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February 16, 2011

Contractual Matters

AL West Payroll Projections

by Jeff Euston

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The American League West provided one of baseball’s feel-good financial stories of 2010, as the low-budget Rangers dethroned the big-spending Angels, the three-time defending division champions. With their ownership situation now stabilized, the Rangers’ 2011 payroll should approach the $90 million range, where the Mariners generally reside.

But both Seattle and Texas remain well behind the Angels, who figure to push the $140 million mark this season. About $75 million down the road are the Athletics, content to keep spending relatively flat as they dream of playing in San Jose. With the usual disclaimer that the numbers are subject to change six weeks from Opening Day, let’s break down the projected 2011 payrolls for the AL West.

 

Texas Rangers
Projected 2011 payroll: $91,451,000 (13th)
2010 payroll: $64,810,570 Opening Day (25th), $74,302,980 year-end (22nd)
Future commitments: $63.45 million for 2012, $33.1 million for 2013, $17 million for 2014, $18 million for 2015

The Rangers achieved the unique feat of going from Chapter 11 to the World Series in a span of just five short months in 2010, giving them the dubious distinction of being the most successful club ever to come out of bankruptcy. The recent competition—the 2009-10 Cubs, 1993 Orioles and 1970 Brewers—never seriously challenged for postseason berths.

As part of its winning bid for the club, the new ownership group led by Chuck Greenberg and Nolan Ryan assumed more than $200 million in debt owed to Major League Baseball and other creditors. But as their magical run to the AL pennant began last fall, the Rangers signed a lucrative 20-year television contract with Fox Sports Southwest. Although the deal does not kick in until the 2014 season, it likely included a significant payment up front and eventually will pay the club about $75 million annually.

The ownership change gave general manager Jon Daniels the right to opt out of his contract a year early this winter, but he passed on the opportunity and spent much of the first month of his offseason joining Greenberg and Ryan in trying to convince ace Cliff Lee to sign with Texas long-term. In the meantime, Daniels bolstered his pitching staff through affordable free agent deals with Brandon Webb ($3 million) and Arthur Rhodes ($3.9 million). Lee chose to return to Philadelphia in early January, setting off a chain reaction that might still be unfolding: The Rangers subsequently bid $80 million to win the Adrian Beltre auction, displacing incumbent third baseman Michael Young, who is now 34 years old and still has three years remaining on his own $80 million contract. Factor in a two-year, $24 million extension for Josh Hamilton, and Texas now has committed more than $130 million for 2012-16, more than any other club in the division.

 

Oakland Athletics
Projected 2011 payroll: $65,495,000 (22nd) 
2010 payroll: $58,304,500 Opening Day (27th), $61,773,644 year-end (26th)
Future commitments: $17.54 million for 2012, $13.09 million for 2013, $2.15 million for 2014

A’s GM Billy Beane has constructed a roster built for 2011. Three Oakland regulars, Mark Ellis, Coco Crisp, and David DeJesus, will become free agents at season’s end. Two significant off-season additions, Hideki Matsui ($4.25 million) and Josh Willingham ($6 million), signed one-year contracts. The offensive upgrade gives the A’s a chance to improve on 2010’s second-place finish with a relatively inexpensive 2011 payroll of $64 million.

Beane supplemented his bullpen with two-year deals for Brian Fuentes ($10.5 million) and Grant Balfour ($8.1 million). The fifth spot in the starting rotation could be filled by one of two low-cost free agents hoping to rebound from injuries: Rich Harden ($1.5 million) and Brandon McCarthy ($1 million).

The short-term deals give Oakland payroll flexibility going forward, which is important for a low-payroll club that values cost certainty. Catcher Kurt Suzuki and lefty starter Brett Anderson signed affordable long-term extensions during the 2010 season. With as many as a dozen potential arbitration cases looming next winter, the A’s will quite likely discuss multi-year deals with key young players like Daric Barton, Dallas Braden, Trevor Cahill, Gio Gonzalez, and Andrew Bailey.

 

Los Angeles Angels of Anaheim
Projected 2011 payroll: $139,665,000 (4th)
2010 payroll: $121,113,867 Opening Day (7th), $123,478,263 year-end (7th)
Future commitments: $75.12 million for 2012, $25.5 million for 2013, $21 million for 2014

The Angels predictably responded to their third-place finish in 2010 with a 15 percent bump in payroll. Surprisingly, the lion’s share of the money will go toward Vernon Wells, who comes in a trade from Toronto at a cost of $81 million—$18.5 million this season and a cool $21 million a year for 2012 through 2014.

In making the deal, GM Tony Reagins emphasized the fact that the financial commitment, though significant, runs for only four seasons. That’s true, but the Angels are now hitched to Wells at an average of $20.25 million through his age-35 season. As the offseason began, their top target was reportedly Carl Crawford, who eventually signed with Boston for an average of $20.285 million a year through his age-35 season. Wells has posted WARP marks of 4.0 or higher in three of his nine full seasons. Crawford has done it six times in eight seasons. So which was the riskier option, exactly?

An upgrade to the bullpen proved to be pricey, as well. Scott Downs came from Toronto at a cost of $15 million over three years, and fellow lefty Hisanori Takahashi signed for $8 million for two years.

Still, the Angels starting rotation makes them a contender for at least the next two seasons. Ace Jered Weaver is under control through the 2012 season, and the Angels hold options on Ervin Santana and Dan Haren through 2013. Joel Pineiro and Scott Kazmir are entering the final years of their contracts, though LA holds a $13.5 million option for 2012 on Kazmir.

Reagins could face as many as 10 arbitration cases next winter, including expensive paydays for Weaver and regulars Howie Kendrick, Erick Aybar, and Kendry Morales.

 

Seattle Mariners
Projected 2011 payroll: $91,020,833 (15th)
2010 payroll: $91,143,333 Opening Day (14th), $93,376,107 year-end (14th)
Future commitments: $59.513 million for 2012, $38.263 million for 2013, $21.2 million for 2014

The Mariners payroll projects to be $91 million this season, almost exactly where it was for Opening Day 2010. GM Jack Zduriencik signed Eric Wedge to a three-year deal as Seattle’s new manager in October, but the M’s made only modest improvements to their lineup, which struggled mightily in 2010, scoring just 513 runs.

Russell Branyan and Jose Lopez have departed, replaced by Jack Cust, who signed for $2.5 million, and Brendan Ryan, who signed a two-year, $2.75 million deal after coming over in a trade from St. Louis. Ryan figures to slot in at second base, with Chone Figgins moving to third.

Zduriencik also signed free agent catcher Miguel Olivo for $7 million over two years. Only Figgins, ace Felix Hernandez, and center fielder Franklin Gutierrez are signed beyond 2012. So with money for Milton Bradley and ex-Mariners Yuniesky Betancourt and Carlos Silva coming off the books in 2011, Seattle does enjoy financial flexibility going forward.

 

AL West Summary

The division’s wild card in the short term is the new ownership group in Texas and its appetite to engage the Angels in a financial arms race. That’s not likely, given the Rangers’ success with more modest payrolls, to say nothing of the cautionary tale that is the Tom Hicks era. The Athletics will likely continue to lean on their young talent and try to do more with less. But the Mariners, Angels, and Rangers all could threaten the $100 million payroll mark in the near future.

Jeff Euston is an author of Baseball Prospectus. 
Click here to see Jeff's other articles. You can contact Jeff by clicking here

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