddon clearly stating that a Harper signing is “not going to happen” seemingly slammed the door shut on any pursuit.

Despite all of the above, Chicago Sun-Times writer Gordon Wittenmyer commented in December that sources indicated that the Cubs front office requested that Harper and his agent, Scott Boras, come back to the team before Harper decides to sign elsewhere in order to give the Cubs a chance to make a final play for the young star.

What Will the 2019 Payroll Be?

Well, it’ll be a new team record, that’s for sure. But just how high will it go?

Currently, team payroll comes in at $202.1 million before accounting for the luxury tax. If spending sticks approximately where it currently stands, the team figures to incur a luxury tax of approximately $4.4 million based on a luxury tax payroll figure of just under $228 million and a 20 percent tax on the overage.

So how much room is there for additional expenditures? I suspect that ownership would push total spending up around $220 million given the need for an in-season acquisition or two. Given that, don’t expect to see additional expenditures prior to the start of the season save for a possible minimal commitment to a backup catcher or a reliever.

Projected 2019 Payroll: $210 million

Projected 2019 Payroll Space: $2.9 million

If you’d like to go even further down the rabbit hole of Cubs payrolls, I refer you to my series of articles that have appeared on The Athletic going into tremendous detail on team spending.

Projecting Payrolls: St. Louis Cardinals

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The Winter Meetings are now in full swing, so it’s time to keep this ball rolling and move on to our 11th team. Here are links to the previous team payroll projections:

Philadelphia Phillies
Los Angeles Dodgers
Los Angeles Angels
Atlanta Braves
New York Yankees
Chicago White Sox
Boston Red Sox
Minnesota Twins
Milwaukee Brewers
San Francisco Giants

If you have questions about financial information made available to the public and the assumptions used in this series, please refer to the Phillies piece linked above.

Today, we look into a club who has missed the playoffs for three consecutive years for the first time since the 1990s and has already made (possibly) its biggest offseason splash: the St. Louis Cardinals.

Team Leadership

After over 40 years of Anheuser-Busch ownership, the Cardinals were sold to former St. Louis Browns bat boy and American businessman Bill DeWitt Jr. in 1995. DeWitt has maintained ownership of the club since that time, involving his family in the management thereof. DeWitt’s son, Bill DeWitt III, is has been team president for the past decade. St. Louis missed the playoffs each year from 1988-95, a seven-year postseason drought (nobody made the playoffs in 1994), and they made the playoffs only once during the first five years of DeWitt ownership from 1995-99, reaching the National League Championship Series in 1996. Beginning with the 2000 season, however, St. Louis has made 12 postseason visits while missing out on the tournament only seven times, a remarkable run of success.

The front office is lead by President of Baseball Operations John Mozeliak. Mozeliak joined the Cardinals organization in 1996 as a scouting assistant and climbed the ladder, finally becoming General Manager in October 2007 before ascending to his current post in June 2017. In a move that coincided with Mozeliak’s ascension, Mike Girsch was named General Manager.

Historical Payrolls

Before hitting the numbers, please recall that we use data from Cot’s Baseball Contracts, we’ll use average annual value (“AAV”) on historical deals but actual cash for 2019 and beyond, and deferrals will be reflected where appropriate. And, of course, the value of examining historical payrolls is twofold: they show us either what type of payroll a team’s market can support or how significantly a given ownership group is willing to spend. In the most useful cases, they show us both. We’ll focus on a 15-year span for the Cardinals, covering 2005-18 for historical data as a means to understanding year 15: 2019. This period covers a time of tremendous success for the Cardinals. We’ll also use Opening Day payrolls as those better approximate expected spending by ownership.

St. Louis spending was largely unchanged for the latter half of the past decade, sticking just south of $100 million each year from 2005-10 before finally crossing the threshold in 2011. Nevertheless, spending didn’t take a big leap for the Cardinals until the rival Cubs emerged as a force in 2015, perhaps fueling a payroll surge in 2016 that hasn’t subsided.

Despite this increased Major League spending, the Cardinals have never paid the luxury tax, nor have they been players for the most significant international free agents. Their laudable ability to develop talent internally has enabled them to eschew massive spending or risk taking in their pursuit of wins.

Future Liabilities

The Cardinals have something of an all-in approach for 2019. See below.

There are some big-money salaries on here, but most of the Cardinals’ commitments are in the form of mid-market deals for relatively short periods of time, many of which expire or feature options for the 2020 season.

Nevertheless, the team’s best hitter, the newly-acquired Paul Goldschmidt, and their best pitcher, the recently-acquired Miles Mikolas, both figure to get massive raises when they hit free agency in 11 months. If both players produce as stars, the club will either make a big play to keep one or both or they’ll enjoy the compensation draft picks that come along with having a pair of free agents decline qualifying offers and sign elsewhere.

The multi-year commitment to franchise icons Molina and Martinez look like good investments. Molina figures to spend his entire career in St. Louis. His 2017 extension all but ensured that. His top-level defense renders this deal a fine use of cash, albeit not the most efficient one. Martinez struggled with injuries in 2018, but he has consistently pitched as an ace, comes at bargain prices thanks to his 2017 extension, and is still, incredibly, just 27 years old.

Contrarily, the multi-year commitment to Fowler looks like a bad one. The former Cub enjoyed a strong year with his bat in 2017, but 2018 was an unmitigated disaster as Fowler failed to get on bad or hit the ball with authority. For a player with a lengthy injury history, he also missed substantial time with a foot injury. He is rapidly nearing pumpkin territory.

The Cardinals feature a trio of players with club options for the 2020 season that are auditioning for that payday. Carpenter is overwhelmingly likely to have his option exercised as the offensive force with defensive versatility fits on every team. Gyorko has recovered nicely after arriving in St. Louis after bottoming out post-extension in San Diego, but his option is a coin flip at best. Gregerson washed out in 2018 with shoulder issues, but a strong 2019 that shows a return to his 2009-16 success could change the script.

Cecil largely provided the desired results after arriving in 2017, but he flopped in 2018, struggling with homers and especially walks. At 32 and having lost two miles per hour on his pitches across the board, he could be dead weight for the club absent a surprising rebound.

One more franchise icon, Wainwright returns for a last hurrah in 2019 on an incentive-laden deal that contemplates a starting or relieving role. Regardless of who he has left in the tank, he won’t cost the club much.

Finally, there are a pair of extensions for athletic middle infielders. Wong came with a first-round pedigree, but his bat has never fully justified that history, save for a strong BABIP season in 2017. His glove and wheels, however, have rendered him a solid regular. DeJong, on the other hand, the 131st pick in the 2015 draft, positively exploded onto the scene in 2017 and showed that it was no fluke with a strong repeat performance in 2018, albeit one that was based more on his glove than his offensive prowess. Nevertheless, DeJong appears to be a league-average bat with legitimate defensive chops at shortstop.

Finally, we hit the dead money. Like so many clubs in the last decade, the Cardinals featured deferred money in big-money deals for Holliday and Pujols, owing the pair $2.6 million annually throughout the 2020s. That’s not backbreaking money, but it’s more than nothing.

As with the Giants before them, given this amount of guaranteed money, it is perhaps unsurprising that the Cardinals have very little in the way of arbitration eligible talent. Ozuna is the big fish with a seat at the arbitration table as he makes his final trip through the process in advance of free agency next winter. Here are their arbitration projections, noting that Chasen Shreve has already come to an agreement at $900,000, a bit below that projected by MLBTR and Matt Swartz:

In addition to Ozuna, Wacha figures to play a key role despite having lost much of 2018 to a lingering oblique injury.

What Does Team Leadership Have to Say?

The Cardinals are talking like an organization ready to push in a whole bunch of chips on the 2019 table, with Mozeliak stating at the Winter Meetings that “simply, we realize the importance of 2019.”

DeWitt turned things up a notch last month, explaining that “there is value in star players” and adding that “we’re aggressive and we’ve got resources to deploy if the right situation emerges.” Incredibly, DeWitt even specifically addressed spending on free agents when commenting about his desire to build a team that perennially wins 90 games, offering up that “frankly, we felt that incremental benefit (of free agents) could get us those last few wins.”

This is not an organization that seems content to watch the Cubs and Brewers rule the National League Central for the next few years.

Are the Cardinals a Player for Bryce Harper or Manny Machado?

No matter what you hear elsewhere, the answer here is simple: absolutely yes.

Although the Cardinals haven’t signed a player to a contract larger than Matt Holliday’s seven-year, $120 million pact, they made competitive offers for Jason Heyward and David Price approaching $200 million each while agreeing to take on over $250 million for Giancarlo Stanton before he ended up in the Bronx last winter. The team hasn’t shied away from monster offers.

As for their roster, even after shipping out Luke Weaver in the Goldschmidt trade, St. Louis is dripping with cheap, controllable pitching behind Mikolas, Wainwright, and Wacha in the form of Martinez, Jack Flaherty, super-prospect Alex Reyes (despite his injuries), and Dakota Hudson, and that’s before factoring in John Gant’s surprising 2018 season. They don’t really need starting pitching help.

The team is loaded up with right-handed bats featuring good-to-great power in Goldschmidt, Ozuna, DeJong, Molina, and defensively-homeless Jose Martinez. Harper would provide an awfully attractive complement in the middle of that order. I’m not sure if Machado fits as smoothly, but Harper sure does.

Watch out for St. Louis on Harper. They make a ton of sense.

What Will the 2019 Payroll Be?

The Cardinals will almost certainly avoid reaching taxpayer status in 2019. They’ve never shown a penchant to spend to that degree. However, I wouldn’t be surprised if spending received another boost based on the fact that the team has missed the playoffs for three straight years and given the amount of resources poured into the Goldschmidt and Ozuna acquisitions.

As currently constructed, St. Louis has a payroll of just $148.7 million, $149.3 million for luxury tax purposes. Given historical trends and the pressure to win now, I expect to see a notable one-year jump in spending before the team regroups for 2020 with Mikolas, Ozuna, and Goldschmidt all hitting free agency at the same time.

If spending spikes to $180 million, the team would have $31.3 million of space, nearly enough to sign Harper without any other roster maneuvering. I don’t think that things will get quite that lofty, but even a bit below that figure, there’s enough space for the team to make a relatively simple move — like trading Gyorko for salary relief with the third baseman displaced by Carpenter’s move back across the diamond — to clear space for Harper.

Projected 2019 Payroll: $175 million

Projected 2019 Payroll Space: $26.3 million

Projecting Payrolls: San Francisco Giants

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With the Winter Meetings set to kick off next weekend, we’re moving to the tenth installment of this series. Here are links to the previous team payroll projections:

Philadelphia Phillies
Los Angeles Dodgers
Los Angeles Angels
Atlanta Braves
New York Yankees
Chicago White Sox
Boston Red Sox
Minnesota Twins
Milwaukee Brewers

If you have questions about financial information made available to the public and the assumptions used in this series, please refer to the Phillies piece linked above.

Today, we look into a club whose on-the-fly re-stocking in 2018 largely backfired, keeping them out of the playoffs for the second consecutive season for the first time since 2009: the San Francisco Giants.

Team Leadership

Unlike many of the teams that we have examined in this series, the Giants’ ownership structure is highly diversified and somewhat secretive. 2008 began with Peter Magowan’s 15th year as managing general partner of the club. Magowan began the year in turmoil in the aftermath of the Mitchell Report and ended the year having transitioned his management role to Bill Neukom. Neukom ran the show only until 2011 at which time Charles B. Johnson became the plurality member in the LLC that owns the ball club. Johnson reportedly owns approximately 25 percent of the team as part of a group of approximately 29 co-owners.

Despite the complicated ownership structure, the front office enjoyed tremendous continuity. Brian Sabean ascended to the role of general manager in 1997 and held that job through the 2014 season before climbing to Executive Vice President of Baseball Operations, with Bobby Evans handling day-to-day operations starting in 2015. No more. Sabean was reassigned out of Baseball Operations following the 2018 season, at which time Evans was fired.

The executive tasked with re-imagining the San Francisco front office? Former Dodgers general manager Farhan Zaidi. Zaidi spent a decade in the Bay Area with Oakland before spending the last four years in Los Angeles. As the new President of Baseball Operations, Zaidi will oversee the first major transition in San Francisco’s baseball management in two decades.

Historical Payrolls

Before hitting the numbers, please recall that we use data from Cot’s Baseball Contracts, we’ll use average annual value (“AAV”) on historical deals but actual cash for 2019 and beyond, and deferrals will be reflected where appropriate. And, of course, the value of examining historical payrolls is twofold: they show us either what type of payroll a team’s market can support or how significantly a given ownership group is willing to spend. In the most useful cases, they show us both. We’ll focus on a 15-year span for the Giants, covering 2005-18 for historical data as a means to understanding year 15: 2019. For the Giants, this time frame covers a period of rebuilding that ultimately fueled three World Series winners. We’ll also use Opening Day payrolls as those better approximate expected spending by ownership.

Those payrolls were remarkably stagnant through 2010 before taking a leap in 2011 that became an annual tradition throughout much of the years that followed.

During this period of increased spending, the Giants did reach luxury taxpayer status for the first time in 2015, remaining there for each of the next two seasons before resetting their status in 2018 by falling under the threshold. The team paid just $8.8 million in aggregate luxury tax payments over those three seasons, so the tax hasn’t substantially impacted team spending over our time frame.

While Major League spending has increased dramatically over the time period above, the Giants haven’t allocated substantial resources to international amateur bonuses. It seems as though the cash increases were focused nearly exclusively on the Major League roster that made regular trips to late October throughout this decade.

Future Liabilities

Get ready for lots of big numbers for multiple years.

The big-money, long-term commitments are staggering.

Cueto, owed $71 million over the next three years presuming that the Giants buy out his 2022 option, was a star during his debut season with San Francisco in 2016, producing 5.5 WAR in leading the team’s rotation as they made their most recent playoff trip. Cueto’s 2017 season was marred by numerous injuries, including the dreaded forearm strain that served as a precursor to a nightmarish 2018 spent largely on the disabled list before he underwent Tommy John surgery last August. As a result, the Giants likely expect little to nothing from him again in 2019.

Like Cueto, Posey underwent a significant operation in August. Unlike Cueto, Posey has produced at a consistently elite level throughout the course of his contract, until this year’s career-worst 106 wRC+. While Posey’s hip operation figures to hamper his efforts to prepare for the season, he should be ready around Opening Day.

Samardzija was solid during his first year in San Francisco before a strong second year in 2017. Unfortunately, the remarkably durable righty finally succumbed to the injury bug, losing most of 2018 to a shoulder injury that lingered into the start of the offseason. With only two years left on his deal, it’s possible that the Giants have received as much value as they’ll be getting from that contract.

The next two players are both longtime Giants who played key roles on championship teams but have settled into roles as solid regulars instead of impact stars. Both Belt and Crawford are young and talented enough to rebound in 2019, but neither contract represents excellent value, especially Belt’s as the first base market has largely collapsed since he signed his extension.

The next two contracts look bad. Really bad. Melancon arrived in San Francisco to shore up the back of a wobbly bullpen. However, bouts with forearm injuries have limited his chance to make an impact. When he has pitched, he’s been solid but certainly nothing close to what the Giants expected from him given his contract. Longoria appears headed down a startlingly similar path, struggling mightily in his first season since arriving from Tampa Bay via trade. At 33, Longoria faces long odds to reattain star status, but the Giants would likely be happy if he returned to being a solid regular for at least a few more years.

We’ll skip to Watson for a moment. The veteran lefty structured his contract in such a way that the Giants stayed just under the luxury tax threshold, and he rewarded the team by delivering the finest season of his career in 2018, despite an across-the-board drop in velocity.

Now for the skipped contract: Bumgarner. The longtime ace and World Series hero finds himself at a crossroads that would have been inconceivable two years ago. Bumgarner made at least 31 starts each year from 2010-16, but an April 2017 shoulder injury suffered in a dirt bike accident, perhaps combined with years of significant usage, has changed his trajectory going forward. The Giants are willing to listen on their ace as he heads toward free agency next year.

In the aggregate, San Francisco is as committed to their current roster as any team in the league. Overhauling the roster would require a bevy of big-salary moves from Zaidi.

Given this amount of guaranteed money, it is perhaps unsurprising that the Giants have very little in the way of arbitration-eligible talent. After they said goodbye to Hunter Strickland and Gorkys Hernandez, key reliever Will Smith is, incredibly, the only arbitration-eligible Giant who hasn’t already agreed to terms with the club. Here are their arbitration projections, noting that both Sam Dyson and Joe Panik have already come in at salaries south of those projected by MLBTR and Matt Swartz:

While Smith missed all of 2017, he returned in 2018 and filled the role of bullpen ace that Giants leadership hoped to see Melancon fill.

What Does Team Leadership Have to Say?

Very little regarding the specifics of the 2019 payroll. Given their recent payroll push into the baseball stratosphere of spending, the Giants are largely expected to maintain a significant payroll next year. While Zaidi has hinted at something of a mini-rebuild — perhaps including a Bumgarner trade — there’s no indication from management or ownership that payroll will plummet.

Kerry Crowley of The Mercury News expects payroll to stay in line with that of current years, coming in shy of the luxury tax line but among the top figures in the league.

Are the Giants a Player for Bryce Harper or Manny Machado?

Probably. It’s a bit tougher to see a Machado fit given that the Giants would likely have a whale of a time trying to move Crawford or Longoria right now. But Harper makes plenty of sense for a team in need of youth, power, and an influx of talent. He certainly checks all three boxes. As a kid from Nevada, it’s likely that the Giants at least get a chance to pitch the young slugger on the benefit of playing on the West Coast.

What Will the 2019 Payroll Be?

The Giants are much tougher to peg than most other teams given the relative silence of their front office and the equally likely possibilities that they rebuild on the fly or go for a return to glory in 2019.

Entering the next phase of the offseason, the Giants hold a payroll of $156.0 million, $162.8 million for luxury tax purposes.

If the Giants can get Harper to commit to the team, I expect that his commitment will be accompanied by ownership’s commitment to enter taxpayer territory for the next two or three years in order to field a viable winner. It’s going to take additional cash to get there.

If Harper doesn’t come to town, expect to see the team remain under the tax line, albeit arriving close to that figure. With the tax threshold at $206 million and somewhere north of $13 million counting for player benefits, the Giants figure to want that tax payroll to come in around $190 million to leave them with a bit of wiggle room.

Projected 2019 Payroll: $185 million cash ($204 million for luxury tax)

Projected 2019 Payroll Space: $29 million

Projecting Payrolls: Milwaukee Brewers

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As we kick off the ninth installment of this series, here are links to the previous team payroll projections:

Philadelphia Phillies
Los Angeles Dodgers
Los Angeles Angels
Atlanta Braves
New York Yankees
Chicago White Sox
Boston Red Sox
Minnesota Twins

If you have questions about financial information made available to the public and the assumptions used in this series, please refer to the Phillies piece linked above.

Today, we examine a club whose rebuild exploded in 2018, propelling them to a surprising division championship and baseball’s final four: the Milwaukee Brewers.

Team Leadership

As many longtime baseball fans know, the predecessor to current Commissioner Rob Manfred, Bud Selig, spent 28 years as owner of the Brewers franchise prior to ascending to the commissioner gig. Formed in 1969, the franchise spent one disastrous season in the Pacific Northwest as the Seattle Pilots before Selig purchased the team out of bankruptcy and moved them to Milwaukee. Selig’s daughter, Wendy, became the team owner in 1998 when Selig became the full-time commissioner. In September 2004, Wendy sold the team to businessman Mark Attanasio, the club’s current owner. After making just two playoff appearances in the 36 years from 1969-04, the team has made three postseason trips during Attanasio’s ownership, including two trips to the National League Championship Series in 2011 and 2018.

The team’s front office is headed by general manager David Stearns, who took the job in September 2015 at age 30. The franchise has enjoyed tremendous growth under Stearns, winning 68 games before he arrived in 2015, then 73, 86, and finally 96 in the three seasons that followed. Last winter’s acquisitions of Lorenzo Cain, Jhoulys Chacin, and Most Valuable Player Christian Yelich paved the way for greatness in Milwaukee.

Historical Payrolls

Before hitting the numbers, please recall that we use data from Cot’s Baseball Contracts, we’ll use average annual value (“AAV”) on historical deals but actual cash for 2019 and beyond, and deferrals will be reflected where appropriate. And, of course, the value of examining historical payrolls is twofold: they show us either what type of payroll a team’s market can support or how significantly a given ownership group is willing to spend. In the most useful cases, they show us both. We’ll focus on a 15-year span for the Brewers, covering 2005-18 for historical data as a means to understanding year 15: 2019. For the Brewers, this time frame perfectly covers Attansio’s ownership tenure. We’ll also use Opening Day payrolls as those better approximate expected spending by ownership.

Attanasio inherited some bottom-of-the-barrel payrolls, but quickly increased spending in a big way upon taking over the club. Spending has continued on a relatively clean trajectory without any significant increases.

2016-17 stick out for the opposite reason as spending cratered while Stearns rebuilt the franchise. When the club showed significant (and somewhat unexpected) progress in 2017, Attanasio OK’d a return to something close to pre-rebuild spending levels.

The above chart conveys team spending pretty well as the Brewers haven’t endeavored on significant international acquisitions, either via international amateur bonuses or posting fees for negotiating rights with foreign professionals, and the club has never come close to luxury tax territory.

Future Liabilities

For a small market team, the Brewers have committed a good fit of payroll space moving forward.

Braun has long been the face of the franchise, though surely he ceded a good bit of that status to the stars that follow him on the team’s payroll chart, Cain and Yelich. Braun will receive $1.8 million per year from 2022-31 in deferred salary, but that amount won’t handcuff the team now or in the future.

The Yelich deal provides some of the greatest value of any contract in all of Major League Baseball. That should help keep the Brewers competitive given the immensity of their savings over Yelich’s market value.

The remaining commitments are all quite safe as the team has only $1.5 million guaranteed beyond 2019 for Thames, Chacin, Anderson, Jeffress, and Albers combined. Thames, Anderson, and Jeffress are all controllable further via bargain-rate club options.

While the guarantees feature much of the Brewers core, the team’s arbitration-eligible players include numerous contributors, a couple of them essential to the team’s renaissance. Here are their arbitration projections (salary projections by MLBTR and Matt Swartz):

The Brewers feature numerous non-tender candidates. The biggest decision involves Schoop, a 27-year-old second baseman who starred for the Orioles in 2017 with average on-base skills and 32 long balls on the heels of a 25-homer season in 2016. Schoop’s offense cratered in 2018 as his BABIP dropped to .261 after he posted a composite BABIP of .319 from 2015-17. Schoop presumably had a chance to play his way into a big payday with the Brew Crew, but a putrid .202/.246/.331 batting line after his acquisition likely sealed his fate as a non-tender, especially given the presence of near-Major League-ready stud prospect Keston Hiura and fully-Major League-ready prospect Mauricio Dubon, despite his knee injury. The decisions on Kratz, Perez, Jennings, and Saladino are comparatively much less impactful to the budget, even for a team with a smaller spending capability such as Milwaukee. Kratz in particular was one of the great stories of the 2018 postseason. As it turns out, despite the presence of solid prospect Jacob Nottingham ready for a meaningful role and Pina around (discussed below), the team agreed to a $1.2 million deal to avoid arbitration, less than the $1.7 million for which Kratz was projected but a salary figure at which he has a much better chance to stick around.

On the other hand, many of the other names in the arbitration table are of the impact variety. Shaw has proven to be the team’s third-best regular, solidifying the third base spot. Knebel forms an elite bullpen triumvirate with Jeffress and fireballing lefty Josh Hader. Guerra provided 141 roughly average innings in 2018. Santana regressed markedly in 2018, but there’s still significant power in his bat and, if nothing else, he provides a strong bench bat at a cheap rate. Pina is a strong defensive catcher with a bit of power on a bargain deal.

Nelson merits separate mention. He missed all of 2018 with a shoulder injury, but that came on the heels of him making an ace turn in 2017. If Nelson returns at something close to his pre-injury form, the Brewers will enjoy a marquee addition for just $3.7 million. The rich keep getting richer.

Davies merits his own paragraph for largely the same reason. He compiled 5.3 WAR across 2016-17 before being felled by a shoulder injury that cost him most of 2018 and sapped his effectiveness when he did pitch. Nevertheless, Davies is yet another cheap rotation option.

Milwaukee is brimming with cheap, controllable talent that should help them compete into the next decade.

What Does Team Leadership Have to Say?

Following the season, Stearns hinted that spending won’t increase in 2019 to nearly the extent that it did prior to 2018. That doesn’t qualify as much of a surprise given the bare-bones payroll employed in 2017 and the competitive number utilized in 2018. Stearns called a repeat offseason “unrealistic” at the beginning of November.

It doesn’t seem as if management is expecting a huge influx of cash, at least not publicly.

Are the Brewers a Player for Bryce Harper or Manny Machado?

No.

Not in the Milwaukee market. Not with bottom-five payrolls every year. Not with so many big-market clubs competing to sign Harper and Machado.

Milwaukee isn’t going to be in these conversations.

What Will the 2019 Payroll Be?

This is a really important consideration for the Brewers. With so many significant players entering arbitration, they need to find a bit more cash to keep this core together for the coming years or Stearns will need to be especially creative in moving the right arbitration-eligible starting-caliber players for cheaper reinforcements.

Even assuming that the Brewers take the most aggressive non-tender approach that is plausible, cutting ties with Schoop, Perez, Jennings, and Saladino, the team would enter the offseason with $95.1 million committed to the roster, $4.1 million more than last year’s Opening Day payroll. Making any additions will require Stearns to expend some currency.

According to MLB.com, the team’s top seven prospects and 10 of the top 11 are position players. If the club makes a big expenditure, expect to see them focus on pitching.

Given where Milwaukee is on the win curve and how seriously they curbed spending while rebuilding, it’s reasonable to expect Attanasio to authorize a new franchise-high Opening Day payroll. But by how much? I’ll guess that payroll increases enough for everyone to notice but not so much that it stuns the baseball world.

With the projected payroll space below and an entirely right-handed rotation, don’t be surprised if Milwaukee makes a play for a free agent starter like J.A. Happ. If payroll is a bit tighter than expected, perhaps Wade Miley or a reunion with Gio Gonzalez make more sense.

Projected 2019 Payroll: $110 million

Projected 2019 Payroll Space: $14.9 million

Projecting Payrolls: Boston Red Sox

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As we kick off the seventh installment of this series, here are links to the previous team payroll projections:

Philadelphia Phillies
Los Angeles Dodgers
Los Angeles Angels
Atlanta Braves
New York Yankees
Chicago White Sox

If you have questions about financial information made available to the public and the assumptions used in this series, please refer to the Phillies piece linked above.

Today, we visit with the other Sox and reigning champions: the Boston Red Sox.

Team Leadership

The most recent significant ownership change for the Red Sox saw John Henry, Tom Werner, and the New York Times (yes, that New York Times) purchase the club from the JRY Trust, established following the 1992 death of team owner Jean Yawkey, the widow of Tom Yawkey. The Times sold its interest in two separate sales in 2011 and 2012, leaving Henry and Werner as the primary owners and Henry alone as the face of ownership.

The baseball operations department underwent a massive shakeup late in the 2015 season with longtime contender builder Dave Dombrowski joining the fold as President of Baseball Operations with former general manager Ben Cherington stepping aside in a corresponding move. Dombrowski had previously assembled pennant winners in Miami (1997) and Detroit (2006, 2012) before his arrival in Beantown. Over his three seasons, the Red Sox have averaged 98 wins per year, recording at least 93 victories each season.

Historical Payrolls

Before hitting the numbers, please recall that we use data from Cot’s Baseball Contracts, we’ll use average annual value (“AAV”) on historical deals but actual cash for 2019 and beyond, and deferrals will be reflected where appropriate. And, of course, the value of examining historical payrolls is twofold: they show us either what type of payroll a team’s market can support or how significantly a given ownership group is willing to spend. In the most useful cases, they show us both. We’ll focus on a 15-year span for the Red Sox, covering 2005-18 for historical data as a means to understanding year 15: 2019. We’ll also use Opening Day payrolls as those better approximate expected spending by ownership.

As a major franchise playing in a major city, it comes as no surprise that the Red Sox have spent and spent big year after year.

While Red Sox spending has always been significant, it took a notable jump following the only Yankees World Series win of the past 15 years as the 2010 Boston payroll increased a little over 38 percent from 2009. Since then, the Red Sox have remained near the top echelon of spenders.

That changed in 2018 as Boston blew away the competition financially, finishing the year as the only American League team to pay the luxury tax. The Red Sox made approximately $22 million in luxury tax payments from 2005-17, but they pushed the envelope in 2018, incurring a tax bill of at least $12.7 million and possibly more depending on the final calculation.

International spending has also been a hallmark of the franchise, as was blowing past slot recommendations for draft picks prior to the new rules that severely disincentivized the action. The Red Sox were responsible for arguably the most famous example of overspending international bonus pools under the previous system, throwing a $31.5 million bonus to Yoan Moncada, complete with a corresponding $31.5 million tax payment in February 2015.

The Red Sox also allocated a massive sum to the posting fee paid of $51,111,111.11 to the Seibu Lions in advance of the 2007 season for the rights to negotiate with starting pitcher Daisuke Matsuzaka.

Needless to say, Major League payroll has comprised only a significant portion of team spending, hardly the entirety of it.

Future Liabilities

Unlike some other teams in this series to date, the Red Sox have significant present and future guaranteed liabilities. Here are the guaranteed future dollars with club options highlighted in peach and the opt-out clause for J.D. Martinez that follows the 2019 season shown in light blue.

There is a lot to digest here.

The remaining four years and $127 million owed to David Price naturally jumps out. After a strong debut season, Price hasn’t delivered the ace-level production that the team hoped for when they signed him, but Red Sox fans enjoyed watching Price hoist the World Series trophy this fall after 26 solid postseason innings. He’s hardly an albatross, even if his contract doesn’t offer value at this point.

After a superstar offensive season, Martinez’s contract appears increasingly likely to be a two-year, $50 million deal instead of a five-year, $110 million pact as was guaranteed. If his 2019 is half as successful as his 2018, Martinez will opt out of the deal and pocket the $2.5 million buyout that comes along with the decision to do so. In the meantime, he’ll serve as an essential middle-of-the-order bat for the defending champions.

The remaining multi-year commitments go to players unlikely to help the next championship team in Boston. Pedroia has been a mainstay, but knee injuries may very well render him unable to return to form especially at 35. 2017 indicated that Vazquez had emerged as a defensive force with a palatable, if below average, offensive game at 27. 2018 indicated that 2017 was a mirage. It remains to be seen what value, if any, Boston will milk out of the remainder of Vazquez’s deal.

The remaining current players are all on one-year deals and they all figure to play a starting-level role for the team in 2018. Sale is a perennial Cy Young contender heading toward a record-breaking contract, Porcello won the award himself in 2016, and Moreland, Pearce, and Nunez all figure to get north of 400 plate appearances next year. The club features a ton of walk-year talent.

Of course, the future commitments to players aren’t limited to current Red Sox players by a long stretch. The team owes a staggering $47.5 million to released free agent flop Sandoval and Triple-A 30-year-old Castillo. Perhaps the club will find a taker for Castillo if he comes along with approximately $22 million, though it’s worth noting that he does not count against the Red Sox luxury tax payroll as long as he remains off of the team’s 40-man roster.

Finally, former stars Ramirez and Pedroia will receive just over $34 million between them into the middle of the next decade, a sum that is not insignificant but also doesn’t figure to move the needle much for the deep pockets in Boston. Those amounts have already been accounted for in regards to the luxury tax, so they won’t hurt Boston when making that calculation.

While the guarantees feature plenty of star power, there is no shortage of elite talent to be found among the arbitration eligible Red Sox. Here are their arbitration projections (salary projections by MLBTR and Matt Swartz):

Betts, Bogaerts, and Bradley have long formed a young core for the club. Bradley’s bat has been below average the last two seasons, but Betts and Bogaerts have both regularly combined strong offense and defense to be impact players. With two years of control remaining on Betts and Bradley and one on Bogaerts, the team will likely continue extension talks.  Obviously they have not found common ground to date, and it’s not known whether the Red Sox will succeed in locking down any of the three.

Rodriguez has grown into an above-average starting pitcher, albeit one who routinely misses time with injury issues. He figures to hold a rotation job through the coming years.

The remaining arbitration eligible Red Sox primarily serve to complement the bevy of ultra-talented players listed above.

What Does Team Leadership Have to Say?

Perhaps unsurprisingly, not much to date. They’ve been busy winning the World Series and celebrating their newest championship. The most noteworthy disclosure came from Henry following the season when he noted that the team won’t push their payroll to the top luxury tax penalties every season, calling out 2018 as an exception where adding the missing piece was worth the extra expenditure.

Are the Red Sox a Player for Bryce Harper or Manny Machado?

Well this is a tricky one. The Red Sox are obviously massive spenders who routinely find themselves with one of the top five payrolls in the game. Generally speaking, that is expected to be a prerequisite for entering the fray for Harper and/or Machado.

However, Boston has already committed major dollars to its championship core — a core that will only get more expensive in the next two years — and it would seemingly require major roster reconstruction to fit either young star into their group.  In the case of Machado, there would also have to be a resolution of the conflict dating back to his April 2017 takeout slide of Pedroia.

Then again, it’s the Boston Red Sox. They shouldn’t be fully counted out for any big-time talent.

In the end, I’ll say that they’re not players for Harper or Machado. It’s too tough to see the math work from my vantage point.

What Will the 2019 Payroll Be?

More than for any other team that we have examined to date, the luxury tax is going to be a major factor for the Red Sox this winter. If the team makes no additional moves, they’ll have a cash payroll of $214.2 million and a luxury tax payroll of $216.0 million, assuming that Castillo remains off of the 40-man roster and, thus, doesn’t count against their tax payroll. With the luxury tax line sitting at $206 million, it’s awfully difficult to see how Boston gets under the line without sacrificing a key contributor or two. That’s no way to defend a title.

Instead, I suspect that the Red Sox will try to minimize their tax bill and ensure that they avoid hitting the $246 million threshold at which point their top draft pick is dropped 10 spots. It seems overwhelmingly likely that they will incur the 12 percent surtax for exceeding $226 million in luxury tax payroll, but, again, I expect that they will avoid the 42.5 percent surtax for exceeding $246 million in luxury tax payroll.

Provided that they plan to leave a little space for in-season acquisitions, let’s peg them at a spending level that enables the club to replace Craig Kimbrel at the back of the bullpen without breaking the bank.

Projected 2019 Payroll: $230 million cash ($232 million luxury tax)

Projected 2019 Payroll Space: $15.8 million

Projecting Payrolls: Minnesota Twins

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As we kick off the eighth installment of this series, here are links to the previous team payroll projections:

Philadelphia Phillies
Los Angeles Dodgers
Los Angeles Angels
Atlanta Braves
New York Yankees
Chicago White Sox
Boston Red Sox

If you have questions about financial information made available to the public and the assumptions used in this series, please refer to the Phillies piece linked above.

Today, we examine a club in one of baseball’s worst divisions that is nonetheless seemingly far from contention: the Minnesota Twins.

Team Leadership

Despite rumored relocation and contraction in the 1990s and early 2000s, Twins ownership has been impressively stable. Banker Carl Pohlad purchased the team in 1984, passing it to his children upon his death in 2009. Pohlad’s son, Jim, succeeded his father as Chairman of the ballclub and the public face of the franchise. With the sparkling Target Field opening in 2010, it appears as though the team is married to the Pohlads and the Twin Cities for the foreseeable future.

The front office is headed by general manager Thad Levine, hired from the Texas Rangers following the 2016 season to resuscitate the Minnesota franchise after over a decade as assistant general manager in Texas. The front office also brought in Derek Falvey as chief baseball officer contemporaneously with Levine. With two years on the job and despite a surprise run to the American League Wild Card Game in 2017, Levine and Falvey have primarily focused on clearing the financial books to rebuild the roster in their image moving forward.

Historical Payrolls

Before hitting the numbers, please recall that we use data from Cot’s Baseball Contracts, we’ll use average annual value (“AAV”) on historical deals but actual cash for 2019 and beyond, and deferrals will be reflected where appropriate. And, of course, the value of examining historical payrolls is twofold: they show us either what type of payroll a team’s market can support or how significantly a given ownership group is willing to spend. In the most useful cases, they show us both. We’ll focus on a 15-year span for the Twins, covering 2005-18 for historical data as a means to understanding year 15: 2019. We’ll also use Opening Day payrolls as those better approximate expected spending by ownership.

The Twins spent a franchise record on payroll in 2018 and it wasn’t particularly close to the previous high water mark in 2011.

Spending under Carl Pohlad was consistently among the lowest in the league. When his children took over and the club moved into Target Field, spending immediately increased in a meaningful way prior to a mini-rebuild in 2013-14. The days of Minnesota spending alongside the likes of Oakland and Tampa Bay appear to be a thing of the past.

While the Twins have never come particularly close to the luxury tax threshold, the team has made some major endeavors into the international amateur marketplace…and not just in Latin America. The franchise’s marquee amateur signing was that of Miguel Sano, whose $3.15 million bonus in 2009 set a record for a foreign amateur at the time. The franchise’s wide vision also led them to give outfielder Max Kepler an $800,000 bonus out of Germany in the same 2009 class. That said, the Twins weren’t one of the clubs that blew past the league-imposed soft spending limits for international amateurs or North American draftees.

Not included above: a $12.85 million posting fee to negotiate with Korean first baseman Byung-ho Park prior to the 2016 season. More on Park below.

Future Liabilities

This is quite possibly the funniest chart of any team in the series: the Twins have $0 guaranteed on their books beyond 2019.

This chart would have included $3 million in 2019 and $500,000 in 2020 for Park, but the Korean first baseman elected to forgo his guaranteed salaries in exchange for an outright release that permitted him to return to the Nexen Heroes for the 2018 season.

With Park out of the picture and buyouts paid to Santana and Morrison, the Twins find themselves only with the contract-year commitments to Reed, Castro, and Pineda as well as the final payment due to San Diego for Hughes.

Reed came to Minnesota as a closing candidate in his late-20s, but imploded in his debut season with the team, showing velocity decreases of nearly 1.5 miles per hour on both his fastball and his slider, a big drop in strikeout rate, a huge uptick in homer rate, and an upper arm injury. The Twins can take solace in the facts that Reed has long succeeded in Major League bullpens and that his injury was apparently to his biceps instead of his elbow or shoulder.

Castro has enjoyed a nice career with a slightly below-average bat complementing elite framing, but a meniscus injury wiped out most of his 2018. With Mitch Garver and Willians Astudillo providing more interesting options as the club continues to rebuild, it’s possible that Castro could find it tough to come by plate appearances in 2019.

Pineda was paid in 2018 to rehabilitate following Tommy John surgery in the hopes that he would prove to be a bargain in 2019. In late August, 13 months removed from his operation, Pineda suffered a torn meniscus, derailing a September Twins debut. He figures to be ready for Spring Training.

While the guarantees are rather ho-hum, there is plenty of organizational intrigue to be found in the arbitration-eligible ranks. Here are their arbitration projections (salary projections by MLBTR and Matt Swartz):

Odorizzi and Gibson both enjoyed strong 2018s on the heels of disappointing 2017 campaigns. Should either or both succeed again in early 2019, Minnesota will likely find themselves with a difficult decision to make: extend or trade. While the team should plausibly be able to fill one 2020 rotation spot between Triple-A southpaws Stephen Gonsalves and Lewis Thorpe, they will need significant depth behind Jose Berrios to contend in what could be a wide-open American League Central.

Cron was a shrewd pickup from the cost-shaving Rays and figures to replace icon Joe Mauer’s production at first base for a small fraction of the financial cost. Rosario offers a similar power-first, minus-defense profile, albeit from left field. Kepler offers a solid mix of power and defense, but his on-base skills have limited his overall effectiveness to date. Improved on-base ability would propel Kepler to be a plus regular.

Speaking of plus regulars, as recently as this time last year, the Twins surely thought that they had two of them on their hands in the forms of Sano and Buxton. Despite missing 94 games between 2016-17, Sano blasted 53 Major League homers over those two years at 23 and 24. Buxton, just 22 and 23 in 2016-17, had seemingly established himself as a below-average offensive performer with loud tools who was nevertheless an impact player on the strength of elite speed and defense in center field. Then both players imploded in 2018, combining to post -0.4 WAR while Buxton spent more time at Triple-A than in the Majors (due in part, controversially, to service time concerns). Moving forward, the team will need big rebounds from both young stars.

Rogers sizzled in 2018, pitching well versus right-handed batters and positively stifling lefties to the tune of a 1.39 FIP. He figures to be an important bullpen piece in his age-28 season this year.

It seems as though it has been many years since May, a former top-100 prospect, shined in the Minnesota rotation. Alas, it was just 2015 that May pitched to a 3.25 FIP over 114 2/3 innings, emerging as a potential key piece for the Twins. Then, the injury bug derailed his career in a significant way, first via a stress fracture in his back and then with Tommy John surgery. Finally returning to Major League action on July 31, 2018, May threw 25 1/3 splendid innings while striking out nearly 13 batters per nine innings. A healthy May will be an asset at the back of the Twins’ bullpen.

Finally, Grossman and Adrianza appear to be non-tender candidates.

What Does Team Leadership Have to Say?

In projecting the 2019 payroll as the 2018 season wrapped up, Pohlad acknowledged that the club possessed significant payroll flexibility but countered that “I don’t know if you can ever go out in the offseason and sign a face-of-the-franchise player,” following up with an acknowledgment that “everyone knows my aversion to long commitments. Most often, they do not turn out to be successful, in terms of getting your return on them.” Levine seemed to admit that the Twins don’t expect big-time free agents to target Minnesota as a possible landing spot, commenting that while the team planned to pursue important free agents, “whether or not they’d actually want to come here would be yet to be determined.” Falvey seemingly drove the point home, arguing that “we know that free agency can be a risky place to spend a lot of time.”

While the front office is seemingly willing to take on salary to improve, it doesn’t look like paying top-of-the-market prices for premium talent is going to be a big part of team building in the Twin Cities this winter.

Are the Twins a Player for Bryce Harper or Manny Machado?

Given the comments from Pohlad, Levine, and Falvey, and considering the Twins’ market, it’s difficult to envision a scenario in which Minnesota is a finalist for either player.  Still, if management was being coy or considers one of them an exception, the Twins do currently have the payroll space to accommodate a huge salary.  A monster contract has the potential to hamstring the franchise in the future, however, making them an extreme long shot for Harper or Machado.

What Will the 2019 Payroll Be?

Unlike the Red Sox in the previous piece, the luxury tax will not be a factor for the Twins.

After seeing his club finish at 78-84 in 2018 and examining the roster in place, it’s tough to imagine Pohlad sinking a significant payroll increase into this team. However, such an increase isn’t required to make a couple of big additions given the dearth of committed payroll at this juncture in the offseason.

Assuming that Grossman and Adrianza are non-tendered — far from a sure thing — the Twins would enter the offseason with just $76.9 million committed to the roster, approximately 41.5 percent of which will expire at the end of the season in the form of payments for Reed, Castro, Pineda, Hughes, Santana, and Morrison ($31.95 million).

Put bluntly, while ownership and management sometimes wax poetic to the media regarding the state of their franchise, the Twins genuinely have a ton of payroll flexibility both now and into the future.

While I doubt that Levine will get north of $130 million with which to work, I could see Pohlad authorizing a payroll that is nearly on par with the one he authorized in 2018.

Projected 2019 Payroll: $125 million

Projected 2019 Payroll Space: $48.1 million

Projecting Payrolls: Chicago White Sox

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As we kick off the sixth installment of this series, here are links to the previous team payroll projections:

Philadelphia Phillies
Los Angeles Dodgers
Los Angeles Angels
Atlanta Braves
New York Yankees

If you have questions about financial information made available to the public and the assumptions used in this series, please refer to the Phillies piece linked above.

Today, we visit a rebuilding team that looks ready to take a big jump in 2019…0r maybe 2020: the Chicago White Sox.

Team Leadership

After making his fortune by perfecting real estate tax shelters, Jerry Reinsdorf purchased the White Sox for $19 million in 1981 four years prior to purchasing the Bulls. Dating to the time of his Bulls purchase, Reinsdorf has always been known to prefer baseball to basketball, though obviously his success with the Bulls has dwarfed his team’s success on the baseball diamond. However, his most recent championship did come via the White Sox who blitzed their way to a World Series win in 2005, going 11-1 in the playoffs to snap an 88-year title drought.

The baseball operations department has enjoyed incredible consistency over the last two decades. Executive Vice President Kenny Williams joined the organization in advance of the 1993 season, eventually working his way to the general manager job at the end of the 2000 season, at which time he added Rick Hahn to the front office. After 12 years on the job, Williams ascended to his current role, promoting Hahn to general manager where he serves to this day. Reinsdorf has a reputation for over-the-top loyalty — just ask Bulls fans about John Paxson and Gar Forman — and the continuity of the Williams-Hahn front office bears this out.

Historical Payrolls

Before hitting the numbers, please recall that we use data from Cot’s Baseball Contracts, we’ll use average annual value (“AAV”) on historical deals but actual cash for 2019 and beyond, and deferrals will be reflected where appropriate. And, of course, the value of examining historical payrolls is twofold: they show us either what type of payroll a team’s market can support or how significantly a given ownership group is willing to spend. In the most useful cases, they show us both. We’ll focus on a 15-year span for the White Sox, covering 2005-18 for historical data as a means to understanding year 15: 2019. We’ll also use Opening Day payrolls as those better approximate expected spending by ownership.

Whereas we’ve seen some robust numbers earlier in this series, the White Sox simply haven’t followed the rest of the league in increasing spending.

The first year in this chart featured a World Series winner that unsurprisingly led to a meaningful increase in spending over the next three years as it often does for a winning team. However, instead of employing regular payroll increases to continue staying competitive in the coming years following the World Series win, Reinsdorf instead largely stuck with payrolls between $90 million and $120 million excepting a spike in 2011.

Then the tank finally got cheap in 2018. Payroll cratered to just over $70 million and the record followed suit, dipping to 62-100, the worst White Sox record since 1970. Given the above, it is perhaps unsurprising that the Sox enter 2019 on a 10-year playoff drought.

While the White Sox certainly haven’t come close to the luxury tax threshold in recent years, their spending total for 2017 listed above doesn’t include a massive one-time expenditure in Latin America. While the club hasn’t been among the more aggressive teams when it comes to international amateur spending, they did give Cuban phenom Luis Robert a $26 million bonus in mid-2017 that came complete with a corresponding $26 million tax. That $52 million was a one-off expense and not the culmination of years of excess spending, but it must be considered when evaluating club spending over the past decade or so. If Robert’s bonus is allocated to 2017 payroll and the tax payment is allocated to 2018 payroll, the recent dips aren’t nearly as notable.

Future Liabilities

Giving the White Sox future liabilities section its own spreadsheet is almost comical (wait until we get to the Rays for high comedy). Here are the guaranteed future dollars with club options highlighted in peach.

There’s simply not much to see here. Castillo is a bridge catcher to get the organization to catcher-of-the-future and 2016 first round pick Zack Collins. Collins had a breakout year with the bat at Double-A in 2018, so he should be ready for the full-time gig in Chicago by 2019.

Jones has been a key cog in the White Sox bullpen for years, but he also comes with serious injury concerns. As a result, his contract occupies the middle ground between a closer-type and an injured middle reliever.

And then there’s Anderson, the former top pick with extreme athletic tools and a deeply frustrating inability to get on base. Anderson has hit 37 homers and stolen 41 bases over the past two seasons while playing a roughly average Major League caliber shortstop since his 2016 call to the Show. However, his .286 career on-base percentage has rendered him a decidedly below-average offensive player on the whole. The primary culprits? A 3.4 percent career walk rate against a 26 percent career strikeout rate. If he manages to either curb the strikeouts or kick up the walks above his career-high five percent from 2018, Anderson may yet turn into a plus regular. If he doesn’t, he’ll remain a roughly average starting Big League shortstop who leaves talent evaluators and fans wondering why he never took then next step toward star-level production.

A more significant amount of White Sox talent can be found in the arbitration table. Chicago did non-tender Danny Farquhar, whose recovery from a brain aneurysm figures to be one of the great baseball stories of 2018 and possibly 2019 as well if he completes his comeback to the field. Farquhar was cleared to play last week. Here are their arbitration projections (salary projections by MLBTR and Matt Swartz):

Abreu burst onto the scene with an explosive 2014 debut, blasting 36 homers and reaching base at a sparkling .383 clip. He hasn’t repeated that offensive success in subsequent years, but he had durability on his side until 2018, playing at least 145 games each year from 2014-17 before slipping to 128 last year, and his worst career wRC+ is 114. Abreu is an offensive positive, but in recent years, it has been unclear whether he’ll be a force or merely above average.

Garcia came to the White Sox at the 2013 deadline in a deal that sent shortstop Jose Iglesias to Detroit and landed starter Jake Peavy in Boston. It’s hard to see his career to date as anything other than a massive disappointment. Since his 2012 debut and excluding the 2017 season, Garcia has produced exactly 0.0 WAR over 1,936 plate appearances. Ah, but that 2017 year. Garcia rode a .392 BABIP to a 137 wRC+ and an appearance in the All-Star Game. His 2017 success wasn’t replicated in 2018 as hamstring and knee injuries limited him to 93 games and a dreadful .281 on-base percentage. He underwent knee surgery shortly after the season ended in early October. What his 2019 will look like is anyone’s guess.

After showing awful offensive production in pieces of three seasons from 2014-16, Sanchez produced decently at the plate in 2017-18, allowing his plus defensive profile at second and third base to shine, making him a surprising average regular.

After being selected third overall in 2014 draft, Rodon zoomed to the Majors, making 23 starts in 2015. He made 28 more in 2016, exhibiting above-average ability in both seasons. In 2017, the injury bug bit the big lefty and it hasn’t left him yet. 2019 will be an essential year in his development.

Defensive metrics despise Davidson’s glovework and he has struggled to get on base with regularity in the Majors, posting a .295 on-base percentage to date. However, he has launched 46 homers over the past two years and showed adequate on-base ability in 2018, reaching at a .319 clip…and he struck out Giancarlo Stanton. Wait, what? Davidson made three pitching appearances this past season, working with a low-90s fastball and both a slider and a curveball. Perhaps thanks in part to Shohei Ohtani, the White Sox and Davidson himself both envision him as a two-way player in 2019.

Finally, the diminutive Garcia has managed to stick around despite career marks of a .280 on-base percentage and a .102 ISO. He does play numerous defensive positions, perhaps explaining his continued role.

What Does Team Leadership Have to Say?

Hahn and Reinsdorf have refrained from making explicit declarations that the White Sox will spend big, but for those interested in reading tea leaves, the indications are there. While Hahn has repeatedly indicated that the team will continue to focus on its future and long-term building, the team is “fully aware there are needs [they] need to address in the coming weeks and months,” adding that the financial flexibility that the team has accumulated in recent years will be used “this offseason or next.” Given what sources have relayed to Jon Heyman, the Sox are ready to take their step forward now.

Are the White Sox a Player for Bryce Harper or Manny Machado?

Despite indications that the White Sox are going to exercise some financial might this winter, genuine interest in Harper and/or Machado would be an unheard of step for the organization. Although Hahn has been quick to point out that the deal wasn’t the largest offered in team history, it nonetheless speaks volumes that Jose Abreu’s $68 million guarantee is the biggest commitment made to an individual White Sox player in club history. The jump from $68 million to perhaps a figure $300 million higher would be a stunning leap.  As MLBTR’s Tim Dierkes pointed out earlier this month, the Sox did once sign Albert Belle to the largest contract in baseball history.  A fair portion of MLBTR’s readership had not yet been born when that deal was struck in 1996.

This is a club that is ready for a splashy addition, they have the financial wherewithal to do so, and these two players are both generational talents who are available now, not in a future offseason. The White Sox will be players for each member of this young pair — though not a threat to sign both — as they look to improve, but for a team that has never shown a penchant to carry a top-of-the-market payroll, it’s tough to see a fit absent a cultural shift.

What Will the 2019 Payroll Be?

The standard disclaimer: ownership and management knows the actual budget whereas we’re focusing on historical data and other relevant factors to project future spending in the immediate and more distant years to come.

It remains to be seen if this winter will be the one in which the White Sox take a major financial plunge. Their best young pitcher, Michael Kopech, will miss the 2019 season recovering from Tommy John surgery, and their prized elite young bat, outfielder Eloy Jimenez, has yet to debut. Few would fault the team for waiting another year and taking the big step forward next offseason when Kopech will return, fellow top young righty Dylan Cease should have debuted, Collins will likely be ready at catcher, Jimenez will have a year — or perhaps 171 days of service time — under his belt, top youngster Yoan Moncada will have had another year of development, Robert should be ready, and the club can make a long-term decision on Abreu.

Then again, it has been a decade since the White Sox made the playoffs. Their closest American League Central finish in the last six years was finishing 16 1/2 games back of Cleveland in 2016. They’re well past due for a winner on the South Side.

Assuming that the team keeps its six arbitration eligible players, they’re slated for a laughably low payroll of just $58.9 million as of the start of the offseason. There’s no chance that payroll will remain this low.

Given that recent top-10 pick Carson Fulmer appears to have washed out and that elite righty prospect Lucas Giolito has struggled mightily, the Sox could set the market for somebody like Patrick Corbin or Dallas Keuchel, forcing either lefty’s hand with a economic argument made in order to secure a much-needed stabilizer for the team’s rotation.

I expect that the White Sox will wield their financial might to sign somebody for a guarantee larger than the $68 million given to Abreu. If Reinsdorf and Hahn elect to flip the switch from rebuild to contention this winter, payroll will likely jolt back to the $115-120 million territory. If instead they elect to inch ahead in the rebuild, focusing on 2020 as their year to make a big move, payroll will likely only continue the climb toward previous levels. I predict that they’ll take the second track, one that will still leave them with plenty of cash with which to make a couple of meaningful additions before another significant jump next year.

Projected 2019 Payroll: $100 million

Projected 2019 Payroll Space: $41.1 million

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