Projecting Payrolls: Chicago White Sox

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