Projecting Payrolls: New York Yankees
As we kick off the fifth installment of this series, here are links to the previous team payroll projections:
Philadelphia Phillies
Los Angeles Dodgers
Los Angeles Angels
Atlanta Braves
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’re moving north to visit with the once and future biggest spenders in the game: the New York Yankees.
Team Leadership
The ownership portion of this section likely needs very little explanation, but a bit of history is actually instructive. Going back to the end of World War II, The Yankees were owned by Lee MacPhail, Dan Topping, and Del Webb from 1945-64. The team failed to reach the World Series in 1945 and 1946, then, improbably, played in the Fall Classic in all but three of the remaining years of their ownership run. CBS then purchased a controlling stake in the team in 1964 and the Yankees failed to make the playoffs during all 10 campaigns of corporate ownership.
Then, the Boss arrived. George Steinbrenner led a group of investors in purchasing the Yankees in 1973 for an unfathomable $10 million. While the team has had minority owners since then, the Steinbrenner family has held the reins with George relinquishing control to his son Hal and his three siblings in 2008, two years prior to George’s passing.
The baseball operations department is headed by senior vice president and chairman Brian Cashman. Cashman took control of the baseball operations department in early 1998 and promptly saw the team make the World Series five times in his first six years at the helm, winning three championships in the process. Perhaps somewhat surprisingly, Cashman’s job security has rarely been at issue despite the fact that the Bronx Bombers have won just one World Series title since 2000 (2009).
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 Yankees, 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.
Fasten your seatbelts, the payroll figures are about to get gaudy.
The Yankees surprisingly began the 2000s with a payroll of just $107.6 million and that figure held true in 2001 at $112.3 million. Then the spending boon started in 2002 as the team increased payroll by $13.6 million, $26.8 million, $31.4 million, and $24.1 million in four consecutive offseasons causing payroll to soar to the 2005 starting point above of $208.3 million. Incredibly, payroll has been largely stagnant since 2005 with only modest dips and climbs over the next 12 years before a notable drop in 2018 that reset the Yankees luxury taxpayer status (more on that below).
The Yankees have been a model franchise when it comes to finding ways to use their financial might to improve their club on talent beyond the Major League roster. The best recent example of this spending acumen came in the international amateur market in 2014 when the Yankees zoomed past their bonus threshold to sign one third of the top-30 prospects that year. It is overwhelmingly likely that this bonanza spurred Major League Baseball to revisit and revise the international spending limitations in the next iteration of the Collective Bargaining Agreement. To read more about this spending spree, check out this piece on Baseball Prospectus from Dustin Palmateer. Needless to say, if there is a way to use the club’s financial might to create a competitive advantage, the Yankees have done and will do it, even if significant taxes are at issue.
Speaking of taxes: since Major League Baseball instituted its first version of a luxury tax in 1997 through 2017, teams paid approximately $548,155,916 in taxes. The Yankees paid $329,519,651 of that amount, accounting for 60.1 percent of total luxury tax payments. Truly astonishing. Keep in mind that these tax payments do not include the taxes paid for overspending in the international marketplace. Simply put, the Yankees will spend and spend big, not that this is news to anyone.
Future Liabilities
The Yankees entered the offseason with a truly bizarre contract table: they had no guaranteed contracts with one year remaining, instead holding multi-year guarantees only. The recent re-signings of CC Sabathia and Brett Gardner added a pair of contract year players to the payroll table. Here are the guaranteed future dollars with club options highlighted in peach and player options — in this case, opt-out clauses — are highlighted in light blue.
We’ll start with Stanton. It was an imperfect debut season for the former National League Most Valuable Player, but on the whole, Stanton delivered what was expected: a whole bunch of home runs. His contract comes with two deeply intriguing facets. First, the Yankees enjoy a significant luxury tax benefit as a result of the inexpensive early year guarantees on his deal when with the Marlins and financial help Miami will send to New York in the mid-2020s. The Yankees should seek out players for whom they can pay exorbitant amounts while enjoying relatively depressed luxury tax figures. Stanton’s $22.7 million annual luxury tax hit is on par with the likes of Justin Upton, not befitting an in-prime superstar. Second, the 2026-28 commitments are comparatively very small given the influx of money from the Marlins. Assuming that the Yankees exercise their option on him in 2028, they’ll be responsible for just $49 million over those three years. In the meantime, obviously, they’ll pay an MVP level rate.
The other commitments are for the team’s three most recent marquee free agent acquisitions: Tanaka, Ellsbury, and Chapman. The returns for those three have been all over the place. Despite some control issues this past season, Chapman has largely excelled since returning starting with the 2017 season. At the other end of the spectrum, Ellsbury enjoyed a good first year with the Yankees in 2014, but he provided below-average production in 2015-17 before missing all of 2018 with a hip injury. Tanaka has occupied the space between stars and scrubs. He looked like an ace in 2014 and again in 2016. In the middle, he struggled with an elbow injury and since 2016, he has been a slightly above-average starter but not the ace that the Yankees hoped he would become. His value isn’t poor by any stretch, but he’s being paid at almost exactly his market rate.
As for the arbitration projections, the Yankees figure to spend a good amount on controllable talent with less than six years of service time. The Yankees don’t appear to have any obvious non-tender candidates. Here are their arbitration projections (salary projections by MLBTR and Matt Swartz):
It’s likely Gray finds himself wearing a new uniform when 2019 kicks off, but the front office will nevertheless take pleasure in seeing both Paxton and Severino occupying only arbitration salary slots instead of monster eight-figure annual salaries.
There is one name that comes with oodles of intrigue: injured shortstop Didi Gregorius. Gregorius underwent Tommy John surgery on October 17, an operation that will keep him on the shelf for months. With a $12.4 million arbitration payday on the way, could the Yankees consider non-tendering him, especially if he won’t be available until late in the 2019 season?
I don’t see it. His middle infield partner, Gleyber Torres, underwent Tommy John surgery on June 19, 2017, but he was ready for Spring Training in 2018, participating fully and playing the entire 2018 regular season starting on Opening Day. Torres needed only about eight months to return to full participation, though it’s possible that he would have been ready even earlier. If Gregorius is ready to return in mid-June, he’s certainly worth his arbitration estimate. It’s also possible that the Yankees come to a multi-year agreement with him in lieu of playing out his final year in advance of free agency.
What Does Team Leadership Have to Say?
When asked about how the team will fill out its rotation holes early in November, Cashman unsurprisingly explained that the Yankees will take whatever path necessary to build a winning rotation. “I think we’ll just gravitate to anything that will make sense,” Cashman said. “It could be a combination; something could make sense via trade in the same category as free agency. I’m interested in adding more than one pitcher. I need to, I think, add multiple. If I can do so, we’ll see.” While commenting on his preference to remain south of the luxury tax line, Cashman admitted what we all already know: “…because of the market we’re in and the ownership we have I know that we’re capable of and it’s a decision they ultimately will make when they’re forced to make it…” Quite simply, Cashman has openly admitted that big spending is a viable option, even if he publicly states a desire to avoid doing so.
Are the Yankees a Player for Bryce Harper or Manny Machado?
Yes.
We could spend a long time explaining why this is viable for the Yankees, but for a team with revenue estimated at $619 million as of 2017, it probably doesn’t require much in-depth examination to see how this works financially.
The more interesting question with the Yankees involves the fit of these two young stars. Incredibly, the Yankees’ top seven players by WAR in 2018 were four outfielders (Aaron Judge, Aaron Hicks, Stanton, and Gardner), two shortstops (Gregorius and Torres), and a third baseman (Miguel Andujar). Judge, Hicks, Gregorius, and Stanton all produced at star-level rates.
That said, it’s not terribly difficult to see the fit for Machado. Andujar’s rookie year defensive metrics were putrid. He could justifiably be moved to first base and/or designated hitter, or traded, opening up third base for Machado. Shortstop will be open to begin the season with Gregorius recovering from surgery and Torres also comes with Tommy John in his background, so Machado would be a safer bet to hold the spot defensively into the future, especially with Gregorius an impending free agent. Machado could easily cover shortstop or third base with minimal roster revisions.
But Harper? The Yankees would need to kick Harper to center field, enforcing a massive defensive downgrade for their outfield, move one of Judge, Stanton, or Harper to designated hitter, or trade one of their current corner outfield stars to clear a spot for Harper. Or they could do something even more surprising like moving one of Judge, Stanton, or Harper to first base, a risky defensive move.
I’m sure that Cashman would find a way for this to work. But the Harper fit is clearly tougher.
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.
The Yankees’ payroll is going to go up. The only question is whether they sneak over the $200 million threshold or if they blow past it.
Assuming that Gray is gone but that Gregorius stays at his arbitration salary, the Yankees are staring at a cash payroll of $152.2 million with a luxury tax payroll of $164.9 million. There’s absolutely no chance that they’ll end the offseason with payroll figures that low.
They’re going to be major players for the elite free agents with cash, prestige, and a young core of premium talent to offer any players looking for a new fortune and a ring or two to go along with it…and that’s before we factor in that the Red Sox have won four World Series titles over the last 15 years while the Yankees have just one flag. Given their need for pitching, expect to hear plenty of Patrick Corbin, Dallas Keuchel, and J.A. Happ rumors, even after the acquisition of Paxton. And expect to hear Harper and Machado linked to the Bombers until the day they sign, be it in New York or elsewhere.
I could see them marrying Cashman’s desire to stay below the luxury tax line with a couple of impact additions, setting payroll above the $206 million tax line but below the maximum penalty threshold of $246 million. As a refresher, the Yankees will incur a 20 percent tax on amounts spent over $206 million and a 12 percent surtax on amounts over $226 million. Once spending reaches $246 million, the tax rate is 42.5 percent and the club would see its top draft selection lowered ten spots. Those penalties are tough to swallow.
I expect that the club will begin the 2019 season either in the first tax tier or narrowly into the second tax tier in order to maintain some flexibility for in-season acquisitions and to stay safely below that $246 million threshold. This will bring spending back in line with where it has been for much of the past decade and a half.
Projected 2019 Payroll: $220 million cash (approximately $232.7 million for luxury tax purposes)
Projected 2019 Payroll Space: $67.8 million
Indians Acquire Walker Lockett
Nov. 22: The Indians announced the trade, revealing that they sent 19-year-old righty Ignacio Feliz to San Diego in return. Feliz spent the 2017 season with Cleveland’s affiliate in the Dominican Summer League and the 2018 campaign with their Rookie-level affiliate in the Arizona League.
After some significant control issues in 2017, Feliz took a huge step forward in 2018 against older competition, pitching to a 3.00 ERA with 10.8 K/9, 2.8 BB/9 and a ground-ball rate well north of 50 percent in 45 innings. Encouragingly for Padres fans, Fangraphs’ Eric Longenhagen opined that Feliz was the best prospect traded on the day of the 40-man deadline and provided a brief scouting report on the athletic young righty.
Nov. 20: The Padres are in agreement on a trade that’ll send right-hander Walker Lockett to the Indians, MLB.com’s AJ Cassavell reports (via Twitter). In exchange, San Diego will receive a minor league pitcher who doesn’t need to be added to the 40-man roster in advance of tonight’s deadline to protect players from the 40-man roster.
For San Diego, the trade boils down to clearing some space on the 40-man as they look to protect as much of their vaunted farm system from next month’s Rule 5 Draft as possible. It’s the second such trade they’ve made today, having already sent Colten Brewer to the Red Sox in an earlier swap. Quite likely, there’ll be more moves for the Friars when all is said and done.
It’s also the second such trade that Cleveland has made, as the Indians yesterday acquired righty Chih-Wei Hu from the Rays. Like Hu, Lockett will present Cleveland with some optionable depth for the pitching staff. The 24-year-old Lockett was hammered for 16 runs in 15 big league innings this season, but he showed strong ground-ball tendencies and solid control while pitching in the minors. Through 133 1/3 innings in Triple-A last season, Lockett posted a 4.73 ERA with 8.0 K/9, 2.2 BB/9 and a 47.3 percent ground-ball rate. The ERA, of course, isn’t pretty, but the Indians clearly believe he can improve with some adjustments under their watch.
Agency Changes: Grandal, Liriano, Drury, James
Here’s the latest agency news from around the majors:
- Free-agent catcher Yasmani Grandal has hired Adam Katz of the Wasserman Media Group, Ken Rosenthal of The Athletic tweets. Long one of the majors’ most well-rounded catchers, the 30-year-old Grandal now stands as the premier backstop on the open market, where MLBTR predicts he’ll land a four-year, $64MM guarantee. The switch-hitter spent the previous four seasons as a member of the Dodgers, with whom he slashed .241/.349/.466 over 518 plate appearances in 2018, posting a 125 wRC+ and at least 20 home runs (24) for the third straight year. Additionally, Grandal was the game’s top-ranked defensive catcher last season, per Baseball Prospectus.
- One of Grandal’s fellow free agents, left-hander Francisco Liriano, is also heading to Wasserman, Robert Murray of The Athletic relays. While Liriano was formerly a high-end starter, the 35-year-old’s effectiveness has waned over the past few seasons. He spent 2018 with the Tigers and logged a subpar 4.58 ERA/5.11 FIP with 7.41 K/9 and 4.92 BB/9 over 133 2/3 innings, and saw his velocity tumble as the season progressed. On the positive side, Liriano induced an above-average number of of ground balls (48.3 percent) and held same-handed hitters to a woeful .171/.255/.261 line. Perhaps he’ll be on teams’ radars as a lefty relief option – a role he took on late in 2017 with Houston.
- The Blue Jays’ Brandon Drury is yet another new Wasserman client, according to Jerry Crasnick, who adds that the infielder has tabbed Nick Chanock as his agent. The Yankees acquired Drury from the Diamondbacks in a noteworthy trade last February, and New York’s hope was he’d serve as its starting third baseman. Drury did win the job in spring training, but he landed on the shelf early in the season with blurred vision and migraines, which opened the door for rookie Miguel Andujar to emerge as the Yankees’ top third baseman. The breakout seasons Andujar and fellow rookie Gleyber Torres, a second baseman, enjoyed in 2018 helped influence the Yankees to trade Drury to the Blue Jays as part of a July deal for lefty J.A. Happ. Under two weeks after Toronto acquired him, Drury suffered a fractured left hand, ending a Murphy’s Law season for the 26-year-old. Drury ultimately slashed a horrid .169/.256/.260 and showed almost no power (one homer, .091 ISO) across 86 major league PAs. He’s projected to earn $1.4MM in 2019, his first of three potential arbitration years.
- Astros righty Josh James has hired CAA Sports, Jon Heyman of Fancred reports. After performing brilliantly in 114 1/3 minor league innings in 2018, the flamethrowing James continued to wow during a 23-frame debut with Houston late in the season. The 25-year-old notched a 2.35 ERA/3.51 FIP with 11.35 K/9 and 2.74 BB/9 in six appearances (three starts), perhaps giving him the inside track on a rotation job for 2019. James currently ranks as MLB.com’s 95th-best prospect.
These changes will be reflected in MLBTR’s Agency Database, which contains representation info on more than 2,500 Major League and Minor League players. Agents, if you see any notable errors or omissions within the database, please let us know via email: mlbtrdatabase@gmail.com.
Mariners Notes: Leake, Segura, Coaching Staff
Mike Leake‘s name surfaced in trade rumblings surrounding the Mariners and Padres yesterday, and The Athletic’s Ken Rosenthal tweets today that Seattle has approached Leake about the possibility of waiving his no-trade protection. The club has not yet taken that step with shortstop Jean Segura, however. It’s not known whether Leake has made a decision on the matter, but if he does approve a deal, he’ll quickly become among the game’s likeliest trade candidates. The Mariners are taking a step back and “reimagining” their roster while also paring back the payroll, and although the Cardinals are on the hook for a notable portion of Leake’s salary, the Mariners still owe him $27MM over the next two seasons. Leake already waived a no-trade clause once to approve a deal to Seattle, and speculatively speaking, perhaps he’d welcome a move to the Padres as a San Diego native. Importantly, though, Rosenthal notes that Leake is “mulling other potential options,” so it seems other destinations could be in the discussion phase.
As for Segura, the 28-year-old (29 in March) has batted .302/.341/.425 through 1198 plate appearances as a Mariner and has another four years and $58MM remaining on his contract. Like Leake, he can block a trade to any team.
A bit more on the Mariners…
- The Mariners announced that they’ve hired Jared Sandberg away from the Rays as their new Major League field coordinator. In his new role, Sandberg, who’d managed the Rays’ Triple-A affiliate for the past four seasons, will be a part of manager Scott Servais’ staff. “Jared brings a lot of experience in building relationships with young players, having managed successful teams in Durham,” said GM Jerry Dipoto. “He has a demonstrated track record of using a wide expanse of tools, from data analytics to sports psychology to traditional baseball education, and allowing each of those things to affect his decision-making. We think he is going to impact our staff in the ability to create order, deliver messages and convey plans, both among our staff and our players.” He’s managed at five different levels in the Rays’ system since retiring as a player back in 2007.
- Seattle also announced that 2018 bullpen coach Brian De Lunas has been promoted to director of pitching development and strategies. Jim Brower, an assistant coach in ’18, will be the team’s new bullpen coach in 2019. Meanwhile, former Rangers pitching prospect Cody Buckel, is moving up from a role as an organizational pitching coach to the role of pitching strategist. Dipoto explained in a press release that De Lunas “will work with pitchers, pitching coaches and analysts both in Seattle and throughout our Player Development system” in an effort to “optimize development and performance.” He’ll also weigh in on pitching evaluations and acquisitions. Buckel will assist him in all of those facets while focusing on using technology to further the team’s development processes.
Trade & Free Agent Rumors: Dodgers, Indians, Phils, Harvey, Goldschmidt, Brantley
Always active on the offseason trade market, the Dodgers have been having “lots” of discussions with the Indians regarding a variety of potential scenarios, tweets Ken Rosenthal of The Athletic. Los Angeles unsurprisingly is intrigued by Cleveland’s pitching — as all teams would be — and Rosenthal notes that catcher Yan Gomes could make sense there as well. Conversely, Cleveland has a significant need in the outfield — an area of depth for Los Angeles. There’s no indication that there’s anything especially close to fruition between the two sides, and Rosenthal even notes that both clubs are chatting with several other teams. The Dodgers, for instance, are one of the many clubs with interest in Marlins star J.T. Realmuto.
Some more chatter on the trade and free-agent markets…
- Carlos Santana‘s name has come up on the rumor mill early in the offseason, but Fancred’s Jon Heyman tweets that the Phillies also have relievers Pat Neshek and Tommy Hunter “on the block.” Reports since the team’s late-season collapse have indicated that the Phillies will be open to trading just about any player other than Aaron Nola and Rhys Hoskins, so it’s only reasonable that they’d be open to moving either relatively high-priced setup man. Neshek is owed $7.75MM and has a $750K buyout on an option for the 2020 season, while Hunter is owed $9MM and will be a free agent next offseason.
- Heyman also tweets that in addition to the Reds, Matt Harvey is drawing some level of interest from the Athletics. Cincinnati’s interest in Harvey has been well-documented, as he won over some decision-makers in the organization during his four-month run with the Reds. As for Oakland, their search for rotation help is no secret. It’s unlikely that the cost-conscious A’s will be players for the highest-priced options on the free-agent market, making second- and third-tier options
- The Twins checked in on Diamondbacks first baseman Paul Goldschmidt, tweets Jon Morosi of MLB.com, though the report describes the talks as “preliminary.” While Minnesota has an obvious opening at first base following the retirement of Joe Mauer, though, Dan Hayes of The Athletic downplays the possibility of a Goldschmidt pursuit for Minnesota (Twitter link); Hayes notes that the Twins did make some form of inquiry but adds that this “doesn’t appear to be a path the Twins will go down.” The fit is obvious, but Arizona’s asking price on the perennial MVP candidate will be quite high, and he’s a free agent after the 2019 season.
- Morosi also tweets that the Cardinals have “maintain[ed] interest” in free-agent outfielder Michael Brantley, although Derrick Goold of the St. Louis Post-Dispatch suggests (via Twitter) that Brantley isn’t a top priority for St. Louis. Per Goold, the Cards would need to miss out on more preferable targets and perhaps move other pieces of the roster before embarking on a legitimate pursuit of the 31-year-old. Brantley is coming off a strong season in which he hit .309/.364/.468 with 17 homers, 36 doubles and 12 steals, but the Cards do have in-house alternatives and are known to be looking at bigger fish (i.e. Bryce Harper).
Orioles Hire Sig Mejdal As Assistant General Manager
The Orioles announced that they’ve hired former Astros executive Sig Mejdal as an assistant general manager with a focus on analytics. Mejdal becomes the first front office hire under new GM Mike Elias. The pair is well acquainted already, having worked together in the Houston front office.
“Sig Mejdal is one of the most experienced and accomplished analysts working in baseball today,” said Elias in a press release announcing the hire. “To have him join our Orioles organization is a major moment for this franchise, and I look forward to him charting the course for all of our forthcoming efforts in the analytics space.”
Mejdal’s baseball career began in 2005, when the Cardinals hired him as a quantitative analyst — a pronounced change from his previous work as an engineer and biomathematician for the likes of Lockheed Martin and NASA. In a front office career that has now spanned more than a decade, Mejdal has focused on the draft, Major League roster decisions and organizational process improvement. He’s also worked with minor league players and coaches in an effort to help them utilize new technology and data at the field level.
An expanded analytics department will be a key focus for Elias, Mejdal and the rest of the Orioles’ front office, though that’s just one of numerous areas the organization will be looking to improve in the coming years. Perhaps most notably, the Orioles have also fallen behind the curve in terms of international scouting and have been outspoken about the desire to add resources and facilities in that regard with an eye toward rebuilding what had become a barren farm system. MLB.com’s Mark Feinsand tied Mejdal to the Orioles organization at the time of Elias’ hiring, tweeting that Mejdal would “likely” join his former colleague in the revamped Baltimore front office.
Astros Announce Coaching Staff
The Astros announced their new-look coaching staff for the 2019 season Wednesday — including a series of hires necessitated by the loss of three coaches being hired away by other organizations. Last season’s first base coach, Alex Cintron, will shift to the role of hitting coach — a role he’ll share with Troy Snitker (the son of Braves manager Brian Snitker). Houston also announced the hiring of Don Kelly as the new first base coach and Josh Miller as the team’s bullpen coach.
Cintron, 40 next month, is entering his third season as a coach at the Major League level — each of which has come with the Astros. A veteran of nine Major League seasons as a player, he’s previously worked as the team’s first base coach and as a Spanish translator/advance scout/assistant coach on A.J. Hinch’s 2016 staff. He’ll pair with Snitker to comprise a duo of hitting coaches. Snitker, somewhat remarkably, is just 29 years of age and is moving up from Double-A Corpus Christi, where he served as the Hooks’ hitting coach.
Kelly, too, should be a familiar name for baseball fans, having spent nine seasons in the Majors himself. From 2007-16, the now 38-year-old Kelly played every position on the diamond (including pitcher) while serving as a super-utility player — primarily for the Tigers. His playing career ended quite recently, but he’s already spent two seasons on the Tigers’ pro scouting staff prior to taking this role — his first as a coach.
The 39-year-old Miller was Houston’s minor league pitching coordinator in 2018 — his third season in that role. He’s also worked as a scout for the club and as a minor league pitching coach.
Houston’s coaching staff took a hit this offseason, as three of their coaches took a promotion to join a new organization. Former assistant hitting coach Jeff Albert was hired by the Cardinals as their hitting coach, while bullpen coach Doug White was hired as the new pitching coach for the division-rival Angels. Hitting coach Dave Hudgens, meanwhile, was hired by the Blue Jays as the bench coach under newly minted manager Charlie Montoyo.
Angels Acquire Dillon Peters From Marlins
3:30pm: The two teams have announced the swap of Peters and Stevens. Peter will go on the Halos’ 40-man roster, while Stevens will not be added to Miami’s 40-man roster.
2:15pm: The Angels are putting the finishing touches on a trade with the Marlins that will send lefty Dillon Peters to Los Angeles, per Jeff Fletcher of the Orange County Register (via Twitter). Righty Tyler Stevens is set to move to Miami in return.
If completed, the swap would send Peters onto the Halos’ 40-man roster. He was designated for assignment by Miami yesterday as the team looked to set its 40-man roster in advance of next month’s Rule 5 Draft. Though the 26-year-old has not found any success in his two attempts at the majors, he was viewed as one of the organization’s more promising arms at this time last year and considered to be a mostly MLB-ready starter. To this point, Peters has only worked as a starter, though as Fletcher notes, he experienced a velocity boost in 2018, so perhaps he’ll be given a shot to transition into a relief role.
As for the 22-year-old Stephens, he reached the Triple-A level in his second season as a pro after opening the year with excellent numbers at High-A and Double-A. But the right-handed reliever was drubbed at the highest level of the minors, surrendering 34 earned runs on 58 hits in just 28 frames — though he did still maintain a respectable combination of 11.6 K/9 and 4.5 BB/9. Stevens is still rather young for that level and was a quick riser through the Angels’ system last year, so he’ll hope for better results with some additional experience under his belt in a second run at the Triple-A level.
Projecting Payrolls: Atlanta Braves
As we kick off the fourth installment of this series, here are links to the previous team payroll projections:
Philadelphia Phillies
Los Angeles Dodgers
Los Angeles Angels
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’re heading back to the National League East to examine the payroll situation of a burgeoning juggernaut: the Atlanta Braves.
Team Leadership
While most baseball franchises are now owned by families or groups of them, the Braves have been owned by corporate entities since 1996. Time Warner purchased the club, along with TBS, from Ted Turner and Turner Broadcasting in 1996, then sold the club in 2007 to Liberty Media Corp., the current owner, as part of a convoluted transaction involving billions of dollars worth of assets. The human face of ownership is that of chairman Terry McGuirk, a lifer at Time Warner.
The baseball operations department is headed by executive vice president and chairman Alex Anthopoulos. After serving as general manager of the Blue Jays from 2010-15, Anthopoulos turned down a five-year extension from the club to remain in his current role, instead spending two years as a vice president with the Dodgers. The arrival of new president Mark Shapiro reportedly played a significant role in his decision to leave Toronto. In the end, Anthopoulos found his way to a superior situation, taking over the Braves front office just over one year ago and inheriting a loaded farm system outside of the rigors of the wildly competitive American League East.
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 Braves, 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.
Using this time frame for the Braves captures the end of Turner’s ownership period, a spending downfall from the peak of $106.2 million in 2003. Braves spending was remarkably consistent from 2005-16 before a notable jump in 2017. Here is what the Braves have spent in the prior 14 seasons:
After spending like a top-10 club for much of Turner’s ownership, the Braves have spent like a mid-market team throughout Liberty’s ownership, never ranking higher than 13th or lower than 22nd in end-of-season payroll.
Atlanta’s spending hasn’t been limited to Major League talent by any stretch. In fact, their penchant for swimming in the international amateur market got them into deep trouble and helped propel Anthopoulos to the general manager’s job. The Braves infamously split the signing bonuses paid to top amateurs between the the elite prospects and lesser “foreign professionals” for whom bonuses were exempt from international signing restrictions. This enabled the team to funnel additional money to top amateurs without being forced to incur stringent tax liabilities. Unfortunately for the club, when their deceit was uncovered by Major League Baseball, it resulted in the exodus of many top amateurs, including elite target Kevin Maitan, and much of the club’s leadership, including president John Hart and general manager John Coppolella. The Braves will be significantly restricted from signing expensive international amateurs in the next two summers, so they’ll paradoxically have more cash available for spending on Major League talent should they choose to allocate the unspent funds in that way.
Future Liabilities
The Braves have truly remarkably little on the books in terms of long-term commitments. Organizational stalwart Freddie Freeman has three years remaining on his deal and defensive wizard Ender Inciarte has three years plus an inexpensive club option for a fourth. That’s it for guaranteed money beyond 2019…at least, that’s it for current players. Here is a look at their future guarantees with the peach highlight indicative of 2020 club options for Julio Teheran and Tyler Flowers. Note that the numbers shown on here are cash payments by year, not the salary plus the prorated amount of any bonus. The AAV column captures the player’s luxury tax number.
The top portion of this chart is relatively straightforward: the Braves have long-term commitments for Freeman and Inciarte and one-year commitments for Teheran, O’Day, and Flowers, unless they want more for Teheran or Flowers via the options.
The bottom portion? The bottom portion carries the intrigue. We’ll start with O’Day, the simpler case study. When the Braves acquired starter Kevin Gausman at the trade deadline, they also agreed to absorb the remaining contract for injured reliever Darren O’Day as a means of limiting the talent package they sent to Baltimore (this should make Braves fans happy and Orioles fans sad). O’Day’s contract called for $1 million each year from 2016-19 to be deferred, payable in equal installments from 2020-23. Perhaps as a sign of how desperate the Orioles were to move payroll, the Braves agreed to absorb the deferred obligations owed to O’Day, even those incurred from money deferred in earlier seasons. As a result, the Braves owe O’Day $1 million for each year of O’Day’s contract, including the time he spent in Baltimore in 2016, 2017, and 2018.
Sutter is an entirely different matter. The Braves signed Sutter to a six-year, $9.1 million deal prior to the 1985 season when Sutter was coming off of a top-10 finish in Most Valuable Player voting having just completed a return to star status after a couple of rocky seasons. With Atlanta, Sutter produced a whopping 0 WAR while sputtering out after three seasons. However, that’s not the source of intrigue. That comes from the extremely unique structure of Sutter’s contract which called for minimal annual payments and massive deferrals, paying Sutter $1.12 million per year for 30 years after he retired. Mercifully for the Braves, Sutter will collect his final annual payment in 2021. Unmercifully for the Braves, Sutter collects the entire $9.1 million principal that year as well. His $10.22 million payment in 2021 may very well rival Mike Foltynewicz for the second largest payout on the team. If the Braves already have Sutter’s balloon payment tucked away and ready for payment in 2021, this is merely a goofy historical anecdote. If, however, the Braves need to come up with the balloon payment, it may have a meaningful impact on the 2021 roster and the team’s willingness to commit future dollars this offseason.
With Sutter out of the way, let’s move to the arbitration projections. Outfielder Adam Duvall and reliever Sam Freeman both appear to be non-tender candidates, but for now, both are included below (salary projections by MLBTR and Matt Swartz):
Gausman, Foltynewicz, and Vizcaino all figure to occupy significant chunks of payroll, but all three pitchers are important to the 2019 Braves, so they provide nice value to the contending team.
What Does Team Leadership Have to Say?
Anthopoulos was surprisingly forthcoming when discussing Atlanta’s spending plans, telling reporters, “We will have a good amount of money to work with.” This likely doesn’t surprise anyone. The Braves have been a picture of consistency with their spending over the past decade, so it would be stunning to see payroll plummet or explode this offseason.
However, the color that Anthopoulos added to his basic comment provides significantly greater insight: “We’re not going to just walk in the store and buy because we have money in our pockets. If we don’t find the right deal with something we like, there’s still other opportunities to shop. There could be opportunities next season. If you start signing guys to big, long deals, if you feel good about the deal, you do it now. I wouldn’t force a deal right now that would limit you in years from now. I don’t think with our club, with what we have, that the value is going to be there in the free-agent market. It doesn’t mean it won’t. We’ll certainly explore it. But if I could sit here in the middle of October, I’d say it’s more likely we go the trade route. It’s not ideal to give up young assets, but it’s also not ideal to do a deal you don’t believe in — that may look good for a year or two, and then in years three, four and five, it does not.”
Are the Braves a Player for Bryce Harper or Manny Machado?
It’s entirely possible that some of the above was merely posturing on the part of Anthopoulos as the Braves prepare a foray into the depths of free agency. But given the club’s hesitance to spend at top-of-the-market rates in the past, I would expect that Atlanta’s free agent targets won’t reach the Harper/Machado tier.
However, that said, Atlanta’s salary flexibility and ludicrous hoard of prospect arms ready to fill the Major League rotation for the next half decade or longer mean that the Braves can afford to take a massive swing and miss without crippling the franchise for years. So few teams have such a luxury. As a result, they should be considered a sneaky contender to spend big dollars, especially for Harper as the Braves would likely love to put him in the outfield with Ronald Acuna Jr. and Inciarte. Machado makes a bit less sense given the presence of Ozzie Albies, Dansby Swanson, and well-rounded top prospect Austin Riley, but the money is there. There’s just a chasm of disconnect between the figures on paper and the words of the general manager.
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.
The Braves’ payroll has been quite consistent over the years, and given their historical trajectory and current revenue streams, I’d expect for them to at least comfortably plod along with methodical increases. That might mean something like $130 million in 2019.
However, last year’s club blew open the competitive window. As a result, I foresee a slightly larger increase this year than expected. As a result, they’re likely going to make a significant expensive addition or two. A reunion with Craig Kimbrel makes an awful lot of sense.
Projected 2019 Payroll: $135 million
Projected 2019 Payroll Space: $50.6 million
Yankees Acquire Tim Locastro
The Yankees have acquired infielder/outfielder Tim Locastro from the Dodgers, per a club announcement. Righty Drew Finley and cash considerations will head to Los Angeles in return.
Locastro was dropped from the L.A. 40-man yesterday, among many other moves. He has experience all over the diamond, with most of his time in the minors coming at second base and shortstop, but was announced by the Yanks as an outfielder.
It seems his likeliest fit, though, is as a pure utility piece; perhaps he’ll have a shot at competing with Ronald Torreyes (assuming he’s tendered), Hanser Alberto, and any other potential contenders to take up a reserve role. It’s not hard to see why the Yankees had interest, given that broad defensive background combined with Locastro’s generally productive numbers at the plate in the upper minors. He’s a .283/.354/.401 hitter through 626 Double-A plate appearances and has turned in an eyebrow-raising .307/.402/.443 slash in his 471 trips to the dish at the game’s highest level.
Finley, a 22-year-old righty, has yet to move past the low A level despite three attempts. In 120 innings as a professional over four seasons, he carries an unsightly 5.48 ERA with 9.7 K/9 and 4.8 BB/9. That said, Finley was a third-round pick back in 2015, and it could well be that the Dodgers still think there’s some talent to be unlocked.